How Linkfluence CEO Guillaume Decugis grew to $20M revenue and 500 customers in 2018.

hello everyone my guest today is guilherme de kookas he is the founder of a company called linked as ceo of a company called linked fluence a sas platform that turns social data into valuable insights for global brands using ai and human expertise from 100 plus data scientists and analysts he's also also the co-founder and ceo of scoopit a web content monitoring sas platform which was acquired by link fluence he's been an entrepreneur since 2 000. are you ready guilham to take us to the top yep all right so what so what happened you sold stupid to link influence and then they made you the ceo yeah it's a pretty exotic deal uh but uh it came at a time where linked ones was looking at developing in the us accelerating after just having closed a new round of funding of uh 21 million dollars uh and they were also looking for a new ceo so uh to kind of hit two birds with one stone yeah you said okay fine i'll come be ceo but you have to acquire my company for a 10x multiple well there was a yeah well the conversation didn't go exactly like this but yeah the the question was like you you know influence has been very uh strong developing its um revenue model in europe and asia but among all of the uh top players in the social listening space it didn't do anything in the u.s um stupid however was headquartered in san francisco so it was a nice fit and also the technology level both companies are doing the same thing which is you know crawling the web using ai to analyze this content uh and helping marketers derive value from it yeah okay so tell us about i mean you just give us a bit of an overview about link influence give us an example of a customer that's using it uh yeah so customers include you know large global brands like uh denon or burberry or louis vuitton muay thance and so on so those large global brands who need to develop an intimate knowledge of their consumers that's essential to understand our brand and whether it's still relevant or understand market trends so the traditional way of doing that is you call people you do surveys you do polls and you get insights out of this the new way of doing this is you look at social data you look at what people say online in public conversations uh and you use big data and ai technology to make sense out of all of this yep yep very good okay so give me i mean you just mentioned some enterprise customers i don't want to go down every cohort but on average what would one of these customers pay you per month or per year for the technology so the interesting part and um you know we we did one of uh those a few months ago i talked about the stupid business and yeah we scaled up to enterprise um one of the things we saw in marketing technology that was the limitation of stupid is like how do you scale those deals well the thing is um you know uh lengthwise managed to do this they have a number of clients above one million dollars in revenue on a yearly basis um they start you know you know we start i should say we now at smaller sizes with the engagement which can be 20k 30k 50k but if you look at those large global brands they want those inside the social data to be a global deployment which means uh hundreds or thousands of users and that's where you go and have you know above a million dollars a year of uh ricky ryan revenue with with those larger brands okay but number you know adding like number of seats is a pretty typical pricing axis to drive expansion revenue why weren't you able to figure that out at scoop it so at scoopit what's um you know what we found is that if you want to drive the number of seats you need to do more than software uh and that was the limitation we didn't have the the resources to build a service team and that's what linked ones did really really well the company actually started not as a sas company uh but more like a a traditional agency model and they built the platform that they felt they needed from a technology standpoint and i think if you want to scale and be able to have 2000 um you know people using um your software you need to have a very simple very uh bottom-up approach or you need to bring services like project management consulting uh and the other thing links when it's does it's it's also capable of operating the platform itself for its own customers so what it does is it's able to derive insights uh and operate the platform on behalf of its clients so that's the beauty of the model and that's how they were able to scale to that level that you know we failed to do at stupid to be really honest interesting okay so now when you put it all together so you're looking at like average contract values call like 100 grand 200 grand what generally where are they falling yes we have uh you know we're you know we're doing a recurring basis we're doing about 20 million a year of ar uh with about 500 customers yep okay good so we can obviously just take 500 and divide that into into your ar to kind of get a good sense each customer is paying about what three four grand a month something like that uh yeah that's more forty yeah yep it's about forty thousand dollar acv something like that interesting and and and what are they and obviously that might be maybe first year acv when they're signing up originally are they starting within one specific sector of the business and then expanding to different like uh other other departments or silos are you really going for a full deployment right off the bat so uh that's very interesting they usually start with one uh part of the company but the interesting part with social data now is it started with digital marketing obviously all of the digital marketers want to listen to social data