How GoldMine CEO richie neale grew GoldMine to $2.7M revenue and 5.5K customers in 2024.

hello everyone my guest today is paul peterson he is a former developer and big eight consultant on selecting emerging technologies for use in sales and marketing for companies like mcdonald's allied van lines united airlines and others he led the enterprise sales team at dell arena which is win facts and symantec now form flow and now as general manager of the gold mine business unit of avanti inc paul you ready to take us to the top sure now is ivanti your baby are you the founder there are you working for the founder inside avanti is a very large enterprise it's a combination of land desk and a few other entities that are focused on i.t security networks remote users so that's uh but part of a gold mine was founded in 1988 and i started in 1999 so think about what the technology looked like it was before al gore had invented the internet and things like that so i've been with him 22 years that the founder sold out and he's running another product called nimble right now so i'm sort of the caretaker or steward as it were of goldmine over the years nimble are you talking about john ferreira yeah exactly he was goldmines ferrara with a lawn yeah so he was leading gold mine before you came in that's right so i i came in as a regional manager i i i worked for symantec selling uh you know anti-virus software when people thought it was optional fun uh win facts i don't know you'd be probably too young to remember when faxing was a big deal out of the computers and so we had oem and so i got the gold mine because i was a good at a good sales person at taking package software winfact symantec and selling it to large corporations and that's great look the reason i the reason i invited you on is because i always like folks doing something a little unique and right so there are right now many multi-billion dollar tools that are crm sort of sas tools vista got behind pipedrive at a plus billion dollar evaluation close.i o hubspot free crm obviously salesforce a bunch of folks you're doing something different you're actually selling a one-time sort of license to theorem software help me understand how you're competing in the space well so it's a little bit of a legacy that we uh you know inherited the perpetual license and windows on premise uh you know so we were one it was goldmine act and maximizer then siebel came along and uh and then later on salesforce you know you know came about we stuck with our architecture you know windows windows based and we do things a little bit differently we we didn't expand to do everything like salesforce sugar microsoft you can find every bell and whistle you have architectural but with that comes some complexity so we kind of what they call stick to the knitting that we were liked by individuals for productivity and so we stuck with that over the years and that said be available on their pcs not not in the in the cloud and a lot of our audience likes to own the data they like to own the software so i'd say we're a niche product today we're not you know salesforce is the probably the you know the leading go to um but but we have a niche product where people want that and it takes advantage of some of the windows uh uh you know multiple windows can be open it's very fast when it's running on your local systems local keep their data these are all the reasons people buy this from you now what do you charge what do you charge on average for this so you know when you said we you were charging a one-time fee so it's a one-time fee you buy it and uh we we actually uh pricing's a big issue for me and we've done a number of things around to make pricing part of the value prop uh we're not necessarily the cheapest but we're you know strong value for what's the one prime fee well the list price is 6.95 but we have a couple of ways to get in uh you we have a front we're kind of a reverse discount it's front loaded the first three or five you buy are heavily discounted and then we hope to get a little bit more when you add seeds down the road uh but that to make it easy so we did a bundle sort of like so it's 700 700 bucks to get started as a single user uh we typically start out with a three user bundle which is about nineteen hundred dollars and that includes a year of support and three users and then in year two like subscription you buy the product again and often with an uplift they're adding seven percent every year uh whereas with our product you buy it up front and then in year two you pay about twenty percent maintenance for software updates and access the technical support if you need it so uh the long time cost of ownership with gold mine is very very um you know strong in our favor what is the average customer paying per year just for the maintenance contract it's about 140 to 150 a user per year so times that by five 750. 750 a year whereas whereas if you go with you know a subscription service then you paid eighty dollars a month or whatever you're paying 80 plus a month every year thereafter so yeah i like that look this is an interesting model there's still a recurring element here which is the service and maintenance right we're going back to real og times back in the 80s right um most of these folks have obviously moved over you said we're going to stay on prem installation one time up front sale front loaded then 20 maintenance fee over time give us a sense of scale what year did you join the business i i joined in 1999 1999 now do you remember in 99 when you joined what sales were uh they were they were probably uh 20 million 20 million okay and that's a combination of the one time plus the service fee no there was no maintenance it was all shrink wrap and it was retail cdw's and comp usa's i mean uh you know people that are you have disappeared from the same office depots uh max it was all it was all retail and and then and then the retail price was probably about 300 bucks so it was the heyday uh people in 2000 were replacing everything because of they thought planes and their businesses were going to fall out of the sky because of y2k yeah so we had a huge year things sort of tailed off after that and we shifted uh goldmine shifted from where we were using borland database engine so this is technology that goes way back but it was the first database that people touched on at the time and so we shifted the sql when it was coming out sql seven it was a affordable database we were an oem we were a large uh uh oem product for that and uh that became one of the first database and shared applications that many many businesses used and in fact we were often a network tester goldmine because it was sending data over the network would find uh