Pingboard Revenue & Funding (2023)

hey folks my guest today is bill babel uh if he looks or sounds familiar because we had him on back in 2018 and 2019 actually he's building a very cool org chart tool called pingboard much bigger vision though they've got an exciting change in update to announce today when we had them on last they broke about 4 million bucks in revenue so guys help me welcome to the show bill babel bill welcome thanks nathan for having us you bet now we have laith too we're going to get to lathe in a second but but bill give us give us a little bit of context so a product that pinkboard is today and then introduce lathe and sort of how he's now infused with the business and gotcha yeah so we've spent a lot of time since we last talked expanding the product into other areas and uh a lot of it revolves around the whole shift that happened with remote work and all that lathes show that in a minute but the big news and why lathe is on this call is i've hired lath as our new ceo i was founder and ceo and i'm taking a step back now and you know we're entering this new phase of the business and and there's a lot of exciting things ahead that that lathe is going to lead us through now bill this is the this sort of transition very few people have enough courage to come on and like sort of talk about it which is why i jumped when you when you offered uh because a lot of founders frankly a lot of founders maybe should replace themselves but it's a really hard thing to do from an ego perspective uh i guess talk a little bit in terms of so where um when did you because and you also had a board right so i guess give the funding history so how much raised to date we've raised seven and a half million we did it as three separate seed rounds though so we've never truly done a series a okay so so i think 4 million 2018 2.5 in late 2013 a little earlier than that about another million so 7.2 total uh we raised 7.5 total 10.5 total okay great and so i guess when did you first you know a company was you know i think you told me historically in 2014 you break 240 000 bucks in arr right in 2018 you break three point you don't probably remember the 3.1 million in 2018 4 million in 2019 the business is growing so when did you start going you know what maybe i'm not the guy to lead this thing uh it was probably two years ago i started having the thoughts but didn't really decide to do this until last year but you know we crossed 5 million in revenue in 20 uh 2020 began right before covet hit and uh we're at 40 people and i was already starting to realize that i was uh getting a little a little bit uh struggling as ceo because like i i'm really good with a small team going from zero to one but as a team scales there's just a lot of things you have to do to to operate a business and lead and um you know a lot of things just didn't come as intuitive to me at that scale we scaled back a little bit after covet hit and um got down to 25 people and felt a lot more comfortable there but as we've really got our growth uh clicking over the past year we're you know we're hiring like crazy right now and i've realized you know pretty soon i'm gonna be uh not the ceo i would hire to run the business through this next phase so that's that's why i decided to step back and hire somebody better than me to to help scale the business from here so step one is you stop ignoring that like little seat in the back of your head and you're like i gotta do something about this i've been thinking about now for 16 months what's the step after that do you write something do you do something with the board what's step two uh the first thing i did was talk to the board even before i had decided this i started talking with them and they're good about asking tough questions to me and they were like do you really want to be ceo for the next for this like next phase and um i thought for a second and try 30 seconds of silence and then i said no and then there was uh yeah that day we decided all right well let's go hire somebody amazing and it took 11 months to find our new ceo so we hired a recruiter they really helped us scour our own networks and networks outside of people we already knew and it took a while probably half the time was figuring out the exact profile of what we're looking for but we definitely found the right person 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 it 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 valuation 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 valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're going to get a different valuation a vc is going to pay a different valuation private equity firm is different if you're going to do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when i hover over here right so the teal is what a vc would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on youtube all these datas are built from real-time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raised they sold 22 to their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the 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 valuations than what you can get now inside of founder path and we're thrilled to bring it to you all right we're going to 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 evaluation 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 so we want to get over to lake here in about two minutes but first build extra context there because i'm trying to develop a playbook here for anyone else listening to do this so who who did you use can you name the recruiter you used uh yeah caldwell was the the name of the firm and they and you were happy yeah yeah very happy they did did a great job yeah and and can i ask so most recruiters are charging like 30 to first year salary as like a fee is that sort of the model they used with you yeah that was that was it paid over over time during the course of the search and what were some of the inputs you gave them they said bill board what kind of person do you want and you said prefers loom videos over zoom extrovert like what do you make a list how does that work uh sort of they had their own scorecard format that they used um it was easier for me to just like tell them and let them draft it as a