but now what we're saying is that as those clients get more mature they also want to use the social data for uh consumer insights which is you know the traditional market research um teams they want to use that for uh social care so all of the customer relationship like you know when you tweet at an airline because you're complaining your flight is late they want to listen to that and it informs even their product uh strategy and so the the it usually starts with one team but uh our role is to evolve this maturity uh model and to help those clients get more mature and get into more teams yep so so what is typical expansion year over year on a single account uh so you know we've got some clients who started that you know with a 50k engagement 50k uh average contract value and now our like you know multiple 100ks uh and that's what we're looking at doing we and that's why we focus on large enterprise with global brands because it gives us an opportunity to work with multiple markets a lot of those companies if you take uh denon for instance uh they're also multi-brands which means each of the brand companies will want to have their own implementation of our platform uh so if you multiply that by brands by markets and if you cross from digital marketing to consumer insight to marcom you get a lot of expansion capabilities so go home if you look at kind of net revenue retention annually it sounds like you might be above 100 by a by good chunk if your expansion machine is working nicely what is it today it means like revenue retention um so i don't have that number in mind but you know the company's been you know growing through negative churn from you know over the past uh three years already okay if i peel if we peel back that onion for a second though i mean do you have the gross revenue churn number before you add back back expansion sorry can you give me a second yeah given the question was if you peel back that onion do you have your gross right do you know your gross revenue churn per year before you add back expansion um so to no not at the top of my head uh and bear with me you know i've been in the business for uh just uh just a few weeks um i think you know if we look at the um and there's a tiering uh approach we're having there with you know with like you know uh maybe if you look at our top 10 clients we've been growing um you know with them at a probably a 30 40 percent uh expansion rate uh year to year um and the smaller clients is you know going into you know from one engagement to becoming a tier one client so the way we look at our model is really you know do we go uh do we start with local clients in one geography with one team and can we get them to become then global clients where with multiple geographies multiple teams uh so for us that's that's where we are focusing our activities from a sales point of view from an account management and cs point of view okay but you're sure from a net revenue return retention perspective you're above 100 percent on a cohort okay okay got it very cool and then what do you the overall business you said you're doing about 20 million today where were you what were you doing about a year ago what's overall company growth rate so company's been growing you know 30 40 a year for the last uh four years okay so so call a year ago maybe doing about 15 million bucks in ar something like that yeah that's great and how much of the growth over the past 12 months was from the stupid acquisition or or were they really just going after you and your team oh so that that's uh before we include the stupid acquisition oh uh 15 was before those numbers are performed before the stupid acquisition including the 20 you just told me today yeah oh okay well did scuba have meaning i forget what you told me because it was many many shows ago but did somebody have meaningful revenue uh stupid is uh 2.5 ar okay approximately at this stage okay so 22.5 today total altogether yeah interesting that's great and then and then um link fluence uh it sounds like they've raised capital um how much total have they raised uh 45 45 okay and where was the latest yeah the latest round was 21. um and that closed uh that's that's what we announced a couple weeks ago yep was that round contingent on them doing a deal with you when you're joining a ceo uh it happened at the same time but it no it wasn't uh contingent on this uh but he raised those questions about you know where do we take the business like what where uh what's next for the company uh and how do we solve the the gap uh in uh in terms of geography with the company been one of the only players um in that market that hasn't been really present in the u.s yep and when was put kind of linked affluence on on on a time like a timeline line for us when did they launch so company actually launched in 2006 but the the uh the the kind of shift uh to becoming a sas platform happened in 2012 uh so from 20 2006 to 2012 the company was very good at understanding social data but more acting as consultants or as an agency with with their clients and they started to build the uh the sas platform in 2012 and started you know transitioning from an agency model to a sas platform which i think is a great way to discover some some needs and really understand the model for your clients it's just a hard transition that a lot of agencies or consulting firms fail to achieve at some point why do they fail because it's not the same culture you know being uh being a consulting firm being is like you know uh you don't have to productize you don't have to uh really narrow down the the needs of your clients to the essentials uh so having the discipline to build a product uh is a different exercise um and i think you know i've seen i've seen some people