Engagedly Revenue, Valuation & Funding (2024)

[00:00] Quick context. This was recorded March twenty eighth and twenty ninth. So a couple weeks ago at my live event, saasopen.com. We had a thousand software CEOs there. If you missed it, we hope to see at the next one, September fifth and sixth in New York City, saasopen.com. But for now, let's jump into the recording. [00:21] >> Let me just go over I'm gonna try to try to talk a little bit more interesting topics than just that. But how many of you are right now trying to hire your next executive right now? Like your VP or anybody like that? You are okay. And how many have had tried to or had to fire or let go on other underperformers in the last few. Okay. Great. So we'll talk a little bit about that as well [00:44] >> in this. So essentially for the next twenty minutes, we're gonna first talk about what kind of hires you really need at 1,000,000 because they are your ultimate fulcrum for you to get to the next five to 10,000,000. So the first key hires are extremely important. So we'll talk about that. We'll talk about how we we need to hire for hunger and things like that. Then from three to five, the hires typically change the type of hires [01:07] >> you want and what does that look like. And then hiring for scale which is where I am right now. So I'll talk a little bit about where we are. So there's some I'll be a little bit transparent about where we are as well in the process. [01:18] >> So our growth, this is our chart. These are real numbers. So we were we started in end of twenty fifteen. 2016 is when we launched. We were like, I don't know, 20,000 in revenue or something like that in 2016. 2017, 2018 we started growing. We didn't really hire. I was doing all the sales. I was doing marketing. I was doing implementation of the product. I was doing a lot of those things until we got to about [01:41] >> 1,500,000 or thereabout in revenue. That's when we hired our first CSM to help implement so that I could focus a little bit of my time in in sales and marketing and things like that. We also hired our first AE, which is our salesperson who didn't have prior sales experience. 2019 actually this AE should have been here. Anyway, the 2019 is when we first hire our AE. First VP in 2020 is when you first hire VP and [02:09] >> I'll tell you about some of the mistakes we did in the in the process and you hired a second VP. The first VP or the VP of sales, second VP or the VP of marketing. Typically what you hear is that you should hire your head of marketing first before you hire your VP of sales second. But I did the opposite here. And then since then we really haven't hired any new executives if you will. So we [02:29] >> we are here right now roughly 7.5, 7,600,000 ARR. We'll hope to finish the year a little over eight. And part of this was also an acquisition we did last year as well. So let's start with section one. The first hire of your 1,000,000 at the Fulcrum, you hire for hunger and that's one of the things that I'll talk about and the lessons I learned from my first hires. The typical hiring times, engineers typically will take anywhere [02:56] >> from month to month and a half depending on what type of engineers you're looking for. If you're really looking for some high end AI engineers, it might be longer. Marketers are fairly easy to find, but the good ones are really hard to find. So that's a big lesson I learned about marketing. Sales execs depending on the market conditions, know, last few months and last year has been extremely good from a hiring perspective because a lot of [03:18] >> companies are laying off and letting go of people and there's a lot of uncertainty that we saw in last year. So we were we were pretty we were in a good state to hire AEs. But if you're in a hot market, it's really hard to find the good ones in a reasonable amount of time. Finding a good VP of sales and marketing are really the hard ones which can take anywhere from eighty to ninety days, sometimes [03:38] >> even longer and it's worth waiting for it because this is not something you wanna change every few months. So hiring for this is a data I looked at one of the [03:48] >> research studies on why people don't succeed in their roles. And that's why I talk about hiring for attitude because technology changes, environment changes, you can teach new skills especially if there's a hunger for learn learning with the person you are trying to hire. But what I saw here is that [04:10] >> forty six percent of the time people fail in eighteen months in any hire you do. 19% of the time they're not a long term success. [04:23] >> Actually, only 19% of the time are they a long term success in your role. So essentially at some point they fall out of the role that they were hired for or the role that you want them to get into. 90% of the time if they lose their job, whether they lose it voluntarily or you let them go, is because of some attitude related issue. Either personality or because they have an attitude issue or they can't work [04:46] >> within the team or there's a culture fit issue or they're unwilling to learn and grow, things of this nature. It's only 10% of the time there's a skill gap issue. So nine out of 10 times you're letting a person go not because there's a skill gap, it's because it's one of these other aspects here. So that's an important