How Getoutlaw CEO Evan Schneyer grew Getoutlaw to $720K revenue and 60 customers in 2019.

hello everybody my guest today is evan schneier he is the ceo and co-founder of outlaw a next-generation contract lifecycle management platform that helps people close deals faster as a seasoned entrepreneur he's built a product builder of products and teams having started three successful companies over the last decade he believes that ideas are cheap and execution is everything evan we're going to get along man you ready to take us to the top absolutely all right so the website is git heavenly yeah yeah the website is getoutlaw.com tell us what the company does if i missed anything and are you guys a pureplace sass company we are a pure play sas company yes we are a contract platform so we help we help uh both parties of a contract uh just go through the entire deal process much more smoothly and easily and take it from really from discussion to agreement including redlining if there is any it's best for i'd say medium to high volume senders so if you have a even such as yourself if you have release forms or something like that that you're constantly sending out uh that you just need to turn around really quickly it's it's makes the process of kind of drafting uh which i put in quotes because it's not really drafting it's really a template driven you know button click you fill in a few a few fields you send it out if there's any back and forth uh the whole the platform handles all of that uh and it just makes it really easy to basically to agree uh especially when usually the agreement has actually already happened in english first and so we we kind of help help people get get the english the plain english agreement into a contractual agreement really smoothly uh it includes e-signing and everything so you can really go from from hey we should do this to all right we're in contract in seconds yeah you've made signing like more conversational and less like intimidating legal like legal i mean even how you structured your website it's very clear that you're trying to just make this more comfortable for everybody yeah yeah exactly very cool okay um help me understand pricing right so if i want to sign up or the average customer what are they going to pay you per month to use this yeah we're we're actually in the process of we you may have noticed we don't have we haven't published our pricing right now but we're overhauling the marketing site uh and that that comes from a relic of we kind of started more focused on smbs and now we're moving much more into a mid-market space so the the standard starting point uh is uh based on 1200 per uh user per year so 100 a month per user and we really look to work with companies who are in the 10 plus user range so if you figure a company of maybe 100 people is likely to have around 10 to 20 people who have reason to deal with contracts that can obviously vary depending on industry if it's a real estate agency then like 90 percent of people are dealing with contracts but um i'd say our sweet spot right now at least is in the 10 to 25 user licenses per per com per organization uh and the the base price is 1200 uh per license per year yeah yeah so if you have someone signing up for 10 accounts it's gonna be like a thousand bucks a a month right 100 yeah yeah and i want to i want to come back to what you just articulated so it sounds like you're going through a pivot right now i was just debating on twitter with somebody about kind of pricing and moving up and down market so i want to chat with you about that since you're actually doing it right now um yeah yeah put it all on timeline though first when did you launch we launched uh about around early last year early 2018. okay i started picking up a bunch of customers mostly in the smb space so we got a lot of um you know a lot of one to five person agencies and things like that who have reason to send out uh msas and sows and ndas uh and other fun contract acronyms and uh so we've got we we got those are good customers but a lot of them it's hard to differentiate sometimes between those kind of real you know you can have a five-person business that has been around for 15 years and is really you know professional and then you can have a a one or two man shop who like has does not have their act together at all and so we got a lot of in the smb space uh we would get a lot of leads who were who would come in the door and say hey do you guys have contract like they would think we were a contract uh repository template you know a template library and we kind of you know i hate saying no to customers so we we like every month for for a good six months we're back and forth it was like are we gonna are we gonna grow a champlain library and offer this uh but it was just too much there were too many businesses who just were not kind of real businesses so how many today how many customers have you scaled to i can't i can't share actual like exact traction numbers but um but we're we're growing pretty rapidly uh we are i can say we're you know we're not at a million in arr yet so that's kind of the goal for the next uh really of the seed round that we raised in december but um we it's more that we're shifting from you know uh from lots of little smbs to to uh focusing more on mid market yeah yeah folks signing up customers who are 10 seeds plus yeah well i mean so if you said average acv is about a grand a month right and you're not yet it's until you're close but you're not yet at a million run right i mean that means you have caught between like maybe 60 and 80 customers something like that something around that when do you think you'll break the million mark do you think that's this year or is that gonna be next year oh man i uh i mean i'm a founder so i always think that everything can happen in like three months um you know and it could like we have we have a really healthy pipeline uh it's it's interesting in this space because we're we're jumping up market by leaps and