How Encompass Corporation CEO Wayne Johnson grew Encompass Corporation to $10.5M revenue and 250 customers in 2018.

hello everyone my guest today is Wayne Johnson in 2012 he co-founded encompass corporation a SAS business driven by the belief that the best decisions are made when people understand the full picture as CEO of the company has led the creation and the companies know your customer automation software for the banking finance legal and accountancy sectors Wayne are you ready to take it to the top good look forward to it all right all right good so tell us more specifically what does the company do maybe give a customer example and how do you make money is it pure play SAS yeah it is it's a we service the legal market accounting market in the banking market for those organizations when they onboarding your customer they've got to go through a series of manual checks to work out who they are do they conform to their requirements and do some research before the current board and that's a costly process so this area of ring tech regulations technology is really about reducing the cost of that compliance requirement okay and what a customers paid caught on average per month would you say for a midterm legal legal sized company probably around in US dollars 5,000 a month for the platform ranging up to financial services company starting at 25,000 a month or left around a hundred fifty thousand months okay do you feel like five grand no is a fair average across the base you know it probably is this some they all have the same problem but some are smaller organizations where their customer base is primarily regional whereas a larger firms have an international customer base and that causes a lot more issues more data required to do the job and so that's probably a Theory's reasonable average across it it was the mark and Wayne are there any other kind of elements that allow you to drive expansion revenue is this number of seats feature set are there any other metrics that drive the expansion primarily Thetis it's you know we solve a part of the onboarding problem but we also solve part of the when an organization gets an alert about a potential financial crime they've gotta do some research we solved that problem and we're adding components to the product like automated news research and so on which once again takes cost and their process and gives us opportunity to upsell new features in the product and you said in the bio you launched the thing in 2012 where were you at that state was is this your first venture or have you sold many companies where were you you've done a few of those the parts I guess I've been in technology for most of my life we've built as technology in Australia and taken international into Asia into the u.s. partnered with with partners in the u.s. to distribute a technology and exit out of a company Hong Kong things that are overcome in Australia so in fact athletics I took some time off and my business partner I invested a few things one of which unfortunately went went sour and as a result of that it led to the idea of a great visualized due-diligence product to be able to bring information together I had to find out things you need to know about thing being deal with and that led to the KYC solution tell me more about that because that's a great I mean discovery story right so how much money did you lose in that thing that went downhill and and what was the nuance around that you know nice it's pretty painful it was Millions okay of your of your own money or investors are their own money and and the reason was is because we just didn't have the detailed background of those people involved in different parts of the transaction and we stopped and thought when you get this information from effectively when you won't do business and you know and lives in registers and there's in companies all around the place but you got to pull it together in a way that makes sense and you got to do that quickly so you did this visualization technology that reached out to government registers government agencies property databases valuation databases bankruptcy databases to pull up together visually and deal quickly to make a quick decision and we found that lawyers started to use and banks started to use it for personal due diligence and then involved into our kyc product and when what was the transaction that you were trying to get done that that failed it was a property investment was a the subject that we were actually funding providing some isn't in finance for and then found out I can provide the finance that things weren't right so I'm decided to take the project over and things got worse from there so interesting and painful story but nevertheless it was the genesis of how we could bring this corporate information together to solve this problem for us and for others in the same situation and then so you were obviously your first customer how I'm gonna take you to build the product and get your second customer you know we built a video Nisan and we took the video to people and said would you buy this and we got the feedback and we just kept them in the video until about something people says this is really great idea we took it to a partner who it was in the business of supplying this kind of data to a large group of legal companies in Australia we've partnered with them we bought the product and we rolled that with them and that's that was the beginning of our success did you give them a kickback that sounds like an early channel strategy yeah it was and uh we we did a revenue share there on top of them selling and you know that evolved over up here of time and we grew our business on the back of that we changed our pricing model a few times and eventually we did a great deal with them where they become exclusive distributor for that product and in that country and allowed us to to take the product into other markets quickly and what have you scaled to today in terms of total customers there are around 250 customers currently on the platform okay and you're I mean so obviously you're at a price point where you can afford an inside sales team or how many team members you have today and what your sales team look like sales team the primary sales team is based here in London and there are 20 people in the product and sales team here in London we have a back office with around 30 people in Glasgow who development and customer success and Development Center is still in Sydney so around 70 in the company with with G they'd be 12 in direct sales okay and can I do them I mean is this math correct if I take the 250 customers times that minimum five grand per month are mean you guys are north of a million per month at this point correct we're not quite there yet because we've still got some customers on our older product which are a lower pricepoint so I see them when when do you think you cross a million a month will be this year that was really next year our current projections okay that's great and what is what does growth rate look like today so if you look at the past twelve months how much have you grown around thirty four percent last quarter and I think it was just on the same number 32 or something like that for the quarter before that so growth is pretty good for us okay so like if we go back to June of 2017 you know what what were you doing at that point what have you grown to today we don't really disclose revenue numbers so I can give you growth numbers but we don't disclose written you okay save me from doing the quarterly to annual conversion what was the annual birth rate we really look quarterly I guess I can you need to be be close to from this point we're nearly at the end of this quarter now working backwards on that on that let me G around a hundred and overall everyone in tweet to send it back to you I don't 20% okay that's great no that's great that's great growth and where's most that growth coming from is it onboarding new customers or expanding current ones primarily onboarding new ones actually and we've got you know a strategies both direct sales and indirect sales so we we're now signing up partners to distribute the product in certain regions so you know that strategy started they're starting to contribute as well what's the incentive structure look like on that is it a 30 percent kind of in perpetuity on sales they drive what is that channel structure look like you know varies from channel to channel and and also the position that the partner has some of them have significant install base and and therefore you know it's they're on board and we split the revenue 50/50 basis others we've done some long-overdue any yeah yeah well thank Allah say sir it's a it's a great deal for them but it helps us to get significant growth as well and so what what I mean one person of your current revenue was driven through a channel partner would you say yeah look at Sonny just started so currently probably less than 10 percent of that revenue comes through them however if I add in the there areso revenue from our partner Australia that deal that I've talked about earlier on that would probably take it to close to 20 percent okay okay so so meaningful but not where there's you know not huge not the majority of your revenue not yet but I think if we looked at a ton that's where it's gonna come from that's where the growth is yeah so obviously the kickback you're paying these partners are included in your CAC when you look at your fully weighted CAC where are you hovering around and how do you think about that number you know it's still too high well what does that mean though like what that's what I want to know well I guess we're looking to try and drive that number down at customer acquisition...