Metadata Revenue & Funding (2024)

[00:00] Quick context. This was recorded March twenty eighth and twenty ninth. So a couple weeks ago at my live event, saasopen.com. We had a thousand software CEOs there. If you missed it, we hope to see at the next one, September fifth and sixth in New York City, sasopen.com. But for now, let's jump into the recording. [00:18] >> The bank account went down and down and down. How do you compete with a giant that has like 400,000,000, if I'm not mistaken, in funding? How do you compete with someone like that? Now how did we make it? And that's the majority of this presentation. [00:33] Hey folks, if we haven't met yet, my name is Nathan Latka. Launched and sold my first software company back in 2015 and went on to write a book about it, which you guys made a Wall Street Journal bestseller purchasing over 30,000 copies. Thank you so much for that. After the book, I launched this show and one went on to create founderpath.com. I raised a large fund to do non dilutive deals with b to b software founders. [00:59] So far, we've invested in over 400 software founders totaling a $150,000,000. Here in 2024, we're doing three to four new deals per week. So if you're looking for capital and don't wanna give up equity, go sign up at founderpath.com for free to get your offer. Alright. Let's jump into the interview. [01:18] >> From 2,000,000 to 12,000,000 in ARR and what particular playbooks we use to get there. Some of them are not very sexy, but they've been tried over and over and over and are guaranteed to produce pipeline. So focus on that. A little bit about myself, I'm a software engineer, a robotics software engineer in my background. I turned into a marketer at some point, did a good job because because I have a technical background and today b to [01:41] >> b marketing is a very technical job. So I've done well as a VP of marketing and at some point I saw the gap between what is available to a VP of marketing in terms of data and technology and what is possible in terms of data technology for a b to b marketer. And I made a choice to take the leap and start a company that if you're our customer you essentially don't have you don't have to [02:03] >> hope for pipeline. You don't have to you know be a rocket scientist to generate pipeline because you use experimentation and data as a means to an end to guarantee that you have predictable pipeline with economies of scale. [02:18] >> A little bit about our revenue because that's that's the proof that you should listen. We had a very interesting path where it took us years to find product market fit. For years we built this piece of software and did a lot of customer development. And in 2020 we found what we thought was product market fit. I was so happy after years finally a meaningful revenue number, meaningful ARR, but unfortunately this also happened at the same time. [02:50] >> Have you ever been in a situation as a founder where you're worried about your runway? I couldn't sleep during that time we had less and less money in the bank and although we had product market fit you know we had a repeatable sales cycle the same kind of customer the same kind of pitch roughly the same amount of revenue but the bank account went down and down and down and investors wouldn't take my money not a [03:17] >> good investor I had a bunch of sharks who saw that were bleeding and would give us terrible term sheets, but no good investors want to put their investment on the table. And so in one day I've decided that instead of trying the same thing and trying to raise money with the same story that I have for that market fit, etcetera, I have to take ownership on the future of the company. And so we decided to cut [03:41] >> enough of the spending and I'll show you exactly what tactics we did. What we took such aggressive measures to make sure that next time we go fundraising we don't need the fundraise. And when you don't need the money, when you go to an investor and you tell them this is happening anyway, you are invited to join us for this journey. The conversation is very, different. You talk to different people, much kinder people, and you get term [04:07] >> sheets that you're proud of, not something that you're ashamed to go to your board with. So what did we do? First things first, the decision that many people don't like to do, cut expenses. We, I went through every line item in QuickBooks, every line item in my American Express credit card, and whatever was not necessary to keep the lights on, I didn't pay. Just like that. My credit score went down to about 300 at some point [04:33] >> with American Express. They didn't like that. And they would call me every day, pay your bill. I was like, I'm not paying anything out of the bill until I have money, I'm paying all of it. And you know that happened eventually, but they didn't like the the the path in between. I have some derogatory remarks and I'm proud of it because it saved the company. I also went to my sales team who were doing great and [04:52] >> told them look I can't really pay you but you're doing a good job. Can I convert some of your commissions into stocks? And surprisingly more than 50% said yes. The best salespeople in fact said yes and now they are majority stakeholders in the company. A bunch of other hacks we did. We launched, I talked to all of the customers. I decided that moment that I'm going to meet every customer that I have. We only had like [05:15] >> what 50 or 40, but I met all of them and learned that for some of them that were about to churn a piece of the product was still relevant to them. So we launched a mini version of the product and we're able to maintain some of the of the GRR, some of the retention. We did a bunch of other measures for example, every campaign that I had, every marketing competitor had, had all the way to revenue [05:37] >> ROI, return on investment. I made sure that every campaign that we have generates revenue, not just pipeline, not just leads, but actually goes all the way to revenue. And so we were able to focus and then quadruple down on what was working. [05:51] >> And so that was kind of the measures we took. From here I can tell you we got into break even if you don't see it here, that was the previous presentation, but I got we got all the way to I think $25 in the bank. It's like not a lot of money in the bank. Almost going under and then slowly going up. From that moment I was able to get 200 ks in accounts receivable debt. From [06:12] >> that I was able to get 300 ks in convertible note and then $2,000,000 raise and then a 4,500,000 right after that. So being sustainable company chills out investor. They're like alright there's one less risk. I know you're not gonna run out of money. I know this is happening anyway. Looks like you have product market fit. Now I'm going to give you a shot. [06:35] >> And that year was a special year because after we raised that money, suddenly the survival was like we didn't have to survive. We didn't wake up every morning, okay how am I making it one more day? And from that mindset when you're not have, I still get cash updates by the way twice a week. So I still have a little bit of PTSD. But I don't wake up every morning thinking I'm running out of cash. And [06:54] >> that gives you a little bit of okay, now let's think about the vision. What do I want? And when things started working out the product market fit was really there. And so once we started investing in sales in marketing, we're a little bit more more spendful than before. We started focusing on what is repeatable that can take us to the next level. And we actually negotiated if the year before I negotiated with the board to cut [07:19] >> the growth by half because I didn't have the money to support that growth. This year we're like hey how much more can we grow? This may not last forever, which it didn't right the economy tanked. So how do we take advantage of a market that is growing and so we we renegotiated with my leadership team three times and we almost made it to the third goal. So instead of growing to five, instead instead of going to [07:39] >> seven and a half which was the new goal, we decided 12 and a half is the third goal and we almost made it. Now how did we make it? And that's the majority of this presentation. There are four cool playbooks. Some of them came from us, metadata and some of them came from our customers. Because we run demand generation for our b to b companies, b to b SaaS companies, mid markets, then we have a lot [08:01] >> of proof, a lot of quantitative proof on what works. When I say works, again I don't talk about vanity metrics. I don't care about leads, don't care about impressions, click through rates, all of those cool KPIs that growth hackers talk about, I really don't understand much about. I dive all the way into board level KPIs, revenue, CAC, pipeline. Comparison guides. So we were poor still even with an A round we're competing with giants that were creating [08:29] >> categories, spending lots of money on SEO and SEM, owning all the display inventory. So how do you compete with a giant that has like 400,000,000 if I'm not mistaken in funding? How do you compete with someone like that? One hack is called comparison guides. We were able to parachute into deals in the last minute and steal it away. How does it go? So most companies invest advertising and marketing money in the entire funnel. Everything from what [08:58] >> is this category about? What's problem are we solving? Who's the best vendor? What are the features? Why is our pricing the best? Well, this is cool. If you have the money to do it, that's amazing. If you don't we didn't. We said hey we're going to focus on one area only. When they get to the place where they're already qualified they already know they want to purchase something and they're just comparing vendors, comparing features based on [09:19] >> the problems that they have. I want them to know about us. In fact when they do the comparison, I want to be the one that gives them the