How LearnWorlds CEO Panos Siozos grew to $27.3M revenue and 4.5K customers in 2024.

hey folks my guest today is panos chozo he's the co-founder and ceo of learn worlds a cypress-based e-learning company that's transforming self-paced learning through hassle-free textual and video-based learning he co-founded the company in 2014 during a period which the economics of both greece and cyprus were not conducted to new ventures lower rural is now a multi-million dollar status company based in 70 countries with a team of over 30 employees panos are you ready to take to the top yes okay very good and in fact we're even bigger right now we're we're at 75 people right now and growing so our online courses are super hot so the past few months have been amazing for us so how many customers do you have we have over four and a half thousand customers right now okay and what are they paying for uh if we are a software as a service people start by our lowest package is 29 dollars per month and you get a full blown online school which you can use to sell online courses our most expensive package packages are 7.99 per month 799 yes yes what what is the average customer pay per month average customer is around 120 right now 120 dollars can i take 4 500 customers times 120 you're doing about 540 000 a month in revenue no no that's not uh precise there are some some other like lines of business some mobile applications that we're selling and other stuff which uh make it slightly bigger okay so you're doing more than half a million a month in revenue yes yes okay that's great what's the back story here when did you launch we launched originally back in 2014 we have a as a team three co-founders we go way back in e-learning i have a phd in learning so we started first working together as scientists within a university setting you know creating platforms for the academia publishing papers but didn't have much entrepreneurial capacity or understanding back then so after a few years of working in the academia and doing different stuff we got together we were really believing in the future of e-learning and that the future of the learning is the future of learning is online actually so we wanted to create a platform that will take the state of the art of learning the things that we were studying and bring them at the hands of actual trainers and creators and and folks who want to monetize their their audience this is how we started and and tell me a little bit more about uh how you guys decide to split equity in the early days it's always a tough conversation well for us it wasn't a tough conversation we've known each other for 25 years we've had done several projects and we we always even when we were students we had a joint pot we were doing like projects and had a you know a little piggy bank for purchasing books going to conferences doing uh even like fun stuff together so we we split evenly that wa that was a so four four four co-founders you each took 25 percent three okay we're three co-founders we we split evenly in the first couple of years we bring we brought in our very first couple employees and they got a very small part also of shares we couldn't pay them proper salary back then nobody got a salary so they also got into the business with some uh like with with some with some equity understood now if you're doing if you're doing more than 500 000 a month today what were you doing a year ago so we can look at your growth rate well uh in our growth rate in uh 2020 was about 200 so uh we were already growing by about 100 per year before that that was the average i guess of the entire online course industry it's not just us other businesses as well but 2020 kovit has been a catalytic phenomenon overnight all learning became online people started to try to find the solutions to stay online get in touch with our customers get in touch with our students they were trying to find emergency solutions so it was obviously a breakout year for us and the growth was about 200 percent for 2020 and it's continuing at a very high percentage so 200 year-over-year growth and you're doing more than half a million a month today we mean about a year ago you were doing call it 250 000 per month in revenue something like that uh i think it was less less than that because okay very cool now you talked to him talking a bit more about your team there's 75 people today is that right yes and what's the breakdown how many engineers well we got about 30 engineers overall or in the product team let's say because they might include product managers and and people who are like or working also on the on the back end and the devops and all this stuff and we have about 25 people that are working on customer support and customer success roles uh very few people that are on the admin we're quite lightweight in terms of our processes because of all the like everything we super automated as much as we can and the rest are marketing and sales people empower us how many sales people do you have that carry a quota uh right now we have five sales people five sales reps very cool and what is their quota uh this depends because we are working on different segments uh different geographies so it's not uh it's not a unique number for for all of them and also i would say that less than half of our pipeline comes through the sales people we are very much a product led company so more than half of our funnel is automated people understand that upon us but there's a lot of people with product like growth that are trying to hire their first sales or trying to figure out what quarter to put them on so i'm trying to learn from you here what did what quota did you give your first sales rep this is something that uh we cannot share and this is something that as i mentioned depends on the geography we are we have customers to know where was the first geography you hired a sales rep for uh it was the the us okay and how did you you don't have to share the exact i guess quote if you don't want to share that but what ratio did you have between like what the full on target earnings a sales rep could earn relative to his or her quota uh it's about 50 so it's 50 the salary and 50 percent is the the the commissions no my my question is how much higher is the quota target relative to what their full pay is if they hit quota it's it's it's about 50 higher so you well if i joined you today as your first sales rep my full earnings would be about 200 000 if i hit a 250 000 quota or 300 000 quota that's 50 percent higher uh yeah i'm not sure how you break that down because that's that's not how we that's not how we calculated things initially uh us that's upon us that's what i want to learn give me give me the exam that's what i'm trying to learn here you're making me yeah yeah in our in our case just since we are learning here and the the the thing is