thing to hire. So what that means is hiring for attitude. So I use this two a model, attitude [05:08] >> and aptitude. So I look for attitude and aptitude. Aptitude tells me what is the potential to learn and grow. Attitude tells me whether they have what they need from a mindset perspective to do that. [05:22] >> This is another graph I found from one of the investors. Graham Weaver is a famous investor in Silicon Valley, if you've heard of him. And the candidate performance over time, I'll take a minute to look at this. So this is the black line is high attribute, less experienced candidate. So attributes are those attitude related variables I was talking about. The blue line is low attribute, but more experienced candidates. That that they are so they're shorter on [05:53] >> some of this attitude thinking. Are they a go getter? Are they a growth mindset? Are they a team player? You know, are they flexible and adaptable and things of this nature, but have more experience. But you look at their performance over time. When they're coming in, the performance is gonna lag. But over time, their performance is gonna exceed the other individuals. So this is extremely and I don't know how to ex exactly measure for aptitude. There [06:14] >> are and attitude. Aptitude is easy. There are a of tests for that. Attitude, there there are a lot of personality tests you can give. But I've never found anything that's so reliable that I can say this is the way I would render some assessment to understand that. Because it really comes down to your own cultural values as well as an organization. A startup might need a separate set of attitude versus an established company like an Oracle [06:34] >> or Google. [06:37] >> So lessons learned of from a first hires. It's better to be understaffed than hire too fast. I've made this mistake multiple times and I still find myself making these mistakes sometimes because you really get excited about some of the growth you could see or some of the gaps you might have in your team or the skill set gaps. And you find a great candidate, you meet them at a conference like this, and you wanna hire that [06:57] >> person. It's better to be understaffed than to hire too fast. The hiring for hunger, we talked about that already. You know, one of the things I've learned is that hiring for logos really means, you know, diddly squat to be honest. I've hired people from Salesforce, Zendesk. I've hired people from big brand companies and I've seen no difference in performance from somebody who might have just worked for a smaller startup or run their own mom and pop [07:21] >> business in the past. I've noticed this is a very golden rule of thumb. In six to eight weeks, you know the person's gonna work hard on that. Every single time. Every single time I've had to let a person go. Even a year later, I knew within six to eight weeks that person wasn't going work. If you have any doubt, when I say any doubt, I don't mean like there will always be some doubts, but some conviction [07:41] >> related doubt that this person is not going to work out. There's some problem going on here. You typically know that within six to eight weeks. And at that point, it's time time to make a decision. It's rather easier [07:55] >> sorry. I accidentally answered my phone call. So [08:01] >> in six to eight weeks, you should you should you you would know. And at that point, I think it's you should let them go. It's better to let that person go quickly rather than let them hang around for a while. Sorry. One second. I'm gonna have to turn my phone off or something. [08:26] >> Alright. I put on airplane mode. I should've done that earlier. Anyway, so that's that's an important lesson. I still sometimes catch myself because you you you know, you always have to self doubt if you are sure because it's it's too early. I haven't really figured it out, but you kinda know. If you've done enough this enough times, you'll know. So acknowledge your early hire gaps and mistakes, which is one of the things is you you can [08:49] >> everybody makes mistakes. I've made mistakes and I still continue to make mistakes. But the thing is to not make them twice. And that's the most important thing in in in hiring and and keeping people and growing them. Timing and time to hire your leadership hires matters. And we'll talk about some of the mistakes I made. So this is between now if you're a startup founder starting from ground zero, this is basically what the curve looks like [09:14] >> at how much you are doing versus how much your team is doing. So in year one, this dark green line is you. So I was doing most of the work, at least for my section of the and I had a co founder who was doing technology work, so I'm not talking about that. In terms of I was running sales, marketing, finance, customer success, and what else? I think that was primarily it. And so I was doing [09:37] >> basically that's like four departments. But it's it's a department of one. Right? So I'm doing all that. I'm creating brochures. I'm also helping them answer support tickets. I had a I had a straight line phone number to my cell phone from my customers who could call me and ask me about, hey, with this, I can't log in. Can you help me out? Okay. I can get on the phone. I'll help you log in. Stuff like that. [09:55] >> So that's you in the first year, second