scorecard though but the things that were important to me is someone that really understands product and product led growth so you know we didn't want someone who had a more traditional enterprise sales background turned ceo that would come in and kind of layer on a lot of just sales around an existing product we believe a lot of our future is continuing to expand the product and have additional value we can upsell into our base and we don't have a sales team today and it's all product led where customers sign up online and it's just i think it takes a special type of person to understand the mechanics of that and then and build it not saying that we shouldn't have a sales team we're probably leaving a lot on the table by not having a sales team but we've engineered um a kind of a well-oiled machine with uh kind self-serve type growth and we want to continue to scale that as well as layer on other ways of going to market so someone that really understood that and that was the hardest thing to find and before we go over to late the last question my audience i i think they're probably wondering i'd be wondering why not promote from within yeah that's a good question i think the main thing is we wanted experience um someone who had led other companies through similar stages of growth no one on our team has done that okay so now introduced late when was the first meeting and what was it like what were your initial impressions on both i want to get both sides so bill your initial impressions and length your initial impressions so we met in january i believe um and it's strange we have a lot of mutual connections but we had never met before in the recruiter this year this year yeah okay yeah and uh yeah we met like i said we have we had mutual connections through the networks here in austin and san antonio and just somehow had never connected um and as soon as i saw lay's profile i was like yeah this on paper sounds like what i'm looking for and then we started talking and yeah in the first meeting or two it was pretty clear that lathe was different than a lot of the other candidates that i've been talking to and he got really interested quickly as well which it helps a lot like uh we quickly started talking about strategy and what we wanted to do you know as opposed to it being a traditional interview and so lathe what was the first question like bill on the board asked you in terms of hey late what do you think we should do from a strategy perspective here like what was that first question that really got your mind hooked to the challenge i think it was kind of we we were asking each other like what is ping board and what does it what does it want to be in in the future how does it need to evolve that's immediately where where my head was at and i think i think the answer is we don't know so i think that's where the dialogue really started and i started you know my wheels started spinning around you know category design and strategic narrative and like how can we how can we really focus the story of ping board so that we can accelerate growth i'm here to accelerate growth the company's growing you know 26 27 year over year it's at 6.3 million run rate you're at 6.3 today we're at 6.3 today so it's it's a it's a nice little nice little growth uh growth curve there but there's a lot more we could do you know my goal is to take it to 40 plus growth in the next you know in the next 12 months so i think we can do that we're in we provide retention and employee engagement for the remote workforce that's really where we're sharpening our sword so to speak and that's that's what pingboard is now there is this big world changing event that occurred in march 2020 that forever changed the nature of the workforce and and workforces now are remote and remote first as far as you know office jobs right so that i i really started keenan on that even even sort of during the interview process i think that's where we really started um getting the wheels spinning and um in our head and uh it was great it's great what was your well i mean look what was your opportunity cost so what was bill going to have to convince you to leave to do ping board quite a bit i mean there was everything had to kind of fall in place i was a general manager at weed maps which is the largest software and data company in the legal cannabis sector so i was hired to stand up their entire b2b sas division um this is a you know company doing north of 240 million in revenue is a huge step up for me um but really like my roots are in like b2b sas taking companies from you know this four five six million um dollar run rate to you know 10 15 20 million had some success at scale works with a couple companies so everything had to line up um great board of directors that was that was the first thing um super experienced i know i'm sitting here going how the heck did lathe get kip and crew to agree to a a 40 year over year growth target with vc funding you've got to be at like 80 90 100 percent to tell to tell a damn good story so how did you convince them to agree to 40 in year one well they haven't they haven't agreed yet but you know um look i'm just throwing numbers out there right now but look you know just based on based on where we've been i think we can you know we can aggressively grow we haven't raised a traditional huge round and you know we are looking to raise around in the next year like a traditional series a but you know we're not looking to play the game of you know let's raise a you know 50 100 million dollar round and just go go go you know burn burn burn right we want to be methodical about it bill's built an amazing business it's profitable it's growing um and we have this whole switch to the remote workforce that we're really going to lean into um i'm i'm under promising and hopefully over delivering as far as far as the growth but i think there's a great story there we can start well bill and we didn't touch much on your backstory but you've already had sort of financial success in the software world with an exit to rackspace and other angel investing at capital factory and just very active here in austin and personal endeavors so true or false you kept the cap table pretty darn clean because you were the sole founder it's