How iAdvize CEO Julien Hervouet grew to $48M revenue and 1.5K customers in 2024.

hello everyone my guest today is nicholas de rosen he is the ceo of a company called i advise uh specifically north america he's got a lifelong experience in the technology industry before i advise he launched to develop two businesses in the real estate and online retail spaces one of them cynthio became a major player in the industry he also has experience as a venture capital investor by training he's an energy and telecommunications engineer and holds an mba from insead okay nicholas are you ready to take us to the top all right all right well first off congrats on on leaving the dark side the vc world and joining the operating side you get way more cool points in my book for that walk me through the company what do you do and how do you make money uh all right advice is a conversational experience platform we help e-commerce brands build conversational strategies to connect with their online shoppers and remove the friction on the customer journey we make money quite being very straightforward we are a sas company monthly license based on the number of conversations that brands are having through our platform interesting okay uh number of conversations is this uh this is uh so someone uses you it's conversational marketing they chat with a million customers especially during like the black black friday period where there's a lot going on you're basically charging per conversation with each individual potential customer absolutely and there are many different conversations right there's of course conversation with live chat it can happen through facebook messenger sms click to call click to video many different possibilities you could be engaging with chatbot an in-house agent and on-demand experts it's essentially a toolbox so that each brand can build its own conversational strategy but whatever uh the feature they use a conversation stays a conversation and this is what they pay for i see and give me a general sense here of what kinds of customers you know your average customer looks like in other words are they paying you know 10 bucks a month a million a month a grand a month what's kind of the average customer pay per month would you say or per year yeah sure um i think the essentially two answers to this first of all uh i advise is initially a european company so we are a european leader in uh back there and we opened the u.s office last year after raising a 38 million dollars in the serious round so the big focus now is in the us that the answer to question is different depending on if we are in europe or in the us in europe like all companies all startups you start off with a lot of customers that don't pay much and then as you go you try to target bigger and bigger customers right um so there is a bunch of customers that we we signed up in the first years of the company they are not paying much typically 100 200 dollars per month but now in the us we are targeting companies that are paying between 50k and 1 million per year so let me ask you let me ask you a different question nicholas this is interesting uh if you look at the your total revenue past 12 months what percent was europe versus u.s um let's say that u.s uh this year so this is the first year officially in the u.s we are uh targeting uh a million dollars of new booking so we are now you know when you enter a new market the focus is more how much you sign rather than the revenue and let's say that this represents probably uh something around the of the new booking around 10 oh wow okay so so even though you're charging way way more than your european counterparts it's they must have a huge volume of you of customers then uh yeah absolutely yeah we have around 1500 customers so definitely a lot of customers i see i see got it so 1 500 customers and i want to make sure i understand what you just said you're targeting you know for ending here 2018 basically a million bucks in new bookings and that represents only one tenth of a total kind of 10 million in new bookings that the whole company will bring in that's correct i see interesting now you mentioned a big round of funding you also mentioned you were passed to vc did you come in at you know with that round of funding you were like an eir out of vc and then you joined myself yeah uh no i've been actually from you could i'm a late stage founder i joined the company something like three years ago when the company was completely pivoting right we started off with a very basic live chat solution and then we adapted and we are now pivoting on uh the the core feature of what we sell what has been driving our growth over the last two years is an on-demand community of experts so it's a sort of uber-like solution but in customer experience it means that when you go on the e-commerce website and you have questions you i'm sure you're familiar with the typical live chat experience um what makes us special today is that you will not be engaging with an in-house agent you will not be engaging with a bot you'll be engaging with someone that has been sourced and i advised and identified by advice as being highly passionate and knowledgeable about the products the brand is selling so that person is on a smartphone and just sharing advice and gets a percentage of the sales that he gets that he generated through his advice interesting so but just to be clear you're not employing a marketplace model where you're basically connecting freelancers with conversational jobs and taking a cut in between you're pure sass for that specific feature uh yes it is a marketplace we are a software editor and we are connecting some on-demand experts with brands or more specifically with the brand's online shoppers so we make the connection we take a percentage of whatever those experts are generating i see are you generally moving more towards the marketplace percentage model or is sas still dominant and