Repsly Revenue & Funding (2024)

hello everyone my guest today is Alan Bondi he's vp of marketing at reptilian an adviser to several startups he's also held executive roles at place cap placed her Open Text in Cana and was co-founder of Offerpop which obviously was acquired he's been a consultant at McKinsey and Yankee group and started his career as a data scientist he's an avid speaker and writer and he blogs at small data a group Alan are you ready to take us to the top I am ready hey Nathan all right so tell us first your VP of marketing today were you founder of any companies in the past that you exited or what kind of what got you under VP in the role of VP of Marketing yeah sure so I've I've had a couple of my own consultancies which I've sold and I was also a co-founder a company originally called Offerpop now called wing which was one of the really early social media marketing companies kind of ahead of its time for good and bad and what happened with off our pop offer pops still going yeah we've I'm now an advisor where I think we've done a sea route at this point so still chugging along doing about fifteen million dollars in revenue so a nice little business but not exactly the big eggs that I was hoping for yeah I mean look I was very familiar with the space because my company Hayao was a much smaller player in the space so it was fun in 2012 for me to watch the wildfire that but will Buddy Media really started and wildfire then involve or then vitru you guys did not exit and there was another company I can't remember where there was basically two companies really in the space I would say they decided not tags that you are one of them why didn't you sell in 2012 you know I think we had a nice little business going and you know working with a couple other co-founders who had some pretty nice exits in the past I think they had a number in mind and sometimes that's uh it's tough right you you you have a view of what you're worth and it just didn't seem the right time and like a lot of things timing is everything isn't it I have a few friends that I've worked with just through M&A stuff where they'll say Nathan we turned down the 930 million dollar offer because we want a billion and you know what you look then forward five years and they're selling the thing in a flash show for ten million bucks and it was all because they wanted to be behind the number and I missed out I also have a big believer in cycles in business so I'm hoping that there's another cycle when it's social marketing gets frothy again and and you're right the companies you mentioned most of them had exits you know people like Adobe and Microsoft and others and I'm hoping that uh that comes back around so it's not like we missed the boat there's gonna be another boat yeah good and just real quick on to round out the story and Offerpop how much total have you guys raised offer pop I want to say has raised about 25 million so far but if my numbers are right so how the name want why the name change I think it's a I liked Offerpop way better than a wing which is like hard to talk about and hard to spell so it's interesting because that was that was sort of past my time as marketed but I think wing signaled you get a penny if you were going with a name change happened I'm not gonna hit you hard you get a free pass okay I'll use my life one and that one all right tell me about it tell me about you're currently working on so I've been working with some guys and it's it's an interesting story rep sally is a mobile CRM specifically for field teams and for consumer companies that sell to retail and it was started in Croatia of all places so it's it's it's not your typical or maybe it's your typical Croatia to Boston startup story where started by some guys first client was L'Oreal in in Europe so really nice initial client they were doing consulting for L'Oreal creating a tool so that their sales reps their merchandisers could just be a better organized when they went out into stores yeah Alan just clear they're selling a L'Oreal shampoo they're canvassing some geographical area the rep for L'Oreal they're trying to convince Kmart Walmart these places to carry the shampoo and this tool this mobile CRM helps them stay organized it help them stay organized and so this was L'Oreal in Europe initially so the business started in Europe it started focused on Central Europe but you're right think about the reps what are they doing every minute of their day they're going at visiting accounts checking on stock looking at competitors trying to figure out how the product is doing in retail and the old way of doing that they had to have a notebook maybe they'd put stuff in a Google Doc maybe they would be you know filling out a whole bunch of paperwork when they finished their visit what reps Lee does it enables them to take pictures fill out forms it's more like Instagram than Salesforce so so when I position the company I have stuff with CRM for years back to doing work for an initial Siebel integrator if your audience remember Steve don't Agers falen sorry I'm aging myself so CRM is great when people use it it's awful when people don't use it and so reps li addressed the challenge of how do you get reps many of whom were kind of younger they're in the business because they like dealing with people they like being out and about they're not gonna use sa p or Siebel or something like that so how do you make an app this more like Instagram than Salesforce it helps them gather data organize their day feed all that back to their territory manager or the brand managers so that they can really see what's happening in the field and sell more stuff and are you selling just from a per seat model and if so what's the average seat yeah so this is a it's a kind of classic SAS model it's per rep per month okay and how much is it on average there's three different tiers starting at about 30 bucks up to about 60 bucks bucks per month and our average customer is paying us probably around 350 dollars per month okay and we just crossed a bit of a milestone where we just signed our 1000th customer which was another pretty big brand invited cocoa in the beverage space that's great so can I multiply a thousand times 350 and assume you guys are doing about 350,000 grand a month today that is correct we just hit a milestone of four million dollars ARR so that's great that's where we are yeah and what is that up from in terms of taking back 12 months ago what were you doing 300 grand then 250 so the business is pretty consistently and again starting from a pretty small base but we've pretty much doubled year over year over the past say about five years so it's not a pretty nice trajectory and it's relatively lean you know the businesses raised just short of about four million dollars but really through seed rounds there hasn't been a proper a round so it's been mostly bootstrapped and there are certain of rice around now where is it all convertible notes it's I mean the last round was in I want to say July and that was a 1.6 million dollar round so yeah right yeah okay that was last July that was the last July all right is the last we're coming up on a year you know what that means right it means we gotta sell more stuff and it means you're either raising capital or you're selling which one is it so we are raising and and the I mean it's a nice little story right if you can double the business every year if you could project forward we if if we're at or we want to do 8 and we think that in the in the bigger picture of CRM we've got a really nice niche market here rights not for everybody knew like how specific it is it makes it easier to compete in and one challenge I'd say in thinking back to some of