Forcemanager Revenue & Funding (2017)

hello everyone my guest today is Oskar masya he's an experienced sales oriented manager and entrepreneur he's the co-founder and CEO of a force manager which has transformed from a small start-up to leading competitor and sales management in a very short amount of time the rapid growth has been forced managers impact spread globally this over 35 countries with offices already in Spain London in Latin America counting with a wide portfolio of clients including several large multinationals Oscar are you ready to take us to the top hi how are you doing I'm doing good ok so tell us about forced manager you know the sales space is a tough space what do you guys do and how do you make money well basically it's it's a tough space where it's a huge space there is opportunities and you know it is where you can you can get value from for instance in our case we have two specialized ourselves in field sales a field sales is a very important part of basilis landscape and and there are a lot of field sales reps out there that need a different solution that become potential CRMs in our case a we use and we leverage a contextual information AI and everything to to provide a solution for fist size reps that it's more sales assistant that's basically helping them on their daily activities so this is basically our our approach and well it's been quite successful and we are growing so much in the last years and I think it's a very good solution for these guys well basically we were doubled in our staff and our our business every year so before for this market I think it's a it's a great number of course and so are these these are teams that utilize field sales it's a mobile app that you know the sales rep in the morning pulls it up on their phone they see where they need to go today and they maybe recommend where they should drive and who they should close yeah so Lee and it's very important for a mobile application to understand the context of the user every time because as long as mobile users there it is look into their phones they're a very short window of time and we need to provide them always information that it's interesting for them at that time and it's actionable for instance we use geolocation to provide information on their surroundings for instance if he has to go to a nexus we take in account the traffic conditions so basically is everything all the information that we have already in the system to have this guy to do better each job mm-hmm now you mentioned on your website some of your clients include like zapper and Hertz and Ford can you tell us how maybe everyone knows Hertz I think how does Hertz use you well basically these guys they have a very interesting b2b model so because basically they are selling their services to corporations and small and medium businesses so basically when it comes to sales basically you have two parts you know the first one is hunting and the second one is farming in this case we have them two to get a new customers on board running through campaigns and track everything on the process and have a full track ability on how this a complaints are going or basically managing their sells seems like you do with your average or hurt sales reps I mean what are they doing each other are they driving around and in California where like I thought Hertz was a stationary rent-a-car place yeah that's it because they have a business unit that they sell their services to companies so they have to be sit come Panisse in-house to offer their services and this is where where our product really makes a difference I think they need to be they need to be proactive and go there to find their potential customers I see what's your business model how to make money well we are another software as a service company and yes and well basically we we charge of our customers a monthly or yearly and basically Percy and what do people pay on average would you say per month well it depends on the number of states that we can say that the the basic the basic what's your answer on yeah what's your average though like across your entire customer base would you say yeah we'd say it's around a 20 30 Celsius well that's probably around a to $2,000 per month okay so it's 100 bucks to see yeah more or less yes got it okay now tell me more about the backstory here when did you launch the company Oscar well we started back on 2011 so it's been doing such a long time since we started for manager and well it's been a very long story so a lot of things to happen at beginning where me and my co-founder basically two guys sitting together in front of each other and then we had to hire a lot of people we needed to build the technical staff at the beginning are you check with your sales marketing excuse me were you technical or business like how did you guys meet in the beginning well if my my co-founder is a tech guy I'm the business guy but the cool thing here is that I understand perfectly his needs because I have technical background as well and he has a business background as well so I think we are very complementary that we understand each other well what's our role in the company and did you guys just in the beginning to say okay we're just gonna split equity 50/50 or how did you have that tough equity conversation well I think the the it's very important to be very straightforward and put this over the table as soon as possible and in our case as long as we were providing the same amount of value to the project and