year, hopefully you'll get some good people like some sales people, maybe somebody to run your demand gen, somebody to do your creators for your marketing team so on and so forth. But here's the most important thing. Your first hires can break your skills. Think about your one hire can take you from here to here and this is valuable time you can use for building and working on your company [10:21] >> versus working in the company. But a wrong hire will set you back a year. So if you hire the wrong person, you'll end up doing their job and then you'll have to get back here and then you'll have to find the next person and then you'll be gun shy about hiring the next person quick enough so you'll spend a full year trying to figure out who to hire to to do that. So this another one, hiring. [10:44] >> There's a lot of data driven approach to hiring and and stuff like that, which is fine. I think some of it works. But what I really realized is if your answer is not a hell yeah when you hire somebody, when you're looking at somebody, especially for a critical role, then it's a no. [11:01] >> Alright. I'm gonna skip through this, which we've already talked about that. But the the most the most important thing is the timing of these hires I was talking about. So you obviously need an engineer right off the bat if you're building a SaaS software. That's your time is zero. At that point, one to two years is when you first started hiring marketers and then you hire sales exec in two years. And I'm a firm believer that [11:23] >> the founders should be doing sales and doing some of the marketing for the first two years. They should be the one closing the first 10 accounts. If you're not doing the and I closed the first 40 accounts because we were bootstrapped and it was we had a long run but I do believe if you if your founder is not selling and at least one of the two founders or one of the three founders, how many depending [11:44] >> on how many founders you have, then you're you're not set up to succeed because the founder has to intimately understand the market, understand the customer, the buying patterns, the ICP, all of those things extremely important. [11:58] >> So I hired [12:01] >> unnecessarily. In 2020 when the COVID hit, all my competitors were cutting staff, I was hiring staff. And I was like, I'm gonna go against the grain. I'm gonna keep hiring and because I'm finding good talent right now and I did and it didn't help. I should have been more careful. And we were bootstrapped at that point but we had some extra cash that I had put into the company from a last exit that I had. [12:26] >> Which increased cash burn and we really got into trouble in 2021. It didn't rear its ugly head until 2021. [12:34] >> I did not follow my own rule of hiring slow and firing fast. Like I said, multiple times, I still do it. I need to remind myself not to do it because sometimes you've you feel so bad about letting people go because you feel like it's your fault. But ultimately, your organization needs to come first. [12:51] >> And scaling sales before you're ready and this is an important one. I one of the things we did is I started we we we had multi language capabilities in our products. So we said, oh, what can we what can we sell in Europe? Why can't we sell in Asia and other places where we can have other languages? And we started doing that. So we started hiring people. I hired a person in Netherlands. I hired a person [13:09] >> in Vietnam or Malaysia, actually. And then I hired somebody in Singapore and in UK. And so we had all these salespeople. And we were subscale to do that. And we don't do that anymore. All of those, we shut down the international operations because we could not figure out how to support them. The sales team did not fully understand how to sell the product in those countries because we didn't understand the HR culture in those countries. Lot [13:33] >> of problems there. So we are actually our sales team is actually less than half of half of what it was two over two years ago. [13:43] >> The last part, hiring for scaling. You know, we will quickly talk about scale scaling from five to 10. So like I said, I'm a I'm a rest just a little under eight, seven and a half ish in terms of revenue right now. So this is the segment I'm in, so I'm still learning. So take it with a grain of salt. You know, hiring for expertise and how to fix a bad hire bad hire. So I'll talk [14:02] >> quickly about that. The hardest I I think this is the hardest place to hire because you really need somebody who's done this before. You don't need a newbie. You don't need somebody who's been AE who wants to be a VP of sales. Or you don't or you don't need somebody who's done marketing coordination work or demand gen work to be the head of marketing. Because then they are learning with you. I don't want that. You want [14:27] >> to learn from them so that like Steve Jobs would famously say, you hire the people, the good people so that they tell you what to do and not you tell them what to do. And that's the hardest one. So you really need to figure out how to hire somebody who's at least done that once before and can confidently deliver on that motion, but still is excited about your startup. So why would they do that? And if [14:48] >> that person has done that, let's say, at a bigger startup like Zendesk or