How Proposify CEO Kyle Racki grew Proposify to $11M revenue and 10K customers in 2024.

Kyle has built proposed by up to 8 million bucks in ARR he's going to dive into how he's done it tactics that work tactics that didn't over the next 20 minutes please tell me welcome to the stage Kyle [Applause] racky stage is here man [Music] Joy hey everyone it's been so inspiring to hear all these great stories from Founders who grew from zero to 100 million in you know two years five years 10 years um I'm going to share a story that's a little bit different than maybe some other ones that we heard because I'm going to be very raw and vulnerable and share a lot of my fuckups and hopefully you'll if if you're be you know if you're pre8 million Revenue you can avoid some of these pitfalls and I think some of these can still happen even when you're a little bit further along so to to kind of Set It Off I want to start with a story about two years ago it was the fall of 2022 I was in a state now for a couple years where I was really checked out in my business I was really bored I was frustrated things weren't going terribly well our rate of growth had been declining year after year and when the SAS Market changed around 2022 is when we actually started to decline for the first time really since we found product Market fit and I had been going through this m&a process where we hired an m&a banker and had strategics and PE firms lined up to to sell the company because I was just trying to offload it I was trying to hit the escape hatch and get out while the while the getting was good um but everything kind of happened around the same time the SAS Market kind of crashed in 2022 investors and acquirers started getting nervous and suddenly I had this you know what was this big list of potential acquirers all pull out not get a single Loi from anyone and it was at that moment where I I really didn't know what to do and and I was in front of my board when they asked me like Kyle do you have the the stomach to keep going I shed a tear for the first time in front of them and said I don't you know I think so I don't know but how did I get here and that's really what I want to share with people today is some mistakes you can recover from pretty quickly and other ones can you may not even feel the effects of them for a long time how did we get here so when proposify got off the ground it was around 2014 we started finding product Market fit we started to scale things were really fun you know it was a kind of a new and emerging space proposal software online proposals Interactive quotes e signatures that kind of thing um and we were one of the first like SMB players in the market who were doing what we were doing with these highly visual um interactive proposals and then you know people entered the space pandadoc quiller and some other ones but you know for a time we were really leading in our category and um you know it was at that time growth really felt easy we were selling to digital marketing agencies we were very niched down in that um in that market and had a very strong plg motion selfs serve trials that was going really well so around 2018 my co-founder I first um close our first round of actual you know major investment Capital we take uh we take a million each in secondaries you know put three million on the balance sheet it was uh it was a really fun time and I think what we started to do was we made the mistake that I think a lot of Founders have made once they raise money which is they try to grow too quickly they feel this realer perceived pressure to um higher headcount and scale and build a sales team and go after the Enterprise and we completely fell into that trap so you know we we hired enough people that we were eventually around you know 100 people or so and for you know at the time I think only a five or six million doll business we went after the the midmarket before we really were ready we didn't even really know what they wanted um and I'm going to share what started to work there but I think one of the biggest issues that we had was the speed at which we moved in the early days to build features and ship started to uh it started to slow down we started to kind of buckle under the weight of technical debt and Legacy that I didn't have an experienced engineering leader who really knew how to scale us past that um but I'll get there I'll get back there in a second what I want to share here is you know what started to work for us as we moved up Market because we had the problem that a lot of companies have I think we talked uh you know heard Adam Robinson earlier today talking about the 10% churn you know we didn't have churn that that was that bad but as with all self-serve um you know small businesses free trial motion churn starts to eat away at your growth overall right even if you're at a two or 3% you really want to get that down low but it's tough when they're small businesses and it's a low price point so when we started to experiment with um building a sales team and having you know going after larger businesses we you know I made also the mistake of basically just like hire a team and a VP a sales to figure it out instead of trying to learn that myself and try to sell deals myself but um after a few false starts what started to work for us is you know we realized that the product had to change significantly so larger businesses were mostly interested in like how does it integrate with Salesforce and do you have SSO and what's your security policy we we had to check a lot of boxes in order to win deals and it took us a while to get there the other big thing was our positioning um you know we heard Eric talk about that in terms of pendo like how they'd position against competitors and what we realized was that you know the customers who bought proposify to send beautiful proposals and get faster sign off that messaging didn't really resonate with the mid Market because they're like we have cool PowerPoint decks like we know how to send proposals what they really wanted was control right sales reps using the wrong materials sending out proposals with Stakes the management team not really having any visibility into what's going out the door and getting in prospect's hands that's what they were buying and so once we shifted our positioning to that sales became a lot easier um and then the the third really big thing was pricing so we did again the classic startup mistake of like put everything on the Enterprise plan um give it all away and so we were just capping our ability to sell larger deals once we were you know moved to a per seat price um that also became easier and we went from you know being able to sell at most a $3,000 a year ACV contract up to now where we have a couple in the six figure range but average would be more 10 20 30k deals so that that started to help us and what you know when you look at this graph what you notice is this is the black lines the total AR growth of the company um the orange was the small self-service segment which grew and was you know the majority of the revenue for a long time but then that started to decline and the um you know the other graph ended up being like stuff that came through the sales team the midmarket deals started to almost U reach the same amount in terms of ratio of Revenue but you know what was happening was because we raised we didn't raise a massive amount but we raised enough and we deployed it too quickly we were at a point where we were just burning a lot of cash but still not growing fast enough we weren't moving quick enough from a product perspective and there was just friction between every Department like sales was pissed that engineering wasn't delivering things faster and um you know customer success were frustrated with products so there was a lot of internal friction happening you know as I mentioned our our growth was pretty good during the the early days um but really we noticed the rate of growth started to decline and we got to the point where we because we weren't moving fast enough on product to stay competitive you know Nathan said just before this it's a competitive space contracts we didn't feel the effects of it right away but we were starting to feel this this compounding of really not changing our product a whole lot um you know we were sort of in this game of like whack-a-mole where you know you we were just in maintenance mode the engineers were just keeping the lights on but we weren't innovating anymore um and there was no quick way to fix this for for a number of reasons it felt like the more people we added to the company the slower we got and I think we were AC a lot more like a big company than we actually were right we had too many layers of management um we had managers with like one or two reports like we we were just buckling under the weight for how small we still were and so this is the burn chart you see in 2021 we raised or that was the last time we raised a round of investment and we were just like okay let's let's add more people to the company because that's how we're going to move faster um and you can see at one point we were actually burning 400k a month which you know it depends on your size right that might not seem a lot...