SalesScreenrevenue, valuation & funding

Introduction hello everyone my guest today is syndra holland he was born and raised in norway but lives with his beautiful wife son daughter and dog in brooklyn new york he's the founder and ceo of sales screen the world's most comprehensive gamification platform that creates a fun motivating and competitive atmosphere for revenue teams all right syndra you're ready to take it to the top sure all right this revenue space is sort of hot right now would you put yourself in like the revenue intelligence space or like the call tracking space or more like an hr tool gamification tool to help people meet their quota we're definitely a sales tool uh meaning you know that that's people that we talked to but i would say we're kind of like a counter balance to a lot of the craze uh recently you know with the outreach and uh i think it was gone um announcing get another you know gun buster round as they call it uh but they're all about like you know automation artificial intelligence machine learning we're more more about the humans it's like you know it's still people closing business and your biggest asset and cost i would say is people so how can you kind of unlock that next level by pushing the human reference so that's kind of where we sit so tell me more about sales screen what's the title of the person at a company that's usually paying for your technologies the head of sales how to revenue something else yeah it's usually uh you know all the way up to the top uh with the cro or chief commercial officer chief sales officer depending on the industry but um it's it's usually you know within the sales uh trajectory and and there's always sales enablement and um you know sales operations involved in evaluating the purchasing decision but eventually it's going to come up to the cro or like a vp sales type of personality and what are these cross paying for your technology on average per month you know an average deal for us uh it's it's around 24k um today so um it's it's a number that keeps on growing um quarter of a quarter center is that per year yeah yeah and and what are they paying for that typically there is a sort of number of seats feature based up selling or some usage based metric so our list price is uh it's fairly simple model it's it's 29 bucks per user per month for the base package it's paid annually of course and then you have five modules that you can add on top each of them costing seven dollars per user is that one of those modules that is more effective at upselling than others there's always you know two models uh that that i feel like uh that people pay out of the gate with um so what are the things like yeah you should almost like yeah just bundle them into the base package at this point i guess uh but yeah it's it's the boost module so it's like the actual gamification components with the competitions in particular and it's a reward reward module which is like um this coin that you can introduce to you inside a platform and then you can have your own internal web shop where people can exchange these coins that you make through unlocking badges or hitting your quota or you know um winning prices and competitions and exchange them for actual gift cards or or days off or giving push-ups your manager or whatever you want to have in that webshop so take me back to the early days when did you launch the company um so the company was launched in 2011 actually i was a student at the time uh but the sales green product which we are known for now that came on the market in march 2014 um and you know the idea came after iterating with multiple sauce products that eventually died out or failed but this idea came from a client which was using well for other tools for a different purpose that i didn't think of like we had this messaging sauce application set out to kind of replace text message corporates and uh and this one advertisement sales company like the yellow pages just in the nordics um they sent out like a text message every time somebody closed the deal to create like a virtual tap on the back um even though you're gonna we're not working or work in the field or in the call center uh and they they used our tool to for this purpose of like motivating their sales team was that my first customer in 2014 you know it became the first customer because i would say they were instrumental in like forming the idea behind sales screen and we we built pretty much every feature since then based on customer requests and what customers were willing to you know pay for us to prioritize to develop so big thanks to them now did you bootstrap up until the pivot in 2014. we did we actually bootstrapped all the way up to 2018 and surpassed three million dollars in there as a bootstrap company a 100 employee owned before we took out outside money for the first time okay well we'll focus pre-2018 because that's what i love i love i love hearing these bootstraps they want to talk about what why you shifted why you went the other direction but get me in your head in 2018 where were you in terms of revenue and how much you decide to raise so you know i i think we can uh go back to 2017 because that's that's the point where you know we passed two million dollars in ar we were growing nicely we had this amazing company culture and everyone was making you know good dollars we're paying out dividends um you know things were great but at the same time um oracle dell sap like these companies were knocking on our door uh requesting like a quote and and starting to talk with us um interested in our gamification technology and we realized uh we weren't big enough we weren't able or capable of handling their organizations they were simply told you know too big we had the technology and the technology was scalable enough but not organization so at that point we kind of realized okay you know what we have here is it's nice and all but we're not going to win our industry and become a new category or you know a dominant player unless we actually embrace this opportunity that is presenting itself more and more and and raise money to expand on on you know the market opportunity that was there so um that kind of made us transition over to bringing in money from the outside for the first time because we saw that the timing was right in the market how much did you end up raising in 2017-2018 uh so at that time we didn't have like that machine built out that is more well now known today i would say and then which we also have today but at the point i wasn't sure like how much money i needed because at that point in time we made money so um i raised like two million dollars just to have something to start with um and then since then i haven't really done any missions either i just taken i guess total 4 million more in loan um most recently this year a couple of million more so now we're kind of hitting the stride of where we can convert money that we take into actual growth and uh the growth is accelerating quite rapidly so to talk to me 2 million 2017 2018 is equity um you mentioned you were paying