we were 100 percent committed a 50% 50% it wasn't that it at the time was the the obvious outcome so this is basically what we did and you said at this time so you're inferring something has changed what has changed well from from that point has sent a lot of things and now we are scaling our company we are we are going to new markets so now the company is absolutely different from what the company was at the time so a lot of things had changed well how does that all impact the cap table though that's what I meant I mean is he still with the company or Missouri yep so Lee well every time we go for a funding run the table extend this because we have new investors that are coming on board and we've been through a seat Capital ground is series a series a boost and now a series V hammer gonna be raised we've raised so far I think it's about 15 from probably around six six sixteen million dollars one six right one six right okay sixteen million dollars and why did you decide to raise the capital versus can't to bootstrap like where is it going is the tech really hard that's ringing the capital or is it user acquisition that you need the money for where'd you use the money well it's it's a pretty good question because when basically when you're at that position it's the first thing that you have to jump to yourself if it's a good idea to raise money because when you have investors on board basically you have another response annuity and another people to be a Content too so and of course in our in our case as long as we are in the tech business we know that the best in berea 22a come to our competitors is growth so we needed to grow very very fast and the only way to grow very very fast this happens capital yeah to be clear though my question is where strategically do you spend the money to drive the growth is it on an engineering team because the tech is really hard is it on acquisition because those leads are expensive where is it well it depends on the moment of the company at the beginning was everything about product product and product but as long as the company has a stable product and it's a good market feed everything is about sales and marketing so right now I would say that a 80% of our expenditure every month it's going to market it in sales and other related activities to market in sales yeah by the beginning everything is about product what's your team size today we are about to get to 100 I think we are 95 properly ok so basically this is where we are and where you guys are based and we are based in Barcelona and then we have a team in in Madrid another team in in the UK in London another team in in Mexico in in another one in Colombia sorry very good ok so we are we are spread abroad yes yes spread out ok good and then you mentioned you're spending you know 80% of your spends on sales and marketing activities ignore sales reps and any human expenses what do you spend each month just on paid acquisition well right now we don't have a very active data acquisition strategy because we Suites from inbound to advanced and we we are investing heavily on admin campaigns and what I mean with at one is basically that we have HDR's we have the typical predictor with revenue team is yours phone calling then inside sales that basically getting delayed and running demos and then closing the deals so at the beginning we were very focused on on leader position through online channels like for instance mobility we were on Facebook and we were on Google Adwords and so on but now we are putting more resources on on advant because it's it's a way to be more strategic in sales because this way we can target better with the industries where we are more strong and the good thing here is that we get a lot of feedback because we can actually talk with our prospects it's basically the thing that you cannot do when you are doing a basically in online marketing yeah most of the times considering all of this you know you're scaling your sales team you are experimenting you know you were experimenting with paid you really not anymore what is your fully weighted CAC right now what are you paying to acquire customers well it did really depends on the on the the segment because we are going to meet market and do big market in mid market it's it's it's around a 300 3 K per customer and in big market big corporations it's about 8 to 10 K it really but it's it's quite a bit related on the size of the customer and the total value that this customer is going to with you to over the table along the years yeah and that's basically where you have to look into the if your if your company it's gonna be profitable in the long run so yeah let me ask that question differently because this it won't matter what cohort you answer this for what is your what a payback period you like to optimize for yes well the thing is that the the margin that little margin of the customer should be around 80% so if it cost you 20 you will have to be able to collect from this customer in the whole life of the customer around 100 so this is basically the metrics that it happened on my head well yeah otherwise not be a good business you know back and still even if those numbers are healthy can still kill you so if you only spend 3 grand on acquisition but it takes you 30 years to write get get Forex you know CAC that that's why I asked about payback period the time it takes you to recover the CAC not what it is over their life okay and basically it's between eight to ten months that's healthy on