Richter Revenue (2024)

hello everyone my guest today is robert cornish he's the founder and ceo of richter and companies he started the company which is a bootstrapped in 2008 beginning of the economic collapse currently he owned six companies and made the inc 5000 list five consecutive years today he works with many of the largest b2b companies in the world robert you ready to take it to the top ready to go all right so tell us how you're working with so many of the largest b2b sas companies in the world you know for i mean for us it started uh you know we boosted up the company started very small and it just started to really kind of elbow our way in quite frankly i mean to get the initial logos i remember getting um sap and getting hp and and sort of getting traction there but it was very hard initially we had to really aggressively sell and and kind of fly under the radar on some some companies like maybe win a little sale and then get the logo and get in and win some people over and then from there it kept building but i've been obsessive about it for probably eight years what's the what's the product though robert first oh yeah so for us we do a lot of video content um that was the that was usually the foot in the door we created a lot of video content for the sales journey so when you think about any one of these enterprise level sales that they're doing they need content to help support that journey so video is a lot of what we do nowadays we've kind of evolved to doing a lot more but video is a big part of it yeah so on the website you talk about video campaigns enterprise and then you list many of your large clients disney cox netgear etc so did you come from these guys i mean how have you landed them as logos yeah just being scrappy no i didn't come from them um i did grow up in a business that um you know my dad helped build to a significant size over a billion dollars and and so i think there was some familiarity for me quite frankly i i think there's some lesson there from being close to it and seeing it and that always kind of stuck in my mind but um and so i always wanted to go after those kinds of companies companies that are a billion plus and and it just came down to networking it just came down to cold calling and just doing the work and making the calls and making the relationships and i think when you're brave enough just go do that you can break in and we just continue to break in break in break in make those calls and i think a lot of people are sitting there going how do i get att or how do i get this company but you know the truth is these people are are people just like you and i obviously and and i know you know that you deal with all these people and you've interact with everybody and and i think that ultimately you have to understand that they are just people with problems that they need to solve and you have to find a way to get to them and and have a compelling offer so we'll dive into one of those real stories in a second you know how you landed at t what you actually did to sort of weasel you can get your way in there nudge your way in i use the word weasel that's negative i should say forcefully push your way in um but let's start let's start from like macro level for a second so revenue total revenue in 2019 was what 2019 was about three and a half um that was actually a really tough year for us to be honest we were actually down my mom passed away uh and and i had to buy out my partner in 2019 it was a really tough year um you know we we typically do around four or something you know for better and it was it was a rough one for us what did you do in 2018 uh 2018 was about four okay and what do you think you'll do this year uh just under five yes okay got a four eight and so let's sort of break that down right when you did three and a half million last year um you know talked about like one of the services that one of your big customers paid and maybe tell me the story of how you delivered yeah so that was our that would be our enterprise program and so what we ended up we sort of moving away from transactional and moving into what we refer to enterprise and that's looking at the entire sales journey from start to finish so when you think about a b2b sale and you think about everything that they go through from the initial contact initial lead all the way through to a closed deal and you start looking at all the gaps in between and think what do they need if you're in b2b sales selling something that's enterprise um we look at it from a product box cube that we created which is basically marketing sales training and customer experience and so by breaking that down to how do we help support all those different things that's what we did essentially with att and it just happened with them that they needed a huge amount of training so we basically ended up mapping out their sales journey they were launching directv now okay uh the product directv now and they had like 2 300 sales reps on the ground that needed training and there was inconsistencies in terms of what was happening and what they were doing and so our job was to basically build a repeatable scalable training model and so we helped do that to train new sales reps selling this direct cb program right and the people on the ground so they're all saying and doing the exact same thing so they could take those that series of content that we created we built out a series of nine videos some drills and some other things and they can deploy that through their lms learning management system to make sure that everybody's doing the same thing and those are there were 2300 reps you trained on that yeah well they they they would deploy that through the lms how many reps though were taking your program watching the nine videos doing the drills somewhere around there 2300 reps yeah okay and so so that the reason is i'm curious how you build do you build based off number of reps that are consuming the content or something else no we we just have like an enterprise contract a budget that they commit to per year uh i think in that scenario was two or three hundred thousand or something like that um it wasn't all for that but it was part of that went to training what else goes into the if they pay you a quarter million bucks what else what are those they get you know some of it's just alicar to be honest different divisions that need different different things related to sales enabling um but it could be like i said it could be from marketing sales training and customer experience so for example we might be building out um when you look at the sales journey might be mapping out their sales process and arming the team with everything that they need to help follow up and follow through and nurture the sales cycle we found that on average people follow up about three times but it takes 18 plus contacts to actually close a deal so there's a big discrepancy between those two and you start looking at go why are they not