How Salecycle CEO Fabien Sanchez grew to $53.5M revenue and 500 customers in 2024.

hello everybody my guest this morning is Dominic Edmonds he's the founder and CEO of a company called sale cycle and is focused on utilizing customer data to drive conversions and ROI through behavioral marketing Dominic are you ready to take us to the top hell yeah all right this is a tough tough space how is sales cycle winning yeah we're winning pretty well I think that helps being one of the early entrants in space which means it we've been able to develop our offering together with the view of the market as it's grown itself so yeah we went through a blend of our technology features together with service as well we don't shy away from giving people the best in bus what percentage of your revenue over the past 12 months was from professional services versus recurring SAS my head it's relatively small given that the professional SAS pieces what we've done terms of scalability but my background in agency means that you understand that when you talk about building relationships rather than vesting in hands-on client support it allows you for cross-sell upsell opportunity so it's all about building a relationship having someone didn't pick up the phone is really important to us so when you say relatively small mean are we talking less than 10 percent is professional service less than sorry a lot 10 percent yeah okay all right and then tell me about the rest of your model is the recipe like a pure play SAS model yeah yes so we've been through a number of different pricing models over the eight years existed we start out in a pure performance-based pricing model which is really cool because it allows you to really get ballsy with the market and really talk about what you want to deliver but as you mature you understand that actually you need to build something a little more predictable for those tough CFO's out there yeah and and your model so what how are you making money in that model and when did you shift it to more SAS soon find a number of iterations so we start out with performance now odester class performs as SAS for us because having done that for kind of three four years in the early days we understood sees now down to an art meaning that we understood what to expect from a client depend on their sales cycle excuse the pun so well that was fairly predictable however taking something then to a blend of a base fee which allows us to talk about servicing allow us to talk about the implementation fees the cost and go with it and then applying a performance fee on top was our second iteration and now we've moved into 100 percent flat fee model which and matches with the same kind of fees people wouldn't be paying us an average but it smoothes out rather than making it choppy I guess I don't understand that if you have a bunch of customers paying flat fees your revenues gonna be really chunky up and down versus predictable kind of stacking sass when I misunderstanding no no so when I say flat fees those flat fees means instead of a customer who may go through a period where they're in sale on there let's say it's a fashion retailer and they're paying of 20,000 a month and when they're not in sale that could be paying us 5,000 a month what we're talking about is picking effectively the equivalent of an average billing so a flat fee is between those mean over the year nobody loses out I see okay and then generally just so we can better understand your customers average contract size in your one is what are we talking 10 grand a million 100,000 we do have very expensive see working in different sectors as well we work very well you know yeah on average you'd be looking at a monthly MRI which is technically what we live in we'd be talking around about the $5,000 a month month okay now you launch let's go back and learn more about your story here launched in 2009 where was your head at at that time at were you you know struggling back against the wall had to make this work did you just sell your last company where were you at so I came out with agency so strictly speaking we started in 2010 for every 2000 cent for every fifth that she just passed her eighth birthday but I came out of an agency role where it was becoming clear to me that clients for approaching us to address abandonment issues on their side as they would list them as they had a high abundant rate they didn't they had an average abundant right the challenge you faced mr. Kline is the same challenge your competitors are facing and that really was a crystallization behind sir cycler could be a singular enterprise level product which can address this issue for a number of customers okay interesting so you and give me a sense of the size of the agency before you started thinking about building software I mean were you doing a million bucks si or a hundred grand so we would be doing around about five millennia fine okay so it takes some energy and focus to basically slowly shut that down while you ramp sass or are they both running in parallel right now so I've stepped away from that businesses gone from strength to strength and the interesting thing is the shareholders in that agency are the same shareholders I haven't sales cycle which means my relationship with them has continued but there's certainly 12-month transition period where I was wearing both hats interesting now when you talk about shareholders I star wondering about investment have you bootstrapped this thing or if not how much have you raised I think when the definition of boots strapped into certain terms of us terms so we raised 80,000 pounds of investment to build this and nothing on the agency side you mentioned you have shareholders there was that totally bootstrap as well yes totally this job okay got it with no institutional money today that's great so I love that and your based I think you told me earlier you're based in Leesburg Virginia my hometown which is great where are you based there what part of the Cassidy in London ah very good that's a good that's a good spot to be in and what's the team size today a team sized in the u.s. is 35 globally hundred eighty okay and walk me through the breakdown so so where else do you have offices and what do they do so officers currently we still have our headquarters based up the northeast of England we then have one in downtown Paris and we've got one in Singapore together with here in the US as well in terms of what they do they I suppose we split the business into regions as you might expect so we have the Americas office based in the US which allows us to win customers manage those customers support them implement them locally we do exactly the same thing in Paris exactly same things import exactly the same thing in the UK however we also have a Central Division as its referred to which is core technology functions finance roles like myself strategic roles which effectively all of the region's benefit from interesting now you're the foul you were the founders correct I'm the