Getvero Revenue & Funding (2020)

hello everybody my guest today is chris hexton he's the co-founder and ceo of vero they help companies collect and organize data so they can create better customer experiences and happy customers through email they're five years old and help hundreds of customers send hundreds of millions of emails every single month chris are you ready to take us to the top absolutely all right you bet okay walk me through the platform you're not a typical email marketing platform what do you do and how do you make money yeah absolutely so uh we tend to well i'm probably that's going to explain this who we work with so we tend to work with large consumer facings for b2c companies who have hundreds of thousands up to tens of millions of their own customers uh those sorts of companies generally have either engineers on the marketing team or you know strong strongly technical marketing teams and they're looking for tools that help them you know collect data ideally collect that data in real time uh give meaning to that data to store it with some structure and then and then like have a workflow tool to actually deploy both automated campaigns and ad hoc broadcasts to their customers so uh a lot of it's around the technical side of how that data is collected and stored that goes beyond your typical mailchimp or whatnot and is this more uh marketing platform or a transactional email platform on the like of like sendgrid or mandrill yeah definitely more on the marketing side of the you know those two descriptions so we um don't compete very heavily with sendgrid et cetera in fact you can plug bureau into cengrid and it sits on top and helps you do the data capture and automation layer okay and what's the business model is it a pure place sas company yeah exactly where sas company we charge based on volume so how much data how many customers you've got data each store uh and then how many amounts you send them up and give me a general sense i'm sure you have many cohorts you look at but on average what would you say a customer pays you per month uh so yeah it's shifted quite nicely over the last two years i would say and these days you know 500 plus really so reasonably large customers and uh but that depends here we've got outliers on both sides of that and when we started it was much smaller customers like us and then the platform's gotten more sophisticated more stable so we uh we attract larger customers and it makes sense i mean if you if you've got a lot of your own customers and data you know automation is a very powerful and useful tool so it's piece what year did you launch the company uh 2012 okay 2012 and up to today have you been bootstrapped or did you raise uh so we've been strapped up until last june so june 2017 and yeah i think we're really happy with that decision and then we've taken on a bunch of bc money in here in australia mid uh last year how much total have you raised uh four million dollars ah chris you went to the dark side man i suppose so i mean it hasn't been too dark so far i think uh yeah but yeah bootstrapping first uh was it gave us a lot of confidence in what we built you know where we're going the roadmap sorts of customers we work with uh obviously good unit economics to be able to bootstrap for so long so uh raising money was a very considered decision and we felt there were things we could do both on a product and growth axes that we couldn't do without some more money and that's that's how we ended up on the doctor name one of those things you feel like you couldn't do without additional capital i think yeah growing as a leader uh every year you know my co-founder and i we would sit down and say okay what do we want to do next year and uh coming coming into 2017 we felt that we had to build you've always got to build things in your product to stay to keep product market fit to stay with the market stay with custom with customers expectations and we've always been really good at doing that and we had a very very word of mouth driven growth uh cycle or project or you have been pricing today and so we wanted to start we knew we were getting a scale where we we need to be adding on more than just relying on that we want to have more consistent approach to driving that word of mouth i suppose so we knew we needed to hire a bigger marketing team than we had we felt we couldn't do that without taking capital and then we also have some ideas for uh how we might extend what vero does so you know going on going beyond just um improving the features we've got if you will and uh and we definitely felt we wouldn't be able to do that without building a larger engineering team over time you're talking about fusion and some other kind of api related things yeah exactly so i think a big deal for us has always been that angle of saying like um we don't sell beer to customers and say hey just throw this snippet on your site and magically your marketing team will be able to do everything you know i personally think that that's that's not reality uh the truth is the best companies marketing engineering product everyone works together and sending emails is an extension or just part of the customer experience right like it's an extension of your product experience and so you know we've always been big on saying we want to give um i think the engineering component of that has been overlooked off and we want to give these guys good tools to load data load load data cleanly um and actually use what the customers have told them so things like fusion you know we want to extend that product fusion allows customers to load data from an api just for the email sent and that's kind of flipping the traditional data load on its head that means you don't push data to vero it means bureau pulls data from your apis or data stores at send time that's been really really popular so absolutely you know that's like a totally different angle or new tooling on top of what we've already got and really plays nicely with that like holistic team that we have and why is kind of your verticalized solution more powerful than someone just using uh zapier or segment to connect apis with their plumbing yeah i think a lot of it just come uh comes down to the sort of automation you can do uh and you know the at the moment for example like i assume you're saying could you just use zapier and connect it to mailchimp or something like that it's about having that or a mixed panel or mix panel and mailchimp through zapier yeah i think it's really got to do with um we built from the ground up to sit on top of that like raw rich event stream that segment sends so you're not really it's just less cobbled together and if you're a serious mid-market plus company um you know you want robustness you want to be able to send all the raw data somewhere maybe you have to store all that raw