How Easygenerator Reached 1,250 Customers and 94% Annual Growth While Staying Bootstrapped (Interview with Kasper Spiro)

Introduction and COVID Impact

Nathan Latka

00:00Hey folks, good morning. My guest today is Kasper Spiro. He's the CEO of Easygenerator and he's both the initiator and driver behind the employee generated learning trend. He's made an impact on the field of learning as a blogger at kasperspiro.com, so good distribution channel there, and author of trainingindustry.com, Learning Solutions Magazine, CLO Magazine, and others. Also as a speaker at various e learning conferences around the world. Kasper, are you ready to take us to the top?

00:22Yep. All right, very cool. So, hey, you back, you came on the show back in November of last year, sort of middle of COVID. How was COVID impacting you at the time?

Kasper Spiro

00:32>> Yeah, it was a big boost for our business. Everything went online. Basically, I think it moved everything forward a couple of years. Interesting.

Customer Count: 1,250 and What Easygenerator Does

Nathan Latka

00:40And you had mentioned at that time you had about 1,200 customers. I want to learn more about what you're giving them, but how many customers today?

Kasper Spiro

00:47>> Yeah, we're a bit over that. So I actually made a mistake at that time. It was like 1,100, now it's around twelve fifty, something like that.

Nathan Latka

00:54Oh, great. Why are they paying you? Tell us what you do.

Kasper Spiro

00:57>> So what we do, we have a SaaS solution with an e learning authoring tool that allows a subject matter experts, employees to capture their knowledge and share it with their coworkers.

Nathan Latka

01:09So are you selling to heads of HR typically or the employees directly?

Kasper Spiro

01:13>> No, we're selling to the companies. So they facilitate their employees with the tool. So very often we make enterprise wide deals. And so if

Nathan Latka

01:23you sell into an enterprise and they buy a 100 seats, what's that sort of HR manager after they purchase your tool, what email are they sending to the team to get them to start using Easygenerator? What's it sound like?

Kasper Spiro

01:33>> What do you mean? What does it sound like?

Nathan Latka

01:35What the pitch is? How does an after an, you know, head of HR purchases your platform, how do they get their employees to use your platform? Why are employees excited to use it?

Enterprise Sales Motion and Onboarding

Kasper Spiro

01:45>> Yeah, well, there is already a need for that. People want to share and they want to do that and there are no real simple tools for that than we are. But it's a whole program where we help them, onboard them, do webinars with them, we help them communicate around Easygenerator, give them best practices, and that way we sort of build out the audience.

Nathan Latka

02:07And it's all about creating courses, is it just internally for teams, or can someone like me, an influencer, create a course to sell to my community?

Kasper Spiro

02:14>> Yeah, you can. You can just subscribe for a license and buy a subscription and create courses. We even include hosting and result tracking for free, but that is where the business started, that we now are moving more and more into the corporate market and bigger corporate use.

Nathan Latka

02:34Why is that?

Individual vs. Corporate Market and Churn

Kasper Spiro

02:37>> So, if you sell to an individual, if, for example, it would be you, and something happens with you, you will cancel your account. So initially, the churn was relatively high, 25% or something like that. Now we have moved up market with bigger contracts and the churn is below 10.

Nathan Latka

02:54>> 10%. Up here annually.

Kasper Spiro

02:55Yeah. Annually. Yeah.

Nathan Latka

02:56>> Annually. Got it. Yeah.

02:58Think you told me churn annually was about 10%, expansion was 32, and your net dollar retention was one twenty two. Have any of those changed?

Kasper Spiro

03:07>> Yes, so I think that we've grown significantly. We've grown harder last year than we expected, so we ended up like we were planning for around 90, we ended on 94. We still are on the same pace, which means the MRR is now in dollars over $600,000 so we made quite a step there.

MRR Growth and 94% Annual Growth Rate

Nathan Latka

03:25Okay, wait. That's incredible because when you came on the show last, you were doing about $360,000 a month in revenue. You're doing $600,000 a month, 7,200,000 run rate?

Kasper Spiro

03:33>> Just crossed the €500,000 line, so that is the $600,000 line as well. Okay.

Nathan Latka

03:38I mean, that's impressive growth over six months. You've almost doubled over the past six months revenue wise. Where did the growth come from?

Record December and COVID Pilot Conversions

Kasper Spiro

03:45>> So, well, we had a huge last quarter, but especially December was like a record breaking month. So our best month in growth terms ever was 90 ks in new MRR, Last December, just that month, we did 47 ks growth in one month, net.

Nathan Latka

04:04In December.

Kasper Spiro

04:06>> Yeah, just December. Yeah. So it was a huge jump that we made.

