Promys Revenue (2024)

[00:00] Folks. My guest today is John Breakey. He created a tool called Promys, which was created as a single solution that could support the growth and complexity of a multi office IT full service business. They achieved this to us of a highly respected integrator by developing industry best practices. Check them out again at promys.com. John, are you ready to take us to the top? [00:20] >> I'm ready. [00:21] All right. So on your website, you say the company is the world's best CRM help desk and professional services automation software. What does that mean? Tell us about a customer who's paying you. [00:32] >> So what happened, maybe just to understand the background that I used to be one of our customers effectively. And so I really understand the business that our customers are experiencing and the issues, the problems, the challenges and so forth. And so the product was really built with best practices in mind. You think about a services based business that also does the technology. Can you [00:58] name one, John, as you tell the story so it's a real story? [01:02] >> Yeah, sure. Well, the company that I was involved with was called UNIS LUMIN and it was the third largest Cisco partner in Canada And it did an array of services from, if you think about it from a consulting design implementation and post implementation services or what's now called managed services. And so if you think about a company that's doing service based business, most of their profitability comes from their services, not from the product sales that they [01:33] >> do. And so it's really critical in a service based business to really manage your utilization and to make sure that you're not losing money because you're doing work that didn't get billed. In addition to that, as you're growing and our experiences, we grew from 30,000,000 to 50,000,000 to 70,000,000 and so forth. And every time we grew at a fairly good clip, it really put a burden on our cash flow. So it's really important to be able [02:01] >> to think about how you're billing customers, how fast you're billing customers and so forth. So all of those best practices were integrated into Promys. In addition to that, if you look at most people in the market, they're using two, three, sometimes four different products to cobble their business together, whether it's in the sales process, the order admin process, the delivery project services, and the ticketing side of the service post implementation. And what we want to do [02:30] >> is have a single place where every time I updated something, it updated across the whole system. [02:36] So John, if an agency is listening right now with 100 people working at the agency, they can use Promys so all their reps and all their workers can manage their time, their inputs, what clients they're working on, how many hours worked, things like that. So you never miss a billable hour. [02:50] >> Correct. [02:50] Also Understood. [02:51] And when did you leave that bigger company to launch Promys? What year? [02:56] >> So there was a parallel process or cutover for a few years, but in 2011, I went full time to just drive the Promys business. [03:07] And are you 100% owner of the Promys business or does that agency own a bunch of the business? [03:11] >> No, I'm a majority owner, but there's a secondary, owner as well. [03:16] Was that an investor? Did you raise money or have you bootstrapped? [03:20] >> No, we actually, took money that we had from other businesses and use it to do our own investment. So it's an actual partner, not an investor. [03:31] Is that partner, are they also a customer of the tool? [03:34] >> No, they're not active in the business anymore. They're off doing some other things. So they're just really acting in the board of directors. [03:43] Oh, what's going on there, YouTube? Good to see you guys. Now imagine this, you love watching these interviews with SaaS founders. But imagine if we took all of the valuation data out from over 2,807 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 Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect [04:06] your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna [04:31] get a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna 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 [04:52] not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna 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 [05:18] going out right now and you're raising your seed round. We'll 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 dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. Alright. We're gonna go back to the YouTube video here in a second, but if [05:40] you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation 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. Alright. Let's jump back into the [06:06] interview. Interesting. Okay. But you own, call it 70%. They own 30%, something like that. [06:13] >> Exactly. Right. Right. [06:14] Okay. Interesting. So you launched this in 2011. Tell me more about these customers, these big agencies that use you today on average. So what's sort of a sweet spot that they pay you per month to use the technology? [06:26] >> How much do they pay per month? [06:28] On average, yeah, spot. [06:29] >> Well, if you look at it, it's based on a seat license and there