following up and you start finding that they're running to call reluctance they're running out of gas so these large companies are spending a huge amount of money on driving the lead in the first place but then they're not uh really supporting the sales enablement side enough to actually see through and get a close deal so we start creating content whether it's decks case study material uh experience trailer content all the different things are going to help win confidence and and and give them tools to save the course and close the sale and in a given year like 2020 here it sounds like you work with what between like 10 and 20 customers something like that well right now i mean you know we have 200 projects going at any one time and right now we we have many many customers we don't have like a large agency where they only have 10 or 20 customers that are working with um so we actually have quite a lot more than that so how many how many how many customers are you working with today who are paying you for for your services you know uh you know right this minute it's probably somewhere around a hundred um but in terms of the enterprise contract uh you know it's probably probably somewhere around 10 or 15. yeah okay that's i'm because i'm backing into 5 million sales this year 200 or 300 000 contract prices that would be somewhere between 10 and 20 customers right and so we're in the middle we're in the middle of transitioning to more of a more contracts right you know we want to have we want to have 80 contracts and and 20 transactional right now we still have probably 80 transactional and moving in and twenty percent contract so that means this code for your moving downstream you want more customers paying lower prices so there's less concentration risk yep why make that decision a lot of people go the other one go the other way it just seemed to work it's working for us and and it's it's the numbers are showing up in terms of you know our growth and what we're doing and also it allows us to really invest in the company like with att we can really focus on helping them solve problems and put more people internally on a t to deliver better customer experience better work hire better talent right now we're talking to some some people who are bringing on board high-end 3d animators and people who can do incredible work i think it's more focused and actually enjoy it better how can you be more focused though if the total number of customers are serving is growing i mean one thing sorry i i made this book we're moving more into like more enterprise contracts so you would be moving so when i ask how many customers do you have and you say hundreds and then you say 10 to 20 enterprise what you're saying is you're trying to get rid of the lower paying hundreds and move more into the only 10 or 20 contracts at higher acbs that's right oh i see i see yeah i misunderstood you okay got it that makes sense and so to flesh out your team for me you mentioned 3d animators how many people total on your team today about 35 total right now and i mean what are the main skill sets any engineers no engineers um really talented creative people so for us you know we have animators we have videographers we have audio engineers we have copywriters and voice over town all that kind of stuff um we're not doing any building or coding we're doing things like uh animated animated banner ads and work like that for dell we're doing a lot of video content again you know video is really huge these days and it's it's only growing and all the different vehicles in terms of where it can go is as you know robert what's the what's the trick to video like so i have run so many tests around this like i have spent you know 20 grand on one 60 second video and then i've shot one on my cell phone and running a b tests and you know what many times this sloppier cheaper many would call uglier one performs better because it looks less produced like i'm trying to hide something you must get into this debate all the time with with your customers where do you fall in terms of what video is working today and what's not you know i used to say exactly what you said years and years ago you said exact same thing and then we really started going heavy on it but i think there's truth in what you said in both angles i think that i think that content creation and and recording on your phone and doing that sort of rough authentic piece has value but at the same time i think that when you're dealing with a fortune 500 company and they have a specific pitch in their microsoft cloud they're pitching their microsoft cloud there's a level of professionalism and polish to the deck into the pitch and everything that's being presented to the audience and i think it's very different it comes down to the audience and who you're communicating to and they're expecting the same way you would have a polished site the same way you would have a polished deck or a polish webinar there there's it needs to say the right things to the to in a way that's going to compel and move the audience and i always say to people that i don't believe that clients are coming to us for video i believe they're coming to sort of communication our job is to actually understand who's watching this why they're watching this what are the pain points how to get in their head and how to move people in a way that's compelling and ultimately that's what we're doing um i think anybody can create a video ogilvy is one of yeah obviously ogilvy is one of your customers uh you very much have the sort of new refreshed you know 2020 mad men look going on with what you're wearing in your background do you want to build a massive sort of billion dollar agency here or can you sort of write code around some of the stuff that you're doing and build an interesting software company i want to do the first thing you said i've always wanted to do the first thing you said yeah yeah yeah interesting and why why is i mean it sounds like your your family comes from a sort of business lineage is there where's the creative gene come from as long as i can remember i always want to be an entrepreneur since i was like eight or nine i'd be writing ideas for businesses and so it's always just what i it's just who i am i think it's always what i wanted to do i i that was the one thing that i really had had a strong reality with my dad on that's what i wanted to talk about we were talking about business so i had that i luckily had that exposure so if we went golfing i would be out there talking business with other people and i think that since i was young you know i was talking to some of the top people at general electric when i was like 14. and i just remember that and i just i think for me i just know it can be done um we now have a couple different companies who are building within a group of companies and um i just think that's what i want to do robert is your dad still with us today no he passed away this this year what was