Nathan Latka

04:11But why? I mean, success is good, but if you don't understand why it happened, you can't replicate it.

Kasper Spiro

04:18>> It happens almost every year that December is like by far our best month, but this was like exceeding all our expectations by far. And I think it was partly driven by COVID. So we really thought that people at that time noticed, so working from home, even COVID will go away, working from home will not. So we now need to make choices and commitments. They tried it, we sold a lot of, when COVID started, we started selling

04:44>> a lot of pilots. So we just gave them a pilot for $1,000 a month with unlimited capacity during the first month of COVID. And that really paid off in the end of the year because then they had to sort of renew that. A lot of those companies went to enterprise contracts in one go. We actually had companies going from a six month pilot straight into our maximum enterprise deal, where normally we expect them to take like

05:09>> two or three years to grow into that.

Largest Customer and Enterprise Upsell Model

Nathan Latka

05:11You told me in December your largest customer was paying $105,000 per year. Is that still your largest customer?

Kasper Spiro

05:18>> No, no, we have a new one. One of those pilot customers went over that, so I think it's like in dollars, we're on 30.

Nathan Latka

05:25Wow, okay. And why are they paying so much? Like what are you upselling against? Is it number of seats? What else are you upselling?

Kasper Spiro

05:31>> Yeah, so the upsell is more facilities, better guidance, higher SLAs, but it is, the key thing is unlimited seats.

Nathan Latka

05:39So people upgrade to get to those unlimited seats.

Kasper Spiro

05:42>> Correct, yeah. If they buy an enterprise license and if they go over a certain number of seats, they can buy an unlimited license and then it doesn't really matter if it's like a thousand or 5,000 people authoring, the price will remain the same.

Nathan Latka

05:55When you say better SLA, you mean going from 99% guaranteed uptime to 99.9% guaranteed uptime or you refund them?

Kasper Spiro

06:03>> We have 99.5% and we do indeed refund them if we don't make that, but we're working on going close to 100%, so it will be 99.99% shortly.

Nathan Latka

06:15So haven't refunded anybody for that?

Kasper Spiro

06:17>> Yeah, what we did in the past year is that we didn't refund anything, no, no, no, because we were way, way over that, but we are increasing the quality of our hosting. We took away every single point of failure that we had in the last year. We're now working on continuous deployment, so we can also go put things live without going down,

06:38>> so it will be really close to 100% hopefully in a year from now.

Capital Efficiency and Bootstrapped Structure

Nathan Latka

06:42Okay. Now talk to me about capital efficiency. Have you raised additional capital or still just the 500,000 from 2013?

Kasper Spiro

06:49>> No, it's still, so we don't have also in 2013, that was also just our own shareholders at that time, so the company we're, so we're still bootstrapped.

Nathan Latka

06:57Yeah. Okay, got it. So does that mean you own 100% of the business?

Kasper Spiro

07:02>> Sorry?

Nathan Latka

07:03Walk me through how the ownership works because I think you told me that this was a spin out.

Kasper Spiro

07:08>> Initially we were part of another company, so I started it up as a business unit and we sort of grew out of there. Now we're an independent company. We're close to 100 people now making a profit.

Nathan Latka

07:21How much profit per month?

Kasper Spiro

07:24>> So last month it was 30,000. Overall, I expect a year because we are investing a lot of money, I expect us to be just above breakeven. So just on the positive side of that. So making a profit is not a goal, but we are growing faster than we can actually hire people and spend money.

Nathan Latka

07:42Yep. Have any VCs reached out asking to invest and if so, what's the highest valuation you turned down?

Kasper Spiro

07:47>> So we haven't done that into that. We have a lot of interest, so we actually held a webinar for all the VCs that wanted to invest in us, but we didn't ever really talk to them. So we expect maybe in a few years from now, right now we can fund our own growth and we're growing like 100% per year, so that is what we want to do. Maybe if we have plans to even accelerate from that,

08:12>> that could be something, or when the shareholders decide that they want to exit, but for now it's not a plan.

Ownership, Rev Share Agreement and Parent Company

Nathan Latka

08:19The parent company owns 100% equity of your business. You have a rev share agreement. How does that work?

Kasper Spiro

08:25>> Yes, very simple. So if we sell the company, I have an agreement with that, that I get a percentage of the sale.

Nathan Latka

08:32Oh, I see. Got it. So interesting. Got it. So is that more or less than 20%?

Kasper Spiro

08:37>> It will be less.

Nathan Latka

08:39Less than 20%, but more than 10% hopefully? No, probably not. Come on. Do you regret This is what I asked. You've built a great business here.

08:48You put in your hard sweat, tears, you spun it out.

08:50I mean, do you wish tried to negotiate for more back in 2013?