comparison guide. And so what did we do? [09:31] >> First thing is review sites. Just like there is Yelp for consumer, there is G2, there is Trust, URadius and a bunch of other websites to help consumers of SAS determine which vendor they should go with. Right? This exists. We started paying the biggest check I paid was for G2. I pay them for two things. One to have lots of reviews so that our profile looks good. Our customers loved us. I want to make sure it's very [10:00] >> public. So we had one of the best g two profiles. If you go there, you're already half in. The second one is how do I know that the deal is being cooked? Right, if my competitor is talking he's not telling me hey I'm talking to this to this prospect you should join in. I need to figure out that the deals are in the making. So I purchased the buyer intent signal. It's a very fancy name to [10:19] >> pay for a web log data. G2 would send me their web log data. It's like a bunch of IPs and URLs. And what I did with that is reverse IP so I understand which company it is, which location it is, I know who is my customer so I will go and find the contacts of that customer and I would start bombarding them with emails and ads to tell them hey I think you're in a buying cycle [10:40] >> for this particular product. Right? Here's a comparison guide. It's a generic comparison, it's objective comparison guide. And the comparison guide was not created by us, was created by G2. So there is credibility to it. But as the author, as the one who is, sorry as the vendor, I can determine which features I'm sorting the guide by. And I can sort it by the features that I'm best at. For example we're best at ROI, the best vendor [11:06] >> in our category. And so I would go and sort the buyer guide based on this feature. And when the customer if they care about ROI or ease of implementation or customer service, boom we come up first. Even if you don't come up first, it's still worthwhile to do it because if you're in the top three or top four, it's very likely that the person is going to give you a shot. They're to give you half an [11:27] >> hour on the phone to maybe convince them. Even if they use it as a negotiating tactic, they're going to give you the time of day to at least compare you to someone else. So person guide from review sites, you don't brand it, don't brand it with your logo, make sure the person who is buying understand this is an objective as much as possible objective comparison and you'll get a shot at the table. [11:55] >> This is how to do it. It's not very complicated. I do the step by step by the end of this presentation you have my email. I think Nathan will also send you these slides, but this is a very easy to implement within I would say a month you can have this up and running. [12:12] >> Second one, Convo ads. Many times CEOs of SaaS companies or VP of marketing for SaaS companies ask me, how can I generate pipeline quickly? I am told that there is no silver bullet. It's wrong. There are some silver bullets out there. You can apply tactics. It's your sum game of time and money and the audience you're going after. Right? Like you have there are some restrictions, but there are particular playbooks that can generate pipeline quickly. I'm [12:38] >> not talking about e book leads, webinar attendees. No, I'm talking about people who will hop on a call knowing they're going to be sold to is the person you want to sell to and you have half an hour to try to sell them. I can't guarantee you'll sell them, but you'll have half an hour to try and do it. How do you do it? LinkedIn has this ad type called conversational ad. It's basically a promoted email, [13:00] >> right? You get emails all the time on your email, you don't open them, they're in the promotions tab. But on LinkedIn you get emails and if you pay for it as a vendor you can be on top of the list. So you'll be the first person that they see on their email. And it's a chat bot that you can create, it's a workflow that basically ask them and the workflow that we use is either giving a [13:18] >> gift card, a donation, or an audit, a marketing audit for your company. So something of value. You get something of value for free, in return you give us your time. Half an hour twenty five minutes for a demo. This tactic we've been using it maybe for four years now. It hasn't been exhausted. All of my customers use it. It hasn't been exhausted. The arbitrage is not there. You can't get it for really cheap anymore because many [13:45] >> people know about it. But this works and within weeks, within maybe two weeks of executing this campaign you would be able to start seeing a flow of demo request. As simple as that. It's not rocket science, the steps are here. You can determine exactly which buyer, which influencer, which message you want to get them. You pay for the email, you pay for the targeting, you also pay usually for some sort of a value add where it's [14:13] >> a gift card or an audit or whatever it is that you want. In return you get a shot in