bounds i mean when we first launched we were you know selling and also also our price point has increased dramatically um we were we were initially charging like 20 or 30 bucks a month then we discovered we could charge 100 bucks a month for the same even some of the same businesses and even that we still serve smbs but now we're signing up smbs that you know who will sign up for three seats uh for for three grand you know for the year as opposed to you know a fraction of that wait so what are you pivoting to like after you finish the website update and everything what will your new pricing look like what's that final jump going to look like the the pricing is going to be the same it's more that we're we're dealing with dramatically larger prospects so we've got we've closed a bunch of mid market customers but we're also talking to enterprise customers who are then somewhere between 10 and 50 times the size of even of the mid market ones so when you ask you know how long will it take to get to a million you know if we close two quarter million dollar enterprise contracts then the you know in the next three months which is conceivable um then the answer is dramatically different yeah you have to have this year versus next year yeah exactly have you invented any other pricing axis with a price run besides just purely number of seats it's come up a couple of times um we we've done a number of integrations with customers who who um there's a really interesting scenario actually uh where someone will have a contract as part of a larger flow uh you know be some like one of our customers is a factoring startup where they they do uh like short term effectively short very short term loans um and so they they have like on their onboarding flow there's a contract that their customers have to sign it's not just like a terms and conditions it's actually a reason you can you can build it into their your api can connect exactly exactly and so we're powering that piece of their flow see so like price around number of signed contracts per month as well besides just number of seats right so if it's so for someone like that who if if someone like if we work with someone like that who's operating a much higher volume you know if a bank said we want we want you to power our our new customer account uh contracts and we're signing up a thousand a month um then then yeah we would we would much more it wouldn't be it wouldn't be license based it would be volume based why not have let's see i always wonder why people think about it like that the most successful sas companies have both you either upset you can upsell against both of those things like let's say someone wants a ton of seats but they only do one contract per seat you can still upgrade them using the seat based approach but if you only have one user and they want to do 10 000 contracts a month you can still upsell them against that one so you'll have both right yeah we'll have both we just we just haven't activated that one because we haven't had a customer yet who yeah who makes sense for that model okay that's really interesting um talk to me first off getting 60 customers or 70 paying a thousand bucks a month is not easy in the first place so how did you get the first 10 customers what does growth look like today if you're not using like seo kind of template plays what is the play um how do we get the first i'd say we well there is a nice um kind of natural viral effect with contracts you know every every customer who is who starts using it even if they're using it for free initially is sending out their contract well how did you get the first cut let me just go how do you the first customer the very first customer i mean you know you you tell everyone you know you tell everyone that you know that you're working on this thing uh and the uh you know it's it's interesting in the south like my background prior to this is much more consumer focused uh my first startup was a travel startup and so everyone you tell that you're working on a travel site they're like oh let me check it out when you tell people you're working on a contract startup it's not quite as exciting you know even if people want to use it not everyone has an immediate need for a contract today but um you know you tell everyone you know you start getting people saying oh like i've got i've got my contract could i use can i use outlaw for that uh so we get get a bunch of early you know pilot customers set up and it really grows pretty organically from there we did some some advertising and we're actually now starting to do a little bit more now that we've kind of identified that we're more mid market focused so what is your best guess on that what's your best guess on full weighted customer acquisition cost for a thousand dollar a month you know customer i mean it's a small fraction of of the of the revenue i don't i don't have a good guess on it right now because so much of it is still inbound at the moment uh and we haven't we haven't spent anything meaningful on on advertising well what's your team size today and any of them are marketing sales seo we're about ten um and we're we're about to split about half and half between product development uh and uh marketing sales so you could take the five marketing sales salaries divided by new number of customers kind of per month and kind of back into a fully weighted cac and what you're saying is even that is still going to be like a a fraction of first year acv yeah yeah for sure yeah um interesting do you have enough data yet to know you know things like what churn looks like annually and what expansion looks like annually it sounds like you have a lot of expansion um not really i mean we've we've gotten some churn from the smbs but every one of those who drops were kind of glad when they dropped because there was generally someone who wasn't really using the platform for its full capabilities anyway uh and was was frustrated with the price point and then we're raising the price point and