How MoxiWorks CEO Aliene Chase grew to $56.2M revenue and 3.5K customers in 2024.

guys Moxie work start off a spin off with one big customer paying single digit Millions per year back in 2012 they brought in New York to scale the business they now serve 3 500 brokerages think of them almost like Salesforce but for brokerages and a lot of other details and and individual products sort of uh silos built on top of that base platform those customers are paying a bunch of money now multi-year deals they're close to 50 million bucks in a run rate uh growing rapidly uh they've got healthy expansion Revenue through arpu expansion and also what they called Cola those multi-year deals they accelerate um looking to be acquisitive obviously they're backed by private Equity Firm called Vector looking to do more deals hopefully in the near future as the markets compress and deal prices get a little bit more into York's liking we'll see what happens hey folks my guest today is York Bauer he's a startup and turn on Executive with a unique blend of General management sales and marketing skills he specialized in venture-backed and family-owned technology companies helping them get their product right then go to market using direct sales marketing BD to make Revenue growth scale and profitability happen he's now building moxieworks.com which is a leading residential real estate platform New York you're ready to take us to the top uh yes sir thanks for having me Nathan great to be with you all right what does that mean leading residential real estate platform are you selling to Brokers consumers buyers or someone else uh we sell the brokerages and in particular the Enterprise brokerage one of the Lessons Learned I think is the consumer and small business part of the market is very hard as a SAS company you always have to be concerned about churn and boy you can't avoid it at the low end of the market so we chose a decade ago when we started this journey to concentrate on the Enterprise how does adjustments and sofa affect your business a lot of these Brokers can't get cheap money anymore it was four percent five percent cheaper about eight months ago does that mean they turn from from oxy no because again with the Enterprise Focus the the customers we have we're not only on the large brokerage and we're also on the quality Brokers the full service Brokerage in which means that these companies tend to be better run they are profitable and they don't rely on the kind of funding that you've seen some of the new model uh real estate experiments I'll call them in the last five to ten years you know that have been heavily dependent on funding that's now dried up that's not the case for the traditional uh well-run full-service brokerage very cool okay so what are they paying for what do they get so think of us as salesforce.com for residential real estate and it's more than just CRM it's a whole Suite of products uh websites presentation software the CRM of course um management tools recruiting tools Etc everything you need essentially for a brokerage to give an agent to be successful and they're buying it though very much like they would buy like any company would buy salesforce.com they're they're buying it on a monthly uh you know RP SAS basis uh and we license we don't do what are in our industry at least are known as hunting license deals and we're licensing the entire Enterprise up front on a multi-year deal as opposed to hey we have X customer here's a lot we have X customer what it means is you can just you're allowed to sell into them onesie Tuesday uh that's a that's a beating so we again have focused on the Enterprise and that would be the one word of of I guess advice I would give if if you can generate something for the Enterprise that's going to be a higher it it's harder to sell into at the beginning yes but it's so much more durable and stable over time yep so you say you're selling multi-year deals give us a sense of range here right what's the average brokerage paying you per year to access this technology we're talking 10 grand 100 Grand a million sure it it varies all over the map our small deals are typically 50 000 in ARR um although we don't concentrate heavily on that end of the market we tend to focus on more we would call at least the Middle Market which is I'd say you know 100 to 500 Grand AR but we have customers a number of them that are uh single digit Millions per year for us so it's really uh yeah that's the best clue you can look in a SAS company to go do they have the ability to drive net dollar attention above 150 is how many customers are paying more than a million bucks a year it sounds like you've already got a couple of them yeah actually we have about a half dozen so it's we've oh wow okay yeah and it's you know it's funny one of the jokes I make is Max is the overnight success that took 10 years I mean that's the uh that's the other message for entrepreneurs out there you know this this business takes grit and I think the successful businesses when you look at them they all have a long history of grinding and we are no exception so you launched in 2010 yeah I came to the company actually in 2012. the company started as a spin out in 2011 um the leadership um there was a change made in the leadership which brought me in in 2012. oh what's going on there YouTube good to see you guys now imagine this you love watching these interviews with SAS Founders but imagine if we took all of the valuation data out from over 2807 interviews I've done manually saves you a lot of time well we've done this we've built the into the beautiful interface inside of founder path check this out I'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for evaluation this year now the secret evaluation is there's many different ways to value a SAS business so the reason you're going to see three or four different 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valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of SAS valuation than what you can get now inside of founder path and we're thrilled to bring it to you all right we're gonna go back to the