founder yeah any do you have any other co-founders or just you it's just me how have you catch look how have you kept yourself sane who do you who do you go talk to when you're when you're having a bad day my wife the cats the children realistically though I can speak to my shelves because they have a strong track record themselves of entrepreneurship and investment and seeing journeys like this through to multiple points Alexis so no I do rely on those relationships and what are you growing at right now would you say year-over-year just the software siding or the agency yeah yeah what i steped fully away from the agents I'm so growing at 30% year on you that's good I mean for a boot trip company that's healthy and what do you I now today in terms of total customers are serving I would got north of 500 customers we've been profitable for five years yeah life's good and is that all just to be clear is this all kind of karke abandonment related or you're branching into other parts of the sales cycle and other kinds of business models so when we started the business we focus very heavily on the cart baman piece because that was our entry to market but when we talk about being a behavioral marketing business it opens above much further I saw email as a channel and within that term you have kattabomman yours have post purchase cross sell up self survey based information but then we have the on-site channel which allows us to engage your year this is throughout the shopping funnel cut traditional data provide them with different points of entry to complete their purchase etc that's a channel and then we have the SMS channel as well so that's really the way the business is structured at the moment interesting so your value would say as you're pulling all these data channels together so the business can make the smartest decision on how to drive more sales that's exactly right interesting are you selling access to the data anyone else kind of like a clear bit model or no not currently okay something you're expanding to yeah interesting why enough said I can't go into any more about that okay why is it just too sensitive yes it's sensitive based off we're going through a great deal of an opportunistic learnings within the business and and I think it's fair to say that we're in a a path to become a data marketing business but there's a lot of sensitive information in both of them interesting interesting okay good um in terms of size by the way 500 customers $5,000 monthly are poo I mean I put you it out north of two million a month is that generally accurate that's pretty close okay and grown 30% you over here that means you're doing somewhere about what 1.7 is about 13 months ago monthly ah yes roughly speaking forgive me again not digging through a telephone yeah I'm just gonna say yeah your must pretty solid so far you trust me it's something like alright good yeah you're right around well if it is 30 percent year-over-year growth it was about 1.7 last year so that's healthy now a model like this obviously churn can kick your butt if it's not in check tell me about churn oh yeah know that we've been through those paints absolutely a way you can win customers fast and you can lose them fast and that really boss aren't the service element I touched on before and being able to focus the team not just on renewals but also on growth opportunities means actually currently if you look at our retention analysis if you look at our gross retention it's around about 90 percent if you look by a net retention it's around about 101 percent so it's gonna revenue basis or a logo that's revenue basis great so one more time in with so grossss Jen you're looking at 91% sorry gross retention I shouldn't say gross Jen that's completely the wrong thing you'd be out of business entity yeah so just to be clear sorry to break that down you're churning nine percent of your revenue annually but you're adding 11 percent order sorry Tessa give you 101 growing the customer holding on to yeah interesting and would you say generally speaking as you think about new products like potentially this kind of data play is your is your focus going to be getting more wallet share from current customer base increasing our poos there or actually bringing on brand new customers you weren't able to serve earlier it's gonna be both it generally does obviously we've got a tremendous foothold in the customers so we actually hold the moments and we understand them very well so there is in theory a soft to sell there but the whole point in having larger missions is it truthfully I wouldn't go over there and I want to eat the lunch of some very established players who really can't do what they said it it come on you can't you can't act like you're all competitive and they're not for our names who are you targeting you want me to tell them I'm coming name a big one Dominic well I don't know the space you know your business I mean whatever eat are we talking like a are we talking like a Shopify are we talking like a like a demand base way big well Shopify is pretty big way big Shopify is a multi-billion dollar company so I mean who I'm gonna be I've gone ballsy it is wonder if you think of the marketing cloud space let's call it that if you consider the Martin cloud providers as being build being constructed on technology that was acquired in Kabul together that's never designed to work intuition meaning that actually they make a lot of promises it can't deliver on if you focus on the data initially and how you can actually use it to not only identify potentially to buy but also effective ad spend and realistically communication based digital spends then that means you can take yourself into a space where you can deliver a significant uptick and RNA with a greater reduction in cost moving into I guess what you'd classify as certainly the Martin cloud space of the empty space start to blend them together it becomes really interesting on what we can do if you consider the date where we capture is all transactional so this is understanding what people want to buy one the one about what why they bought it together with understanding okay if you're gonna contact it same customer let's understand that data pull together so on the marketing automation side you've got the Infusionsoft the hub spots the Marquitos of the world when you start getting a DMP and DSP side you've got the you know Bill wisest at media ocean of the world there's a whole market over there you're interested in kind of bringing both those sides together my question to you would be the the the fastest way to bring those sides together sue has access of the most data cuz then you make your engine the smartest so you train your thing it's not just the volume of data okay why not just some it's the quality of the data so you're saying they have shitty quality no I would never say that about them what I'm saying is the quality of the data that we have it's very unique to us so they've they have I would say a much much harder but by a