the on the core right yeah it's very healthy we have a very good unit economics and it's basically because we focus a lot of that because until we read the last a capital proud we had to be very very very precise on how we spent our money because we were a capital constraint and we had to be almost in breakeven and we have to look into the numbers very very precisely every month Oscar you know this but the king of unit economics in a nice-ass company comes down to one number and that's churn what is your churn at right now well the gross ron is around 0.8 percent monthly it depends between 3.5 and 0.8 and so I would say it's a it's it's a it's it's a very good child Ronettes logo to earn monthly is about 0.8% yeah it's the MRA but it's basically what methods to be you know easier is it a logo Cherno about equal to your revenue churn or no they're different no a lot of churn used to be is likely higher because as you know if the small company start the ones that turned the most yeah so what does that though what is tell me both of them so revenue turn is healthy what's logo churn well though atrani something a bit higher I can I can remember it Damian right now okay I've been fixing number but it's a little slightly higher but it really depends on the car because the the very small customers are the ones that charge the boss and the biggest customers are the most stable well yeah that's why ideally revenue sure number right right this is the revenue waste for me it's what matters yeah so you haven't hit a net negative revenue turn yet yeah absolutely yes the viewer I was telling you was it was a gross turn the the net charm is negative constant minus 0.5 percent god only that that's good that's great so yeah about negative six percent annually meaning your expansion revenue makes up more than covers any lost revenue and then adds additional six percent on top of that absolutely absolutely that's great and give me a sense of how many customers you're helping out now what do you and we have to run 703 customers okay great by not paying customers and they used to be you you know are on between 20 and and three thousand subs thousand subsidies the biggest but they had better now so most of them are big corporations yeah so have you I mean if I take 700 customers and you know times that there are P you told me earlier of around 2000 folks because you said the average sales team is about 200 people I mean you guys are doing well north of 1.4 million monthly right yeah my rocks yeah do you think this we're about to round out this year I mean do you think you got you'll break the twenty million dollar IRR mark this year or no well I don't think so we'll try yeah it's gonna be it's gonna it's gonna be hard you have ten days you have ten days left it's good as you to be very complicated yes alright well we are we're gonna we're gonna try to do our best that's good and what you said you're about doubling you over here so is it fair to say back in December of 2016 you were doing somewhere around 700 or 800 K a month yes about a year ago okay very good Oscar let's wrap up here with the famous of five these are quick answers number one what's the last business book that you read well the last one and let me feel each one about hiring I think it's called who it's a very very interesting book for to read to any founder or anyone related on on human resources and if it's it's a really good one because having the the working class the guys on board is it's it's Parliament for building a business number two is their CEO you're following or studying right now well in the one that it's cooler for me and our lifestyle is is the one that we trying SpaceX and Tesla so he's guy is Eleni amazing he one must number three what's your besides your on with your favorite online tool the online tool well one of the tools that we use all the time and we are very very happy using it is apps but for instance for our marketing campaigns so it's it's a very very built up tool and we love it so much number that's interesting because they're all about inbound and you're shifting to more outbound strategy but they're still helpful huh yeah it's very helpful yes because a we are doing not but strategy we have a lot let's even so we need to manage them number four how many hours of sleep to get every night Iran seeks hours okay that's good and what's your situation Oscar married single we have kids I had rickets holy mackerel so married married with three kids in how old are you I'm 40 40 okay last question take us back 20 years what he was your 20 year old self new Oh probably how to hire people better this is something very very important and a lot of things really really this is basically how to manage people and align them to basically what we went to do this is probably the most complicated part of managing a company there you guys have it from Oscar with force manager he wishes he would have learn how to hire better and faster and quicker and more efficiently launched the company back in 2011 he since raised about 16 million bucks 700 customers he's currently helping their growing 2xu every year so again about in 2016 doing about 700 Rand in revenue now today in December 2017 doing one point four million bucks a month super healthy unit economics retaining loads of their customers super healthy a payback period of eight to ten months with his team of a hundred folks between Barcelona Madrid UK and Mexico Oscar thank you so much for taking us to the top okay thank you so much