selling to your prospect. And if even if you don't sell at the very least you get objections and you can learn and iterate. [14:26] >> Next one, close loss campaign. This didn't used to be like nicely packaged in a slide like that, but I started using this tactic many years ago. It used to be me and my VP of sales sitting in a bar doing shots, two of our laptops open, and as time goes by we're less worried the typos and the type of emails that we send and how many emails and is it perfect? No. But basically the tactic is [14:49] >> you lost many deals sometimes to price, sometimes to a competitor, sometimes due to timing and so you go back to the same company and you go back to the same buyers, two different avenues. Same buyer, different company, things change. Same company, different buyer, different point of view. You go and you use whatever reason you lost that deal, It if was budget, maybe now there is budget. If it was timing, maybe now is the right time. If [15:12] >> it was a competitor, maybe that competitor sucks. So you go and you have that message, start that conversation with that person. And the other avenue is we want a huge deal just by going to the same person who liked us, but she couldn't bring us into that company. She later joined ThoughtSpot, big ass logo that we still have and we were able to win that just because we woke up. It's like hey you remember us, you [15:31] >> liked us, you work in a new company now. And so this is very simple here where you need to gather the data from your Salesforce. You can add on top of that information from user gems. User gems are very unique data source that tells you which people switched which jobs. Another thing that you can put there is the reason why you lost that deal because that's how you personalize the message. You you the opener for the [15:55] >> conversation. That simple tactic always gets you pipeline back, always. This is the email that we send. It's not very sexy, it's long, but you can notice two things or maybe you can or you cannot, I'll tell you. First, this is not HubSpot. This is Apollo. We have HubSpot, but we don't send this email from HubSpot because this is not a marketing email. It's a sales email. Also the email doesn't come from a marketing at metadata or [16:20] >> my my AE or my VP of sales. No. This comes from the same ICP. I find the same person that I sell to and I find the same person in my company with equal and I send that email from them because there is much more credibility. There's camaraderie between a marketer and a marketer versus a salesperson and a marketer. Those two things very high very high open rates and reply rates. And you can see below, oh [16:42] >> no you cannot see. Now you can see below the bunch of opportunities within less than a week. It's a healthy open rate you know. 30% of the people open the email, Some of them reply a bunch of new opportunities. Some of you don't even see here conversations that happen over text. Oh I saw that email. Yeah I'm ready to hop on another call. Oh it wasn't right before let's hop on a call now. So not very [17:06] >> sexy tactic. I do it every quarter guaranteed to wake up some buyers and get you some some deals back on the table. It's very important to add new contacts to the companies that the champion move to another one. So, you add more and more people into that contact so that one of them will give you a shot. [17:32] >> Last but not least, B2C social. How many times have you heard the sentence Facebook doesn't work for b to b? They say it all the fucking time. All kinds of sacred cows out there. Go and massacre them because you'll be the one who breaks the status quo. You'll be one of the only marketers out there who goes and bid on people on Facebook, on Twitter, on Instagram, on Reddit, on TikTok. People are everywhere all the time. [17:57] >> And if you target them, if you like, if you target them properly, meaning if you don't use the channels native targeting, sometimes doesn't make any sense for b2b, right? Facebook doesn't care about b2b. They make 90% of their revenue from political and consumer campaigns. So they don't have any job title or company name on seniority, but we do. We're not the only vendor, but we're one of the layers of targeting for a company like Facebook. If [18:20] >> you target exactly the same people using the same email, the same PIIs, now you have a whole new channel. And first of all, it's interesting because you'll be able to distract them. They're so accustomed to the usual content of Facebook, some see a b2b ad for them you're going to get their attention. Two, you're going to be doing crazy arbitrage. In our platform we constantly clone automatically campaigns exactly the way they are. One campaign type to [18:48] >> the other because the CAC goes down significantly you're competing against many many less people so it gives you the opportunity to target more people with the same budget so take a look every channel gives you different types of targeting capabilities on Quora on Reddit you can target based on questions on tags. People are asking questions about what problems are you solving? Whatever problems that you're solving put them in a long sentence now you'll start targeting based [19:14] >> on that tag. It's very very powerful, but you have to experiment. You have to experiment constantly and see what works for you. Just by trying, just by trying you'll be outside of the 99% of the marketers who only go after LinkedIn and Google and that's it. [19:29] >> That's it. I'm one and a half minute before my end. Thank you for your time.

