How Progressly CEO Nick Candito grew to $3.6M revenue and 100 customers in 2017.

he's launched progressively really wants to be the operating platform or the system of record for folks uh companies and the process all the processes they run through all their employee set or vendors or or contractors things like that they've got a team of 30 again focused on this problem raise 10 million dollars serving hundreds of customers with less than 10 000 seats served less than 300 thousand bucks in mmr buddies goal is to hit a 5 million annual runway by the end of 2017. this is the top where i interview entrepreneurs who are number one are number two in their industry in terms of revenue or customer base you'll learn how much revenue they're making what their marketing funnel looks like and how many customers they have i'm now at twenty thousand dollars per and i'm your host nathan latka this is episode 767 coming up tomorrow morning you're gonna learn from martin koppelman i asked him i said martin in a mature crypto market who gets rich who makes the money he tells me an answer tune in to find out hello everybody good morning my guest today is nick candito he's the chief executive officer and co-founder at a company called progressly championing the company's mission towards becoming the new standard for how teams find and execute business processes he previously served as related iq's head of user success in business operations which was acquired by salesforce.com as the first automatic and intelligent crm solution nick founded progressively to address how large industries operate innovate and share around core business processes nick are you ready to take us to the top hey everyone thanks for having me yeah man thanks for coming on real quick before we get into progressively who's going to who's going to win the crm space oh that's a great question um i am a big supporter of salesforce.com we use salesforce within our company and i think there's a lot of technology attached to the related iq acquisition that makes that a pretty exciting play and i i have not taken my eye off what linkedin and microsoft are going to be able to do together where i've heard some good things about dynamics so it'll definitely be a race to the finish let me re-ask that question that sounds good for the enterprise space but if i asked you to pick a baby in the smb space who would you pick okay so think like uh crm rpoos like under 100 bucks per month yeah i was always impressed by base crm they were they were the one that we were kind of keeping an eye on at related iq we launched the company and we had some massive differentiators and they closed the gap on us pretty quickly and also know the team over at uh social capital that that works really closely with them a moon and team um so i think they're they're one to keep your eye out for very cool okay take us into your story here so was was relate iq kind of your first kind of tech exposure or did you have your own thing before that or what's the story there great question yeah i had um i kind of stumbled into tech in all honesty where i was a finance major and i was thinking about what i wanted to do and if i wanted to kind of stay on the east coast and go do the new york boston finance game and really just optimized for the best team that i could find so i ended up joining a very small software team that was based in central massachusetts and we were building technology for the pharmaceutical industry so think of it as like a crm for clinical trials and that was the first time that i really got to see what it could be like building technology for large companies and it also kind of opened my eyes to a lot of the things that were very very manual within these companies where externally they had built efficiencies internally it was it was a lot of paper it was a lot of excel there's a lot of emails kind of back and forth that that didn't help with it didn't help people to get things done very efficiently and what moved you from that into related iq so i actually thought about taking a pass at my first kind of entrepreneurial journey right after that decided to run operations at another company in boston um and we were actually doing really well a close partnership with which company was called crimson hexagon and they're still doing very well in boston stephanie newby was the ceo that i worked i worked for and she was world class in my opinion so i i learned a ton from her around what it looked like to kind of take a company from where we were to the next level and i implemented a lot of tools like salesforce.com um in jira and what i saw is that i i felt like as the person who decides on a lot of those technologies your evaluation criteria is much much different than the people who actually use it and what excited me about relate iq is we were really thinking about how we could build a sales system of engagement and i think the way to think about that is you know you got to have social features um you got to work well with data and you really just have to kind of tie into how people are going to need to be doing their job day in and day out were you early enough at relate iq to get you know equity to the point where the sales force exit was financially actually meaningful for you or no you just really learned from the experience and now you're going to do your own thing no it's definitely meaningful um and you know still a shareholder in crimson hexagons one of their biggest cheerleaders but yeah that was a phenomenal ride i learned a ton steve steve laughlin was our our founder and ceo adam evans was our founder and cto i thought the two of them were probably the best founding duo that i had i'd ever come across and i was fortunate to to work very closely and actually report to adam for a period of time so um not only to kind of help me financially to be able to take the jump for progressively um