somebody like that, why would they come and do it for you? That's a good question. It's very hard. See, that's where the founder has to start selling again to this candidate on the value of that role. But maybe they were not a VP, maybe they were the director and now they are getting a VP chance but the role was very similar, scale is [15:07] >> different. So there are other ways to look at finding those people in there. But it needs to be somewhat comparable. If I hire a VP of sales from Salesforce, that's probably not gonna work for organization like ours or a VP of sales from Workday or things like that. It's just gonna be completely mismatch of the scale and culture and things like that. And they should be comfortable being uncomfortable. Even at this scale, I don't know which [15:31] >> scale you guys are at, I consider ourselves a scrappy startup. You don't have all the processes. Some of the things you'll to do it yourself. You'll have to clean your own dishes and clean your own toilet bowl, all of those things. You're not going to have all of that necessarily. So that's the important thing here. And I saw this really good graph where I talked about founders selling up to a million, making it repeatable. The making [15:55] >> it repeatable part is where you need some good processes and that's where you really need some good executive level mindset. And then you're just scaling that out. So this is around, this is where we are for for, you know, contextual purposes. Hiring skilled adventures. This is one of the things I I I really like is you wanna find people who want an adventure. They don't necessarily want a job where they get paid well. They want an [16:22] >> adventure. And I think that's what I think about. Do they have an adventurer mindset or do they have I want a big paycheck mindset? [16:31] >> Hopefully it does well. They'll get a good paycheck because you're probably going to share some of the equity with them. [16:36] >> And one of the things I read, and I've actually did this once before where find a company that you really admire, that scaled really well, and find a second in command of that company who's now because that person can't do that right now because there's already above somebody above them. So that's a good way to find those people. But this is another one. I don't this is my personal view. I don't want people who will say [17:01] >> yes to everything I say Because then you have no idea when you're wrong. You want people who will challenge you, but ultimately will be team players. So they can agree to disagree but commit, which is one of the Jeff Bezos thing they talks about. You can agree to disagree but you commit. So even if they disagree with you, they still need to commit. But sometimes they will challenge your thinking and you're like, okay, I was wrong [17:22] >> and I need to do better. And like I said, this is a mistake I did. Was getting the sales team before the part and pipeline was ready. So understaffed is better than overstaffed all the time. I absolutely believe it and I really think that's the way especially start ups should be functioning. [17:43] >> So what to do about bad hires? If you repeatedly asking the question and the person is in the right role, then the person is not in the right role. If you gotta ask that question more than three times and you you keep a counter and you if if you had three different times the same question in three on three different days, probably not the right person. Have a frank discussion on what might be driving underperformance. That's [18:02] >> a really good one to have. And and that you need to be really honest. You know, don't try to hide behind a veil. Try to be soft peddling this. Have a hard honest discussion. Have I've had many discussions with my team members. Some of them, they'll end up don't end up well. That the person will hang up I've had these discussions, so but you need to have them. It's your job as a as a founder to [18:21] >> do that. This is an important one. There is no reason to do like what a lot of companies you saw on on YouTube where they were firing people over email or over the message and with unsympathetically. You know, you're taking their job back, but don't take their dignity back. That's very, very important. I've I've I strongly believe that every person we let go still remains friends to this day. Well, at least nine out of 10 people. [18:47] >> There are one out there. And I give them a good recommendation. I will refer them to other people. This [18:59] >> is very important. [19:01] >> Alright. So that's my talk. So like I said, the key items I would say, the first hires are extremely important. So be very careful there. Otherwise, it'll set you back in hiring for attitude. Those are two big ones I will say. And then the last thing I will highlight is rather be understaffed than overstaffed with the wrong people. Thank you. Thanks. [19:26] Hey, folks. If we haven't met yet, my name is Nathan Latka. I launched and sold my first software company back in 2015 and went on to write a book about it, which you guys made a Wall Street Journal bestseller purchasing over 30,000 copies. Thank you so much for that. After the book, I launched this show and one went on to create founderpath.com. I raised a large fund to do non dilutive deals with b to b software [19:52] founders. So far, we've invested in over 400 software founders totaling a $150,000,000. Here in 2024, we're doing three to four new deals per week. So if you're looking for capital and don't wanna give up equity, go sign up at founderpath.com for free to get your offer.