[00:00] >> Alright. One more session for lunch. Nice to meet you all. My name is Gil Allouche. I'm the founder and CEO of metadata. We're the b to b marketing operating system. In the next twenty minutes, or maybe a little bit less, we wanna talk about a few things. How we moved from almost dying, almost cash death to hypergrowth, and then how we moved from hypergrowth to survival mode in a recession. Very relevant for where we are these [00:24] >> days. I'm gonna finish with a bunch of hacks for the wartime CEO, and we're currently in wartime. So just a little bit about myself. I'm a software engineer. I have robotics background. I spent about ten years as a VP of marketing post my graduate school, and every lesson that I talk about here is written in blood and sweat and tears. Nothing about this is theoretical. So I'll start with the revenue growth, because that's how Founderpath slash [00:51] >> SaaS Open likes to put it. So this is how the revenue growth looks like. There's a nice peak in the middle. That was our hyper growth mode 2021, 250%. It was amazing, but it didn't start that way. And so in 2020, we finally hit product market fit. It took us three years to build a product, sell it, and figure out who do we sell it to successfully. So we were very happy about the product market fit, [01:16] >> but we were not happy about the fact that I had about $500,000 left, burning about 200,000 every month. So we had about two two months of of life. I would not sleep well during that time. Lot of a lot of heartbreak during that time. And so we had to and I remember at some point, you know, we had a bunch of term sheets from kind of short VCs completely changing the company, de diluting diluting so on [01:44] >> and so forth, but we didn't we didn't do those. We wanted to make sure that we have enough runway to survive this this time. So the first stage that I'm gonna talk about is that survival phase that I think every one of us here experiences at some point, whether the market is good or bad. In order to to get through that first initial stage, we had to first and foremost remove a lot of burn. We had [02:13] >> to cut our company significantly. So right in there, we cut about third of our employee. We also stopped paying every essential vendor. I know this is not very popular to say, but I went through each and every spend with my CFO, every spend, from a consultant to to any software vendor, really anything, and if I couldn't afford it or it was not critical, we didn't pay, which means a lot of people were pissed, especially American Express [02:43] >> credit card, and a bunch of other a bunch of other vendors, but we had to do it. It was either paying it and being at cash zero or postponing it, essentially. We eventually paid all of them, but postponing it. Also, entire management team took a 20% cut, and all of the salespeople converted their commissions to equity, and they wouldn't have done it if we didn't ask them to do it. And so we said, here's an option. [03:05] >> You're gonna get more options than this commission is worth, and it's gonna get you closer, gonna get us closer because you're essentially investing in a company, and it saves us a lot of cash. And we had all of our salespeople and many of our VP of sales committing to doing that. And then finally, we took debt. Essentially, anyone who would give me cash at that point, I would took I think I almost signed a 35% interest [03:29] >> rate. I didn't end up signing it eventually, because I got a better a better one, but I was ready to do it. At that stage, you really wanna save your company. Now, when you have a situation like that, a survival situation, you don't only wanna take defensive mode. You also wanna take offensive moves, because when everyone is panicking and and hunkering down, it's kind of an opportunity for you to make bold moves. And so first of [03:52] >> all, opened a convertible note. We couldn't raise an equity run at that moment because we didn't have enough time, and going into a VC when you're cashless is a bad idea. And so the first thing we did is to raise a convertible note for our tribe, and when I mean tribe is customers, friends, existing investors, advisors, and even employees, and we end up raising a nice convertible note. And with that cash, we had much more confidence [04:16] >> to go and raise an actual series a. The second one is we invested in sales. We hired sales team for for Salesforce that already worked together