sort of the last piece of last time you talked business with him what was that what what did you guys talk about you know we um you know i i think that he you know he just stated how uh um you know how proud he was with what i'm doing and i think that he uh just really respected and admired it and and just you know always encouraged me to do what i what i love doing and i i think that's important what did your parents do you know we have a lot of uh entrepreneurs listening who are trying to raise entrepreneur kids and it sounds like your parents did a great job with you what were they telling you when you were 13 and 14 that made you feel confident enough to go talk to dell sales executives that young how did they raise you to think like an entrepreneur honestly i think one of the best things you can do for people just believe in them and i think that my parents they just believed in me so no matter what i was doing they just kept encouraging me and sort of fanning your confidence the truth is one of the strongest things you can have is confidence and and and that was one of the things where i knew that my parents were in my corner cheering me on especially my mom and i think that that has always anchored me in fact when she passed away last year that was one of the things that i had this huge gap and and i had to kind of replace and find a way to replace that because i didn't realize until then a lot of what i was doing was was from my folks you know and and and you have to replace that but i think confidence if you're trying to teach your children you got to teach them to be confident and and and and believe in their own idea and and see it through and not be dependent on you to do things for them do you remember one thing they actually said so take the theory you just articulated and try and give me a real example maybe something they said or do you have kids something you tell your kids to make them feel confident you know i i encourage my kids to be problem solvers you know i i i so an entrepreneur is a problem solver and the one thing i talk about all the time and if you know how to solve problems like if you if you become a good problem solver that alone will help build your confidence you know and the two kind of connect and if you know how to solve problems and you you read enough i've read read and read probably 700 business books i've written up this book myself i'm constantly studying what's the name of your book robert uh what works let's see it there we go wait hold it up give it give it some love there we go what works robert cornish very good i'll send you a copy all right i'd love that but yeah i i think problem solving and so do you find yourself sort of repeating the same line to your kids like they'll come to you with a problem and you'll say son i know you can figure it out or you know do you find yourself sort of repeating the same sort of what is that line oh absolutely uh you know absolutely you know i my son came to me recently and was asking how how he could make money and i said i said i have a million ways to make money the question is do you know how to make money you need to start coming up with ideas on how to do it i could tell you all day long but if you can't figure it out yourself you you need to know that you need to start listing and writing out and getting your creative gears going of how you could make money so you should flip it around and come to me and and i think that those kinds of things i think as an entrepreneur when you're teaching children i i think that it's important to challenge them and get them thinking in the right way so you have the mindset to build a company and as you start shifting your mindset then the ideas start coming in as i'm sure you know and and that's going to help them be looking at things and asking themselves questions i'm not a father so i'm bi-curiously living through you but one of my good friends who is very successful on schwein by any way you'd want to measure it recently shared with me hey nathan like he we were just casually chatting he said i'm so excited because his son had finally asked for like this this um this like i guess it was a pair of pants that my founder parent would not buy for the child so his response he said he loved the fact that his kid asked for that because he could then bring up the money conversation and say well son if you want to go buy that 90 pair of jeans and i'm only willing to spend 20 you've got to go figure out a way to make 70 bucks and he said he could feel his son's sort of brain start going and the next picture he put on facebook was his son mowing lawns of his neighbors so like is that important to your kids thinking about entrepreneurship don't they have to sort of desire something they can't currently have and then as a parent you have to create the gap and let them go figure it out yeah i i do i definitely think that i i think that all of us are a little different as well and i think that you have to understand each character each person the same way with your employees how each one is different and you have to understand how what they respond to i respond to certain things but then i think that some people respond to different things and i think that's true i think that's a great example if you're ambitious and there's something that you want and then you back into it in terms of figuring out how to get it then that's going to help them but i think other characters are a little different as well and you have to figure out what is that thing that they want or what's going to get them understand to understand that lesson but i do think that everybody is not the same and so there's not necessarily a one fit all type thing and so i think the first step as a good parent and certainly as a good leader is to understand your people and understand how they respond and how they learn and then how you need to teach them to get there robert as we wrap up let's circle back to your business so you'll you'll be just shy of five million this year i mean what are some of the key metrics you're tracking is you're going the agency is it sort of billable hours and and and what you build rate versus your cost or what are some things you're tracking yeah i mean sales you know we we measure sales we measure value of service delivered which is is the overall value of each thing that we're delivering so when we're when we're delivering a video we put a value on every single thing i see you're drinking the uh yeah i got some of those super coffee i mean i could only have a couple sips in this thing you know the brother do you know the brothers yeah yeah yeah with pat did you have fortune egger and then i i reached out to them recently did you invest no uh dude i came across these guys like three or four years ago in dc from at a friend's dinner and i had one and it did not taste anywhere near as good as it tastes now and now i do a hot you know i do a hot coffee in the morning i have a podcast today