How RippleWorx Grew to About 50 Customers at $4 to $8 Per User Per Month (Interview with Co-Founder Angie Sandritter)

Introduction and Company Overview

Nathan Latka

00:00Hey, folks. My guest today is Angela Sandritter. She's building a company called RippleWorx, with an x on the end, rippleworx.com, a people analytics and retention and optimization platform. Angela, you ready to take us to the top?

Angie Sandritter

00:10>> Absolutely.

Nathan Latka

00:12All right, let's jump in here. So what's the company doing and what are companies paying you for?

Angie Sandritter

00:16>> Yeah, good question. So people analytics, and that's a really broad spectrum of things. But I think what we really focus on is trying to understand the sentiment of your employees or your workforce and how you can individually motivate them and retain them. So we really see how do we You have so many systems that are available to manage your machines, your processes that you have for efficacy and so forth. But really, you have little to understand

00:45>> the heartbeat of your workforce. And that's what we're really focused on doing.

Who Buys RippleWorx: HR and Operations Leaders

Nathan Latka

00:49Does that mean you're selling mainly to HR managers, team leaders, things like that?

Angie Sandritter

00:54>> It can be HR, absolutely. If HR is a champion for this, then absolutely. And I find that in today's day in industry, HR has taken a whole new road than they have two years ago. So now they are the strategic workforce course to really drive the company forward when you think of your key individuals within your company, which are your assets. So yes, absolutely HR, but then if it's a champion within a business unit or an

01:19>> operational head, then that individual wants to see that they're keeping their workforce strong. So we definitely work with operation leads or HR.

Nathan Latka

01:29And you have a very cool dashboard for folks to use to manage all this. What are customers paying you on average per month to use this technology?

Angie Sandritter

01:35>> Yeah, so we have a SaaS license. We have a module that can start anywhere from $4 to $8 per user per month. So it all depends on the types of features that you're using.

Nathan Latka

01:47And so what is the average like team sign up? Is it a 10 person team typically, a thousand person team? What's the average brand paying you per month to use it?

Angie Sandritter

01:55>> It is when you start to see that you can't talk to every person in every day and you start to see that the workforce is distributed. So I would say starting out maybe with 50 individuals and then moving all the way up into the multi thousand individual types of organizations.

Pricing Model and Average Customer Size

Nathan Latka

02:10When you look across your current customer base, is it fair to say the average team is starting with maybe 50 seats at $4 a pop or about $200 a month?

Angie Sandritter

02:18>> So you would typically see this closer to 500 users. I'd say that's probably our average customer base size. And so in the $4 to $6 range would probably be the average price point too.

Nathan Latka

02:29So you're more like mid market, not SMB. Obviously 500 seats at $4 a pop is about $2,000 a month on average versus a smaller team.

Angie Sandritter

02:36>> Okay, very cool.

Founding Story and the Ripple Effect Methodology

Nathan Latka

02:38Let's get your backstory here. When did you launch the business? What year?

Angie Sandritter

02:42>> 2018.

Nathan Latka

02:44How'd you come up with the idea?

Angie Sandritter

02:46>> It was based on the ripple effect. And so we found that many organizations had annual performance reviews, but this wasn't really addressing, are they developing their individuals correctly? Are they training them in the right needs within the organization? So thinking of sort of the, if you look at the KMO model, I don't know if you're familiar with that, but when you're thinking about knowledge, motivation, organizational needs, and this is something even my husband has written his

03:14>> dissertation on, so it was kind of something we talked about within our family.

Nathan Latka

03:18Is he your co founder?

Angie Sandritter

03:20>> He is, absolutely.

Nathan Latka

03:21Who owns more equity, you or him?

Angie Sandritter

03:25>> That's a great question. I'm not

03:26>> gonna Come on, hopefully you own.

Nathan Latka

03:28You're 51, he's 49, right?

Angie Sandritter

03:31>> No, actually we're split. We have more people that are part of the founding team. So we started working with athletic teams. I'm the tech brains. He's the inspiration behind the methodology. And then translated this into initially for human performance or a tactical athlete of how do you help to optimize their performance and how do you get teams aligned for this particular goal. And so we saw that as our initial pilot market, but then it started going

04:01>> to high performing teams. So we worked with production studios where they said, We're kind of like athletes. And then we work with law enforcement where they say, We have to think about motivating and retaining and even thinking of cultural changes within the workforce. So that's where RippleWorx can really shine in those types of organizations.

