How Productsup CEO Vencent Peters grew Productsup to $63M revenue and 270 customers in 2024.

hello everybody my guest today is johannes yacht he is uh headquartered in berlin germany and is leading a company called productsup which provides a leading solution for product content integration syndication and feed management the cloud-based centralized platform enables the seamless transfer of product content from brands manufacturers and retailers to marketing and shopping channels around the world it empowers commerce players to be agile and stay at the forefront of digital transformation johannes are you ready to take us to the top yes i am all right so what's the company do and are you a pure play sas business model yes we are so basically we define our business by saying that we tear down digital walls right and we help our customers to turn their product information into a competitive advantage by optimizing their content based on the individual requirements of the marketing channels they feed it into so we're 100 sas business uh no customer support or agency or model involved so there's like a metadata play like gillette the shaving company when they post the product on amazon the better data has to be in one format if it goes up on walmart.com it has to be in a different format exactly yeah okay interesting okay so so i've interviewed a couple companies like this and everyone seems to price around a different product axis sometimes it's number of skus sometimes it's sales volume sometimes it's feature-based upsells what do you price around so we press around the number of sku okay okay so it doesn't matter how many like api calls per month or how many times they're pushing a sku to particular network just pure number of skus exactly we want them to use the platform as much as possible so there we don't have any let's say additional pricing that comes with the usage it's surely based on the number of sku interesting okay walk me through the pricing what's the average company paying you per month for this so it's uh on average is 3 700 per month or a year yeah okay and and put this on a timeline when did you guys launch uh we launched the sauce business in 2014 before that the company we did launch in 2010 and did it as an agency model until 214 and then transformed the company into a sauce pure sauceplate got it very cool and what have you scaled today in terms of total customers uh so we're at 270 customers okay bringing us to an arr of 12 million at the moment you guys got to say 3 700 bucks at obviously 270 that gives you a million bucks in mrr where were you a year ago uh so that basically was half of that right okay good about 500 500k a year ago um that's healthy growth now have you done this bootstrapped or have you raised capital we raised 5 million in capital so far um so i think but for a software company that does sas only you somehow can call it bootstraps but it's not a lot of capital that went into the company right now now um are you looking at raising capital right now at the moment we're let's say exploring strategic options so there's no definite decision that we're going to raise capital in the future so the um the business is around break even so it's not burning a lot of cash at the moment so we have a lot of opportunities and we definitely always look at the market when you say not a lot of burn per month i mean are we talking like a hundred grand net burn something like that so it's around 50 depending on how many new employees we hire and depending on how much new customers we're on board in a certain month so yeah i think it evolves around the zero line yeah that's that's not so bad um and then talk to me about the team today how many folks uh so we have around 100 100 all in germany people in department 20 in sales and and inside sales and then about 20 in everything which is customer support another 20 in marketing and then 10 in supporting functions like hr and finance okay and where's everyone based so the majority is based in berlin so here in berlin we're around 50 people and the rest is spread across the world so we have people in the u.s roughly 10 roughly 10 in the uk um and then a couple of people that sell our solution in australia or mexico or other markets and how are you so let's get into some economic economics here churn's critical and a sas company how do you measure your churn yeah basically i mean uh we look at it on a monthly basis and we see of course we see the local churn and then we see the net retention so um at logo churn we are roughly at five percent right monday annual base and the uh net retention for the cohorts that we look at we are at 120 percent so we have net negative churn uh but of course we have lower churn okay got it so with 120 percent uh net revenue retention if you're churning five percent annually it means you're expanding by about 25 percent is that right exactly 25 to 30 on the on the customer base that we have yeah the historical cohort yeah that's great now walk me through the expansion playbook so 25 expansion is obviously healthy what what's the number one pricing axi uh that your sales team is kind of driving prices up against so so basically the the expansion comes from an increased number of sku within our customers right so that is the the one factor while we why we grow within our existing customers okay and um so just number of skus are there any other pricing axes you price around like number of seats or or feature based no purely on the number of sku okay so there's there's no there's no feature no feature upsells even there's one but that accounts for like five percent of our business so it's not uh material it's really as i said we want our customers to use the platform as much as possible with as many people as possible so i think in the future if you look at it there might be potential to to increase prices based on the metrics that you mentioned but for the time being uh what we want to do is scale the amount amount of customers and not so much by increasing the revenue based on on let's say additional seats or additional channels because we really want to our customers to use this solution right yep yep now in order to get a new customer paying 3 700 bucks a month what's your full weighted cac look like today um so it's roughly 11 months that we need to to recuperate in order to to make a customer break even so it's around let's say 30 33 000 uh us dollars that we spend in order to require customers yeah yeah 33 up to maybe 40ish 40 000 bucks with 11 month payback yeah that's great now where are you spending that capitals are mostly internal sales team commissions are you doing a lot of direct paid stuff now it's mostly on the on the sales commissions and the sales team that we built of course we calculate also all the events that we do and and the let's say um online marketing into it but the majority goes into uh into our sales team what's the last uh conference you went to that got you good results uh basically it was the sap hybris conference that stood out last year in 2018 and where was that based it was based in barcelona barcelona okay good and did you just kind of do the booth or did you speak on stage or what both actually so we had a we had a keynote speak um it was a speech on stage and then had a booth where people after this after the talk came to right so that was kind of a good event for us and johannes what does that run like 100 grand 50 grand no basically we didn't have to pay for it but you didn't have to pay for we are partnered with sap so basically they were so kind to invite us uh and we didn't have to pay for it even got it that's interesting okay that's how you're getting customers last year but take me back to 2014 tell me about the hustle would you do to get your first two customers basically i mean it was in the end it was me selling this solution going out there explaining them what what we do right and was completely different world back then in 214 right it's uh it was more like google shopping what is that do i really have to use their channel so we did a lot of let's say market education at least here in germany and explain people that they should use their channel right it was back then called google based frugal so it was completely different well and i think educating them on the importance of um product information and product data how you can turn that into a competitive advantage that was what uh sold our first so who who were you targeting though specifically you woke up in the morning and you did what uh we targeted brands and retailers and looked for the most uh let's say the the ones from the outside in where we thought they had the most number of skus or the biggest ones how would you get that data how would you know you can get an information or you can get a feeling by the amount of revenue that those folks do and then you browse their inventory and you get an idea how much um sdus their offer right so you go to their website and look um how much products do they offer [Music] now someone can have a lot of products on their website though and be doing have you know be doing no revenue how do you know what revenue how do you look up revenue of these companies i think you can't always tell from the outside but of course you can you can buy lists where you get an estimate of the revenue but as i said so for us the the...