Kasper Spiro

08:58>> Well, maybe if I knew what I know now, maybe, but as I told you last time, it's not really my big drive. And when we will sell the company, so one of our competitors, Articulate, they got an investment in their first investment after twenty years of business and the investment was 1,500,000,000 for 40% of the shares. If you talk numbers like that, if we even come close to that, we will not, but if we do that,

09:25>> then it doesn't really matter if you have like a 5% or 10% because it's still too much money.

Nathan Latka

09:30I mean, when I hear deals like that, and that actually happened just recently, that happened July 1, but you also have Kajabi growing like crazy, Trainual, you have some companies that actually have IPO ed in this space on the Canadian Stock Exchange. Like if you're gonna make money in this space, it feels like now is the time to do that, a big secondary something like that. Why aren't you guys planning to do that?

Kasper Spiro

09:51>> Yeah, I think we have to trust that we can do even better in a few years'time, in the end of the day, is also because I'm not the shareholder. That's the call of the shareholders, of course, to make. I'm building the business.

Nathan Latka

10:02Yeah, they must be thinking about this. I mean, again, have to recognize timing and product is everything in startup land and you guys have the beautiful tailwinds of COVID. We're not gonna have, I don't think another global shutdown in the next ten years.

Kasper Spiro

10:15>> I hope it will not happen indeed.

Nathan Latka

10:17Yeah. So like, isn't now the maximum time, the highest growth, the most noise, the most best valuations? Shouldn't you pull the trigger now?

Kasper Spiro

10:24>> Yeah, probably we'll get indeed the highest multiplier or anything. So indeed, that's true.

Nathan Latka

10:30So you want to do it, the parent company doesn't?

Kasper Spiro

10:32>> No, I'm, so even if they would sell the company, I still wanted to still bring it a few steps further. So that is really what I'm working for. So if the company is being sold to new ownership, that wouldn't really change for me.

Nathan Latka

10:44Yeah, yeah. How much do you think the company is worth today?

Valuation Estimate and Engineering Team

Kasper Spiro

10:48>> Well, yeah, so we are doing this year probably around 7 to 7,500,000 in ARR, so depends on the multiplier, but it can be anything between seventy and one hundred. I even heard multipliers of 20 and more, so well, you can do the math.

Nathan Latka

11:06Yeah, and I think sometimes that's even conservative, but yeah, maybe between 100,000,000 and 200,000,000. Of the 100 people on the team today, how many are engineers?

Kasper Spiro

11:14>> We have like twenty, twenty five is the technical team, which is engineers plus QAs and DevOps.

Sales Team Structure and Quotas

Nathan Latka

11:21And do you have any quota carrying sales reps?

Kasper Spiro

11:24>> We have sales rep, yeah, we have like seven AEs and I think 12 BDRs, something like that.

Nathan Latka

11:32And what is your quota target for those AEs?

Kasper Spiro

11:35>> So they start as a junior, it will be, I think, around $3,000 and that will go up to like $30,054,000 dollars mark when they are a senior.

Nathan Latka

11:46What does that mean?

Kasper Spiro

11:47>> That's the new ARR they have to bring in each month? Yes, yes, new MRR.

Nathan Latka

11:52And new monthly recurring.

Kasper Spiro

11:53>> So each month they have to bring in 3,000 of new MRR or that $36,000 of new ACV every single month. So 36,000 times 12, they have to bring about 450,000 of new ARR in their first year. Yeah.

Nathan Latka

12:06What about at scale, your best AEs? Do they have like a million dollar quota, $2,000,000 quota?

Kasper Spiro

12:13>> I wouldn't know though.

12:17>> Have, I think the quota will be the same, but we have like an uncapped system of bonuses. So, that is where they go for.

Nathan Latka

12:25How does that work?

12:27What does that mean, uncapped system of bonuses?

Kasper Spiro

12:30>> So they will get a percentage of each sale. They also will get a percentage of each sale which upsells within a year, and we don't have a limit on that. The more successful they are in their sales, the higher the bonus will be.

CAC of $5,800 and Marketing Channels

Nathan Latka

12:43I see. Are you still paying about $4,000 in CAC to get a new customer?

Kasper Spiro

12:48>> Yeah, around that. I think it may be a bit more. So it will be closer to 5.5, I think. We are really increasing our efforts with marketing, so I expanded that team. It's, let me see, it's 5.8, so $5,800

Nathan Latka

13:04>> I love that. You come on Nathan's show and you have your metrics pulled up, ready to go.

13:09I love that. Where are you spending that money?