you you keep doubling down there no it's clearly starts dominant let's take a step back to understand why we came up with that of that feature as a brand when you want to set up a successful conversational strategy you have two problems you need to solve the first one is the technology right what engagement technology are you going to use to engage with your online shoppers plenty of vendors out there fine second problem which is a real bottleneck of the market is the resource right it's who on behalf of the brand will engage with the online shoppers and when two or three years ago when we analyzed data from our around 1 000 customers we noticed that around 70 of the engagement opportunities were missed by brands meaning it's people on websites that have questions that are frustrated and brands are not doing anything to engage with them by lack of resource because they're not available 24 7 because they don't have the the workforce to engage them so this is when we developed that feature i've mentioned the communicative on-demand expert but this is just a way of generating more conversations for our core platform which is about uh which is a technology to do to provide uh conversations so that's uh the core of our revenue is still being generated by the sas model yeah the marketplace is almost like a growth channel for you it's helping just add additional value on to what you already have absolutely just a way of generating more conversations yeah that makes a lot of sense um the company was you said the pivot happened three years ago so 2014-2015 when was the company founded though before that 2010 2010 okay wow so they kind of kind of wobbled around for a little bit there for a couple of years and then pivoted away from that and you started you said startup has just a live chat software uh initially it started the live chat software uh but as you can imagine we had to go beyond being just live chat software because today if you are just livestream you have no chance of surviving yeah uh so i mean there's a couple by the way nicholas there's a couple kind of you know olark right some of these folks are you know they just came on the show doing about 25 30 million bucks in ar but they're getting kind of killed by these newcomers like drift and intercom and hubspot's new tool absolutely and by the way yeah you've mentioned intercom you mentioned drift what makes these guys special is the respondent again having an engagement technology plenty of technologies out there typically olark but the bottleneck again is the respondent is who will engage with those online shoppers and the answer to that problem for drift and intercom are bots so bots are providing the content to those frustrated um uh online visitors how much capital has the company raised to date you mentioned your last one was 38 million was that all the capital no total over 60 million 60 okay total and how much of that came pre-pivot um the amount the pivot uh started on the series b round series b it was around 18 million dollars and what convinced the investors to invest was the pivot so this is when we started the pivot and then the last round of 38 million was to accelerate the pivots and do a specific focus on the u.s u.s market being definitely a very attractive market and what's the team size today total european and us 250 employees 250 how many are us kind of under you strictly in the u.s we are 10 okay may make sales but absolutely it's definitely customer oriented so it's marketing sales and customer success customer success is a big part of the advice culture yup yup no of course and then walk me through kind of growth targets so so over the past you know going back a year ago to we're about to end 2018 what do you guys hope to grow by year over year um the typical yeah the growth that we've been having so far on average is around 40 per year um and the objective is to be at around 50 million of ar by end of 2020. okay five zero that's five zero yes yeah and where are you generally where you're at today okay without going too much into the details because some of the information uh we do keep it confidential but we are in between 10 and 20. okay yeah i mean by the way what i was doing was basically going okay they've got 10 million as kind of the bookings target if that represents 40 year over year growth that means they must be doing something like 11 or 12 or 13 million currently which checks out with what you just told me so healthy growth targets um how much of that growth are they expect are they putting on your shoulders they're going nicholas you've got your you at the u.s and your high acv is going to drive most of this growth go get it uh yeah definitely the us is uh the most strategic market for a company uh yeah in that 50 million i shared i uh numbers would be about 30 yeah uh would be coming from the us and so just looking at your u.s contracts and you said some of them are you know 100 000 some are a million let's assume like an average contract year one of i'm gonna make this up 50 grand or actually let's say 10 grand to make it easy i just want to get in your head real quick how aggressive are you willing to be on cac will you spend the full first-year acv to get the customer or are you being even more aggressive than that so we are definitely in a growth dynamic strong growth and add to this the fact that we're going into a new market we are definitely very aggressive on the cac right um the cac that we have in the us is definitely way higher than the cac that we have in our uh home markets are you talking about the actual hard number or the actual the payback period is also longer um so ask your question again so so payback period is a ratio between acv right and and how much you spend cac is a hardcore number we spend a thousand bucks to get a new customer typically okay uh both so yes definitely both they're both longer okay so what payback period right now are you operating at about uh in