How Optimove CEO Pini Yakuel grew to $94.5M revenue and 77 customers in 2024.

hello everyone my guest today is penny Yakub L he's the founder and CEO of optimum provider of the science first relationship marketing hub his extensive experience in analytics driven customer marketing business consulting in sales along with his innovative approach to entrepreneurship business building and marketing have earned him recognition as a thought leader penny are you ready to take us to the top I am alright tell us about opted to move what does it do and how do you make money so we make money by selling a SAS software essentially we work with companies they pay us a monthly fee is how we make money and we what we do we set a relationship marketing hub this means that we help brands to thoughtfully communicate with their customers at scale by leveraging by leveraging machine learning and data science so in every every time they talk to a customer we are one of the channels well it's whether it's email Facebook Google retargeting call center or whatever the one-to-one channel is that convulse station that they struggle the customer is that much more meaningful and engaging because it's based on the day today it's based on the wisdom of the machines learn to understand really what drives customers to detect patterns things like that and what is the average customer pay you per month would you say hmm so I would say that like our price point is around 30 ke okay and that's pretty that's pretty representative of what people would pay on average as well then that is the average okay so that's what is that that's about ten point eight grand per month something like that exactly do you make do you make them sell or pay annual upfront or can they pay monthly so usually our default contract starts with the quality in advance that's how we start we're not the type of a company a lot of companies though you know we're strapped for cash so they want to so usually they want to get the money up front for a year and then the next year is this notion of renewal what do you want to get again a big check for the next year if typically we build a business as a book with the trap or capture positive what we've always been profitable so for us we're not that you know strict on that so we can so typically we do quality in advance we can do monthly in advance if they insist okay so your cash flow positive bootstrapped and when did you launch the company what year so the company was launched in 2009 as essentially in a way a consulting gig around mission planning and data science to Salem automation but everything we do today we did manually with people and presentations and Excel files throughout the years for the first three years we have accumulated money through this agency business and in 2012 we actually launched the brand optimal the software product optic move and we I think a year more into the future so 2013 we probably completed a pivot to fully become a SAS business and all the saw another service business okay and over the last 12 months what percentage of your revenue was SAS versus agency model oh no so ever since that time 2013 we killed agency business so today 20% of our business comes from services 100 sorry say that again you cut out 12 today 12% of our business comes from services and 88 comes from from SAS licensing okay and what have you scaled to in terms of total customers so we we walk today we're are 300 brands I know that one customer can have more than one brand right especially when you sign with a company that owns multiple plans or multiple entities so it's 300 brands it sits on our site and we're hundred fifty people in the company okay a hundred fifty people 300 brands is that generally one to one ratio though in terms of company to brands like do you have about 300 companies or no no that's what I know so let's say I forget the exact number but essentially it's a sometimes a company could have more than one brand yeah I think the average probably 1.4 so that I would okay so you've got you've got somewhere than around like 120 companies 300 brands something like that not exactly but let me give something for myself yeah fair enough yeah because you know what I'm doing here I might do the math the hunter if you do have around 120 right time is the ACV you gave me earlier maybe are you guys doing about north of a million bucks a month right now so you can add we we do you can think it 150 come on 50 people company and it is but it is profitable so you do the math and you can get pretty close you know math would give me if I want to be exact 1.6 million in monthly recurring revenue is that about what you're doing today it's a no but let me keep something for myself well which just tell me which of those numbers are wrong because they're just multiplying 150 times your ACV you gave me no so the ACB is right because they give it to you and well there's your hawk got it okay so I'm obviously too high on customers I won't push harder there other than I mean can you give me a general sense of size are you you know less than 10 million or more than 10 million in ARR no a lot more okay but south of 100 million that's a big that's a big enough range right right would be nice to get yes is that belly and usually you can have 150 people they have around 500 and north stand it again in two thousand usually companies that do hundred million they have a lot more than I'm worth to people not always I've interviewed a few that have around 150 200 yeah you right no I at least in the enterprise software space right of course if you you can be like a money printing machine that can have a heck into a ton of money with 50 people right but in the on top in the enterprise software space it's usually it is like a metric that says okay so how much you're making per employee it is like SAS revenue per employee and typically that number you know goes between hundred fifty thousand to two hundred twenty something like that so and of course companies are raised money and pre-hire they tilt the odds so if you talk to a company that raised a lot of money and they pre hired this will not indicate on the revenue we are we are we've always been kind of like that making more than the number of employees in