YouTube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your valuation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform I hope to see you there all right let's jump back into the interview did that also come with a round of funding were you backed for by VCS uh interesting we're kind of on the SAT test we're the ones that don't belong in terms of funding we started as I mentioned as a spin out we're originally funded by the parent that spun us out which was a real estate brokerage here in the I'm in Seattle here in the Northwest called Windemere real estate and we had some funding from them and a couple other uh key customers that helped us get going and then we brought actually private Equity Firm in Vector capital in 2019 that's been our Capital Partner since then interesting was that a minority buyout or majority buyout uh it was a majority uh but our three existing customer investors the previous investors remain both customers and investors of significance uh so it's been a really good partnership actually to have both both customers and an experienced PE in the boardroom we're I guess you weren't in charge of leading the spin out in 2012 right or were you no I came immediately after that yeah I see I see okay I mean I was going to ask you are you know those those customers that were part of the funding back in 2012 are they one of those six handful today paying more than a million bucks per year that would be great alignment the the yes they are and uh it's interesting because when I came to the company the reason I consider it more of a startup than than perhaps other spin outs is when we spun out the only customer was the customer we spun out of so I mean it really it was a luxury in the sense we actually had a customer but you know beyond that it was a total startup and we had to probably ask yield all the tech anyway can I ask you back in that day back in 2012 what was total revenue just from that one customer do you remember yeah it was it was very low single digit Millions very low okay so it was a pretty significant it wasn't like a 10 month customer it was totally and really really what it gave us was the the experience of having a a large Enterprise customer from day one and as you guys I'm sure your audience knows you know if you're customer focused which I've always believed in being having that customer to to interact with to refine to cycle through and use as a reference and all those things that we we hope for that was definitely I used the term luxury earlier it was definitely for me as a pseudo founder I'm not the founder but you know I came in essentially at the beginning of the business but to have that that one anchor customer was certainly very helpful yeah we call that one anchor customer paying these upfront fees because product roadmap acceleration fees yes well said yes all right so from that one customer who was your spin out in 2012 fast forward today how many customers are you serving now uh we have it depends on exactly how you categorize it but when you look at the total brokerage entities that we serve it's about 3 500. okay and in some cases that's through some master relationships um for example our largest customer is a company called anywhere which is the largest real estate entity in the United States that has more than 200 000 agents across seven franchise brands that they operate things you would recognize like Coldwell Banker and Sotheby's and Century 21. um so we have we have 3 500 customers and about 400 000 agents under those 3 500 customers that use our stuff interesting okay but just to be clear the 3500 sort of brands logos companies are the ones paying you directly they pay for 400 000 that's correct yeah we don't we don't sell directly to the agent uh for reasons that and there's actually a bit of a lesson in here perhaps when I came to the company I have both an Enterprise and a b2c background in my career I actually got tempted to go after the agent but I realized pretty quickly it's like a consumer business it looks it Mass grades as business because these are agents and they're doing business but in reality they behave like a consumer which means the CAC is really high the support burden's really high and they churn like crazy but other than that it's amazing so so I learned that pretty quickly and shifted all all guns to the Enterprise that's pretty that's pretty wild um okay yeah that makes tons of sense now now can I take we talked about sort of our poos and acbs earlier I mean can I take 3 500 times you know 50 000 bucks a year I mean that would put you guys over 100 million bucks in Revenue at this point yeah we're not quite there because the pricing in volume it's it's much more stratified in our business than it might be in a typical B2B and would you have on the small end of the market the pricing is pretty high and then on the volume and it's very low so we're we're more in the in the middle there we're in the 50 million range do you think you I don't know what your growth rate is do you think you can break 100 million this year in terms of run rate I think this year is going to be challenging you guys all see in the headlines what's going on in the housing market so I think it'll be challenging to do this year but we absolutely will break 100 million uh in the in the coming you know couple three years that's certainly our plan let me go back to you personally for a second because this is sort of an interesting origin story you've now been at the company for you had your 10-year anniversary anniversary recently but you're not the founder I mean what's it like being recruited in sort of after the original Founders leave and also why is it worth it for you why not you just go launch something yourself that you own 100 of how do they incentivize you sure that's it's a great question and I think you know the entrepreneur's journey is a very lonely one and um I I just felt like you know you read my bio I felt like one of the things that I've developed an expertise in is to help family offices essentially take businesses that they have in some form and really multiply them so you