the u.s again it's a lot of still based on certain assumptions but we are looking at a year and a half to get uh to get back the the investment by the way that's not horrible i mean i i've seen people pushing 24 months so that doesn't surprise me that much um so 18 bucks just to put that in a different kind of different light that means to get a new dollar of ar you're willing to spend about a dollar 40 a dollar 50 something like that that's correct and where besides salaries and commissions where is most that where are most those dollars going for acquisition uh there is of course the marketing uh marketing we do try to focus a lot on all those in-person meetings again the challenge of being a newcomer in the us and that's the case also for all startups is that it's such a competitive market that the biggest challenge is actually to start a conversation with the people who are uh with your prospects uh when you manage to have an in-person meeting whether it's at a trade show or conference or whatever it does make a difference you're able to establish a stronger relationship another big piece of the investment are everything we are doing with gartner and foster again working with them to help them uh to help us educate and build the market that uh that we are leading yep yep interesting and then last economics question before we wrap up churns critical in a sas company um let's just talk u.s market for a second what's churn look like today and how do you keep it low uh so because we've been here only for a year we are still in the process of onboarding the first customers churn is uh that's a bit tricky i could say that the plan is to be around ten percent of uh that's ten percent of churn uh of yearly churn revenue or logo count uh that is of revenue okay 10 revenue churn and do you have strong i mean again your own you're still pushing your 12 months do you have strong levers to drive expansion or is it really just the one utility value which is number of conversations oh no no it's definitely the strategy is definitely to get a foot into the door of our customers typically start of a pilot demonstrate the value that we are able to bring we are confident on that value and then there are many ways of doing some upsell but most of the revenue is actually coming from the upsell that we can get after the uh after the pilot is validated and what percent increase in that contract value typically happens in that step from pilot you know validation to the upsell are we talking 130 expansion 160 um i'm thinking of a few big uh pure players that we have in europe when i compared revenue generated during the pilot what came after uh i think it's some customers we were able to multiply by 10 the revenue we generated uh with uh with them that's great so yeah the reason i'm asking i'm trying to get into what net revenue retention is annually so if you're churning ten percent you add back expansion i assume you guys are over a hundred percent how far over a hundred percent are you um how far over hundred percent off of what kpi net revenue retention uh again in the us uh it's still major assumptions uh maybe uh we'll uh can have the composition again in the year we're always always selling of course we'll have you back on okay so too early do you have a target though for that or no that it's not something you're looking at right now uh honestly right now um i think part of the strategy is to be super focused i'm really focused on getting those first deals coming in or making those customers super happy to have some good customer stories that can communicate to the rest of the market uh so yeah it's really one step at a time sure the number is somewhere in the business plan but that's uh something that's uh for uh later on down the road that's right and then i assume because of how much you guys have raised you guys are not casual positive yet correct you're investing aggressively that's correct yeah very good all right let's wrap up with the famous five number one what's your favorite business book um jeffrey moore that's a good one number two is there a ceo you're following are studying right now uh the ceo that inspired me the most is richard branson i think that he's uh the one that caused me to catch the entrepreneurial virus that's good good number three what's your favorite online tool for building the company especially as you expand in the us it's actually one of our us neighbors uh hubspot yep good one number off for how many hours of sleep to get every night uh it's probably around seven to six okay and uh what's your situation actually i saw a ring so i think married any kiddos yes absolutely it's a ring uh two kids four and seven oh wow you're busy how old are you yes uh i'm 35 35 last question what do you wish your 20 year old self knew what is what what do you wish your 20 year old self knew um [Music] i uh i like surprises so um i'm happy that my 20 year old self didn't know anything everything about life and that he still had a lot to discover guys embrace those surprises again i advise joined the company back in 2014 after they pivoted from being just a live chat software they're more focused on what the responses look like in fact they've gone so far at another layer of kind of a marketplace layer on top helping companies that use them really make sure they're always responding to these inbound customer requests that are happening again via these website conversations obviously they price around that metric as well today they've got about an 18 month payback period as they expand in the us they've got a team of 250 worldwide again 10 in the u.s they've got about 1 500 customers about again hoping to break 12 13 million bucks ish something like that in ar here shortly as they look to target 40 year-over-year growth and hopefully 50 million bucks in ar by the end of 2020. all right nicholas thank you so much for taking us to the top all right it was a pleasure to talk to you