How Gsx CEO Antoine Leboyer grew Gsx to $7.5M revenue and 250 customers in 2019.

hello everyone my guest today is antoine liboye he is the uh founder and president of a ce and ceo of a company called swiss software editor gsx he's seen information technology from all sides by working on vendor for vendors of all sizes after 12 years in sales and marketing decisions at ibm he started the european indirect operations of candle corporation and has worked for startups in software distribution and mobile phone billing software his most recent position is senior vice president of baracoda the leading pro producer of bluetooth industrial devices all right antoine ready to take us to the top i'm ready to do that and i just have to add one little thing i was not the founder of gsx but that's a small point okay so when did you what year was it launched and when did you join i it was launched 20 years ago and i acquired it 11 years ago in 2008 so i'm part of these entrepreneurs which didn't start a company and some people are able to start a company i knew that i was not the sort of this sort of entrepreneur but i was looking for a company to acquire i found gsx and i used some of my own uh money to buy the company and bring in a private equity investor who's been with me ever since and there are actually many people like me who are now looking at entrepreneurship not by starting a company but by saying can i actually um come in buy a company and and add value when i can add value yeah and that's what i have been doing so sorry it was founded in 2000 and you bought it in 2008. absolutely okay so in so what first off where were you in life in 2008 where you said you know what i have some money i want to go buy a company um i first i was in france i'm calling you from geneva right now and i spent a year and a half doing some consulting uh co-writing a book because everyone wrote a book in my family i understand you wrote a book as well nathan and i visited a number of software companies because given the experience that i've had i knew a number of people and i wanted to be able to run a company and i started narrowing to a number of them then i went to visit the founder of gsx i had worked at candle in in the sort of industry i was impressed by the technology and i thought that i could be adding value and we agreed and this is uh how things uh got started in february of 2008. now this was like 10 years ago so what kind of scale was the company at that point were they bootstrapped so um so what we did is that uh so first we did the acquisition uh we did this um doing uh an lbo but ever since 2008 we actually we are totally bootstrapped we've never raised any funding well no i'm sorry sorry i want to get contacts before you started operating so when you found the company when you went in 2008 and had your first conversation what size was the company at that point how much in revenue had it done um the company was about six six million and something in euros so basically uh seven in dollars okay and that was in 2008 now and that was a sas platform back then or on-prem or what no no it was uh it was a platform that was doing uh monitoring of ibm platforms so i was knowledgeable of the industry and i thought that it was a very very creative technology which could have a lot of application so i could see that i could be improving a number of things in sales and marketing and this is why i thought that it would be a good match in between the strengths of the companies and what i could be bringing okay how did you guys all agree on an acquisition price we uh make a pro we made a proposal he was okay with this and then i looked for a private equity player and we secure financing interesting okay so what did you offer him seven million or some multiple of seven million i wish i could tell you oh come on that was like 10 years ago uh fair enough so we gave him about um [Music] we gave him about 120 percent of revenue okay good so so somewhere called between kind of seven and 15 million bucks you bought it for about 10 11 million dollars something like that something like that yeah okay but you know it's a long time ago now what's very interesting is that uh we had to spend time remember you know professionally the company we had to spend time also um reimbursing the debt but by the time this was done the market in which we were in a way was gone and my investor and i we decided that we had to look at the company not as a sort of lbo candidate but as a growth company and we decided to take the technology and port it not from the ibm world into the microsoft world it took us two or three years to do that and then the cloud started appearing and all the customers started moving their um collaboration tools to rp365 so we had to do two transitions and the strengths of the technology and the uniqueness is that we're able to do this transition and and this is something which is you know we start moving by being and would say company with classic type of tools on um probably what people would look at outdated applications and what we've been doing in the last 11 years was actually transitioning it into a company which can have leading edge into what is the biggest market today for sas monitoring of sas application which is the monitoring of official microsoft office 365. i don't understand what that means what do you mean monitoring office 365. so um so you guys know if it's 365 this is microsoft collaboration platform it's probably the the the platform which in term of package sas has got the the biggest amount of the gross they are adding 30 million of users you know it's huge i get it i'm just understand where you fit in what do you mean by monitoring office 365 we are pro if you want to monitor the performance of a sas application you need a new set of tools which give you information on how the service is being delivered and how the elements that are your own responsibility are affecting the performance okay it's a totally new business it's a totally new type of technology and this is uh where we have a lot of leading-edge capabilities and we think that on this market we got the best uh we have a very very competing community product uh and and we have a lot of experience on on on these things so antoine help me understand the average customer today that then is using your platform to monitor office 365 what are they paying you per month or your per year to do this so what we do is that we have you know microsoft has three packages z1 in three five we got the same thing we have three packages which are dollars per year six dollars per year eight dollars per year according to the workload that they want to be monitoring uh we focus on the large customers so the average size customers that we have got something like 16 000 user we got about uh 250 customers which correspond to three million seeds and out of the three million seeds i would say that one half of them which is the this is the one that we have on office 365. okay so so let me unpack that for a second instead of talking about on a per seat level talk at a talk at an actual a cut a business level so when it with the average business that signs up with you how many seats are they typically purchasing uh let's put something like 10 000 seats and the average price that i have is usually um five and a half uh per a year so we are talking about uh deals which could be uh 50 000 in average the biggest customer however that we have is uh customers with 350 000 seats and we got some which are smaller but the average one would be five fifty thousand uh dollars per year on a subscription basis yeah so that'd be about 4250 per month or something like that somewhere around that do they are they always paying annual upfront antoine uh you know that's correct and we have even some which uh are uh taking advantage of the fact that we offer multi-year discounts so that they don't have to uh to repeat these the year after yeah and and very interestingly you know this is characteristic the we still have a remnant of some old business but it's going smaller year after year whereas my office 365 business has doubled three times in a row and my estimate is that this year we are going to be more than doubling and you said today you have 200 250 customers three million seeds two five zero customer um half of them are totally on office 365 the rest they are on um mixtures of on-premise and uh and um you know have what people call a hybrid platform yep so can i can i use those numbers then to kind of back into revenue so 250 customers at a 50 000 acv you guys just passed 12 million bucks in ar no not quite because some of the customers are actually customers that would transition from an old license and and maintenance model okay so which one of those numbers is lower the average acv of 50 grand or you have less than 250 customers we have 50 we have 250 customers but the uh average revenue that we would get if you take the mix in between the new customers which are subscription model as well as the customer which we would be having in uh you know in a maintenance type of model because they are on the system we probably would be more something like half of what you've been saying okay got...