are two seat licenses. There's a field license or technical license and a full license for the salespeople and the admin people. And so you're looking at on average about, if you blend those two rates together, about $59 a month per seat. [06:51] And how many seats is your average customer? [06:54] >> The average customer is about forty, forty five. [06:57] So you're talking these are like these are like sales motions where you're selling 2,300, $2,400 a month plans. [07:03] >> Roughly. Yeah. That's right. [07:04] Yeah. Okay. Interesting. And do you have a big sales team? What's your team look like today? How many folks? [07:09] >> No, there's only about three and we do a lot of through marketing and referral. And like all of our sales are done remotely. We don't have to visit the customer sites, which is kind of interesting in a COVID world. [07:25] >> And the sales cycle is anywhere from about a month to about four months, roughly. Our customers range from on the low side, about 10 users and the high side about 150 as an average. [07:38] >> What they do and they're in sectors. So we have people that are in the IT integration business. We have people that are pure MSPs or managed service providers. We also have a group of physical security and fire suppression and fire security and fire alarm system companies. They all have the same common problem. They sell equipment. They need to quote the equipment and the labor. They have to deliver the equipment and the labor, and then they want [08:03] >> to do post implementation support. And that's really the sweet spot for our stuff. [08:08] And that account that's 150 users, I imagine that's your largest account. What does that ACV represent? Is that like a $100,000 a year contract? [08:17] >> That's about right. Yep. [08:18] Okay. Wow. And have they been with you since the beginning? [08:23] >> Most of our customers have been around for five plus years. In that case, some of the larger ones have been around for almost ten years. [08:33] >> Where we lose customers is actually sometimes they get bought or they go out of business, usually the smaller ones. How [08:41] many customers are you working with today, John? [08:44] >> So we both have, I guess, approximately about 150, 200. [08:48] Oh, wow. Okay. That's a lot. You're managing 150 customers at $2,300 a month with a team of three people? [08:54] >> No, no, no, no. That's the salespeople of three people. [08:57] Oh, what's the total team? [08:59] >> Oh, the total team's 15 plus another five that are subcontract on the that if you it breaks down into support, like customer service and so forth, implementation training, and the other part of it is the dev development. We're always doing updates and releases, adjusting to what's the need for in the marketplace. So we do a new release every two to three months actually. [09:27] But John, my math right? Can I take 150 customers times $2,300 a month on average to get your monthly revenue or no? [09:37] >> I'm not sure, I don't do math very well, but [09:39] Oh, would be about $345,000 a month in revenue. [09:43] >> Yeah, that's about right. [09:45] Okay, very cool. And if that's revenue today, where were you exactly a year ago? Do you remember? [09:51] >> We're probably about 25% less. Well, [09:57] so 300,000 a year ago, 345,000 a month now, that's a nice growth rate. Where are you getting new customers from? How are you growing? [10:04] >> So a combination of some referrals from existing customers. So we have a program with existing customers that they refer us. And the other one is we do [10:15] >> nice thing about our business is we know who the target customers are. And so we have a pretty strong list of about 4,000 [10:25] >> prospects where we know their names, we know the people in the company, and so we can market to them and call them and so forth. And it's really about a cycle that somebody's, you call them up and they, I'm not interested, I don't have a problem. A year later, they're not happy with their current solution. And so you just have to keep on remarketing to them and over time, those 300 or so or 3,000, I should [10:51] >> say, prospects drop into the sales bucket. [10:55] And just to be clear, John, you've done all this bootstrapped right outside of the other partner you have, it's all bootstrapped. [11:00] >> Yeah, pretty much. We've had a lot of good cash flow and we had our own investment from some other businesses that we sold. So we've never really had to go outside in the marketplace. [11:13] Yeah, know you're very profitable. The biggest expense typically in SaaS companies is headcount. And so we always look at revenue per head and you have top 25 percentile revenue per head of about $276,000 if it's a 15 person team doing 4,100,000 in ARR. So makes complete sense to me why you're so profitable. [11:31] >> Good mathematician there. [11:33] Yeah. Well, I'm just wanna give credit where credit's due. I mean, that that is why you're able to scale is because you do so much with such a small team. That's great. [11:42] Tell me more about plans for 2022. Do you have plans to stay private? Do you have any if someone offered you $10,000,000 all cash upfront to sell the business, do you sell today? [11:53] >> Well, I think that what I've learned from some previous businesses that I've owned is the train time