know I've I've taken what was this embryonic thing and turned it into I think a pretty good mature business for them I like doing that and the incentives on along the way have been typical CEO equity-based incentives as well as you know frankly a decent cash package so it it works out it depends on what you want you know being an entrepreneur from zero sounds attractive but it also comes with a lot of headaches when you can when you come into something as I mentioned that already has some traction everybody has a customer it has some basis of understanding some organization to it um that just accelerates your ability to grow it from there and to me to some extent it's about having um you know smaller piece of a larger pie is how I like to to think of it I'm not some you know ego driven person that has to own it all yeah yeah I it's always an interesting question because there are some people that love zero to one and there's some people that are like I prefer one to ten um yeah I just always wonder with those folks that are on the one to ten category you know look I don't know what your comp is I'm not going to ask you to reveal that live but most CEO comes you know in this kind of situation you're going to be making cash 250 to 350 and you're going to have an equity slug that's something between sort of five and twenty percent of the business somewhere somewhere sort of in that range and I always just wonder man I don't know if it's a courage thing or if it's just a risk thing but if they just start it from scratch they can own 100 and pay themselves whatever they want well and In fairness I've done that a couple times and zero to one it sounds good but for everyone that succeeds like you say and I I say this routine I just said to somebody last week zero to one is harder right zero to one's the hardest thing it can be the most gratifying thing but boy the failure rate is off the charts and I've I've been there I've done that I've had successes and failures and I figure at this point in my career I just wanted to to do the one to ten I've had a good fortune Nathan to do all these things I work for Microsoft in the early 90s at you know 10 000 employees all the way down to starting my own stuff so it's and I don't think by the way one is inherently better than than any other of those range of models it's what you prefer and it doesn't have to be the same right it can vary throughout your career yeah who recruited you in was it was it was it I think he pronounced it Jacoby or Obi Jacoby uh yeah ultimately he was the decision maker but I got found through uh through a head hunt through an executive recruiter here ah I see okay and then I guess you look I think uh Robert amen managing director of vector sort of led the deal what's it like sort of working with a PE form I mean one of the advantages is you've got I think when they did the deal they had four billion in AUM maybe it's more now but if you can identify some takeover targets you can really put together a nice sort of Hub and spoke model here have you been acquisitive we have we've done three hours positions actually in the last three years so we haven't been drunken Sailors it's important to note that that both I personally but also vector and Rob have good disciplines so we we haven't you know we didn't go nuts and that was the difference I think by the way between a PE and a VC approach in these last several years PES are much more disciplined and I think that that serves uh things well now in a in a Slowdown um it's been really good Vector is not only of size with as you mentioned the 4 billion under management but also the oldest is sort of a fun fact for your audience the oldest tech only private Equity Firm in the country still run the same guy that founded it Alex lusky Rob's been there 20 years so this isn't the OG of of this and I think we were um I don't want to call this an experiment but we were a bit you know how the the PE and VC worlds have Blended somewhat in the last five years we were one of those in the middle of the blend kind of experience because we were much more of a growth investment than uh they would be typically used to doing uh as a PE but it's worked out really really well and I mentioned earlier the combination of their expertise with our customers that also sit on the board so it's been really good for me as a as a CEO because I can draw on the expertise and and they sort of alternate perspectives that they each bring to the the conversation it's been a very productive relationship how many are on the board three five seven twelve uh I'm not a fan of huge boards as a side comment but uh but there's six of us in total on the board oh that's rare very I mean so how do you not I mean usually you very rarely hear an even numbers you're right it's actually a seven person board there's just a vacant seat at the moment oh I see okay very cool it's been a very collaborative approach it has never we've never had contention that would cause a problem in that regard anyway so that's nice that's nice um just to be clear that there is no traditional VC dollars here I mean the cap table today looks like an ESOP pool you Windermere maybe a customer or two and Vector right that's right yeah yeah very cool story I guess last couple questions here because you're unique in this Regard in the multi-year contract deal now when I see Founders doing multi-year deals the Smart Ones building accelerators of something like five to ten percent or inflation adjustments sort of at the end of every year talk to me how you structure those multi-year deals sure yeah we've we've done uh that as well uh not 100 of a deal sometimes it's hard to get that over the Finish Line those those accelerators but where we can we have um the other thing I think well York what do you ask for what accelerator do you ask for typically it's typically a cola cost of living you know it's how we phrase it so that it seems reasonable it's essentially an inflation Clause there's a couple of points per year right three percent sent after year one yeah that's right that type of scenario we also have in some cases some