data capture all in real time attach it all to single user profiles you know deduplicate those profiles all that sort of stuff that i guess could seem sort of rudimentary but if you don't want to screw things up it's really pretty cool to get right and so i think if you're plugging those tools together for a lot of our customers that would be seen as a bit janky maybe yeah would be the word idea so at the um at the most basic level can i give an example you know you could you basically use vera aware and say someone if this user id hasn't logged on in this amount of time send them an email to try and re-engage them something like that exactly yeah you know i think the big two buckets of emails people the automation side of things big two buckets to be activating customers so someone's expressed interest in your product signed up for trial um done something but then hasn't converted to actually buy that's activation the other big buckets retention so what you're talking about which is you know target people when they haven't returned or if you're trying to drive them to use new features or if you want to announce you know your specific new things you build or new products you've got an offer or whatever personalizing all those sorts of emails as well got it now what have you scaled to today in terms of total customers using you um yeah we're probably around somewhere between 250 and 300 now and uh yeah that's it's growing nicely i think this year will be i mean obviously haven't taken the vc money it's going to be an interesting year you know we've got a pedal to the metal so i'm excited yeah i mean fair to say 300 customers times a 500 rp you're north of or about 150 grand a month right now yeah and uh well more than that yeah okay significantly more yeah uh not i wouldn't say significantly more because then i'd be that'd be like yeah can we say south of 200 but north of 150 is that fair oh that's fair okay good and what's growth rate look like year over year what were we at 13 months ago um we don't disclose our growth rate if that's cool with you but we i mean we we tended to um like our goal this year would be to do more than 100 basically probably the best way to answer that and really try and do 150 plus yep yep and generally speaking i mean if you're raising capital at these numbers you know you're not doing you know a million a month yet i mean you've more than doubled since your founding date up to this point correct each year yeah like you know we to raise the money we raised we've obviously got to be on a trajectory like that yep yep fair to say um good stuff all right let's let's jump into some economic stuff here so it's obviously a very competitive space we've alluded to some other people in the space what is your guys's churn look like and how are you mitigating that yeah i think we you know what you know i think the thing about this space that's interesting is you for us anyway working with companies where the setup is reasonably sophisticated so um yeah you there's a lot of competition around why pick bureau and then getting that set up but the the good side of that is people are quite sticky and i think working with mid market plus companies um is really been a really good thing for us because those people you know they're really invested in this they get itself so the show for us is not um not too far above the average uh in in the cohorts we want to keep you know average sas churn which i would say people having like two percent a month so yeah that's a logo turn or revenue churn um revenue turn yeah that's that would be it do you have do you have kind of a hyperbole there in other words do you have you know 10 of your customers that make up you know 50 of your revenue because they're extreme enterprise examples or no no definitely not it's a pretty even spread we've tried to avoid that as much as possible like if any if we were skewing in that direction where i think you know 10 cups of banana percent about revenue that would be that'd be really hard i think you know it gives you a very product focused company and a big part of being able to maintain that is having no one customer that represents a huge portion of your revenue so you can make sound product decisions so that's really important to us and we keep an eye on that that's right yeah now are you has any of your thinking around payback period changed since you've raised capital um no i i think we've invested and having bootstrap for like four years we you know we had a good idea of yeah it was clear we built you know built were coming to a certain point that that i think was pretty impressive and um had good fundamentals and and they understood the way we built the company and i think we we had we've had a very content marketing driven approach so our like ltv i mean our cac's a bit nebulous to be honest in my opinion what do you mean well i mean we don't we've never done any paid marketing we don't have a sales team so like you you have the link between like i guess you could say that what's the total we spend on our marketing efforts and divide that by the sort of number of customers we acquire but we you know like you i always see this number of ltv captive three thrown around and ours you know would definitely be much higher than that historically because we've focused on content we haven't had a huge number of people focused on marketing what's your total team says and how many are on content and marketing and sales we're 16 and then at the moment only two people i mean some of our support success team is a bit of an account management team as well so you can maybe save three three and a half in total and so that's what we're ramping up at the moment um but then historically like yeah i mean either one one to two people over our lifetime at any given time would be focused on that element i imagine krista when you raised i mean part of that deck when you were pitching investors or maybe you had the leverage they came to you but regardless i mean they were asking the question where are you gonna spend this money and sometimes i imagine you had to say well we think it's going to cost us this much in these two channels that's what we're going to try how do you back in to figuring out what your first experiments are going to be now that you've raised and you have some money to play with yeah i mean i think we we're definitely starting with the stuff we've already done well and we wanted to do better or in a more measured fashion and uh you know we did a lot of content marketing in the early days and i think i mean when i say content marketing like good content marketing for me is basically uh telling your current customers and future customers about um you know i guess the world they live in and how you see that world and why you've built the product you've built just they're like well you