is any time, but I've been fortunate to discriminate and make sure that the buyer, if there was a buyer, and we're not looking specifically for one, but you never know, somebody might call you up. But the important thing for me is to say, will that buyer deal with both the employees and the customers? You see some buyers who are, [12:22] >> I'll call them financial buyers, who want to strip the company down and you've seen this in the marketplace where there have been some major acquisitions in the past with our competitors and the result is that the service capability drops way off. [12:40] Can you name one [12:40] or two of them? [12:41] >> Well, those ConnectWise had a major problem when they had a major investor come in and buy the company and it took them about maybe a year and a half to really recover from that. [12:52] So who would be the perfect buyer for you? [12:55] Can you name a company? [12:57] >> Not really. I guess you could argue sometimes your competitor, but usually it's about somebody who might be in the adjacent market and looking for the synergy. So if you think about it, you're familiar with SolarWinds or what's now split up into two companies and there's N-able, which is the other side. So these are RMM vendors or remote monitoring vendors who want to keep their customers and provide more services to their base of customers. The other ones [13:29] >> are some of these companies like Acronis and so forth that are providing a whole suite of services to managed service providers. They're providing security, they're providing hosting and so forth. And so by providing additional stuff like the whole sort of workflow system in the back end, that just means more revenue for them and more stickiness with their current customers. [13:53] That makes a lot of sense, John. Let's wrap up here with the famous five. Number one, favorite business book. [13:58] >> Oh, I think that [14:03] >> there's a I love innovation and the Innovator's Dilemma and the Innovator's Solution are kind of a series by two authors. They're just phenomenal about how do you think about always innovating and what's the methodology for basically being successful at innovation. [14:24] Number two, is there a CEO you're following or studying? [14:28] >> Actually, I really like the psychology. Like everything's about people. And there's a wonderful book by a psychologist or neurologist. [14:39] >> The book is called Behave and it's by [14:47] >> Robert Sapolsky. He's a professor, I think out of Harvard. And just a phenomenal read. It's an easy read. He's a little bit funny. But once you read it, you really understand people, customers, how we think and behave and learn. And that's really critical. Like one thing I want to mention is that in the software world, what's really critical is user adoption. And for the most part, companies do a really poor job at it. And so that's [15:16] >> why we studied people like Sapolsky's information so that we could say, hey, we don't want to just buy the equipment or the software. We want to be able to take advantage of it. [15:27] All right, let's move forward here. Number three, favorite online tool for building the business. [15:33] >> I'm not sure that I have one. [15:37] Four, how many hours of sleep do get every night? [15:40] >> I actually do pretty good. I do like six to sometimes seven. [15:44] Okay, that's great. And what's your situation, John? Married, single, kids? [15:48] >> I'm divorced and I do have three girls. [15:52] Three kiddos and how old are you? [15:54] >> Pardon? [15:55] How old are you? [15:57] >> I'm 65. [15:58] Last question. Something you wish you knew when you were 20. [16:01] >> Everything that I know now. More about people. People in situations that [16:09] >> with age comes wisdom. And it's pretty powerful because my favorite expression is that life is a wonderful teacher. The only problem is it gives you the test before the lesson. And so I like making mistakes because I think you learn much more from mistakes than you do from successes. [16:28] Guys, there you have it. John launched promys.com back in 2011. He's helping agencies track billable hours, both on machines equipment and also humans to make sure nothing leaks through and profit margins stay high. He's doing about $300,000 a month in revenue a year ago, now $345,000 a month. Healthy growth, 150 customers, totally bootstrapped, which we love. 15 folks on his team, three sales reps, rest mostly engineering as he looks to continue to scale. John, thanks for [16:54] taking us to the top. [16:55] >> My pleasure. [16:58] One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. 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, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday 1PM [17:23] Central. Additionally, remember these recorded Founder interviews go live. We release them here on YouTube every day at 2PM Central. To make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big [17:46] fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you want to take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign [18:07] up for that at nathanlatka.com slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode. If you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people. [18:27] We got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments. See you.