not like there were six parties that each owned 15 percent that you'd get to agree here right oh there were two founders me and my cto rob robbins and and he's staying on board he's excited about this next phase um but we raised from we have a lot of angels about 40 but they're all like entrepreneurs built and sold companies before have different areas of expertise to tap into um and i think we talked in our last call about like we've run the business in a way where with every round of funding we try to be able to get to profitability and that's what we've done and then we never thought we actually would pull the trigger on going profitable but we did when cobit hit because we had to we wanted to obviously survive and it was nice to be in a position to be able to do that and not raise any more money in the meantime but it's time to really step on the gas so i think we've been conservative and when we think 40 growth that's like man that's a big step up from 25 but i'm sure we could do more especially as we put a plan together to raise and what was the name you actually had a really good name for that chart you put together i think it was like it's day zero cash number or what was that you put a model touch zero operating plan is how there you go the idea is i wasn't close but i was in the right realm touch zero operating model yeah it's a really simple idea of you if you have a certain amount of cash uh there's no point in sitting on the cash because it's it doesn't do anything to sit in the bank you want to invest in your business but if you invest more than you have you go negative and you have to raise money most companies design for that and if you're growing and hitting all your numbers it's pretty easy to raise more money but if you miss it you have a bad year or bad couple quarters it can be pretty damn hard to raise money and your vcs they know what they're doing they'll take advantage of that and buy a little bit more of your company than otherwise they would would have so the idea is like invest it all touch zero in the bank account the moment you hit profitability you at least design for that operate towards it and if things were going well you raise money six or twelve months ahead of running out because you never actually want to run out it's more of a optimization you make month over month to run the business and you know we as we think about raising we may change that strategy but that's how we're running business to date i love the model so i guess going back late over to your side so product vision moving forward you want to play sort of in the remote space how do companies retain remote employees keep them engaged keep them happy is that that's accurate right 100 yeah that's that's that's really what pingboard does we just don't tell the story properly yet right and evan you know there's a lot of there's a lot of things in the product that are you know coming soon that would really make this a powerful suite for retention engagement think about not only employees networking with one another and learning who's who and what's their picture and where's the org chart what are their interests their likes but also recognition and giving applause and integrating with slack to be able to communicate more easily but then we're really looking to target the people ops teams right now the pain and suffering so to speak is in the people ops teams people are leaving the great designation is real how do we help them continuous feedback as far as surveys surveying the employee base one-on-one meetings and being able to look at who's who's holding effective one-on-one meetings what managers have engaged teams things like that so really upping the game from what people think of oh you guys are an org chart company he's like well org charts were the first piece but really we're a retention engagement company we think about all these interactions between managers and teams and people ops teams and managers so how do we empower people i was just saying i can't i mean i can't help but identify i mean there this space is incredibly hot and there are billions of dollars of capital flowing through the private markets for this kind of technology some examples you know obviously you had job by jazz hr next nxt you know combining under k1 massive private equity from with billions playing sort of in the recruitment space but obviously adjacent category is retainment and employee happiness which they're acquiring aggressively under hub and spoke model their pe firm you also have collin day and i sims with back by vista right another massive animal we've got art papas with with bullhorn right i mean these are all massive companies that are would love to actually buy a company like pingboard right so when you go out and you know and you're pretty capital efficient right your ar almost equals the capital you've raised so when you go out let's say you do put a story together you go 40 over the next 12 months you get to the point where you're thinking about a series a how do you balance you mean you're going to hopefully maybe look at the m a market as well how do you balance like what a term sugar of vc might look like for a series a versus you know a buyout offer from vista equity k1 or one of these guys i mean you know being new in the chair i haven't haven't thought about that much yet i think you know i think the bottom line is we you know we have a lot of runway there's a lot of opportunity we're not looking to flip this company i think you know looking at these bigger guys out there our target's going to be the upper smb lower middle market right i think that's our sweet spot so just kind of talk thinking about the first the first part of your statement there like we want companies that have grown large enough to need a tool right if you're too small you don't have people ops problems you're not feeling a lot of pain you're too small you don't need a tool quantify that how big should the team be to really use ping board well yeah you know i think you know i tend to think of it as like 50 to 500 employees is probably our sweet spot um if you get if you get much bigger than that you know getting towards a thousand plus employees you're probably aging out of a tool like pingboard and starting