know we see this as a problem that the customers face we think this could be improved in this way and we feel product to help do that and uh and then hopefully some people are interested in that they sign up you know they're cool thought leadership style customers and you can then work with them to share their story and how they're using your tool as well so i think it's like a virtuous cycle of doing that so i'm definitely doubling down on that cycle which is something we've always done um i think there's a lot of in low hanging fruit for us as well uh yeah perhaps some more technical seo related stuff to this stuff to the work we've done historically in content marketing there's also some low hanging fruit on improving our internal funnel once leads come on board so those will be the areas we start and i think there's a lot of a lot of growth we'll get out of that uh and then beyond that and you're starting to start an experiment with other channels but i don't know i feel i feel pretty good about where we've been historically with that yep so no no paid spend currently though each month uh right now that's right yeah yeah okay good so cac is really negligible as long as you can just afford the two marketing people and let them keep cranking content out and hopefully they bring in more customers over time yeah yep very good um okay uh last question is most of the team based in australia are you guys spread out no we've got six here and then the rest the other ten are spread out okay and then um i lied that wasn't the last question actually with your churn of about call it two percent i mean do you look at things like lifetime value yet as any kind of helpful indicators in the company or or no not really they're not guide points for you uh we definitely we look at it but i mean obviously we've been around long enough now that you can start to draw some conclusions i think one of the things we're very aware of in looking at it is that over the last you know maximum two years there's been a big shift in the sort of customers we work with uh so we're really just enterprise what more i still call them mid-market i think enterprises uh like enterprise content is a certain image yeah um and so i don't you know i feel like we're only just starting to get reliable lifetime customer value data for those those customers so it's not it's not really something that is a huge guiding lock yeah that's for sure yeah yeah i mean generally if you just stuck these things in an excel sheet which probably is not valuable at two percent monthly logo churn that's like a lifetime value of 50 months at the 500 puts you like 25 grand but that's a target that's obviously to move and update with your gut as you talk to individual customers exactly yeah yeah interesting all right chris let's wrap up here with the famous five number one what's your favorite business book uh actually i read this book recently the i covered the title which is not helpful it's like eight unconventional ceos and rah-rah rascal the longest time in the world um but it's about these eight ceos who were you know really great capital investors and you know smashed the s p 500 over their lifetime uh yeah it's like harvard business press or someone did it or um it's like really good isn't it like break oh i know exactly what you're talking about because i just i read that about a year ago it's like breakthrough or seven bench or seven something i know you're talking about though they list all the like uh like city um capital cities all that all that those yeah yeah yeah if someone if people google eight unconventional ceos uh i think you'll find it yeah yeah okay good number two it currently is there a ceo in australia you really respect or you like that you're following uh yeah i think at the moment um a team at canberra are an australian company and they're just smashing it wonderful company that built an amazing amazing thing there both in terms of the people in the culture and what they're doing so uh mel's a ceo there and cliff if he's a ceo i think he's his title and uh i really like what they're doing number you're actually your eyes are moving like they're in that office with you do you guys share a space i know they're like down the road that way all right number three besides you're on what's your favorite online tool oh that's a good question that means gmail i got another fair answer to that uh we've been using asana for a while now and i actually really like that i mean i think there's some nuances to get used to but you know between that and gmail that'll be like 80 of my day so i'm gonna go with that all right number four how many hours i sleep to get every night i'm not too bad i mean minimum is six and a half but you know typically seven seven and a half all right and what's your situation married single you have kids i got a girlfriend but okay got married not married and no kids that you know of right not exactly all right and how old are you uh i turned 30 next thursday oh good congratulations that's exciting last question what do you wish your 20 year old self knew um i mean that is that is a genuinely hard question i think i think i i feel like i'm pretty happy with my 20s uh overall and i it's not a regret it's just anything you wish you knew yeah i think i would relate it to that notice how i'd come to it but probably you know i i think when i when i was really young you know like i used to be an accountant i worked at pwc and i think the thing that uh breaking out of that and starting my own company was a bit of a journey there but like i wish i'd known younger like 18 19 20 that um this you can go and define your own stuff right like you don't necessarily have to follow a certain path or you have a traditional career per se and i was just never never thrown around when i was in school or with the exposure i had so i probably would say um i worked it out pretty quickly after twenty but you know next two or three years when it wouldn't hurt there you guys have it from chris founder of vero he would have started his own thing earlier was just never something that came across uh his uh his radar earlier on but the company's doing well launched in 2012 he bootstrapped it and then recently raised four million bucks they're serving about 300 customers at a 500 rpoo doing between 150 grand and 200 grand right now in terms of mrr growing you know caught between 100 and 200 year-over-year target this year's 150 we'll see if they can hit it healthy economics less than two percent logo churn each month too early on cac and ltv just because they're just now getting into some of the paid spend with their team of 16 in australia making it easier for you guys to have your emails actually talk to your apis and send relevant stuff at the right time chris thank you for taking us to the top no worries thanks very much