like when we got our first people we didn't have fixed numbers we created the numbers along with the people who got on board on sale so it's a it's a role that we didn't have before uh like the platform was selling itself it was purely product-led so once we we hired a few people we started measuring what impact they had on the conversion rate like how many of the five of the what what percentage of the funnel wanted to be sold to because not all of them want and once we we started getting this uh extra this this boost that the salesperson would add into the uh into the the funnel the conversion rate then we started negotiating with them the the the commission so it was something that we built along there isn't once you have a when you have a company that's learning and growing and the numbers are not stable you don't go out with uh like with a with a specific quota this is something that we created along with uh with the sales uh with the sales people how many demo calls do you want your account executives doing today on a monthly basis our account executives do about 20 calls per per week that that's the weight okay so call it 80 per month and how many do you hope they close we hope that they close around 30 of those okay got it so 80 calls per week 30 percent got it so you're looking at like 20 you know maybe 20 new sales per month per rep something like that yes but in in our case again i guess it's this is unique for for every company with our lifetime with our customer lifetime value and average contract value these are usually the biggest customers and the most like uh the most complex product the most complex cases the most complex contracts i would say what is what is your lifetime in dollars today sorry what is your lifetime in dollars today lifetime value that's not something i can i can share let's say that the uh as us as i mentioned there are like usually the people that go to our sales people and want to be sold to and go through the sales process uh usually they buy our middle plan which is at uh at two and a half thousand dollars per uh per year honestly what i'm really getting into is product led growth lifetime values really should be through the roof if they're sticky right if your product's keeping customers in it so how sticky is your platform which churn over the past 12 months er churn is close to the retention is close to 100 slightly less than 100 so it's not ideal we are trying to get it with expansion that we are adding into the product we're trying to get that about above 100 which obviously this is like an amazing scenario we're close to that uh and working through the product to to get to that uh to that level before before you know before yeah sorry just i wanna i want i just just because we're short on time i want to hyper focus just on churn before you add back expansion revenue to try and get above 100 what is just gross turn before expansion yeah it's around 90 percent okay so retention annually so you're churning 10 annually you're then expanding another maybe five percent so your net dollar retention now is called like 95 with goals to get above 100 yes yes i see as as with any product with the different plans you have different retention rates you know in our lower plans where you have newbies and people who are just just starting out the for us the lower plans are effectively you know loss leaders we're trying to give them an easy ramp into the platform get them to start to to use the tool and get into online courses with the bigger plans obviously you have bigger teams smbs usually who have already huge content huge audiences which you're trying to monetize so the stickiness there is unique because once you load a few dozen thousand customers onto a platform it's extremely difficult to switch to a different to a different tool so the stickiness there is uh is almost hundred percent for you have you and your buddies back from 2014 have you guys decided to boot drop the company or did you decide to raise no no we raised we had a we were boots up for several years we had a small round of about one million euro two years ago and just last week we announced a funding round of uh 32 million dollars with inside partners who is a an amazing partner for us they've invested now they're invested in in udemy pluralsight in the past they had invested in twitter shopify so they know both e-learning and e-commerce very well and we we find them amazing partners for fun for funding and continuing the the best the next chapter of our growth you've decreased your optionality by raising 32 million from someone like index you really have one path and that is growth at all costs in other words you and your buddies couldn't sell the business now for 100 million bucks and take 30 million dollar paychecks and go sail up into the sunset why do you decide to decrease your optionality by raising from traditional vc like this first of all it's inside partners it's not index yeah so it's not a traditional vc where inside's a traditional vc insight venture is a very large traditional vc firm i mean and private equity so the the the the their goal is not always you know growth at all costs they can be very patient in in their investments they hold investments for several years so it's not uh and the goal here is to create a multi-billion dollar business the potential now in e-learning is absolutely immense everybody through this past year everybody has realized that the the future of learning is online we see is that true is that true or was that or was that because that was the only option and so everyone saw artificial growth numbers well well this is this is something that i've studied very it's it was also part of my phd this is something that we have been studying for years e-learning always was a revolution always five years ahead so you never saw the the true potential of of of learning always something was missing 20 years ago it was bandwidth 15 years ago it was something else what has happened now was totally a totally catalytic to how ingrained e-learning is to everything we do about just to give you a small example uh a few year a few months ago through the pandemic about 1.7 billion students were using one form of an orphan or another of remote learning either fully online or upon us because they have to schools were closed my question is simply in a world where covet doesn't exist does e-learning keep growing as fast as it did the past 12 months i think it's a very valid fair question it's it's absolutely it's a great question it's a question that we always try to validate every day for us it's clear and for our customers it's clear and it even us subsides we've seen that the the trend continues there is no future at least in the next two three four years without covid that the business that wants to train 400 employees will get them into a hotel for