to go to like an enterprise tool some of those tools you mentioned um or you know you just well we use adp enterprise and it has some of that stuff in there so like i think our fertile zone that middle zone from you know let's say you know 50 to 1 000 employees is our sweet spot i think that i think that's a great niche for us to to play in right we don't want to compete with work day we don't want like that's that's not us right those are big complicated tools with long enterprise sales cycles implementation cycles services like aspects of like i come from the enterprise world i've worked at a vista portfolio company for for four years four years i know that world really well we want to be in that 50 to 1 000 employee sweet spot as far as you know weighing laying in an acquisition from a big pe roll up versus you know a vc like you know let's see what happens let's get to 40 50 60 percent growth and then have that conversation i love it now bill last time we chatted you talked about breaking gosh 1200 kiss was back in 2018 1200 customers and had about a 220 rpoo i assume you obviously your customer is what your customer is like doubled or tripled almost yeah we're about 2500 customers today and is arpu still about the same currently like before late changes or new strategies coming in it's been up slightly but i i think it's pretty close to that still yeah so i guess the reason i asked that is do you think you i mean if you add no new customers this year but you invest heavily in engineering and r d develop more products for upselling the current 2500 base i mean can't you take a 300 rpoo up you know double it and get your 40 growth that way do you think that'll be the strategy or will be plg keep onboarding no touch high volume low rpoo customers no i think i think in the short term like when i use that that 12 month benchmark i think the way we drive growth quickly is is in the base right creating a new like our funnel right now is really well optimized to org charts right but like we're changing the story and it's like turning a huge ship around it takes time to change that funnel of net new customers coming in but we have 2500 engaged active customers right now in our base we're already seeing some success using what we call almost like a support revenue model where we have customer success managers that build personal relationships with the teams consult demo and then drive adoption of the new features that way if you look at our arpa in the um the existing base the self-service base and the arpa and our assisted assisted base it's dramatically higher i mean we're closing you know close to 1200 a month deal um on on april fool's day i had to make sure it wasn't in april fool's versus our you know our base arpa or our new customer harper's more in the you know 150 range so it's it's dramatically different so we think we're gonna have great success so before we wrap up here i got the chance to get it on san antonio over the week and the timing actually just happened to work this was just by chance but i got the chance to talk and interview some of the folks that worked with you at chargerfi and they go actually marcus probably wouldn't mind if i mention his name marcus nicholson he goes man late that guy's intense this is gonna be perfect at pingboard right he's just he just said super intense and a dashboards guy what does that mean super intense and mark i love marcus um i think i think your dashboards guy as far as using metrics to drive accountability and drive growth in the business i think he was also alluding the fact that we launched a business intelligence tool together charge of five which really was the the catalyst for battery ventures to to to for us to exit to battery ventures i i think i'm intense i'm high energy like maybe i drink too many energy drinks in the morning but like i get excited like i like i love i love wins i love collaborate i'm very collaborative right i'm getting i'm not getting in the room and whiteboard kind of kind of person but you know i love hearing that feedback from marcus but yeah i'm intense like let's let's let's win let's do this life is short and these you know five years is an eternity in in tech we don't have much time so like let's let's get cracking on that note let's wrap up here late we'll have you do the famous five this time instead of bill so number one favorite business book oh good to great number two is there is there a ceo you're following or studying no there probably should be now that i'm a ceo i need to get on that number three what's your favorite online tool for building pingboard besides your own for building pingboard something you use just something you use frequently an online tool that helps you build the business oh um honestly like it sounds lame you know google sheets i mean honestly yep no i i have seen bill's google sheets and they are nothing to mess with i will tell you that uh number or excel files number four how many hours of sleep do you get every night late uh with an eight month old three month old uh two hour blocks maybe wow six hours that's great okay so two so married with two kids yes and how how old are you i am oh god 47 47 last question something you wish you knew when you were 20. uh how important mentors are and the relationships you build as a young young professional and having mentors is absolutely critical that's how i got to the ceo role pingboard launched in 2013 they really crushed it as a tool focused on org charts for the first five or six years they grew from 240 000 run rate in 2014 up to a 5 million run rate in 2020 now up to a 6.3 million dollar runner with about 7.5 million raised very capital efficient business uh also revenue per employee very high but they've said you know what we've got to grow faster we've raised capital it's a big space they said today we want to start building a tool that helps teams recruit manage and keep the remote employees happy bill is passing the baton to lathe the new founder to do that we'll see what happens as late targets 40 year over year growth and maybe a series a later this year guys thanks for taking us the top thanks 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 arpu cac ltv 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