so we i i'd say we we haven't had any churn from from kind of our our real customers well hold on this is why people measure logo turn versus revenue turn revenue turn is a much better indicator of if you're churning the right customers ideally you're churning cheap customers right that don't make a lot of your revenue so what i'm hearing you say is you do have logo churn but your revenue turns lower because they're cheap customers what is revenue trend you're trying like less than five percent a year uh yeah i mean again we we haven't it's it's been such a leap-up market that it's not that we don't have many enough enough time data and meaningful data for that i mean our average customer sizes is 10 times what it what it was this time last year so yeah but like you can still just literally take the core that signed up exactly a year ago a portion of those have become enterprise clients and you've upsold them massively another portion of those were smbs paying you 10 bucks a month and have churned do i mean do you know what that revenue churn percentage is annually or no no yeah that's fair enough um but it's not let me let me see if this is a true statement your net revenue retention is well over 100 because of all the upselling yeah yeah yeah i mean we're going again we're going for the first few customers were caught on an annual basis call it 300 a year and now now the smallest customers that we're signing up are paying 3000 a year and then the kind of sweet spot is in the 10 to 20k a year yeah and then we're also pitching stuff upwards of you know over into the mid six figures so that's what that's why it's not that i don't care about the numbers but it's like uh it's trivial yeah yeah it's really trivial at this point talk to me right now about uh about so if you call like 60 customers say at a grand a month you call it 60 grand a month ish today where were you exactly a year ago what does growth look like uh so far uh yeah i mean we've we've i think we've hit that we're is more in terms of the move towards mid-market than than the raw numbers wait wait wait wait wait come on evan that doesn't make any sense you're moving enterprise and getting more revenue so that's why you're doing it so you do have revenue growth there so over the past 12 months what has revenue growth generally been yeah i i told you i can't i can't share like actual traction numbers right now okay and why is that i mean that's a very valuable lesson what you're doing right now is something every entrepreneur goes through and you being transparent open about that educates a lot of people why would you i mean can i convince you to be more open um i would say i i think there's a i think there's a massive mismatch between what people think the revenue trajectory should look like uh and what uh what it really does when you're building a real business that's right that's exactly why i'm asking the real numbers is because people will understand if your revenue growth is not ten thousand percent year over year they're going oh well evan's doing it i can do it too it's it's not but i also you know i'm i i'm aware that uh you know we'll we recently fundraised we'll be fundraising soon how much total have you raised we've rose raised two and a half million okay yeah so five so those numbers by the way those numbers when you talk to vc's they're they're going to come out like anyway so that's why i'm a little it's like it's like you're willing to educate vcs on this but the people you probably actually like more which are other founders trying to hustle and grind like you you don't want to share this story with so again is there anything i can do to convince you to tell more of the revenue growth story uh no not on the revenue growth i know okay and just to be clear it sounds like that's because you for whatever reason see it as a weakness you feel like you're not growing as fast as other people should expect you to be growing and you don't want to reveal that publicly uh i think that we're growing at a really healthy clip uh and i would expect we're growing you know in a similar way to what other other founders who are who are building real businesses i keep saying real just because we're very deliberately not taking the taking the hype route um and you know when we're talking on a public podcast like this uh to be clear though you actually are on that path now i mean you raised two and a half million bucks right you you are on that path whether you want to be or not now right you have to be growing seriously otherwise you're looking at trying to figure out bridge rounds because you can't get a valuation you want from their first valuation you have a down round potentially i mean all kinds of stuff happens right so like this is why i do the show by the way is because these stories are actually what really freaking matter and some people for whatever reason see it as a they think people are going to judge them or they see it as a weakness when i see it as a massive strength like my first company dude i had to sell for like at a loss and returned like 50 cents on the dollar to investors it was a total wash and i tell the story because most people actually go through that story it's not the billion dollar ipo like zoom so anyways i still think you're being very transparent it's really helpful to hear the story i love learning about how you're going up market so i won't push you more kind of on the revenue side of stuff i do want to understand though about because you've done this a couple times you say you might be looking at raising additional capital why is you know now ish the right time for you guys to be looking for additional capital well we're we're not officially we're not raising capital because we just raised two million uh in december okay and uh but it but as we go up market we're we've had some interesting pitch uh pitches recently where we discovered uh there was one enterprise pitch in particular where we basically honestly we had no business being in the