factor maybe a hundred or a thousand X your data size and it's actual transactional data why is your data better if you to consider the impression based data and shopping based specific data that we capture on a daily basis based on the individual user not just an individual session and being able to get the cross device to understand specifically what results are generated cross different customers in terms of video the to pull list data together it's a very unique data set we've had a lot of inquiries inbound asking us as to whether would actually sell that data into parties such as that because they see the value in it at this moment in time we're not looking to do that we're looking to further enhance own data for the rich that data we've looked about bringing on both the part in data the further in richard ourselves so yeah we've got some fun times ahead of us okay good I'm picking up what you're putting down I get it real quick before we wrap up unit economics your bootstraps you can't pay a lot upfront and wait two years get your money back how quickly do you like teach your money back your kak Oh is pretty sold so give me so indented a little cost of acquisition LTV ratio so we pay back around about five point six months okay five point six months and if people are paying on average five grand a month so what you're spending 30 grand no quire these customers and just under just under yeah okay and not okay and that's a max right so 30 grand your paybacks healthy what do you soon this is now we have to be careful here what do you assume these customers are gonna give you over their lifetime how long do they stay with you on average so our LTV its moment as it continues to grow sits just under four hundred thousand dollars okay and that's probably like a minimum right you're conservative with that I guess a question so die expected to be larger next month and larger the month after because we're retaining these customers so as much as its conservative when they looked at the future its actual if I looked at the last time we ran it was two months ago interesting okay and that comes out to about how many years of them staying with you oh okay now yes to me I I have to combat you take the four hundred thousand divided by our average Diwali and you get that out roughly what it is yeah so if I divided by five thousand a month that gives you obviously 80 months or approximately seven years yeah but some will be obviously paying a security or more some will be paying or less a there is a blend in these things I try not to get too lost in what you call the traditional SAS based average metrics as they exist their averages the edge cases are the things you can learn more from why isn't you have a customer pay less what's unique case opportunity there what is the wider opportunity they want why would someone pay vastly more what are they getting that others aren't so I think it's important to understand the full breadth of the business not just the middle point yeah no makes me think Dominic let's let's wrap up here with the famous five first one what's the last business book you read I couldn't tell you I'm not really a business book reader with resume right leaves you go I'm currently reading the Essex seven the Essex serpent oh yeah and I have just ordered the watchman sketch tradition it's called watchman noir so I'm looking forward to reading that number times number two name your favorite CEO and leesburg you like to go out and get coffee or dinner with oh there's a good question and I can't choose me no no not you the book question and actually the CEO I'm studying questions really see I like people to be themselves you know as I talk people to join the business and they want to maybe look up find a mentor etc who is it they want to be the great sports town of got and be yourself because everyone else has taken you go to under skills the skills that you have because those are the skills done I can name a CEO and leesburg you really enjoyed chatting with I don't think I can you don't you don't there's not people you brainstorm with and question asked me to pull one person out who I'm gonna focus on this put them on the top of the tree I don't believe input was on top of it it's not top of the tree you're not ranking people but this is for other people when they're going through area or they're researching Northern Virginia who should they be thinking about name someone who you think is a good thought leader there I take a look at the CEO who spits his time between Leesburg and San Francisco who is the CEO of sobriety although I can't necessarily remember his name it's okay let's move to the third question what's your favorite online tool besides your own business wise we use Google across everything so hangouts is a big deal for us because we're international offices and we connect have them via videoconference Bhaiji chat etc so whether it's the best it's what I use every damn day number four how many hours of sleep to get every night okay and what situation married single you have kiddos oh yeah 11:06 oh wow okay and how old are you now I'm 40 this week good can't happy birthday last question take us back to your 20 year old self what he was she knew oh yeah I think what I would tell myself if I was 20 years old is find the balance I think in the early day is the best you can be pretty sucked into and that makes perfect sense but you've got to stop and enjoy the journey if you become to focus on where you're trying to get you can't enjoy every step I remember being at a business conference in the northeast of England around about ten years ago where Elle McPherson came to speak you might think Elle McPherson business conference at that time necessarily why talking around her perfume lingerie brand of stuff and there's a line she said about enjoying the daily journey said I don't dance to get to the end of the song and I just that's quite a poignant way of putting it that's you've got to enjoy what you're doing it's not just about reaching the target there you guys have it from Dominic sale cycle calm he's enjoying his dance when maybe I'll have to get a video Dominic of you dancing I don't no one's watching launched and maybe not maybe not maybe not but we launched in 2010 now 180 people all over the place again really focused right now on some specific data points card abandoned things like that but their breath and their expanse of their data is growing fast it's powering a much smarter engine he came from agency background ger that's about five million bucks an annual revenue before branched off and did software exclusively it's a bootstrap which I love they're serving 500 customers paying on average five grand a month so doing about 2.5 million per month right now that's up from about 1.7 just 13 months ago so 30 percent year-over-year growth really healthy revenue retention year-over-year at 101 percent tactile to be super healthy as well they get back in under six months Dominic thank you for taking us to the top Thank You Nate