dividends the team at that point how big was the team at that point uh at that point were a bit over 20 people i think and there's a lot of bootstrap founders that are trying to set up dividend plans for their teams how did you structure your dividends before you raised so we only paid dividends once uh we we usually took all the money that we made and just uh we invested it in future growth uh so we're even at the time very growth oriented um and once one time we did it you know it was based on uh how much equity each employee owned at the time um naturally me being the the founder of the company i had the most but uh later on i you know my co-founders um was instrumental in building sales screen uh naturally had second most and then onwards and onwards how much of the company again pre-raising did you and your co-founder own 100 well what about your team like all the all the shares was held by employees yeah so that's what i'm trying to split up how much was owned by you and your co-founder versus the team oh okay um uh so yeah me and my co-founders we at that point in time i think we own roughly 60 perhaps and the rest 40 percent okay got it six that's pretty that's a pretty aggressive employee option pool so they're very incentivized they've got a lot of upside there yeah um so and it's still a pivotal part of our core strategies to have everyone involved in the uh on the upside um now that we're kind of raising money again we'll talk about that in a second when you broke 2 million ar in 2017 how many customers were you serving uh at that time were mainly like smb focused so i think we were north of 300 Currently serving 400 customers okay and how many customers today uh now it's only a bit north of uh customers and you know 20 000-ish uh sales people on the platform got it can i take that 400 times the 24 Monthly recurring revenue 000 average acv so you're doing like 800 grand a month right now on revenue something like that yeah right now we're uh we're probably gonna end this year around 10 um so i think if i'm gonna look at my book revenues right now we're a bit north of six million dollars zero oh great big congratulations what drove most the growth from 2017 from 2 million to 6 million today um you know it's mostly sales uh like uh sales driven and us going up market uh having larger enterprise clients joining in and getting you know 10xing our um annual contract value and what is growth like if you're at six million right today where were you exactly a year ago uh exactly a year ago uh you know a bit less than four okay so healthy growth i mean not like doubling year over year but still healthy growth yeah if we look at like since 2015 is 56 year old year um growth and if we look at the annualized growth of like last quarter we're at 71 percent um the quarter before that we're like 160 so it still goes a bit up and up and down because we have more of these enterprise deals coming in yeah but it's uh it's it's around 100 growth right now when you uh in 2020 i think you said you decided to take a 4 million dollar loan is that accurate and so why did you decide to do that [Music] um it's it's mainly because we've built out the machine um so you know at this point in time um we started uh one of the goals kind of expanded north america we had the brand recognition we had most of the revenue in europe and we wanted to make like the shift towards north america and that's when i moved to new york personally like into 2019 um and we started to to invest more in north america and build up that core team in 2020 uh naturally um you know building out a team in new york is a bit more expensive than in scandinavia let's just leave it at that um so you know it requires some money at the same time as i said you know we 10x are at annual contract value um and we saw lots of growth opportunities especially here in north america so we shifted our revenue from being like mainly um coming out of europe uh and the nordics um to having like uh you know one third of the revenue coming out of uh north america and you know growing very fast so there's a lot of different loan products out there right now for sas founders what did you see when you did this last year what was your sort of how many years do you have to pay it back and can you give me a general sense of what what the cost of capital was so uh what we did you know with 2020 and the code pandemic as well we were presented with some options and choices like um when it hit should you you know furlough people like short-term because of the uncertainty like we being such a employee-owned company that was like a no-go for us so in that first round of uh taking equity for the first time we also sold some shares in in the secondary um so we actually ended up putting most of that money back in assalone um so that was one part of it of the two million dollars in 2017 how how much of that was a secondary versus primary uh so it was secondary was equal amount oh got it so 2 million was primary 2 million was secondary you raised 4 million yeah yeah i guess uh you can save so over two two rounds so that the second part came in 2020 so that was kind of like put back into the company mainly and then uh we did a convertible note uh this year just uh leading up to a bigger round yeah what the two million raised this year on the convertible note what cap were you able to negotiate no i was only on a discount on the next round oh smart so uncapped at what like a 20 discount yep that's not okay that's not that's not bad so i mean what do you think you can go out now to the market you're raising now how much do you want to raise um right now uh you know it's it's definitely going to be north of 120 120 million dollars yeah you mean your valuation will be north yeah our enterprise valuation i guess yeah but actually but how much do you how much capital do you want to go raise uh so uh that's undetermined uh yet yeah we're in the process of kind of like preparing for this stage now so i i can't go out with too many details on this where is your gut telling you you can invest more capital to get more growth i'd sa first and foremost is north america um like uh it's just incredible uh how much low hanging fruit there is here right now uh but it's also in our asia pacific uh region so we have an office in in singapore uh and uh we're starting to break through there as well so we want to replicate the success that we had in uk and ireland and in north america in the apec region and what's your team size today how many folks we're roughly 50 full-time employees okay how many um engineers production we're 15. okay okay guys are they based here or in norway so the product team is mainly based in norway so we have one person in north america the rest is in orlando and how many sales reps do you have that actually do carry a quota uh at this point in time that's uh i should have known these uh numbers i guess um oh an estimate it's fine i think it's around you know 10. okay i mean that's always the hardest thing right about bringing in capital scale is like do you hire engineers higher sales