you know kinks in your network that didn't exist that you didn't know exist but over time that uh you know app accounting applications and other things got up on the network but now paul in 2020 how many customers do you have actively sort of paying this maintenance fee it's about five thousand uh and we probably we estimate we probably have one or two who don't 2 000 who don't pay the fee so you do have that option so then okay with regards to pricing we've got to have it get current upgrade so it's a definitely an older model but you own the software uh it's a perpetual license one of the other elements is we're concurrent and this is actually an important you know hold on concurrent stuff so just be clear 5 000 actively paying the maintenance fee and another 2 000 who choose not to pay it correct estimated yeah estimated yeah okay got it i mean so can i do the math right 5 000 bucks times a what you said of service fee on average of 62 bucks a month or 750 a year i mean what that's like 310 000 bucks a month something like that yeah yeah right around there yeah we're yep and okay so now tell me about you we're going to continue on with another product well so we we used and our motto is concurrent which means shared licenses uh you you subscribe you're paying per login per named user well within goldmine uh the idea is to create an id for everybody in your company and we deal mostly with small businesses smbs but let's say i can put in 20 names so that the people from accounting or sales administration can log in and use it occasionally but they don't have to pay for a license you're just managing the number of people who are logged in at once yeah whereas if you were to go to salesforce or some other subscriptions you've got to pay for everybody who wants access and so we're affordable in that in that sense you can get going you can give everybody in the company access to the features and functionality which are heavy on contact management and you know managing your personal productivity and schedule uh email marketing so we're a good list manager get all your prospects in that list and then a traditional one sales forecasting uh for first size businesses with this kind of feature set how many new customers joined the program in 2020 purchasing you know the 700 or 1900 upfront thing so it's it's it's about a hundred uh new names a quarter oh wow okay so call it 400 ish even during cove about 400 new customers last year yeah uh so so code you know as you scaled back marketing there was a little bit less on the new but there was a strong investment from existing businesses because they had to support remote users yeah um so we did and our parent company uh you know benefits from that as well they provide security for networks and remote users but we saw a lot of people now as we're coming out adding seats so they're expanding they've hired us another salesperson and or or they're getting back so they've um they've renewed uh people who would drop maintenance for cost reasons are coming back because there are some things in the latest release around security and that that they want and so that they can take advantage of and paul when you look at last year and then i want to get more of like understanding your team and sort of where you think the product will go but when you look at total revenue last year what percent would you say came from recurring maintenance contracts versus new signups paying the 700 or 1900 fees yeah it's about 75 percent recurring oh wow you know so it's it's a it's an important part and we run a very lean profitable organization we work through reseller channels that are international that provide the services and guidance we have a lot of you know today the technology is a little bit more stable and people can do more on their own but when it comes to customizing the workflows and all that that's one of the things about goldmine you can touch your data it's very easy with some of the other products you want to have it you you hire an administrator and a person dedicated to it so when you're a big company and you have complex uh so so kind of the evolution has been a lot of companies started with a gold mine you know installation as they got big they had more specific integration requirements and and things of that sort and so they they expanded the bigger products that's the natural evolution we stuck with what we do which is helping smaller businesses manage that what is your what are your team size today how many folks are on your team today uh yeah we don't reveal that number because we're private but uh you know there's dedicated development dedicated support dedicated sales and about 70 channel partners worldwide tell me about how you've signed up so many channel partners i assume what you pay them a 30 cut or something yeah they get a traditional discount and then they get the commissions on the maintenance renewal so we we have them working to uh you know encourage renewals and then they provide local support with customization support usually on an hourly basis as opposed to you know weeks or days okay now uh um i don't know push here where you can't talk about this stuff but on linkedin it says there's for goldman there's about there's five employees right and then there's i guess 70 i added resellers here i assume the team's probably bigger than five people full time on the project it is yeah yeah yeah i'm not sure what that references was was to i'll have to go back and check that one out but yeah well it looks like you have it looks like you have a development team or something in india a lot of these folks that are listed here in india yeah we're out of bucharest in romania we have we have that so the identifiable ones and then we have a support group in colorado springs and uh channel people that were located uh you know interspersed across the uh the globe london toronto i see now this you're obviously operating this inside of a much larger company right so so i mean have you bootstrapped the business or is it really it's not profitable it's really backed by funding from the larger business so uh we i act i would call myself if not a brand steward uh intrapreneur right i'm running a separate business unit within a company and we know we are very uh as i said we're lean but we are very profitable yeah uh you know there are things i think we wish we could do more but we're keeping within the lines of proper research investment and uh and so forth we went we're real lean on marketing because that can be very expensive during covet so we sort of shut some of that some of that down but we are a very profitable entity which is why they've they've uh they've held on to us so you know we're we help that we help avanti and uh