How Highspot CEO David Wortendyke grew Highspot to $450M revenue and 300 customers in 2024.

hello everyone my guest today is robert uh robert wobby he's the co-founder of hispot co-founded in 2012 after discovering the need to empower sales and marketing teams with sales enablement as the ceo he's passionate about leading the company and developing the industry's most advanced technology solutions that help customers win more business before this company he served as corporate vp of the server and tools division at microsoft robert you ready to take us to the top i'm ready to take you so you are you a sight united fan is it again are you a nadella fan you like what he's done at microsoft i think he's done really amazing work i mean he fundamentally has both changed the culture and made a lot of the technology more relevant so he's doing kind of amazing things and i guess the company if you talk to folks they love it and you look at the stock price it's you know richest cup most valuable company in the world so are you still on that train or you get totally off in 2012. i got totally off and 20. oh bummer or maybe it was good at the time who knows all right all right tell us about high spot what's the company doing are you guys pure play sass uh we're a pure play sass um what we try to do is help um customer facing teams engage with customers engage with prospective customers more effectively which means we help them with what to know what to say and what to show so they're having the right conversation and it's really any customer facing team so it could be sales it could be services it could be account management um and if you're having that better conversation that more relevant conversation the hope is that you can if your sales you're increasing revenue if your services you're increasing customer satisfaction if you're account management you're increasing your renewal rates but fundamentally you're giving that customer a better experience we're not about automation we're about helping people talk to people it's all about empowering them it turns out about half the company tends to be these customer facing roles and our job is to make them better more effective at their jobs and hopefully have the customers have a better experience and when people are hearing about your technology going man i want this thing and they start paying are we talking like a couple grand a month or more like you know 100 bucks a month more like freemium kind of model so we're not a freemium model because one of our value props is we help a sales team whether it's a 20 person sales team or a 20 000 person sales team we're the single pane of glass so they know where to get their content where they get their guidance where to get their trainings or we make we take all the chaos out and make it really easy and it works kind of where they work so we tend to be a implementation where it's either a division or a whole company or maybe a whole geography we're not onesies and twosies because we're trying to help the whole team work more effectively yeah i want to capture more your backstory but if i forced you here into an average just for the sake of simplicity and time what's kind of average first your acv look like would you say well we so one thing that makes this a little bit unusual which i actually really love is that we serve smb so we'll literally 20 25 30 people sales team love those customers we have lots of those all the way up to siemens and amazon and aetna and very large companies that have very very broad tens of thousands of users yeah by the way i totally understand there's a lot a lot of sas companies are like that yeah but actually in our space at least we have some competitors that mostly focus on smb and mid-market because they have they've sacrificed a lot of flexibility for simplicity and then we have a bunch of folks in the enterprise who've done the opposite and we've tried to do is really have a pretty easy to use platform that actually has flexibility under the covers well i want to talk more about that it goes all the way from it's actually what's also interesting as you think about you know your audience is it's actually tricky to have both motions in the same company an smb motion and an enterprise motion are pretty different from everything from you know the product itself of course but then also demand gen services renewal all that is very different if you're talking about a 30k asv to a 1 million acv yeah so i want to get more into that and your backstory over the past 10 years right but but again if you look at a sweet spot acv year one i i understand you have a huge range we don't have time to talk about every cohort what would you say a fair averages um 100k is probably a fair average across all the different cohorts okay and paint that picture a little more for me so someone's gonna pay a hundred grand a year what's that team size probably look like well our list price is about fifty dollars per user per month so we can do that math um and what you're doing probably is you're let's just do a typical initial implementation um we probably are now serving all of your sales maybe your services team we're also definitely have a lot of marketing in there because marketing tends to be where you're publishing that content from and we have sales operations and sales enablement also helping to make sure that the sales team is getting the right information in fact one things that we think about a lot is how do you make sure that if you think about a company you can think you can step all the way back and say look there's three kind of big engines in most companies for the go to market side there's services there are sales and um there's marketing if you think about enablement it's the gear in the middle trying to help those those different things actually align and amplify what they're trying to do make sure they have the common content common guidance common sales plays marketing plays all of that we can measure this though right in terms of stickiness and elena was great before the interview she sent over some retention metrics and adoption metrics right from g2 crowd so if you look at your your your cohorts right whether it's the smb or the enterprise and you look at kind of net revenue retention on any of those courts i hope they're all above 100 of your scale but how far above 100 are you pushing them we're well above 130 percent oh wow that's i mean i would put by the way congratulations i mean i'd say that's world i'd say 140 is world class so if you're at 130 across most courts it's pretty darn good and um i think one things we're really proud of so we we work hard to partner with all of our our companies that we work with so whether you're smb whether you're enterprise we have all the right services and account management to really kind of work closely with you one thing that's amazing is that we essentially have never turned um a a customer to a competitor ever oh come on rob how on earth can you actually track that know that for sure no because we we work with them and so we basically don't churn very much if you turn it's probably because either you're not going to use any solution because you're so small and decided you don't need it or you no longer exist yeah you got bot m a and we have customers that have merged like for example send grid you know twilio bot send grid tulia was a customer saying group is a customer now they're a single customer in some sense we turned we didn't really churn now they're you know all one one yeah so so peel back real quick that net revenue retention onion uh real quick so if you got 130 total that's made up of two components gross churn plus adding back expansion right what is the gross turn number on on the on the way to think about it is we have no gross churn it's it rounds to 100 for real okay on any of your co-works there's no one downgrading accounts or canceling completely there's truly no gross revenue churn it's it's so high you can round into 100 it's between 99 and 100 and it rounds up okay fair enough and then so you've got expansion you then i was going to say then you have motions internally at the company where you have just dominated 30 expansion on average across these cohorts year one to your two acvs etc well there's two things going on in some cases we start with a division or a segment like the enterprise folks versus the smb folks in the company or maybe a geo like we win the us but we don't win europe et cetera so that's one area of expansion the other thing is we're really fortunate to work with some of the fastest growing companies out there so if you look at like companies that have gone public recently most of those companies are on high spot can you name one or two of them sure slack airbnb um dropbox servicenow right and so it turns out those companies are growing at amazing rates and so we just need to hang on if you will all right so ups expansion revenue your big levers your upselling seats and additional teams do you have strong feature based upselling and is there any utility based value metric up selling yeah so one of the things that um we've done is we've kept it really simple we have essentially one sku and so we're not doing add-ons we're not coming back in you and trying to continually upsell we're just trying to give you the core product and then make sure you have great value and then you're gonna you're gonna be a retained customer which we love and then you're gonna probably grow either because of new geos new expansions et cetera or new personas we've been talking about new...