running uh because we just we're not we're not fully enterprise ready yet you know we're we're um we're solidly mid-market i would say but you know when you get into enterprise with hundreds or thousands of users uh they have different security and data requirements and all this kind of stuff and but we actually made it all the way to the through the final rounds out of like i don't even know 30 30 plus vendors and we were one of the final three and the the customer was really trying to make it work because they loved our product they actually saw and they told us that we were doing a number of things better than anyone else in the market and so they were trying to find a way to make it work and the real reason that they couldn't work with us was just our sheer size and the and the small amount that we've raised and so it got that that kind of got me thinking where i'm like you know if we raise i i don't i don't think we have the revenue numbers yet on a pure on a pure revenue growth side to raise series a but it's interesting that you know we would have won this quarter million dollar contract simply if we had raised 10 million dollars on a series a and if we had you know 30 30 or 40 people uh head count instead of the 10. yeah well um so what that really is hold on just to be clear what you're actually saying is we could have had the security built and the products built if i had additional money to hire an additional 20 engineers to increase the velocity no no that's that's not what i'm saying i'm saying on the product on the product and platform side in terms of can we serve this customer we were good that was actually what kept us in the running it was more on the kind of you know contract is a really quintessential business function and so if an enterprise is actually looking to looking for a vendor there they're looking you know five plus years down the line and they're looking at a startup who's only raised two and a half million and thinking you know fair enough they're thinking are you going to exist that's right that is ridiculous in my opinion that is ridiculous because you're counter-terrorized yes because your counter is very simple nine out of ten venture-backed startups fail and go to zero and vcs rely on the one out of a hundred to make up everyone else so the fact that you you're you know considering our competitors that have raised more than us they're actually in weaker positions they're burning way more cash they're either going to exceed huge or they're going to or they're going to crash they didn't choose another or whoever my point is though my point is though it drives me crazy when i hear people say we would be bigger if we just raise more money because that's just not true there are plenty of bootstrap founders that have built massive companies and have found ways to win contracts without having to say well we've raised a billion dollars yep i i completely agree and i think the way to do that is that it just takes longer you know is we we do the mid market thing we grow our revenue we you know we grow stability then we do raise a larger round to accelerate growth and in i don't know two years from now we're pitching those kind of enterprise contracts regularly and we've got all the security stuff uh you know ready to go um and then those are easier to win yeah um so absolutely there is there is a path to get those customers for sure uh what what got me thinking when you asked about you know are we raising was was more to the realization that on a product front uh we are actually already already are competing and so you know can we short can we shorten that cycle you know and the feeling that if we actually did raise more now i don't know if we can raise more like my my i spoke very candidly with her with our lead investor who's a really great partner um and she said yeah everyone goes through this but i don't think you can raise now so it's kind of you know you do you say hey mr she investor here's what i'm going to do i want you to give us another 10 million dollars we're going to do a public release about another raise but that 10 million is going to sit in a escrow account and you're going to get it back in a year that's what you do and then you go tell everyone you raised a billion dollars yep yeah honestly i'm not that was just the weird thing that got my got me scratching my head because i was like man it was it's purely purely the you know the appearance of hyper growth startup you know gives people comfort yeah yeah yeah i think we would have won that contract all right man no it's good stuff let's wrap up with the famous five number one what's your favorite business book uh reinventing organizations number two is there a ceo you're following or studying [Music] no number three what's your favorite online tool for building your company beside your own slack i think number four how many hours of sleep do you get every night oh man uh that's uh that's rapidly fluctuating it's been a problem recently like four or five yeah yeah five six but i need more and what's your situation married single kiddos uh long-term relationship okay no kids they're running around all right and how old are you 36. okay last question what do you wish your 20 year old self knew uh just start start now i didn't wait as long as as long as some people um but i i could have started straight out of school and i started started doing startup then guys start now uh uh out get outlaw.com a much more effective way to get contracts signed quickly efficiently in a conversational tone 60 customers right now paying caught a grand a month so call it 60ish grand a month in revenue flirting with and hopefully hitting that million dollar run right here in the next call at 6 to 12 months they've raised 2.5 million bucks to do it team of 10 scaling nicely net revenue retention well over 100 percent as they've moved up market pretty rapidly uh and that's what they continue to do uh evan we're rooting for you man thanks for taking us to the top thank you