How Results CEO Marc Daniels grew to $5M revenue and 500 customers in 2017.

hello everybody my guest today is mark Daniels he specializes in launching SAS companies and rapidly developing the infrastructure and our internal sales organizations to drive multi-million dollar revenue streams before results.com which is where he's at now mark was a founding member of diligent board member services which sold to private equity for nine hundred forty-one million in New Zealand I believe what are they called mark New Zealand Dollars there are New Zealand Dollars New Zealand Dollars about 660 USD 660 million USD thousand 2016 mark are you ready to take us to the top sure all right very cool so I can't just skip over that exit obviously what was diligent board member services what did it do back in 2003 we launched a company that did electronic board packages for board of directors all around the globe previous to that they got these big thick paper board books shipped to their houses not very secure very hard to travel so a board member of ExxonMobil would get this big board package we brought that all into the into the cloud secure environment and we're serving and still diligent and still in business they they serve probably over 2000 boards today oh wow so it's obviously public because a public company acquired or no private equity acquired if it was public now it's private oh so you took it public and then it went private ok public in 2006 we listed 10 years ago yesterday and it was a good day for you you remember it too the day we remember to the day yesterday and what did you grow revenue to before you obviously went private at the when I stepped away from the company in 2012 we were up to about 80 70 to 80 million dollars a year and may occur in revenue it's fascinating serving about one-third of the fortune 500 companies I would have never guessed that those kinds of companies were willing to pay so much for one very specific utility thing but I also understand there's need for a lot of security around that stuff so maybe it makes sense right yeah oh no it definitely did that's great and now was that the first kind of life changing financial moment for your life or did you have previous exits before that now I launched a computer mail-order business in 1979 I launched my first online store in 1985 people always challenged me on that but there's part of CompuServe electronic mall before the internet I invested and sold the company that did digital printing in the 90s so I've really been blessed I've you know three or four pretty amazing technical waves three in the past the one I think I'm writing now is results com obviously so when I dive into that in a second but first you told me earlier you're from New Zealand you retired I believe you said no wait you retired to Martha's Vineyard or you retired to New Zealand I that the company diligent was based in New Zealand and I then got involved in results which is also headquarters in New Zealand I've always worked in Manhattan and about five years ago left Manhattan and retired to Martha's Vineyard and about two years ago came out of retirement told where you had that plane run results I'm what I retired when two years ago 57 50 50 58 I'm lying I'm 60 now so mark what did you see I mean you've had all the success in the world you have no reason to have to leave the beautiful Martha's Vineyard to get back on all these things and have responsibility again and drive growth what are you seeing at results that got you excited a friend of mine called me and he said mark you got to check out this company they run businesses like you always have and what results.com does is actually you first put together a very solid strategic plan then from there you track your KPIs your key performance indicators and you hold your people accountable in weekly meetings it's an online tool and you know if I think all the way back to the first business I started in 79 I had a white board outside of my office door and I'd write down how many phone calls we took how many orders we took how many returns we processed and be shocked how many business leaders don't look at their kpi's on a daily basis so this house you do that in the cloud yeah and I just I fell in love with the approach you know put together a rock-solid business plan at the time they had roughly 200 customers and so I put some investment money into it how much did you invest me personally yeah well overall we brought in thirteen million dollars personally I've only put in a little bit less than a million okay you kind of participated in that yes I brought I brought people together from the from the some of the original investors in dilligent which was a big success obviously so was that a requirement like did the did the was the founding syndicate was that contingent on you joining a CEO as well no we recently the investment group recently actually made some changes we put in some more money and I was I stepped in as a board member and also at that time about six months back until I became the CEO I see okay so 13 million total in the company to date and when did it launch lots of roughly 2013-2014 and you mentioned when you joined it was at about 200 customers what do you add today what have you grown - um we're only at about 500 to shy of 500 right now why do you why do you hedge that by saying only 500 because it should be eight hundred or a thousand five you should just say we have a thousand customers just eight hundred haven't found or five hundred haven't found us yet all right so is this an enterprise model like I mean are we talking well first off what's the business models at SAS SAS small to medium businesses you know 25 seats and above yeah and we've had some companies you know large companies public companies purchased the platform as well and so just so we can talk about maybe one cohorts that have going down all the different rabbit holes what would you say the average contract sizes monthly the average contract size is roughly 35 seats or around 15 thousand dollars a year roughly about a thousand $1,200 a month that makes sense now can I just can I multiply those together 1,200 a month sir 500 and get about 600 ish a month is where you're at um we're at about just shy of 5 million in total yearly revenue so yes yep that's good now what what is the growth rate been like I mean is it so and just to be clear if you're doing it you said 5 million run rate today we're kind of ending 2017 that puts it about I think for 16 grand per month how is it growing the past 12 months relatively flat and that's why we made some changes yeah so like December 2016 you were at what still around 400 grand a month our calendar year end and most companies do ironically end of the calendar year end of March in New Zealand because they take December off all the New Zealanders just disappear for three weeks that's funny around the holidays so we're not used to that year in America but that's that's how it goes so you have to staff up your US staff and keep on work during the holidays but you also up 400 flat 12 months ago we were around 350 you know and you think things were a large problem was retention in the quality of the software what what back give me the give me the so I want to ask you what the retention was back a year ago and what you've done to pull kind of the levers to increase retention so what was it a year ago retention in New Zealand was in the 70 percentile and in the u.s. it was in the 50 percentile so very low is that logo retention or revenue retention that's uh that's logo retention that's client attention and revenue retention reflected that or was it yeah you know pretty very much time you're very close to each other and what have you what have