five hours of powerpoint there will be a riot people businesses and professionals have discovered there are so so better ways to learn much more efficient much more effective from the comfort of your house without breaking the bank uh being able to learn skills at the more interactive more engaging ways better user efficiency that's something that people people realize and we we see that the trend continues even even this year despite all the all the extra outbreaks of the pandemic yeah well i sir i sure hope the growth obviously continues uh you you've raised capital now you can really get creative for future product development now with the 32 million was all of that going into the business or were you guys able to offer some early liquidity to you know early employees you brought on who were incentivized with equity well there was uh some like we had an early an early investor not all of it goes into the business but uh so there there is some some distribution with this funding that's great and look sometimes when folks like you and your buddies get you know five ten million you know out of a round it enables you to say you know what i'm good i'm set for life now i can go for the billion or multi-billion dollar business uh the reason i bring that up is because again you you can't now sell for 100 million bucks right you may have done that two years ago and you would have made a bunch of money you can't do that now because liquidation preferences right that wasn't our objective uh to all to ever sell and go out of the business we are we are feeling very passionate about what we do we've been dealing with e-learning for the past 25 years and we found ourselves for the first time at the position where we have not only the vision and the plan about what to do but also we have the resources so a few years ago when we were a bootstrap company we were trying to implement the state of the art what we had in mind with very limited resources and with lots of obviously compromises at everything we did now we found ourselves in a in a position where we every day it's it's an amazing experience to be able to help people all over the world launch amazing online courses launch amazing learning experiences get lots and lots of money out of what they're there they're launching be able to escape nine to five create their own business create their own space in the world and be and be successful so for us this is a dream come true actually so with the right resources with the right partner obviously boosted by the tailwinds of of covid which will hopefully go away soon will this gives us a great platform to build on top create an amazing product and help as many people as possible discover what is uh what is possible with with online courses hanos when you announced the deal last week series 32 million dollars what valuation did you raise on that's not something that we can uh announce that the the the investors wouldn't be happy with that most it's it's well known most series a's you know you're selling 10 to 20 percent of the business is it fair to say you were sort of in that average range it's not it's not too far off so inside invested 32 million for a minority stake in the in the business let's keep it at that fair enough all right uh let's wrap up here with the famous five number one what's your favorite book oh it's a hitchhiker's guide to the galaxy number two is there a foundry you're following or studying a founder that i'm studying or ceo yeah uh not not per not particularly uh i'm always amazed by the job that the guys over at stripe are doing and also with toby lutky over at shopify these are some some great uh some great cases but we always try to create forge our own path in what number number three what's your favorite online tool for building the business besides besides your own obviously i think i have to say zapier it's something that can it it can really it's like the the glue of the internet we just launched also an amazing integration with with them and we see also from our customers that it's one of the tools that it really saves them lots and lots of time from them and from their va's it's an amazing tool and how many hours of sleep do you get every night hours of sleep yeah i would say now with the with the funding and everything i would be happy to get about five but that's not our normal that's not viable obviously from the long term so hopefully now that we have announced and we're going back into like getting out of the fundraising mode and going back into building mode and expanding hopefully things will be much better right now how long were you in fundraising mode how long did the full process take from first cause to term sheet to closed it was uh it was we took us about seven months but not because just with this investor we had been flooded by incoming requests from from vcs everybody was looking into online courses we i would never imagine that we would be in such a position like to fend off vcs with a beat them back with a with a stick so in the past few months we talked with i guess over 60 of the top vcs in us and and in europe we were trying to find the right i discovered i didn't know that that money can be had cheaply like investments can be can be found we we weren't in such position before kovid e-learning wasn't as sexy there were lots of investors around but overnight e-learning became something like ai plus uh bitcoin whatever what month did you sign what what month did you sign the term sheet and how many months ago was that uh term sheet was around april so okay got it got it so not not too many that's actually pretty quick then not not too bad there uh last set of questions here what's your situation married single kiddos oh i'm i'm married with a with a daughter very cool and how old are you bonus i'm 44 by now 44 years young last question what's something you wishing you knew when you were 20. sorry i didn't get that some something you wish you knew when you were 20 years old um well not much i think i knew the things that i had to know for for that that were good enough for that for that part probably if i knew some things earlier i i wouldn't have been i wouldn't have been the same so i'm not trying to to change anything in the in the past guys there you have it learn worlds they were doing 200 000 a month uh last year in revenue now well over 500 000 a month in revenue crazy growth rate they create helping create and sell online courses from your own website or 4500 customers say who pay on hours 120 bucks a month they just broke about six and a half million dollars in terms of run rate as they look to continue to scale with under 32 million dollars in funding panos thanks for taking us to the top thanks nathan for having me 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 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