go through that transition i was at the board of a company that did that really well but i've seen a lot of people fail and you know be tempted to always do custom work uh with their clients all the time there's always a temptation between there you know as an agency you can do anything but as a product company you can do what your product is good at which means you need to focus yeah yeah it's a tough it's a tough thing to give up uh i the most successful sas companies though you're right that i've interviewed have all started for a year or two as an agency and then they were ruthless in either selling the agency or shutting it down and going all in on the software even if revenue took a hit for a year or two exactly and that's it takes a lot of discipline and it takes you know you need to say no to some clients and it's very hard yep what are you uh what's the combined company linkedin plus coupon what do you guys add today in terms of team size uh 220 people 220 okay very good and spread out obviously between san francisco where else so yeah uh most of the team for link fluence is in um europe and asia so uh paris is the hq uh we've got offices in london uh just sold off in germany shanghai and uh in china and singapore uh so now we're adding san francisco's in your office that's great and i know you're just you've just joined a couple weeks ago have you dug in yet to kind of understand things like payback period on these on these new 40 000 acv accounts so it's actually um very interesting because the company's been growing without doing much marketing uh historically so it hasn't used the traditional you know um uh sas playbook marketing acquisition and cac most of those deals came through you know um being diligent uh being doing some networking with those big accounts being in rfps uh so it doesn't have a good visibility and that's one of the things that i want to you know be more disciplined into understanding is like you know what are the um uh what's the the payback period what's the cac what should we uh focus on so there's a lot of things that the company's been doing which is outside of the typical uh uh sas playbook but they've been you know uh successful at doing it i think uh method for expanding and you know obviously you want to be um strong and disciplined in in our acquisition in the us we're going to have to measure a lot more of those metrics of the 220 people full time how many of them are dedicated to marketing or sales or aes or sdrs or things like that so um the whole sales and marketing part uh is um is about 30 percent okay 30 of the 220. so about 63 people something like that yeah yeah so i mean you could add up all their salaries like per month and then divide by the number of new customers from then kind of back into a fully weighted attack do you do you look at those kinds of calculations or no yeah that's what we're going to be uh putting in place to get a better understanding of this but but it hasn't been in place since you joined no it's uh it's actually interesting um you know the company's been having uh you know pretty uh pretty good growth but outside of the playbook you know of doing everything you know by the book and in in terms of following the the sas metrics like cac like you know uh metron uh retention and so on interesting well it sounds like there's a lot to optimize that's a lot of fun all right let's wrap let's rub with you home with the famous five number one what's your favorite business book um that's funny because you asked me the question last time anything now um um you know there's a there's a business book that i loved um back in the days which was um you know uh built to last um i can't remember the author uh but it takes back to uh a long time ago number two is there a ceo you're following are studying naturally numbers that's okay number three what's your favorite online tool for building the business besides your own um so one of the tools i really love um it's called it's a tool called called uh full story yep uh it's really helping you know understand how people use your product i would really recommend it number four how many hours of sleep are you getting every night seven to eight that's good and which situation married single kiddos married three kids three very good and how old are you so all this one is 18 and then 15 and 13. sorry how old are you i'm 47 47 all right he says he squeaks a little bit all right last question here gail take us back to your 20 year old self what do you wish he knew well i would say um i don't know if i wish i knew uh i'd known more but you know the advice i would give myself would be you know to get out of my comfort zone that's why i told you know my daughters you know as she um started college you know there's a lot more to learn if you go out go out and you know you push yourself on the red and you get out of your comfort zone and you learn you learn new things um i don't know if there's one thing you know i wish i knew but um definitely would push myself to um to get out of things that are easy guys get out of your comfort zone he grew his company scoop it to about two million bucks in revenue then uh recently was acquired by a much larger company called link fluence that was founded in 2006 and in 2012 that company transitioned to a full-fledged sas company still early on really growing through rfp is now doing about 22 million dollars in ar combined between the two companies 45 million dollars raised 500 customers uh paying they've got about 220 folks between san francisco and other remote locations again helping to make social data more accessible more relevant and really social listening more uh simple or simpler guillaume thank you so much for taking us to the top thanks nathan