but i also felt like the playbook that those guys ran made a ton of sense to me what number were you employee-wise there i think i was employed number 21 okay at that point yeah we were kind of hiring pretty quickly um the person who referred me to the company ended up being the first kind of non-technical iron on product hire that they made so i ended up being the second started on the same day as our vp of sales so it was a it was a it was a fun ride together you're surrounded on day one by all the all the tech guys going screw you and everything that the customers say they want and you're like they said they'd buy if we have this how do we get it built and it's the constant debate right yeah it turns out it was pretty helpful to have some people that know sales and know what sales reps want the company so i think hopefully it helped us close the gap on what eventually became a big driver around our success okay progressively what's it doing how do you make money so you can think of us as the operational system of records and the way i kind of think about enterprise today is that all of these large organizations they're all using microsoft products they have a crm tool which is your customer system of record they have an hcm tool which is your employee system a record and then they typically have some some notion of erp in the building so in sap and oracle and we really see it as an opportunity to build the system of record for fortune 1000 clos where we especially like the industry profile where it's an extended value chain so i think energy and utilities transportation consumer package goods even government there are a ton of people who work outside the building that need to be in the loop around what's getting done and if you want to make optimizations around how people can actually work better and stay connected there's really no way to do that today so so we you know pretty simply kind of have a mobile first strategy where we we typically really help the people who are in the field again not in front of computers every day and we connect the data that they need access to and the information that they need to submit all the way back up to what what a clo could be making decisions around um you know we kind of have a standard sas licensing model um around that and give me just a general sense of kind of kind of customer size are they i mean are they paying on average a grand per month or you know 10 000 per month or a million per month what's the general arpu yeah um you know our poo varies quite a bit i think you know we we work with some of the biggest companies in the world um shell oil is one of our big supporters and we should have some news coming on that and then we also kind of have a mid-market segment i think if you look at energy it can kind of be skewed in terms of how big the companies are and what they do from a revenue perspective it's an average though if you had to pin it down um so the highest licensing price that we have is you're looking at probably forty nine a user um one conversation that's kind of top of mind is working with with the it group at chevron um you know you know they have 60 000 employees within the company so you know you do the right thing for your customers where you want to kind of do value based selling where they understand what they're getting and there's high roi for them so i mean it's 50 bucks in about your average seed price or that's that's like the highest you'd say yeah that's our enterprise one so we we always kind of work to get to that that enterprise level um because customer success and integrations are such a key part of what we do what would you say your average seat is like 20 30 yeah second tier is around 19 right so that would okay that would be probably the most common one okay um you know you'll get to you'll get to the 49 but you won't probably stay at that level when you're talking about thousands of users which which makes sense yeah of course okay i just want to get that so people listening and understand okay is this something i might be able to use based off the price point so let's let's get more of the story here so what did you launch the business in uh so the company um was founded in 2014 and then there was uh kind of some wild down time at salesforce to get going um so we probably started kind of aggressively on what we were doing fundraising bringing on investors recruiting the team in early 2015. okay and how much have you raised to date uh so we're right around 10 million dollars if you look at um rc drown series a round and then and then a bit after that and why did you decide to go that route versus just kind of using your own capital keeping all the equity for you and your team and bootstrapping yeah i think um you know you're gonna win based on how great of a team you can recruit and i think there are very few circumstances where um it's only one or two people call them co-founders where they can actually crack it so we had a very very specific profile around how we wanted to think about the seed round where we wanted to bring a large institutional investor a micro vc someone who just does seed deals and is very good at helping them get to the next level and then some high value angels um and i think you know it played out the exact right way where abc was was excited to lead our series a and was that abc um so founded by joe lonzdale one of the volunteer founders and just a great technologist great entrepreneur and i think the ecosystem he's built at abc is is something that's been really powerful for us got it so take us back to i mean your experience with the relay iq really comes down like customer on board and understand like how to make them sticky i imagine you're thinking about things like churn and things like that how do you think about those economics at progressive i mean what is your gross you know seat or logo or revenue turn per