people do you increase paid spend so like how did you think about your first sales higher in the quarter to put them on you know it is uh it is hard that's it was definitely hard in the first place now it's not hard anymore um now that we have the unit economics kind of dialed in and we see that okay you know we need um our pipeline it's coming from marketing uh increasingly more for marketing we need more resources on that part um we we are still you know sourcing quite large portion of our sales from our field sales team and our bdr str team so that's there's a ratio starting to kind of form there two to one um so now then you can kind of see like okay and also from the csm side we're actually starting to break through on the expansion and upsells of these modules and um there's you know this hub mentality and since our market is so big uh we we can build out different types of countries in europe or regions or even uh you know west coast uh as a natural next step here in north america as well and have these foundational hubs that you kind of grow up then um yeah so it's it's it's easier to spend money now that you kind of know that and what to expect from increased marketing spend in terms of traffic on the website conversion rates race and uh skulls and and pipeline group you know and syndra you definitely want to raise in other words if outreach or gong or sales off or henry chuck dominco came and just said listen instead of going and raising a hundred million dollar evaluation here's a hundred million dollars all cash up front right now to sell to us would you exit um hopefully no but that's not only up for me i think that we are very much on on the track to building out the new category-like outreach like course like going in the sales tech stack uh which is it's just yeah it makes perfect sense to be honest like especially given the tailwind from covet and the fact that people are being trusted into a hybrid or even like fully remote setting and getting them you know engaged and motivated in their day-to-day work is becoming like a board type of discussion and we see that um from our organic inbounds as well so uh it's not the right time to exit for us uh to be perfectly honest but you know if there's a ridiculous amount of uh of money on the table then um i'm never gonna say never um so i'm pragmatic like that when you look at your churn right your net dollar retention are you above 100 at this point yeah how much so 120 this um yes it's pretty and it's growing actually it's grown over the last eight seconds and what's just peeling back that math equation what was gross revenue churn over the past 12 months much worse so uh you know i don't have the exact numbers uh and firmly right now uh if we look at the last um you know three quarters i think it's a hundred and twenty hundred and seventeen hundred and seven um 105. so it's uh it's like uh it's a trajectory that i hope continues probably you know not because it's still it's already pretty strong yeah i'm trying to get a sense of is you have expansion revenue that is more than your contraction revenue i'm trying to understand what expansion and contraction are to get us to the net number yeah so uh it's mostly expansion bigger than contraction right now and upsell is not really a big portion of that number yet but it's growing but so you for example you could have 10 churn and 20 expansion or 100 turn 120 like what is the what is the hole that your expansion is making up for right now oh uh if you look only on on the contraction side sure um well you know hard to say it i i i don't know if i fully follow you on this one because uh net dollar retention is calculated by taking contraction and adding back expansion your your number is 110 or 120 right now so there's two numbers you add together to get to 120 percent i'm just trying to break down those two numbers do you know what gross revenue churn was over the past 12 months no i don't have that in front of me right now like we use to follow on our side is actual net retention you know so um how do you calculate how do you calculate net so the way we do it is is at least we look at the dollar amount so um to your point like there is a contraction and there's an expansion so in the seats um since we from from the past days had some contracts that went month-to-month we could actually get like variation on a month-to-month basis um so that that makes it a bit more complicated but that means that companies could scale down and scale up and we actually had like a fluctuation there uh so so the number of speeds is like the biggest uh portion of our net retention number right now and then the the last part is up selling so uh when you look at the what a an account pays going into the quarter and what they pay when going out of quarter um that's you know also has a a portion in that net retention yep no i understood you just don't know what the contraction is and you don't know what the expansion is you just know that i don't have the percentage numbers in front of me right now because um because of that uh legacy we we kind of have it on sub annual contracts and annual contracts so that the dashboard to to combine them uh hasn't been built yet so i only have like the the numbers uh the actual numbers which was the data analysts and the team kind of dug out so we're building out that dashboard to have to your point i understand that yeah no no problem no problem we're out of time here let's let's wrap up with the vegas five number one what's your favorite business book um i don't have a favorite right now maybe yours we'll see number two is there a ceo you're following or studying um no number three what's your favorite online tool for building the business right now i would say abm platform like man base like what demand base demand base number four how many hours you'll sleep to get every night i have two toddlers so like five so since you were married single married with two kids yeah married with two kids and they're both under three years so it's oh wow how old are you i'm 32. 32. last question what's something you wishing you when you were 20. i i don't know what i wished for came true so i guess building a company uh and making a living out of the company that i built was the dream guys salesscreen.com gamifying the sales process to get better performance out of your reps playing sort of in the same space as a gong call rail these revenue acceleration tools they grew from four million in revenue last year in terms of right to six million today they raised about four million in total capital including a bit of a combination there that's secondary looking potentially raising another 10 million today at 120 million plus valuation and they've might scale nicely from 300 to 400 customers over the past three years uh with their team of 50 people 15 engineers we'll see what happens next century thanks for taking us to the top thank you 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 pm 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 lanka 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