hello everyone my guest today is sri showa but he is a passionate entrepreneur and leader in building high performance organizations that care about their people he spent over 20 years in leading organizations and software development and consulting in the us with a unique background in technology people management health i.t and film writing tree brings a diverse set of experiences across industries and specialties to build high performing highly engaged organizations at his new company engagedly.com sure you're ready to take us to the top yeah all right so so what what is engagedly.com well engagingly is the sas product essentially a solution for organizations that are you know looking to build high performance teams so we really focus on aligning organizational objectives with with people right because people have aspirations they want to go somewhere in their career they want to learn they want to develop they want to have good management and organizations have an objective of you know higher revenue higher profits and engaged workforce so our platform helps connect the two by providing tools to align their goals you know align their performance objectives provide training programs internally for employee development career growth and engagement tools to really engage in so what are hr teams paying for on average how much are they paying you per month to use this tool well it's perceived basis right so every employee is a seat essentially um so it's usually anywhere from you know five dollars to sleep to seven dollars a seat per month and subscriptions are typically annual okay so i guess the question is how many seats are people usually signing up for when they're signing up in bunches well that depends on the size of the company right we have clients that are 20 000 seats you know and we have clients that are 80 so the average is probably somewhere around 4 or 500 employee organizations roughly so you have customers of 20 000 seats paying five bucks a seat so that contracts worth a hundred grand a month yeah wow incredible uh that's great okay so on average it's 400 uh 400 seats each and when did you launch the company put this on a timeline for me you say it again put this on a timeline for me when did you launch oh we launched the product in late 2015 so really our first year of revenue was 2016. um and we started off you know really focusing on the engagement part of the product right we're focusing on how to actively engage employees how to keep them connected in the organization so we started with employee social gamification things of this nature and then later we became more of a talent management suite and how did you your first 10 customers well the first customer was my previous customer that's how we kind of built the product around their needs uh and then after that it was just hustle man it's not easy right after that it was a hustle you know sharing come on give us something to work on here hustle isn't a good answer how did you get your after the first customer how did you get your next six seven eight what'd you do specifically um we started doing some ppcs we started doing some cold email campaigns uh and that's basically what's there how much are you spending today per month on ppc ads ppc we've spent about 20 000 a month okay 20k per month and so what do you what's your cap to get a new customer our our payback period is typically within six and nine months to get a new customer but ppc is not the only thing we do have an sdr team as well so seo as well and so that seo team or the sdr team how many well let's do the whole team first how many people are on the total team total which means your whole team your entire business my company's about 102 people 102 and how many are engineers uh about 30 30 and then how many sales folks sales forces well sales and marketing is too different right so sales itself is about 18 20 something like that and how many of those reps carry our quota uh eight of them eight the rest of them are some you know sales options the eight that carry a quota like if i joined your company today and i was one of those eight carrying a quota what quota target would you set for me well that really depends on the segment you'll be on right if you're at the enterprise segment you probably carry a quote off a million dollar error um but if you're on the mid market it will it would bear you anywhere from 300 to 500 so do you pay i mean if i'm if i'm a mid market sales rep for you and my target is you know uh you know a 300 000 quota you know if you want to keep a five to one ratio of my full on target earnings relative to 300 quota you can only pay me like 40 50 grand a month all or a year all in is that right no we ours are a lot lower than that so we don't do a five five to one we do more like two and a half three to one how do you make that work at scale that's that's very tight margin on your sales team well that is true because but we have longer you know we have long term contracts so our contracts are typically two to three year contracts we don't do month-to-month contracts at all one year minimum one