i do 30 back-to-back i'll have a coffee in my morning sessions and then i have two of these one like now and then wait three hours and do another one and my gosh i have plenty of energy and they don't have to eat anything it's great oh my gosh i had i had half of one and i'm already super wired as a person i was like i don't know if i could do this you know they're gonna break i mean they're gonna bring like 25 million in sales this year it's incredible incredible it's really cool i love what they're doing actually yeah wow anyways that's super if any of you guys want to check out us that's there we go that's super coffee yeah highly recommend the three brothers out of dc jordan jordan jake and jimmy i think if i get that right jordan jake and jimmy so but the um yeah incredible so you're tracking outputs you're tracking sort of value per video created um most the reason i'm asking these questions we have a lot of agency owners who listen to this because a lot of sas companies start off as agencies and one of the tricky things people are like when they're building an agency that they're not sure how to measure is hiring people sort of ahead of the contracts coming in because you increase your fixed expenses and then have to pray basically well you know for us you know i at this point i'm obsessive on profitability and income versus outgo and kind of looking at balancing income versus outgo and make sure that when i say outcome obviously expenses but i think a lot of people get that out of whack and we've got that out of the wac historically at different points and it's scary and you have to make sure that you have whatever gap you're comfortable so whether you have a 40 trailing rate from your overall average income you need to be paying attention what is your average income what is your 12-week average income and what are your overall expenses and having some kind of ratio that you keep in that help that helps tell you when you can hire more people yep yeah what is so on the three five you did last year were you break even or did you profit some we profit a little bit last year yeah that's good and do you think you'll i mean are you basically sort of higher you're reinvesting everything right now for the next couple of years you're probably going to break even the next few years yeah you know what when this pandemic hit i started getting really aggressive about like like set asides and building a war chest and all that kind of stuff because that was really interesting like i at around february i don't i'm usually unflappable but i got a little freaked out and we made a commitment that we were not going to fire anyone whatsoever we wanted to keep everybody on board and just keep going so we basically 4xed everything that we were doing we started i personally was making 50 plus phone calls per day we started making cold calls just whatever everything it got super aggressive and and we just paid off debt basically and then we built up our war chest and we're continuing to do that and so everything that we're doing this year it's actually interesting enough been a great year for us what debt did you have did you bring debt to grow the business early on or something yeah i mean we had some you know we had some lines of credit and different things like that we had um you know we had about hundred thousand dollars in just in just some debts at the beginning of the year which we've paid off almost entirely um from february until now and actually i had to buy out my partner last year so that was part of that oh wow yeah and it was last year was pretty tough but we basically paid that off entirely and then we're now you know building up a pretty strong war chest and we're just going to continue along that path because you just don't know what's going to happen and i i think that it's actually been a great year in terms of a lesson and and sort of really the work ethic resilience robert let's wrap up here with the famous five number one favorite business book oh that's tough i'm gonna say uh what they don't teach at harvard business school by mark mccormick number two is there a ceo you're following or studying i just finished the bob iger book and i'm a huge fan yeah the you know disney ceo he just retired but i'm just a huge fan of it you know this what he's done number three and i'm gonna ask you to pick a tool that your animators and folks use to work together to generate videos pick a tool that you use uh aggressively in that part of the business you know all of the adobe creative tools i mean that those are that's what i hear cheating they're a customer too but okay fine adobe creative tools yeah i mean but they they're it's dominant yeah yeah number four how many hours to sleep to eat every night um probably eight eight or more i'm a huge advocate of sleep i i fully believe that i think entrepreneurs should be getting their sleep you know and i that was a mistake i made early years and i think it's it's a terrible investment robert what's your situation married single kids married with uh three kids oh my gosh you're a busy guy uh how old are you 40. 40. last question what are you wishing you when you were 20 what did i what do i wish when i was 20. something something you actually knew when you were 20. [Music] you know maybe just that would simply all work out that that what i'm thinking in my head is actually what's going to happen and i think that you didn't know there's so many questions when you're 20 you're going to choose i don't know what about this one with that you know and i think that just knowing that you're doing the right thing just keep doing that as richter we've got robert launched in 2008 they'll do about five million dollars in revenue this year they've got the business in a very healthy spot paid off a bunch of debt three hundred thousand dollars worth they're hyper focusing on enterprise customers between 10 and 20 customers who they'll work with these are big contracts 200 to 400 000 contracts with firms like att they're building videos uh drills and content for those sales teams and other departments that are then deployed through those companies lms to help get the tool distributed or the the part the part of the company we're working more effectively robert thanks for taking us to the top thanks one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas 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 1 p.m central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m 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 sas world whether it's an acquisition a big 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 sas 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 up for that at nathan latka dot com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 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 we got to push them away click the thumbs up below to counter them and know that i appreciate your guys support all right i'll be in the comments see ya