month uh so what we really try to look at is how do we how do we have net churn that that's positive right so you know there's never really a scenario where we're not accelerating most of our accounts faster than say we're kind of downsizing in certain accounts but if you if you look at kind of the industries that we serve if it goes from a site-wide deployment to a regional deployment to eventually an enterprise deployment um you know you look for kind of that that exponential growth curve so it's definitely something that we we keep an eye on but for us i think it's it's more at the point where um it's scaling into different locations based on especially being accessible uh mobile tablet offline for again the people who are kind of in the field and doing the majority of the work today looking at those so obviously it's great that kind of net turn is negative based on your land and expand strategy but in terms of just gross logo chart i mean is that something you care about and again and if so kind of what is that and how do you drive it down yeah we we absolutely care about that um it right now is not really a circumstance where with any of these kind of major enterprises where we're even in conversations that are kind of tied to if they'd be churning because a lot of it's a lot more strategic tied to how you want to work with them in the enterprise side right so that could be different integration points different use cases that could they could be taking on the product um and i think you know that's that's because we have kind of a named account strategy with some of these major players that we have in the industry yeah i mean uh if i'm if i'm if i kind of understand this correctly you're very much playing in the kind of high low velocity versus high velocity low arpu kind of segment you kind of have targets and you want to go win those targets versus a no touch you know low price point kind of onboarding model yeah exactly right yeah okay and we do have a mid-market segment that we've carved out so i think the velocity there is is pretty exciting where you could look at 30 to 60 days to bring on a new customer and get them deployed but the majority of kind of the revenue that we see ourselves doing is is definitely this named account enterprise strategy okay and how many customers today are you currently serving uh we're still in the hundreds uh when we look at how we want to put that together that's pretty good if you're targeting only a thousand of the fortune 1000 yeah but some of those are in the mid market right so they're not they're not quite fortune 1000 um but yeah i think i think it's really important to just kind of have your first your first handful of customers that kind of love the product willing to tell a story and one of the things we really like about energy and utilities is that um there's a high high network effect there yeah um tied to how closely everyone works together and everyone understands the industry and also contractors um so people that kind of cycle through different amounts right yeah i know i just interviewed jeff moore who wrote crossing the chasm and he just articulated the heck out of that which is target a really specific the weirder the sector the better because the weirder people are the more they talk to each other the more they recommend great products so you crack one cookie and you're in yeah we've also found a ton of success and kind of prospecting into energy utilities i think you know they don't have too many people from silicon valley calling into them but they're you know they get the value of technology which is exciting what is the um how many active seats you have on the platform across these hundreds of companies so it's kind of tough to say because i think we want to really price based on kind of active users where we see ourselves kind of being the platform that can help them with digital transformation so get people off paper get them onto this mobile product and then we also have kind of like an enterprise player that we look at that has millions of seats on the product adds tons of new seats every day based on some integration points but the engagement on the products really well so we're actually kind of exploring if we only charge people and kind of do like the slack model only the people who are on the product or the are the seats you're going to pay for so you know you think about an engagement metric on 60 000 users at a company like chevron you know what is your engagement metric like what's that one thing you track like at least one login per week or like what is the utility metric for us it really depends on what they're running operationally so think like if the use case is more safety based that's probably something that they're going to need to do every day if it's a procedure that they might need to run quarterly then the engagement is is more of kind of like a quarterly active user so we try to do a really good job of kind of understanding what are the classes of use cases within the account and really automating how some of those things kick off so there's not there's not so much that they have to think about tied to when they need to do it and who needs to be involved okay but i mean so again if you had to back the napkin though like last month average like active seats i mean are you talking like ten tens of thousands or still in the thousands or past a hundred thousand dollars generally speaking still in the thousands okay so between a thousand and ten thousand across hundreds of customers hundreds of businesses right and some of these integration points too that we're now working on um you know plugging into active directory tying into single sign-on um office 365 is a really exciting integration point for us too just based on some some assets right so i think core documents and pdfs that you want people to have access to in the field um yeah so