Customer Count and Geographic Reach

Nathan Latka

04:17I see. Okay. So first customers were athletes and athletic teams. You then scale from there. How many customers are you serving now today?

Angie Sandritter

04:24>> That's a really good question. So

04:29>> yeah, probably close to 50 or so customers. 50.

Nathan Latka

04:3350 teams, police, you know, so that could be one government or one city with a police team would be one out of 50.

Angie Sandritter

04:40>> Yeah, yeah.

Nathan Latka

04:41I see. Do you have any geographic concentration? Are you focused on one city or area?

Angie Sandritter

04:45>> We started in the Southeast. So I would say, you know, within Atlanta, Huntsville, where we are headquartered was the initial start of our customer base, but it has since grown. So now we have customers that are located throughout The US, we have international customers, etcetera. So it has grown beyond just the Southeast Region of The US.

Six Co-Founders and Who Owns Equity

Nathan Latka

05:05Now how many co founders are there? You, your husband, who else?

Angie Sandritter

05:08>> There are six of us total. I have to do that.

Nathan Latka

05:10Holy mackerel, six co founders?

Angie Sandritter

05:13>> We expanded that group, I would say. So it wasn't all initial founders, but we've kind of expanded the group of people that have fallen into adding strategic value to the team.

Nathan Latka

05:26But who was there in 2018? How many?

Angie Sandritter

05:29>> That's a good question. I think it started out initially with about four of us and then it grew beyond that.

Team Size and Engineering Headcount

Nathan Latka

05:36I see. Yeah. Okay, so six team members own equity. You're calling them sort of co founders. What's the total team size today?

Angie Sandritter

05:43>> 35.

Nathan Latka

05:4435. And is it heavy engineering? How many engineers?

Angie Sandritter

05:48>> The majority of our workforce are the engineers. So I would say we're looking at about 15 or so would be in the engineering space. And then you go into sort of the sales engineering realm or the customer support team, which is still kind of that engineering mindset. So, and then business development beyond that.

Nathan Latka

06:08I see. Do you have quota carrying sales reps?

Angie Sandritter

06:11>> Yes.

Nathan Latka

06:12Oh, wow.

06:13How many of those?

Angie Sandritter

06:14>> So right now we've got two of those, three of those, which is

Nathan Latka

06:17And Jo, that's a key driver. I mean, that's once you start hiring those and they're running a playbook, ideally you can just hire them effectively scale, not infinitely, obviously, but that's a big moment for a SaaS startup. How did you have the confidence to hire your first sales rep and how'd you know what quota to give them?

Hiring Quota-Carrying Sales Reps

Angie Sandritter

06:30>> Yeah, no, good question. When we started to see that we could articulate the value proposition within a particular market and we saw that it was scalable and the system could be more turnkey or be able to drive itself within those markets, that's where we determined to bring on some quoted salespeople. At first, we weren't so successful at this, but with the last three, we've been able to get this model right and to bring it forward.

Nathan Latka

06:56Can I ask you what quota you set them on? Like, do they have to close a million bucks of new revenue per year? What target do they have?

Angie Sandritter

07:03>> Yeah, somewhere at that amount of money. Yeah.

Nathan Latka

07:05Interesting. And do you follow a pretty standard playbook here where if their quota is a million and they hit it, they're earning about one fifth of that as total comps, so 200,000 total salary if they hit it?

Angie Sandritter

07:15>> It's a typical model. Yeah. So I would say it varies depending on the market and what they may have come in with the base and so forth. So there are some determining factors on there, but yeah.

Nathan Latka

07:24Okay, interesting. And other question you have is capital allocation. Have you guys bootstrapped or did you raise a bunch of capital?

Bootstrapping and Capital Raised

Angie Sandritter

07:30>> We bootstrapped and we raised some capital, but we haven't gone for any serious types. So it was still kind of our friends and family network.

Nathan Latka

07:38Okay, so how much have you guys raised today and when?