year our average contract size is two years what what percent of new signups like last month signed it assigned a deal that was more than one year um like 70 okay wow so the majority are you know one and a half two-year sort of concept contracts yeah some of them are four or five-year contracts too why is someone willing to pay you for you know sign up for a contract five years out i mean they have no idea what you're gonna be doing five years from now well five years is an exception i'm doing someone like you know a freshman fraction um but here's the thing right and this is an enterprise software so when you're implementing enterprise software that affects everybody's life it's not a sales software this only sales team uses our payroll software that only hr uses and when you implement implementing an enterprise software it takes about three to six months to really realize the full value because there's a lot of change management that has to happen within the organization so if you're looking at a product like let's say i'm i'm going to give an example like a workday or sap we have the same segment except we play on the lower end of the segment right i mean their implementation cycles can anywhere from six months to a year just to implement the product and roll it out and typically that for enterprise wide enterprise scale products a one-year deal is generally a minimum for the most part do you have automatic accelerators as the customer moves from year one to your two year two to year three where the acv will increase by five or ten percent fixed in the contract um in some contracts we do not know interesting okay so ppc had some cold outreach you just hustling those that first year in 2016 to get that first customer how many customers are you serving out today how many customers do we have now today yep uh we have a little over 400 400 great and what do you think you can add this year we should finish the year around 600. um but i think what one of the things we are doing is we're also going more upmarket so our acv has been going up pretty much every quarter over quarter so if we were to look at 2016 for example our acv at that time was more like 4 000 per client and right now our acv on an incremental basis or equity basis is roughly around you know eleven twelve thousand percent and so i mean can i do the math there 400 customers at 2 000 a month on average means you're doing about what 800 000 a month in revenue no no so i said 12 000 a year 12 000 a year that's the incremental our current average is right around nine thousand that if you look at the historical so what is mrr today mrs right around three point six roughly at this point so you're doing three points i'm sorry error 2.68 okay great 3.6 uh annually so you're doing about 300 000 per month right now in revenue right so you said you had one customer paying a hundred thousand dollars per month that's a lot of customer concentration risk they make up 30 of your total revenue a hundred okay no no 100 000 a year another 100 a month 100 000 a year you said earlier that customers pay five dollars per seat my question and then you said we have some customers so that's the average right so the outlier in that case they're they're paying like two dollars or three dollars to see so that's more like 150 200 000 so you do have a customer with 20 000 seats but you given a group discount out of about a dollar or two per seat correct i see what you're saying i see okay very cool so how are you those are obviously outliers right and we have to make special pricing for yeah uh out of curiosity out of across 400 customers you have today how many paid seats are on your platform if you added them all up yeah that's great and are you seeing adoption a lot of times these hr tools get they get purchased by hr they tell their teams to use them they pray for the seats but the teams don't actually use them adoption that's why the engagement part becomes important you know so if you add the social component if you add the learning management component or internal training you know a lot of organizations have to take training especially especially if it's a compliance training they kind of have to do it at the employment management level social gamification and their adoption does increase now if they're only using it for performance reviews once a year or goal setting but they don't look at the goals at all up until the year is over then that option does become a problem so there's a lot of process aspect to it which is where our professional services organization really comes in to help them improve their marketing last year when you look at total revenue what percent of professional services or sas oh our profit services is tiny it's like four percent right now okay and what are you selling there what is the service uh there are two types of services one is the implementation services how much do you charge for implementation um it varies based on the size and the complexity of implementation it can go anywhere from two hundred three hundred dollars to five thousand dollars but it's usually like a loss leader we don't really make a lot of money in it you know but it's very in our interest to implement them correctly so they can you know they can get the best adoption possible and what does growth look like today if you're doing 3.6 million in arr today