we think kind of like our our user growth will be directly tied to some of these integration points and what are you i'd love to kind of understand more about growth so far because you said you launched in i guess 2015. how embarrassing was first year revenue what was it do you remember uh pretty low and and part of that was because we you know we did kind of like a paid pilot offering yeah um so not not quite totally recurring to start and part of that is because you know our brand recognition yeah and our brand recognition isn't social we're talking about like 10 grand though or like a hundred grand or like i mean um but really how we were thinking about it was what was our what was our pilot to expansion conversion so they had kind of an initial use case that they want us to serve could we take that on and could we get them excited about additional use cases tied to how we looked at the space um yeah so you know hundreds hundreds of thousands is how we're thinking pretty good but yeah well i think you know yeah i mean not not uh not anything to write home about but i think just the fact that some of these organizations were were excited to work with us and understood where we were going and hopefully where we'd be going together um that was really the most important thing and then i mean are you how are you comfortable sharing kind of a sense of growth rate i mean what did you between 2015 and 2016 like do you aim for 20 year over year growth or more or less and why uh yeah i'd say much more right i think we'd want to grow at a clip that's kind of 100 year-over-year especially when you're when you're you know you kind of have some negotiation leverage based on the size of these relationships it's i think it's actually easier for you to drive a high growth rate than it is for you to have you know your your referenceable customers that are willing to get out there and help you tell the story to help you acquire new customers right because our our ask we're much more comfortable with the ask being hey will you be a referenceable customer for us than saying hey we really need you know another 100 seats on the product based on based on what we have to hit for our metrics yeah that makes a lot of sense what let's fast forward it's uh it's holiday season december 2017. you're there are you in your office right now by the way we are you got that sick i'm curious about that don con and colin count white board is behind you is that your sales metrics yeah but we have uh kind of the round robin yeah we think of our mid-market accounts i love that um and we can't see too many those numbers will blur out in case there's nothing you know i'm not trying to block it no no that's okay i just i know that was like kind of creepy um uh it's december 2017 holiday season you're celebrating because you hit xmr target what would what would make you like ecstatic if you hit you know you get to x amount in mrr by december uh there's not really too much i can say there based on how we're playing uh this relationship with shell but i think um ignoring any big like i mean it sounds like that would be like a game changer if you got it so like ignore any crazy circumstances it's it's actually much more of like an ar kind of calculation for us than it is an mri one just because it's not kind of like high velocity low rpu like you're saying yes um yeah but i think you know the the staff metric holds that once you get to your five million dollars of ar you're you know you have you have enough momentum to build a real business and i think several other customers that i've that have mentioned that that we're working with very closely i think any one of those can be a significant enough relationship for us you're popping champagne if you hit 5 million ar this this by this december right yeah we'd be we'd be feeling good and that's awesome you know that that means we have kind of the right the right champions at an executive level within some of these accounts and in the right kind of engagement with people in the field and i think i think that that's something that most of these large traditional industries have not figured out how do you take it's decision making criteria and actually make that so it doesn't feel like it's a it's a top-down decision that's actually not about helping people do their job yep and then i mean are you comfortable sharing sui again so we can understand growth rate if you have kind of a 30 ish average seat and less than 10 000 seats currently i mean is it fair to say you're doing less than 300 grand per month currently yeah yeah we're less than that now um and again i think enterprise cycles it's it's very interesting and just kind of like inside of salesforce some of those some of the largest customers that they have um you know had purchased and you're talking kind of nine figure purchases yeah and the deployment can actually take time right and they can be they can be very happy through that process because they're defining strategy together and kind of figuring out things on their end um so you know having having the enterprise cycle in your business i think it's something that's a little bit slower up front but it has this the ability to be really really significant uh growth over the long term when you kind of look back at how you've been able to build within accounts and what is the so tell me more about your team structure how many people are you at now full-time right about 30 folks pretty pretty heavy on product design and engineering okay and then on the on the go to market side we have kind of a standard enterprise inside model where there's sales development reps account executives and then and then customer success how many across those three titles uh six people total on that team right now good and then last last kind of question here before we wrap up do you have is it still too early i mean maybe it's not because