Angie Sandritter

07:43>> I think part of that is confidential. So I don't know how much I can really say of that, but yeah, we bootstrapped some and we've, I'll just leave it at that.

Nathan Latka

07:54Well, did you, I mean, is obviously a key piece to getting your MVP launched and going is do you choose to bootstrap or not? And it requires different parts of the brain, whether you throw capital at the palm or creativity. You share any information there, right? I mean, are we talking like millions of dollars raised or under a million and you're being pretty creative?

Angie Sandritter

08:09>> Yeah, I'd say upwards of a million that we raised.

Nathan Latka

08:12Okay. Why and I don't know how to ask this maybe. Don't be offended by this. I'm generally curious. I mean, what makes this heavy lifting? Why do you need so much capital to launch a tool like this?

Angie Sandritter

08:23>> Yeah, I'd say because we're expecting somewhat of a SaaS model, right? So when you think about it, most of your upfront costs are in the development cost upfront. And so therefore you don't have the customer base, you're developing the product and determining market fit and MVP and getting that solidified so that you can go into that scalable market model. So the upfront cost oftentimes for a SaaS company or the traditional models of that hockey stick are

08:48>> going to be upfront. And so we paid a lot for development upfront. And so we're getting to the point that we're looking at the scalability and then the upside.

Nathan Latka

08:56But I mean, there's a lot, we've interviewed now maybe over 3,100 or so SaaS founders directly. And there's this big subset called maybe 20% that bootstrapped their way, way past a million bucks in revenue. They're all SaaS models. Obviously, the flip side is maybe you can move faster with capital, but how do you balance investing in software early versus getting in front of customers so you can fund yourself from customer revenue?

Angie Sandritter

09:19>> Yeah, no, that's a really, really good question. So I would say what we looked at was bringing in intelligence too. So we wanted to have a very, we wanted the product to be the star of the show and that required some level of business intelligence that covered beyond just us developing it ourselves within the team or bootstrapping what could be developed. So I would say because we wanted to bring in the expertise and develop the really

09:43>> stable, intelligent, using the predictive modeling business intelligence so that it was informative and could scale to larger organizations. I'd say our customer base was different at the beginning. So where other people may try to go to a more friendly customer base that would be looking at specifically helping you work out the kinks, we were already going to customers and getting the name brands behind some of our early customers that required a more stable product. So therefore,

10:10>> we invested more into development because that was our strategy and our customer size was larger than just a smaller type of initial footprint.

Next Feature: Natural Language Processing

Nathan Latka

10:19What's the next big feature update? What are you most excited about?

Angie Sandritter

10:24>> Continued intelligence. I think one of the things we're really leaning into is natural language processing and being able to understand the myriad of contextualized data and being able to correlate it and make actions based on that. So it'd be really intense.

Nathan Latka

10:40I'm sorry, hold on, Angela. Those are a lot of big words in one sentence.

Angie Sandritter

10:42>> I know, I know, I know. Goes back to the intelligence. I need to quit speaking that way.

Nathan Latka

10:46Well, can you make this very real? Okay, I am a policeman working on a police force in Georgia. Where am I writing as a police, individual police person writing information so that my organization can analyze it?

Angie Sandritter

10:58>> Yeah, good question. So

11:01>> just being able to understand the qualitative feedback that you may get. So even if it's just to a survey response, which is pretty basic, to be able to say, we're seeing the sentiment of the force getting stronger or weaker, These are areas that need to be addressed over time and making that more precise and being able to correlate it to workload, 911 calls and other factors so that it is really articulate and actionable.

11:28>> See. Okay.

Nathan Latka

11:29In terms of, it does.

Angie Sandritter

11:30>> Yeah, that was helpful. Thank you.

Nathan Latka

11:31In terms of growth, so I mentioned first customer athletes back in 2018. You mentioned you've scaled up to 50 now to date. You do have an inside sales org, so you're growing. You mentioned average price, maybe around $2,000 a month. Can I take 2,000 a month times 50? You guys are north of $100,000 a month right now in revenue?

Angie Sandritter

11:49>> Yeah, yeah, absolutely.