performance accelerator Clauses uh with some of our customers like if we can drive certain results that that they will pay us incrementally but the thing that I say I was going to say real quick before we move on the hit on multi-year deals is you lose the ability to drive ndr because you've already locked them into like a committed fee so how do you preserve your ability to help sell okay so I'll go back real quick to my Salesforce comments so and you mentioned Hub and spoke so the the way that we've chosen to go about our business is put the platform in place we call that Moxie cloud and then we have these modular products that we put on top as well as we've built an ecosystem of 150 partners that plug into our platform so we make money we license the entire Enterprise typically for either a single or in some cases a subset of our product family so our growth comes less from license count growth although you know sometimes our customers grow acquisitively or organically most of our growth comes by adding products expansion yeah and so I it depends on your model but that I think in an inquisitive you know I've been building this company to be acquisitive and grow through that acquisition as well as this partner model because of course we take part of the freight for the partner so that's how we built the the business the way it is so our primary growth is not about you know driving more licenses in the fee for the single product that we have it's about selling them more of our product family yeah that makes tons of sense all right let's wrap up here with the famous five number one favorite Business book um I'm a motorcycle guy uh as you can probably tell by some of the paraphernalia and there's a um book from way back called well made in America and it's a story of Harley-Davidson's fascinating business story behind that company um that uh is a favorite of mine number two is there a CEO you're following or studying right now uh this is a controversial one but I I do watch very actively what musk does um he's I'm an all-in podcast listener for example and as you know those guys are pretty close to the man and I just well I don't necessarily agree with everything I think he challenges us to think outside the box of the trite phrase but he actually does it and I find that very helpful to Spur thought number three what's your favorite online tool for building Moxie works oh um I'm not sure that there's a single one um uh I I will say I do find um the um online and there are many sources obviously of the information about what's going on in PE and BC land and frankly podcasts like yours are it's important to have a multitude of perspectives and you gotta have that coming in all the time New York how many hours of sleep are you getting every night I'm old so I'm getting six to seven look I'm young I think and I get eight or nine so oh man you're my you're a board yeah sleep's important all right and what's your situation married single kids married long time my wife and I um have been uh we're three over three decades in now wow how many any kids two kids uh son who's a data scientist at 31 and a daughter who actually worked for Moxie and just left she and her husband he's a big time influencer and former Olympian Runner so they're working on that business together pretty successfully did she make it Pastor cliff yeah and you know as a CEO I was pissed that she left but his dad I was excited so you know awesome all right and how old are you York I'm 58. last question somebody wishing you when you were 20. I'm sorry say it again something you wish you knew back when you were 12 years old um the same thing that you hear a lot which is you know take the entrepreneurial route I started my career uh less entrepreneurially and that was pretty common by the way for people in my generation then but you know start early with the entrepreneurship because it doesn't get easier as you have a family and other obligations guys Moxie work start off a spin-off with one big customer paying single digit Millions per year back in 2012 they brought in New York to scale the business they now serve 3 500 brokerages think of them almost like Salesforce but for brokerages and a lot of other details and and individual products sort of uh silos built on top of that base platform those customers are paying a bunch of money now multi-year deals they've they're close to 50 million bucks in run rate uh growing rapidly uh they've got healthy expansion Revenue through our poo expansion and also what they called Cola those multi-year deals they accelerate um looking to be acquisitive obviously they're backed by private Equity Firm called Vector uh going to do more deals hopefully in the near future as the markets compress and deal prices get a little bit more into York's liking we'll see what happens York thanks for taking us to the top thanks appreciate it Nathan 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 our poo 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 p.m Central additionally remember these recorded founder interviews go live we release them here on YouTube every day at 2PM Central to make sure you don't miss any of that make sure you click the Subscribe button below here on YouTube their big red button and then click the little bell notification to make sure you get notifications when we do go live I wouldn't want you to miss breaking news in the SAS World whether it's an acquisition a big fundraise a big sale a big profitability statement or something else I don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest price event slack Community for B2B SAS Founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathanlacka.com forward slash slack in the meantime I'm hanging out with you here on YouTube I'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode and if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive I am on these shows but I do it so that we can all learn we have to counter those people we got to push them away click the thumbs up below to counter them and know that I appreciate your guys's support alright I'll be in the comments see ya