you know be strong and develop other other products as well have you asked avanti guys listen i'd really love to spin this out and lead this myself if i go raise whatever 20 million bucks to buy out from under you will they sell it to you it's it's a complicated bit because of because of the of the profit the price it it it's a it's a very interesting financial you know you know model when you have a high ebitda contribution um that there's a lot of value to that because if they take that out some other product has to step in and fill it right so it while it makes well say oh it might make sense to spin it off from a financial perspective and here's the thing for us uh we got a good home right all the infrastructure stuff has taken place for us now while we're very different our customers are very different than avanti's but we're able to take advantage of all the accounting and order entry and legal and personnel and benefits and keep our team going so they pick up a little bit of that but we're still a very a big contributor to their ongoing success yep yep no this makes a lot of sense talk to me about churn how you know obviously keeping those people paying maintenance contracts is obviously important what does churn look like uh we we don't we don't calculate it much it's uh because we're pretty pretty stable on the renewals what what happens typically uh people disappear for a year or two for whatever reason they won't pay you know for a year or two but then they come back because they need a release that has a security enhancement or something of that sort so uh our and and we have uh i talked to somebody who's running a product uh version seven which was last updated in 2005. and i was chatting think about all the things that have changed you know i don't know five or five or six presidents and who knows how many operating systems microsoft has gone through right but the product just can run so so we have a lot of customers that have invested in it once they get it working they don't they don't change it it's the old adage that uh sales people like change they just don't like to be changed yep yeah so but so uh we have customers that have called me up in fact uh uh we talked to somebody yesterday that i was on the original sale in 1999 they worked with one of my resellers to get trained and they had for whatever reason now coming back and uh 20 years i mentioned this this person 15 years crm is very sticky once you get using it it's you just don't swap it in and out it's not like a you know the driver i understand oh we've seen this pat we've i've interviewed you know again we've interviewed a bunch of pipe drive all these folks have been on the show so i get it it is sticky um especially in on-prem and on-prem version is much stickier than a non-on-prem version sassy cancel and and you know the on-prem bit while it's a little bit of a you know it's a differentiator and we're we're you know that helps draw people we also went to a license or a hosting model where unlike a sas application so from our perspective it leveraged the features hey if you like the feature set and you got equipment to run on it that's the most affordable way but we also have uh certified msps who can run that and one of the advantages is now i can put goldmine on that virtual desktop but i can put other applications like they're quoting applications can you break i mean with these extra products with the features i mean you many people argue entrepreneurs like yourself you get very comfortable because you have a much larger company sort of protecting you so you're less aggressive in terms of driving growth i mean can this thing grow back i mean it sounds like your your blockbuster year was back in doing 20 million in 1999 i guess or back in the day can this get back up to you know 10 million a year in revenue this year uh that not this year it it could right you've got it but the on-premise market is is a tough one to be at so um you know we're we we fight to be stable provide our customer a stable version of the product that they can continue using keep the brand name out there that you know the brand name goldmine keeps bringing people in so that's called free advertising but you know to be candid it's it's hard when it's a cloud world out there and so uh some of our customers love gold mine and our hosting is probably you know 20 of our business and that pays us you know the ongoing recurring fee or you can take your license that you own and your data move it up into the cloud and just pay for the hosting services so we've given folks that option and we'll see as we come out of kovid and more people uh taking a look at some of their infrastructure there's a a lot of people looking to be a little bit more economical and goldmine offers a great affordable solution we will we will see what happens we're out of time though let's wrap up here quickly with the famous five number one favorite business book uh in search of ah let's get real or let's not play that by mahan khalsa it's a sales book that basically it says sales people have rights number two is there a ceo you're following or studying um my own james shaper come out of a couple of successful bits and so there's a lot to learn number three what's your favorite online tool for building the business besides your own um a little boy i don't i don't have an answer to that one number four how many hours of sleep to get every night i get a solid eight and what's your situation well married single kids uh married grown kids and uh yeah how many kids i have i have two 27 28. okay one of them is a uh she's the cpa and uh uh manager for the chicago cubs oh very cool yeah she gets to blend something very uh a lot of numbers with a great great team and how old are you i am 68 68. yeah it's like mr peterson tell us about software in the old days when you didn't have windows but anyway last question what's something you wishing you when you were 20 uh how to be patient guys gold mine and og in the sas space they sell on-prem crm software blockbuster year 20 million back in the dot-com boom now today they have got about 5 000 customers that pay servicing fees have cost 60 70 bucks a month so caught 300 000 ish per month in revenue but on top of that they've got 400 new customers joining every every year paying 700 bucks to 2 000 to get signed up and get on board and then they expand with seat bases we'll see if they can get back up to 10 million bucks in revenue but paul is shepherding this meanwhile internally at avanti paul thanks for taking us to the top all right you got it 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 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 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