Kasper Spiro

13:12>> So I think, yeah, mostly what we already did a long time is in Google, but we are sort of now also paying attention to other sources. So we're doing Bing, we're doing LinkedIn. We also do a lot of webinars that we host and do ourselves. So we do a lot of content marketing with white papers, working on e books, stuff like that. So we are sort of broadening the scope of the leads, and we do see

Webinars and Content as Lead Sources

Kasper Spiro

13:36>> that the harder leads like the webinar leads and the content leads, they are actually bringing in more money. They're closer to outbound leads than just the inbound leads that come in through the website.

Nathan Latka

13:47Last question, the rev share agreement you originated back in 2013, where you get five to 10% of the business on a sale, is that transferable? In other words, if someone's listening right now and they wanna come to you and offer you 5 or $10,000,000 to buy that contract, like the right for 5% at exit, would you sell? Would you consider selling?

Kasper Spiro

14:05>> If I would sell the 5% of the business for that?

Nathan Latka

14:08Sorry?

Kasper Spiro

14:08>> No.

Nathan Latka

14:09No. So you have an agreement where you get five to 10% of the business after Is that saleable? If someone wanted to buy that from you personally for 5 to $10,000,000, would you sell it?

Kasper Spiro

14:19>> How would I sell it? I'm not even sure if that's possible. I don't know. No, I think that we're just at the beginning. So

14:31>> I think if we will get an investment in, it will be to grow faster, not to sell the majority of the shares. And I really believe that we can grow way faster than 100% per year. So that is the ambition. So I think we can do better than that.

Famous Five: Books, Tools and Personal Life

Nathan Latka

14:44I love the ambition, but I disagree. I think we're in a very special time for firms like yours and we are at the peak, peak growth, peak revenue, peak valuation, but we will see what happens. Let's wrap up with the famous five. Number one, favorite business club.

Kasper Spiro

14:55>> One last remark on that, by the way, because we are on a growth level of the 90 plus percent for four years in a row now. So it's not really just a peak, it's consistent.

Nathan Latka

15:04Yeah, but a lot of that growth has come from COVID. We're not going to have another, we're coming out of COVID now. We're not going to have another COVID that's going to keep propelling your crazy growth rates. I think now is a very unique time where the past twelve months looks very good for all your historical financials.

Kasper Spiro

15:19>> Yep, a good point.

Nathan Latka

15:20We'll see, we'll see. Number one, what's your favorite book?

Kasper Spiro

15:23>> So I have it here by the way, so I'm rereading it. It's a The Working Smarter Fieldbook, or I'm reading a couple of books of this. It's written by Jay Cross. It's a guy who changed our industry. My

15:35>> master in e learning.

Nathan Latka

15:36Okay, number two, I tried a

Kasper Spiro

15:38>> few years ago, I'm afraid.

Nathan Latka

15:39Oh, I'm sorry to hear that. Number two, is there a founder you're following or studying?

Kasper Spiro

15:43>> So, but also a book I reread, I think I will go for Steve Jobs rereads by Opry, because I love how he had a vision. I was able to translate this vision into products and in business. I really admire him for that.

Nathan Latka

15:55Number three, is there an online tool that you're really enjoying right now?

Kasper Spiro

15:59>> I'm really into Miro recently, creating the mind maps there, but also Miro, it's a tool that can draw all kinds of things, you can use Miro. I think it's a Russian tool, which is drawing really fast, and I love it.

Nathan Latka

16:13>> Interesting.

16:14Number four, how many hours of sleep do get every night?

Kasper Spiro

16:16>> Six, maybe a bit more.

Nathan Latka

16:18Okay. And what's your situation? Married, single, kiddos?

Kasper Spiro

16:21>> I'm married for forty something years to my high school sweetheart, and we have three kids together, three sons, they're

Nathan Latka

16:29And between 25 and 30 how old are you, 58 or did you have a birthday?

Kasper Spiro

16:34>> I just had my birthday last week, so now it's 59.

Nathan Latka

16:37Happy birthday, 59.

16:38>> Last question, what's something you wish you knew when you were 20?

Kasper Spiro

16:42>> Follow your instinct. Go with your gut.

Closing Summary

Nathan Latka

16:44Guys, there you have it. Easygenerator grew from call it about a 4,000,000 run rate eighteen months ago to over $7,000,000 run rate today. Their team has also grown. Customers now twelve fifty. They're making it easier for enterprises to create courses internally for employees to get onboarded faster. A hot space right now, we'll see what happens next. Thinks the company's worth maybe between a 100,000,000 and $200,000,000 and it's profitable. They're bootstrapped and make about $30,000 per month

17:08in profit. Kasper, thanks for taking us to the top.

Kasper Spiro

17:11>> Thank you. Bye, Nathan.

Nathan Latka

17:14One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers. They try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday 1PM

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