you've raised much capital so maybe you've done tests here do you have a good sense of what cac is yet uh yeah it's pretty pretty efficient because not a ton of it is tied to kind of the typical marketing that you'd be looking at um so it's well well under what you'd be looking at so like first year of of acv um so i think that's kind of a that's your benchmark right is can you acquire a customer for less than than they'd pay you in year one am i reading you i mean i'm understanding correctly your payback period is significantly less than 12 months you know and a lot of that's tied to deal size right so sometimes some of these larger enterprise accounts they could take six months to acquire but then initially you're talking about seat numbers that are very very significant um and i think that's that's just a unique position that we're in um where you know we think we have an opportunity to build one of the next enterprise companies you know evan goldberg the founder and cto of netsuite he's one of our investors and advisors i think just understanding kind of where you want to fit in the landscape is going to really dictate a lot around how you think about these economics and how you want to structure the team many of you listening right now don't have time to listen to every b2b sas ceo that i've interviewed if you want to get access to the database i've created with the year over year growth rates customer accounts margins and many many other data metrics and data points you can go to e t l a t k a dot com here's the thing though this database i keep it to myself it's so freaking valuable and to preserve the quality of the data and make sure that the people that have access to it have a true advantage i'm only letting 10 companies on each month so we're full this month we can go to getlatka.com to get on the waiting list for next month and look there's big people on the waiting list i mean the biggest species you've ever heard of you've probably heard of them they're big private equity billions and billions under management so it's an impressive waiting list go get on now at getblatka.com okay top tribe i have to tell you many people go nathan you came out of nowhere your website's going so fast how'd you do it the answer is simple so i use hostgator i don't know if you guys know that but i use hostgator and the reason i do they have like about 4 500 free templates i can use because i don't code they've got a great e-commerce plug-in and guys i bug the heck out of their support they've got 24 7 support which i love so what i've done is i've worked with them you guys know i make great deals if you go to hostgator.com forward slash nathan you can sign up get your own domain for 30 off and a 45 day money back guarantee okay again i make great deals for you guys go to hostgator.com to grab that now good stuff and nick let's wrap up here with the famous five number one what's your favorite business book favorite business book um leaders eat last by simon cynic is is a phenomenal one number two is there a ceo you're following or studying uh again i'm really really excited about um jeff weiner and satya and how they can kind of come together and and i think microsoft's going to have some really exciting years coming up fortunate that our our cto worked for uh dick costello at twitter so i get a lot of good learnings around how he operated and i think jeff bezos is is really the person that you're always keeping your eye on with whole foods announcement and potentially slack i think just one of the more innovative leaders out there number three besides drone is our favorite online tool you have like hostgator for me i would say it's probably email which is maybe a little lame answer but i think email productivity is um is so huge there uh we do we have we have a bunch of kind of the hubspot tools we also i have a good friend um over at foundation capital that was an investor in pockets i i love the notion of your the save button for the internet which i use for that number four how many hours you sleep to eat every night uh definitely less than eight i think it depends on the night um the quote i like there is that a lot of times it feels kind of like casino time right so you're up when you need to be up um so i'm probably around probably around five a night and what's your situation married single do you have kids engaged i'm actually getting married august 12th oh congratulations very good and no kids yet right no kids yet and then how old are you nick uh 29. all right last question take us back nine years what do you wish your 20 year old self knew great question um i think being patient is super important i think asking more questions earlier um and i think optimizing for being around the best people um has played out really well for me although i didn't i didn't quite understand that was the strategy early on there you guys have it from nick candido he cut his chops early on at relate iq learned a lot there obviously a success successful exit to salesforce now back in 2014 2015 time frame he's launched progressively really wants to be the operating platform or the system of record for folks uh companies and their process all the processes they run through all their employee set or vendors or or contractors things like that they've got a team of 30 again focused on this problem raised 10 million dollars serving hundreds of customers with less than ten thousand uh seats served less than three hundred thousand bucks and more buddies goal is to hit a five million dollar annual runway by the end of 2017 nick we're rooting for you thank you for taking us to the top thanks if you enjoyed dick today go back and listen to an india yesterday his company used evangelical christian mobile data to influence the past u.s election whether you love trump trump love hillary or hate hillary you don't want to miss this one it'll get you fired up