you changed or the past 12 months to try and drive that up and what is it today invested money in our resources in the US invested money in development got development not focused on next week's features but on getting the bugs out of the existing system you know in the SAS market you have to have a rock-solid platform to you know to retain customers re-engineered the onboarding the onboarding of client we pulled data in from multiple systems to provide a dashboard of real-time dashboards of real-time data so you know a lot of those integrations were not where they should be so just really investing a lot of money and development in getting the platform's stable and to honor the commitments we were making to clients and what are you at today our attention wise I had one rep in q4 pulled the one hundred percent retention rate which is great but we're averaging just just above eighty percent right now both New Zealand and US markets yeah that's that's a combined retention and the u.s. is uh is is if I ever to pull the two out the US is slightly lower right now still but but on the mend that's great now you mentioned you're an Account Executive what's your team size today and what's kind of the breakdown we have sales staff in now in New York New Jersey we have staff there we have sales staff in San Francisco we have sales staff in in Auckland we also have client support our total company size is just shy of 40 employees right now and one third of our employees staff is is now development and I'm actually increasing or we are increasing that it's starting out in January so forty people New Jersey San Francisco in Auckland New Zealand that's right that's great no good and a mixture of all of the developments done in New Zealand right now so that's at office has a heavier staff load and in terms of you know you give up you get the things stable and now obviously you want to start you know ramping up acquisition customer acquisition again what is right now your fully weighted CAC would you say probably [Music] gosh terrible probably eight thousand dollars customer acquisition cost and why do you say that's terrible I mean a grand a month that gives you an eight month payback which so bad because I've you know diligent we had a lower acquisition cost so you what we had a lower acquisition cost at diligent got it it's not some very well but relative to what relative to lifetime value or quicker payback period or what quicker payback period you know you could do a direct mailing into a CEO at diligent and I'm talking an actual hard piece of direct mail piece into the CEO of a fortune 500 company and that might be an expensive thing to mail out every every quarter but you would end up with an amazing return on investment so I'm you know II enjoyed really a great customer acquisition cost at they'll join great retention to we were you know that that company had a ninety nine ninety eight point five percent client retention rate was was revenue expand it was did you have net negative revenue churn yeah we have more upgrades and it was just good model once you get a board of directors on a platform dependent it might get him to switch anywhere else yeah so you know sunlight you really have to mess up badly so I think that the same is true results if we can provide a platform that helps companies grow you know why would you leave it you know so I think we're a really unique value proposition helping companies grow we have just instituted a money-back guarantee which is probably unheard of I think in the Sask business like you know pay us for $12,000 $12,000 over a year and if your company doesn't grow we'll give you your money back what is your what do you assume right now lifetime value is on these accounts don't really have a good answer for you their lifetime value you know we have accounts of lasted four or five years so I think the LTVs going to be pretty strong if we get the return - you think animam minimum two years so call it 24 grand maybe 36 if the tools helping a company grow I think the lifetime value would would definitely be 5x times the first year's contract yep that's interesting yeah I mean from what I hear you telling me it's kind of like you re-engineered onboarding you have to figure you probably have two or three things that you know a new customer has to do in the first month for them to get value and to stick and once you hit those metrics you know they're gonna stick with you for five years and you don't have to worry about a money-back guarantee that's right and in some of those you know the money-back guarantee you can actually leverage those you can say hey we'll give you a full money-back guarantee these are the things you need to do ya say you know do this do this and if you do this we'll give you a full money-back guarantee that's very cool dark alright let's wrap up here with the famous five quick answers here number one what's your favorite business book I guess my recent favorite book book that I've given to so many people has to be bold I know it's two three years old but it's just a great book number two is there a CEO you're following or studying currently well I always follow Elon Musk I'm recently reading rancheros book on john d rockefeller I love studying you know people that have built business empires well who is that author um journal CH ER n Oh W Ron chernow yeah that's the single is the thick one called titan' yeah tough one to get through but really it's big all right number three what's your favorite online tool besides your own uh huh that's good that was gonna be my answer um I really like this tool called active inbox right now since assuming the CEO role in July I get you know hundreds of emails so active inbox helps you really prioritize you know you just don't starve they come back into your box two three days later it's pretty good it's powerful number four how many hours of sleep to get every night [Music] depends on whether I'm meeting with my New Zealand team or not and on Tuesdays and Thursdays I get about four hours of sleep and I generally sleep about six hours a night and Mark what's your situation married single you have kids married five kids 20 grand it's wow it's three grandkids it's amazing and you said you're 60 now 60 60 okay last question take us back 40 years what are you is your 20 year old self new Wow that's a tough one what would you tell your imagine you know maybe kids or grandkids around that age what would you tell them don't worry just if you stay focused don't spend so much time worrying just stay focused on the task at hand follow it to the end and to follow your dreams and you'll be successful there are you guys out from Marquis have a lot of successes goes back to about 20 years before I was born in the 70s with this first not to aid you mark but with this this first company there then had a company that helped boards basically manage their decks in a very secure way grew that to a big company sold it in New Zealand it basically went public in 2002 thousands then went private for about well over 600 million US United States dollars he then retired I said I'm done with this Martha's Vineyard baby wine and relaxation and then he gets a call from some friends and he says I love this business results.com it helps businesses understand manage employees keep them accountable and keep the KPIs at the top of everybody's mind it's now growing team of 40 across New Jersey San Francisco New Zealand they have about 500 customers paying on average of grand per month so call it 400 you know 20-ish grand per month and revenue they're flat but things are changing retentions getting higher economics look good and they're growing mark thank you for taking us to the top right Hey Thank You Nathan