How OSS Ventures CEO Renan Devillieres grew OSS Ventures to $25M revenue and 180 customers in 2024.

hello everyone my guest today is renan davila he is building and his co-founder and ceo of oss ventures a french startup specialist for industrial companies after working as an economist at the oecd and co-founding a startup in brazil he founded oss ventures to help manufacturers digitize their production lines he published with michael valentin okay google draw me a unicorn renown you ready to take to the top yeah okay so nice to meet you it's nice meeting you too so so industrial companies help us understand the customers you're selling to and what they're buying yeah so factories uh used to have a lot of automation and a lot of software this was 30 years ago actually ibm the very big company at the time they made a lot of money by selling software to manufacturing companies and today manufacturing companies have outdated software that are kind of trapped into the innovator's alumni and so they are they are looking for the next wave of innovation and they are like very very advanced companies such as tesla who are leading the way and showing that software hits everything including in the manufacturing world okay and so what are they paying for your software on average per year per month so the sweet spot is between 15k one five and 75k per site per year why is it a sweet spot because it's roughly the price of a machine so they are very used to making checks of that size and also because when you are in a in a big company or a mid company uh you don't have to ask for corporates for those kind of checks which is way easier yup that makes good sense and so um give me a bit of a back story here when did you launch the company what year uh two years ago two years ago so call it 2019 and how did you get your first customer or two so the first customer was actually a network of network i literally went to 20 factories and said look we want to do that and we want to make good software for factories so let us see and 19 knows and one yes where did you find like you said you just went to 20 factories well how did you find the like who were you meeting there how did you find that person etc network of network uh like using linkedin and site director so the site director is the guy who's responsible for making more and more performance and having good numbers and everything and that kind of lost when it comes to software because there are mechanical engineers and they don't know anything about software so they are in dire need of someone else i see okay so you use linkedin you search for the word site manager what other things did you use to filter your search location team size so factory size and company size the sweet spot is mid market because very big teams they're going to quantify that how many people on the team is in the market market is uh max 2 000 people okay god and when you say how big the factories how do you measure that so yeah so 200 people is a is a good site size for a factory because when factories are like 50 people it doesn't make sense stuff do people put if they work at a factory on their linkedin update you can sort by that so yeah and but you are you you will have only the you have only maybe 50 percent other people uh one indian uh in factories the other fifty percent they don't have any i see okay so if you see someone if you see a factory where there's a hundred listed your guess is there's probably two times that actually working at the factory you find 20 of them in 2019 and you go pitch them what name one of the factories is like a food factory and what does the software do so nobody give anything about the factory so we we targeted all company size and the very first startup that we did um was a startup uh focusing on problem solving because in factories you have that big wave that's called lean management lean was invented by toyota like 30 years ago and so you go to any factory and they are the lean principles that are put in place organizationally so one of the pillars of the limb is solving issues and so you say okay i have that issue in my manufacturing process and now i need to solve it and i have a structured way of solving that and at the end of solving it i will deploy that that's called the lean methodology there are other things but and so today you go to a factory eighty percent of the time this kind of process is put in place there is no software to collect it there is no software to scale it there is no software to get smart about it and so it gets lost even if the process is done and so the very first software that we created was the software just catching that wave and making sure that those were done properly how many customers do you know have today 1580 eight zero one eight zero yeah one eight zero and those are the number of companies or number of factories you're in number of factories and we have a little over 80 clients in the portfolio so 80 clients with 180 factories so between call it two and four factories per client and are they paying fifteen thousand dollars a year each or do they pay it like in across 180 factories they're paying that 15k subscription multiple times to use on multiple pieces of yeah so today the the the total sales are 2.2 million uh euro per year you're doing 2.2 million a year yes okay that's what you did last year that's your run rate right now no that's that's annualized uh february build timestamp that's great and what did you finish 2019 at do you remember uh yeah it was 1.6 that's pretty good so first year you grew to a 1.6 million dollar run rate um what enabled you to get going so fast did you come from the manufacturing world yeah so my background is an industrial economist and uh uh i used to be a consultant at mckinsey and company and so i saw that massive gap as an opportunity because nobody tech goes to factories and nobody from the factory is good to take and it's a massive space it's it's 90 billion just in europe and it's it's more than 400 billion world like just software for manufacturing companies and so just to go to the back and we did the first software like that and now we have eight lines of software and those eight lines of software with eight separate companies that we are in uh those eight are total 2.2 million they are got it and have you done all this bootstrapped or have you raised capital so i've read capital the the thing is that uh i created a company before i'm a second time funder and i sold my first company well i sold my shares for the company to google ventures and and so i used that start capital and then i raised capital with um with your capital with a well-known fund in europe so how much did you raise 16 6 million and then before you raise the six million how much of your own personal capital did you invest um 800k did that make you nervous no it wasn't well this was negotiation with my wife [Laughter] and she said you're allowed to play with 25 of everything we have and so and so i went with more [Laughter] and so that was negotiation you raised the six million obviously you have to tell a story because you want to sell as little as possible so what valuation were you able to get uh so we were able to get a variation that is kind of floating according to what we will be doing the total valuation should be 20 24 million free money or post pre money so 24 pre 30 post yeah and the the the fact that we raised on such a high variation for europe european standards at least the fact that we raised for that is because basically you have sap and oreco and microsoft entering the fields the field and those are the only three while really playing in the manufacturing 4.0 space massive massive markets the net promoter score of sap is four like not 44 it's four and so basically you have that huge market very concentrated it's very low in ps now to capture this market obviously you're building a team talked about the team today how many people total so in the in the core in the studio we are 20 people and in the rest of the different companies we have a little over 50 people what do you mean the rest of the other companies i understand yeah so we have eight software lines each software line has its own team uh so those eight software lines are the ones uh pushing the different types of but they're all part of oss ventures they're all part of the same company yes exactly so across the whole company there's 50 people total yes okay and how many engineers total i would say 35 35 and do you have any quota carrying sales reps or are you doing all the sales still so uh i would say that 40 percent for sales are done like us and the rest is referral and partner channels okay so of the 40 that is you guys who is you guys how many on your team are doing sales uh in our team i would say let me see six people six people and do you do you remember how much revenue you were doing when you hired your first sales rep i would the first 500k were done exclusively by me that's for sure um [Music] okay got it and and what quota do you give them you're sort of guessing sorry yeah when you hired your first sales representative what quota target did you set for them so basically we say that they need to bring home seven times their salary that's like our benchmark matrix um the the the thing that we are slowly pushing is...