where were you a year ago uh a year ago we were at 2.4 two four okay good growth now have you driven all this growth bootstrapped yes okay congrats man we love that thank you are you are you looking would you consider raising are you looking at raising you know i keep going back and forth because as you know and as other people were saying in your uh webinar you know our our emails are blowing up from vcs you know there's too much cash out there they're trying to invest and i'm trying to just see how far i can take it without having to raise cash you know yeah we are not a bit that positive yet but we will be uh in the in the q3 q4 time frame so if you're burning money on your bootstraps who's making up the loss are you personally putting cash in the business every month yeah we are how much have you personally put in we've put in between me and my partners we put into date about three million okay system okay and and so like how did you get money to spend on this did you have you exited a company before before yeah i got my graders to show for it yeah we had an exit you know for another consulting company that we did that got acquired by private equity about a year ago what would you value your business at today yeah it's hard to value man you know because the valuation metrics are so all over the place you know you can say i'm 10x revenue or 20x revenue depending on where you are uh i mean i would i would suspect today it's probably in the 30 50 range depending on who's who's buying it is it buying it for strategic reasons or if they're buying it for purely cash no i hear you hey last few questions before we wrap up churn is critical in the sas business what's your revenue churn over the past 12 months our net revenue turn over the past 12 months was really bad because of the curve you know a lot of our lower end customers a lot of them went out of business or cut your staff dramatically um but we ended up still doing pretty well i think we ended up with a net revenue retention of little over 90 percent okay and can you peel that back from me what was gross churn and then what was expansion so the gross turn was in the low 80s so not 80s 80s retention gross revenue retention was in the low 80s and the rest of it was expansion you got it so you turned it for 10 grocery retention was in the 80s so flipping that gross churn was about 20 percent expansion 17 18 actually yeah i think what like logo turn or dollar gross i'm talking dollar term yeah dollar question is first about 18 churn and then you've got it sounds like about eight percent expansion and that's where you get 90 net revenue retention right that was for the year now i will say the q4 we actually had a 105 revenue retention for q4 so the market is definitely behaving at this point that's great what are you paying to acquire a new customer right now i know you have a 69 month payback period but what are you paying what about paying who customer acquisition cost all in fully weighted about uh six six to eight thousand per per deal and where are you spending that money besides sales people commissions we spend our money on marketing right so we have a marketing team that runs paid campaigns but also it runs a lot of campaigns in general um we have content writers seo i'm factoring in all that cost very good sri good stuff here we're rooting for man let's wrap up with the famous five number one what's your favorite business book my my favorite book is actually black swan by nassim bale number two is there a ceo you're following or studying you know i really like the ceo of atlassian i forgot his name um which one did simmons who just left jay simmons not that guy the other guy mark or what his name they have a great story of how they're bootstrapped and you know and the humility i just really like what they've done number three what's your mo what's your favorite online tool for building a business google analytics number four how many hours of sleep to get every night about seven and a half seven seven years and which situation married single kids um i'm single with a with a with a kid okay good and how old are you oh man that's a tough one now i'm 48 48 last question what's something you wish you knew when you were 23 patients i i i should have had more patients in my 20s guys he's in the hr tech space helping teams manage themselves employee performance and increasing tool engagedly.com they've grown about 3.6 million bucks in terms of run rate up from 2.4 million just a year ago they've done this all bootstrap serving 400 paid customers right now they're still burning cash the co-founders have put in about three million bucks to grow the business today uh team says about 102 people 30 engineers 18 sales employees eight of them carry a quota of call between half a million and a million bucks rooting for you thanks for taking us to the top hey thanks thanks nathan it's always a pleasure always a pleasure thanks for doing all the good work one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas 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 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathan latka dot com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive i am on these shows but i do it so that we can all learn we have to counter those people we got to push them away click the thumbs up below to counter them and know that