other words the average you know the average SAS company 150 grand and ARR per employee what you're saying is because your bootstrapped you're doing actually well north of that you're better than average I don't know I know the average is I'm not sure I know it ranges from 150 to 220 something we checked it like a while back does this all these reports you know that you can get but I'm just saying that sometimes companies when they raise a lot of money think we hire for example they can have like young employees but actually make you know four million in revenue and they are so yeah this would be very nice little you're here about your bootstraps so you're not let's not talk about that because that's that's not your model what what I'm curious is are you saying are you saying you're beating that 150 to 220 range or you're in that range your average your with everybody else we are in a good place in the range and another thing I want to mention because you talked about the bootstrapping we so we feel bootstrapping all the way to like year and a half ago in which we took our first line of growth funding of 20 million okay come on you can't lead me on like that penny that's not bootstraps that means you've raised capital after eight years yeah but okay I'll give you credit for that but now you're on the dark side I liked you way more a minute ago you know that right [Applause] I'm for mr. society that idolizes fundraising so I'm not sure that's you I the arch burns that are most impressive to me are the ones that bootstrap their way and they make themselves very wealthy totally bootstrap but I get what you're saying and you hustled for eight years you said you just raised twenty million now is that that's all you raise is twenty million total right okay got it so so 20 million you bootstrapped and I mean look I can put a better minimum on this right so if you say you have a hundred fifty employees and you're in a healthy set quote a healthy area in the range between 150 grand a year in revenue to 220 per employee I mean at a minimum your guys are I mean you're north of 20 to 5 dude you're obsessed with a number let's get it on with the interview I'm absolutely obsessed with it but if because you're giving me data points that makes it easy I'm just multiplying your team size by the minimum of the range 150 K okay you can you know you can guess to make whatever you want well I'm not guessing no painting I'm just using your numbers all right you want me to you only do what to confirm a number - no no no I just I just want it now I'm understanding because you just revealed that you've actually raised and now I'm thinking about - what you said which is sometimes people higher up front and there's a lag time for growth which yeah but that's not the case with us that is not the case okay even after we raise money essentially the company's still profitable even after raising money and we took the you know we took the the round for various reasons but if I would you know boil it up it's mainly - essentially I thought it was the right time to kind of like to gear up and acquire ammunition and I felt that why did you feel that because we're not either you know do you know the conditions were perfect right you know the the fight of the Concord and then their song but they check it out with check it out that's pretty interesting funny but conditions were perfect so we have conditions though our growth trajectory the market maturity the way we were perceived the type of you know what we were able to get in terms of kind of maintaining the company's structure in the way it was gonna run with the new investors they vest errs philosophy which were aligned with ours the way they you know their little specific experience which I thought was pretty interesting and all of those things made it to be a lot more appealing and when you're looking into the few and and there's a few more things you're getting from me from fundraising while you're getting an external credibility that you never never had as as a bootstrap coming back for yet eight years and you're getting and the ability to buy companies all of a sudden because now your stock is worth something somebody paid something for it so it's worth something you can buy a company with the combination of cash and your stock is that why you raised it's one of again it's like I'm saying it's like if you do things at the right moment and at the right times then there's many good positive outcomes that could come from it one of them is acquisition and I couldn't do before doing now many things which are pretty more aggressive that I didn't do before I'm so profitable but there's something that would never find as a bootstrap because your state of mind of your mentality is most survival kind of a state of mind when you put name one of those more aggressive things post funnel so we've built a newspaper we have our own publication that covers everything to do with relationship marketing it's a separate brand called post funnel we've actually built a publication a real magazine a real magazine you can check it out it's called post funnel like everything happens after the funnel tense relationship marketing attraction marketing and you know we have external writers we have an editor we have designers we have what's it cost you to run it's like it all together is this year is around half a million a year and you just put that in the marketing expense exactly yeah it's awesome I like it I like it's a unique idea with the bootstrap state of mind yeah that makes sense you it's more of a survival man like you never know what you want to prepare for a rainy day so even if you have some extra funds you keep them and you handle yourself differently right so it's a mind still I'm not be hiring like crazy and I'm not changing my philosophy because of the fact that I've raised money but I'm trying to you know always open my mind and listen to the investors and to best practices and see if it's a good fit for optimal but that's the story what payback period are you optimizing for today and have you increased what you're willing to you know how long you're willing to wait to get that money back after you raised you mean investors are waiting to get their money they don't