with one another. Great culture. It was very strong, and they just we spiffed them on cash deals. Essentially, if they got paid upfront, boom, they got an additional bonus. That's what we optimized towards. And then finally, we found a piece in our product that was very well suited for a terrible [04:42] >> time. It's called MetaMatch. Today, it has a free trial. You can you can go to our website and and start with it, but we found out that that piece of software is very relevant for recession. And so we made that a bigger deal and called every customer and offered them that deal. [04:56] >> Now, I like to talk about drastic result because people sometimes don't understand. On the on the left hand side, you see what convertible debt means, you know, or some of the venture debt, sorry. So we essentially sold our accounts receivables. We we went and said, hey, look, we we just closed a $100,000 in MRR. Give us that $100,000 because we're only gonna get paid at the end of the year. So any cash that I can take [05:17] >> ahead of time, boom, a success. Second one, I maxed out all of my credit cards. American Express would call me daily. I would pick up your phone and tell them I'm not paying you anything. When I have money, I'm paying all of it. Right now, you can keep calling me. I'm not paying you any of that. And third one, I would keep getting these notifications on my Mint, because my credit score went from about 750 to [05:35] >> about 250, 300. Was not great. A bunch of derogatory marks. I don't care. My company survived, and I knew it's gonna it's gonna thrive eventually. [05:45] >> And so look at that adjustment. That line, that small line going very close to zero, you can imagine, didn't sleep really well during those times. Heart waves were very high. I think I smoked a lot of weed during that period of time. And we course corrected. And so we almost almost got to zero, but then we course corrected, and once we course corrected, guess what happened? I got a lot of options from VCs suddenly. They were [06:09] >> very excited of investing in the company, and they put our Series A, And we did not we did not start spending a lot of money after that. We actually kept the optimization phase, and then got additional funding. And so what was impossible a few months before suddenly was was our reality. If if we didn't do those things and just repeated it, I wouldn't be here telling talking about this today. And so one of the lessons learned [06:34] >> that I had, and one of my advisers told me that because I was like, hey, I can't make those changes. We're already going on this trajectory. And he told me, you can change your entire business tomorrow. There is nothing stopping you besides your own limiting thoughts. And so that's something that I think is very important for us to remember, especially when we need to pivot. [06:52] >> So survival is important, but this is not the reason we signed up for this for this role. And so travel is really what we're here for, growth and and the the and the victory. And so moving from that stage of travel, was a very interesting experience. So in 2021, we had money in the bank, and I had to completely change the culture, because if until then it was we can't spend anything on on anything, now it's [07:17] >> you have to invest. You have to invest not only in the short term, you also have to invest in the long term. And so we really had to make a big shift, and I can tell you something cool that happened is that we grew a lot more than we planned to. If in survival mode, we cut our goal by 33, 40%, in the Thrival mode, I went back to my VPs, to my to my C levels, [07:40] >> and we increased the goal three times that year. We're supposed to grow from two to five, then we said, hey, we're doing well. Let's do it to seven and a half, then 10.4, then 12 and a half, and we ended up at 12.2. So pretty cool to be able to adapt both ways. When you're doing well, you don't know if it's going to always continue, so max it, and when you're not doing well, pull back. Very [08:00] >> important adaptability. [08:05] >> With the AEs, one of the things that we did is we actually split them this time for higher ACV and ARR. Cash was not a problem. We raised Series B in a great market, great valuation, nothing as great as Chili Piper, but pretty good still, and we were able to use that money to invest in our growth, in content, in a conference with 8,000 registrants, in a community, in a brand, in a bunch of things that [08:25] >> we didn't have money for before. And then we made that transition, know, cultural shift from survival and PTSD to thrival and growth, it was a good time to trust yourself and build the go to market motion, not being afraid of actually seeing what repeatability do we have. And we found out that we have pretty great repeatability. [08:50] >> One of the lessons that I learned in in in those times, and I had to shift the entire culture, is to not make a decision out of fear. Every time I was panicking, I was having a hard time, we