Growth Goals and Whether to Raise Again

Nathan Latka

11:51What's the next big goal? What are you excited about revenue wise?

Angie Sandritter

11:55>> I mean, I think we're trying to scale to, you know, mean, eventually we'd love to see a 10x model. So I think that's where we're setting our sights on and continue to get a stable and repeatable marketplace.

Nathan Latka

12:05Do you think you can break 10,000,000 revenue next year by the end of next year?

Angie Sandritter

12:10>> Oh, we'll see. We'll see. It depends.

Nathan Latka

12:16It makes you a little uncomfortable, but maybe a stretch goal, right?

Angie Sandritter

12:19>> Yeah. We'll see how we end up for the year.

Nathan Latka

12:23Do you think you can grow up to that scale of 10,000,000 revenue without raising more capital? Or do you think you'll need to raise more?

Angie Sandritter

12:31>> We'll see how that goes too. We're always open. We're not in the hunt right now, if that makes sense.

Nathan Latka

12:37Got it. So you don't think, I mean, growth right now, you can keep driving growth without raising more capital using what you've already raised plus customer revenue.

Angie Sandritter

12:44>> Yeah. Yeah.

Famous Five: Books, Tools, and Habits

Nathan Latka

12:45That's obviously a great way to do it. Very cool. All right, let's wrap up with the famous five. Number one, Angela, what's your favorite business book?

Angie Sandritter

12:52>> Right now, it is Never Split the Difference.

Nathan Latka

12:55Number two, is there a CEO you're following or studying?

Angie Sandritter

12:59>> Oh, just one? I think there are several that I'm following or studying. So I guess it depends on the market. I'd

Nathan Latka

13:05say Go and pick one.

Angie Sandritter

13:07>> Pick one CEO that I'm following or studying. I mean, it's always interesting to see what's going on with Space Force. Yeah, it's always interesting to see what's going on.

Nathan Latka

13:22With Space Force? Sorry, which CEO are you talking about?

Angie Sandritter

13:24>> Yeah, no, I mean, we're looking at several things within the Department of Defense. So that's been interesting to see. Then, there are several that I'm following right now.

Nathan Latka

13:36Okay, number three, what's your favorite online tool for building a business?

Angie Sandritter

13:43>> That's a good question. I think I enjoy the intelligence of Salesforce.

Nathan Latka

13:48Number four, how many hours of sleep do you get every night?

Angie Sandritter

13:50>> Oh, that's a good, yeah, easy answer, about four. Four to five.

Nathan Latka

13:54That's not healthy.

Angie Sandritter

13:56>> Yeah,

13:58>> it depends. I catch up on the weekends, but I love to get up early for a run and I oftentimes do my best thinking when the house quiet at night.

Nathan Latka

14:07Fair enough. And what's your situation? Married, single, kiddos?

Angie Sandritter

14:10>> Married, definitely. And kiddos, yes.

Nathan Latka

14:13How many kids?

Angie Sandritter

14:14>> Three.

Nathan Latka

14:15Oh, but you are busy, busy, busy. Okay, Angela, do you mind me asking how old you are?

Angie Sandritter

14:21>> Yes.

Nathan Latka

14:22Okay, us, the reason I ask is take us back to your 20 year old self. What's something you wish that she knew?

Angie Sandritter

14:28>> No, that's a good question. I think it would be just to have more confidence in the beginning and speak up. I was a lone woman in tech for a long period of time. And so I'd say in that situation, just learn to speak up earlier.

Nathan Latka

14:44Guys, RippleWorx in a very competitive and fast growing HR tech space. They helped, they started off in 2018 helping athletes and athletic teams manage the sentiment of those teams. Working with police forces, production studios, and 50 other logos and brands, paying on average $2,000 a month to help them manage again their people and sentiment analysis, doing about $2,000 a month per customer over a $100,000 a month in revenue as they look to scale. They have raised

15:07some capital, but are trying to be smart about it with their team of 35, 15 engineers onboarding new sales reps as we speak to keep driving growth. She's excited about the new NLP modules they're releasing here shortly. Angela, thank you for taking us to the top.

Angie Sandritter

15:19>> Thank you so much.

Nathan Latka

15:21One 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

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16:30for 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. And 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

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