know your payback periods when you acquire a customer how long you you're comfortable waiting to make that money back to LTV what kind of but it's payback period a little difference say with a year you're healthy and has not drastically changed pretty you know bootstrap mindset versus fundraised mindset yeah I think before that we were you know we had like an amazing CAC to LTV ratios because we got a lot on of business word-of-mouth so for many many years we've got luck with very with very limited marketing investment we got get very very strong you know business and however as you scale them as you grow we came to the USA like two years ago slightly less than that like one year nine months ago I moved here to New York I mean New York right now and I moved it and start the office we have 20 people in the office here in New York today and obviously when you go into new markets then it's so expensive at the beginning right there there's a diminishing return sure so every different well did you spend on a new market of you vertical it takes you more time to acquire a brand equity and and and you know good clients that give you that leaf for you to you clients and provide you proper word of mouth so that takes time takes more money yeah and with look you told me earlier you're a CV is about 130 grand that was your average so to get it back in a year that means you can afford to spend up 230 grand to acquire that gives you a lot of wiggle room yeah yeah what about what about churned what about sure so what is your for our customers and and we are churn is pretty good it's pretty solid mostly it's actually very very good but mostly when we lose business is because we have a very tight partnership with our customers that's that's mainly established upon data so we get their data from their databases the first party data and when it goes sour is when there's issues with their data and and you know or there's kind of like a quirks in in operations and the way that they send us data it breaks and stuff like that so this is when the relationship goes sour it's pretty rare but other than that other than that it's it's mostly mostly strong so what I mean what is mostly strong do you care more about logo retention or revenue retention I'm curious how you think about that okay so what what is revenue churn annually would say I do care a lot about so on a monthly basis we churn a point eight percent that's not bad now when you add back expansion revenue is it's still 0.8 percent net oh you mean upsells yes when you add your upsell revenue does that more than make them negative charge forgot it so no so this is only taking into account it's gross it's gross revenue turn not net exactly no the net is is is that we have negative churn which is great for us but how negative are you on that annually we do yes so I think I think we do if you go to the other side it goes to 0.5% got it so you have you mean when you say go to the other side you mean you have a hundred point oh five percent net revenue expansion no we have so if we have a 0.8% churn right so we have plus say how much is that is 0.5 so plus a 0.3% on the other side got it so that's three point six percent basically points over the year yeah the is times twelve yeah yeah yeah point three times twelve yeah the Delta interesting that's cool um which growth last question here before we wrap up with the famous five what's your what's your growth rate right now year over year so we did we did most so throughout the years it's always been fluctuating it's always been there between 60 to 100 cents okay and you you were in that range the past twelve months yes okay that's great good growth all right man let's uh let's wrap up here with the famous five number one what's your favorite business book and great Jim Collins number two is there a CEO you're following or studying right now no I'm very bad at it my my my sister's husband he's like a big CEO back in Israel so I consult with him a lot from time to time and my wife's mother boyfriend is the ex-ceo of Tiffa and he's 78 right I call her boyfriend did you say did you say your ex-wife's boyfriend my wife's no no what did I say ex I'm not sure I'm not sure as well you can check on the recording but my wife's a mother's boyfriend he is the EXCI of Teva the pharmaceutical company so he's like really global you know co-leader and very experienced so I spent a lot of time talking to both of them to gain experience very good number four or sorry number three what's your favorite online tool cleanse in LinkedIn okay number four how many hours of sleep you get every night seven and a half seven pretty good in what situation obviously you're married any kids yet yeah two kids both of them are in bed while I sleep and kicking them kicking me in the head or the bath or somewhere and how old are you Feeny I'm 40 just turned 40 all right last question what he was your 20 year old self knew so maybe I wish I would study computer science and then I would build the product myself and I'm having to bootstrap through all the years but on the other hand maybe it made me who I am so but I was always I was always kind of liking in college I was like I'm a people's person I don't want to sit in front of a computer all day guess what we all sit in front of a computer all day and then I studied math and operations research but I wished I had studied how to code there are you guys have a frumpy knee he wishes he would have learn how to code earlier on launched Optima back in 2009 he bootstrap for eight years and then raised 20 million bucks recently they're growing between 60 and resent a year-over-year they're north of 10 million an AR are super healthy economics churn is less than 0.8 percent per month that's revenue churn net revenue turn point five percent so our sorry negative net revenue turn which is great they're willing to spend up to one year of a CD that's 130 grand to acquire the customer so pay that period of 12 is healthy their team of a hundred and fifty people again making it easier for marketing teams to under use to use AI to understand and foster emotionally intelligent relationships with prospects and customers all right penny thank you so much for taking us to the top Thank You Nathan bye-bye