were struggling, I would not make a decision. I would I would take a break. I would go to the beach. I would take a walk in the tenderloin. I would again, I would smoke one, or I would [09:11] >> just take a meditation, whatever it is that I need to do to relax. When I'm in a relaxed mode, I make much better decision. Not to say that you have a week to wait, but figure out your psyche, and then fix it, and then make a decision. [09:24] >> And so the most interesting part in this presentation, I think, is how to adapt back from hypergrowth and adapt where we are today, because right now, the market is not the best, and you have to adapt to it. I don't know if it's affecting your business. It's definitely affecting mine. And so what did we do to adapt to the recession that we are today? And so the situation arises that we thought everything is gonna continue. That [09:45] >> hyper growth in 2021 is just gonna continue. It's gonna be amazing. We're gonna keep doubling maybe even more every year. It did not happen. This is what happened in reality. Q1 was amazing. We grew exactly as we planned. Q2, we flattened. And so then what do you do? You know, investors actually called me. It was funny. In q one, my my new investor called me and told me, Gil, between the spectrum of CEOs who spend too [10:08] >> much and CEOs who spend too too little, you're definitely on the spend too little spectrum. And fast forward three weeks into that conversation, into that phone call, he told me, hey, Gil, what's your budget cut plan for the year? Because then every the Shopify by then went down, the crypto went down, and so, be cognizant of of the advice you get. You're gonna get a lot of advice. You have to distill it on your own. And [10:31] >> so what do you do? What do you do when you have a reality check like that? When the situation outside in the market is crashing, there's wars. This is more recent with Silicon Valley Bank. Our money was in Silicon Valley Bank. The stock market is going down, and meanwhile, your business is exactly the opposite trajectory. Our number of employees going up. The burn rate was going up and giving me a heartburn. And so the most important [10:56] >> thing is if you see something that is not working, just make sure not to repeat it many times. That's it. You always have the opportunity to change. And so it was funny. I was quoted in Dave Gerhardt's book about the series b trap, and although I didn't fall completely and die into the series b trap, I definitely stumbled upon it myself. And so after we raised the series b, there is this story that you didn't figure [11:19] >> out everything about the business. You keep investing, and actually, you don't get the growth, And if you fully fall into the trap, you run out of money, and then you have a fire sale. And so we found out about that very quickly. Okay, we're flattening. Let's change trajectory. So how did we adapt? What did we do? First thing first, get runway. We want to make sure at any point of time we have at least one and [11:41] >> a half years, maybe two years of runway, and be on a trajectory to break even. It's always important, once you're a master of your own domain, you can make good decision. You have confidence, you can make good decisions. When you don't need money, you can get money. [11:54] >> The second thing is cutting earlier. Every time you get lots of advice, again, you have to distill it as a CEO or as a founder. I got a lot of advice. I think we we not to fire before the holidays, not to fire now. This is not a good time to to let to to do the layoffs. And the truth is, it's never a good time to do layoffs. Never no one ever wants to get that [12:11] >> phone call, to get that Zoom, to get that that meeting. But guess what? If I waited two months like I was advised to by pretty much everyone, then I would have had to lay off eight more people, seven to eight more people, because that's how the burn works, right? You have two more peop you know you have to fire them, do it earlier. You know you have to cut costs, do it earlier, because you're going to [12:30] >> have to do less if you save that time. [12:34] >> Of course, we negotiated the board KPIs. Suddenly, 100% growth was not necessary. No one was expecting it even. 50% growth is above and beyond expectations for boards, even for a hyper growth company. And then we focused more on retention. It's much lower cost to increase revenues from existing customers versus from new customers, and so we shifted. We shifted there because that's the thing we had to learn during this stage. [13:01] >> Another part that I think many people don't put enough attention on is optimization. When you grow, you bring in inefficiencies, for sure. Every company that grows brings in b players, c players, workflows, inefficiency, bottlenecks, and you don't get a chance to fix it until you have to or until you get acquired, and a PE makes you do that. And so if you can do those things earlier, the better, and it's very hard to do it internally [13:27] >> without