your other episodes like what are the challenges of the business when I arrived on the scene it was relatively horizontal we had dog walkers and pool cleaners and solar installers and big brands and small brands and consumer goods and we had a lot of different things for a lot of different people and for a relatively small business we had to get more focused so this year and when I came on board were really doubling down on CPG and specifically what they call fast fast-moving CPG so food in beverage alcoholic beverages yeah uh Sporting Goods and apparel things that people tend to buy pretty often but where there's a high level of brand loyalty because really the the the difference in merchandising in the field you know we're not selling to commodity products we're selling to the L'Oreal's the Nike golf's the Health Aide kabuto we're going house we make bought it how sticky is it what's your turn look like today churn is pretty good it's compared to other SAS businesses I've been in our target is to be at about one-and-a-half percent gross and we've got pretty nice upsell because we tend to sell that's one and a half gross logo churn per month yes okay say and revenue churn is about equal yeah about equal okay got it not okay that's fairly nice and then sorry you were gonna continue on about expansion um there's a lot of upside in accounts if you look at sort of the total net churn we do well because we tend to sell to growth brands and maybe they have 10 reps and then they have 20 and then they have 30 so we tend to grow with companies the challenges as we go up market is it's less of a growth story it's more of a full-featured story and and I think our biggest challenge also is we don't want to compete with the sales forces of the world but we need to integrate with some of those systems of Records so we certainly still in recession it is net revenue churn negative then correct okay how negative I want to say I mean our target is probably to be around negative 1.5 yeah yeah so it's a good it's a good amount upsell yep and that's annually right- 1.5 annually or monthly monthly okay it's a net-net revenue turn good that's healthy yes if you're turning if you're turning call 1.5 in your net 1 you know 1 plet means you're expansions about 3% exactly yeah yeah and that's and that good it's still pretty volatile in our business because of the nature of our customers and some are pretty small it tends to be still kind of you know waggy if you will terms of up and down but but I think we do well especially because we make it easy and it's mostly right in SAS it's if you have most people on a monthly plan it's good to sell in that way and it lowers the apparent risk it's like hey you can try it out for a few months the bad news is obviously we make it relatively easy to get into the product and out of it if people say they're seasonal they hire a bunch of seasonal workers and then when outta season they can charge seats yeah what's your CAC right now what he pain to acquire these guys we're at our paybacks probably around 12 months right so we're looking at a LTV - CAC of approaching 3 I'd say yeah this is not exactly where we want it to be but I think we're still kind of feeling like an earlier stage company we're probably paying a little bit more than we wanted to acquire mainly because we're entering some consumer segments that we haven't really played it before that we have to spend spend ahead in terms of getting it to new mark let me digest to that real quick Allan he said payback period is 12 months if you have an ARP of 350 bucks a month that means you're spending up to one month of first year a cv or about 4,200 bucks to acquire the customer you Vince is that right ah let's see in terms of it's probably it's lower than that so it's like so less than 12 months payback correct okay and then you said your your LTV - CAC ratio is three so I'm just taking four grand which is your CAC times three to get about 12 grand in lifetime value per your thousand logos is that about right yep that probably sounds about right again in some of our markets and especially the earlier deals that were smaller you know I think they tend to come and go much faster than we would want at scale if we go up market I think it'll be more stable than that and what's your team size today we have about 40 people total and we're still between Croatia so zagreb has our tech team some of the founders I have a couple marketers in Zagreb and the balance of the team about 20 people here in downtown Boston hmm you guys are digging out from a big snowstorm huh don't rub it in yeah alright Croatia in Boston very good and what year was the company created so the business actually goes back to 2008 in Croatia but the first few years it was more of a consultancy than a software company and so the pivotal moment was in 2014 when really the product became more commercialized the business headquarters moved to Boston and some initial money was raised so I'd say the modern version of reps Li is about three and a half years old and how'd they convince you to join did you get equity I did in also I was brought in through one of the board members Mike Volpe of HubSpot fame yeah so Mike and I go back I've done some consulting for HubSpot in the past and he he kind of convinced me to take a look and then I kind of crashed their search and you know the rest is history I guess that's awesome that's good to hear all right let's wrap up here with the famous five number one ow and what's the last business book that you read so I don't know if it's my last but but probably my favorite and the one that I go back and reread is Moneyball if that counts as a business it does number two is their CEO you're falling or studying right now they're in Boston in Boston I'll go back to Huff's but I think Brian Halligan you know has done a pretty amazing thing again like doing something that rep sue would like to do is carve out sort of a niche within marketing automation CRM in their case obviously for SMBs and our case for people with field teams yeah number three what's your favorite online tool for building your business personally I like WordPress I've used WordPress forever and I you know what I want to fool myself to think I can code I mess around and build websites that I don't need WordPress number for how many hours is safety every night six but usually four and a half before and a half man and what's your situation married single you have kids we've got three kids although two are now out of the house and one is gonna be going to college so we will be empty nesters and our planets to move to the beach that's great three kids married and how are ya I am 51 all right now and take us home what he was your 20 year old self knew my 20 year old self was studying engineering at the time if I knew what I know now I would have treated my grad studies in engineering computer science for an NB really get an MBA instead I think so alright guys there you have it from Allan working with reps Lee founded in 2008 as a consultancy really got going in 2013 they're now helping over a thousand customers these are field reps for CPG brands manage their day to days are going in trying to hustle and sell into these retailers they have each customer paying about 350 bucks a month so they've passed 350 grand in monthly recurring revenue or that nice 4 million ar-are mark that's up almost a hundred percent year-over-year their churn is about 1.5 percent a gross logo churn per month they have net negative revenue turned per month of 1.5 which is great cocktail to be super healthy payback less than 12 months with her team of 40 between Croatia and Boston alum thank you for taking us to the top hey man thanks for having me