help from external people, because when someone builds a workflow, even if that workflow sucks, they are emotionally attached to it. And so you have to bring in someone else who is not emotionally attached to it, and can have a beginner's mind, and show you that you have a problem here. So that's something we're doing across across the board, in marketing, in sales, in product, bringing in those outside people. Hey, help us identify the bottlenecks. Help [13:49] >> us identify efficiencies, because once you increase, for example, the marketing to SDR or SDR to sales handoff, 5%, $10,000,000 pipeline just comes out of nowhere that you don't have to buy. [14:01] >> And then finally, just like with every other defense offense, you have to make offensive moves. Downmarket, when people are panicking, is a great situation to make some bold moves. And so we use the equity that we and the valuation that we benefited in in a good market and use it to acquire a company, and use it to make some strategic moves. And so don't take all the runway that you're saving just to kind of hide and [14:24] >> wait for things to get better. No. Change your own situation, make some strategic moves with the money that you now saved. Most important lesson here by far is to cut earlier. I learned that when you make that bold choice on your own, it's never going to be popular. It's always going to be the right thing. It's better to let go of 10 people, 15 people than the entire company. [14:46] >> And so we definitely cut the the the ARR goal. We shifted the HR from hiring to maintaining in culture and improvement of the culture. We cut every marketing program that didn't have a positive ROI, and by positive ROI, I mean revenues. Money in, money out, it's profitable. And then of course, optimizing the acquisition funnel. We also made a few cool strategic bets. So we made our first acquisition in October last year, which already is panning out, [15:13] >> which I'm very happy about. We hired a customer success and and the account management team for the first time. We had an account management team. We didn't even think about that before, and then we launched a PLG Motion, a product led growth motion that is starting to pan out as an amazing bet. Not all the bets we made panned out. I'm not showing you the like seven, eight bets that were a shit show, I'm showing you [15:32] >> the three that were very successful because that's how it goes with bets, and it was 100% a good idea to do those. So a few hacks just to show it's it's really not rocket science, but to show you any examples, just like with the reality check of a drastic move, what does it mean to do a budget cut? So we were supposed to grow to about 200 people, and we're at about 110. And so we really [15:54] >> had to make hiring freeze completely. So about 30 people that we're about to hire were not hiring, then and we had to let go of a lot of people, some contractors, some full time people. I had a number because I knew how much runway I want, so I had a number. I was conservative, and it panned out to be a good idea. You don't wanna cut too much, you don't wanna cut many times, but most important [16:17] >> is to make the right decision. Timing and popularity is secondary. Marketing programs, as you can see, everything that is revenue positive stays. Everything that is not revenue positive goes out the door. Product led growth, this was expected to bring us about five to six trials. We're already at about a 100. After a month and a half, this is something that is revolutionary. Without cash restrictions, without a market that is problematic, we wouldn't make this move. And [16:46] >> so you can take challenges and convert them to opportunities. This, without getting into the details, is how we're optimizing our workflow. And so you can see, we're really analyzing every area from the website, from the chatbot to the forums to the SDR, all of those, and see where can we make efficiencies. And then final, but very happy move is to acquire a company. I didn't realize we'll be at a position, but when the market crashes and [17:11] >> companies are struggling, there are opportunities to actually make strategic moves, strategic acquisitions. So we made our first one, and we're integrating it really nicely into the company, providing sticky value for the customer, and it's just a nice win. So making bold moves in a in a tough market is highly encouraged. Most people don't do it. You'll be the 5% that is gaining market share in a tough market. Highly recommended. And then the convertible notes. Look, we [17:39] >> were raised just before the Series B in order to gain confidence. I raised, I think, a 5,000,000. I plan to raise 2,000,000, ended up raising 5,000,000 over a period of one month with convertible notes. It's super, super easy, especially when the market is hot, but even when it's not super easy to raise on convertible note, I highly recommend it. That's it. These are the lessons. It was a pleasure presenting to you. Thank you very much.