Screenmeet Revenue & Funding (2024)

hello everyone my guest today is Ben lilienthal as a serial entrepreneur in the collaboration space he started four companies sold to two public companies and screen meet his current company is number four he's a proven leader and innovator Amherst College ba and Crown pho at the Aspen Institute all right Ben you ready to take us to the top sure fire away Nathan all right what is a screen mean how do you guys make money sure screen meet is enterprise remote support in the cloud so if you think of existing remote support applications which is basically when the IT Help Desk or the call center comes in to take over your computer they're all desktop to desktop based screen meet is the first enterprise SAS solution to be developed cloud native which means it's faster cheaper better than things like LogMeIn Bomgar go to assist WebEx Skype zoom for the remote support use case are you selling directly to the operator of the call center or the companies that put their calls through the call center we sell to the companies that hire the outsourced service provider call centers the verticals that we sell into are mainly subsets of high tech so hardware like PC and phone manufacturers yeah software like other SAS companies and then finally you know sort of random sort of verticals within education manufacturing and obviously the IT Help Desk you know goes across lots and lots and lots of traditional industries and help us understand briefly kind of how you price so the average customer pays you you know about what per month to access the technology you know anywhere from 20 to 60 bucks per user per month and how many what's at a logo bed set of a seed based at a logo basis are these are you typically serving small teams of five people or enterprise teams of 500 well you know the of sass and the beauty of startups is you build the software and to sell it to sell one license is as much work as selling 10,000 licenses not always with the sales motion it can be very different ones a notary play another has a whole system yes but from the back-end perspective of course so what we did is we started by selling a couple seats here and a couple seats there and then we landed a big customer an open table which was a couple hundred seats so we felt like we were pretty cool and then we recently deployed the largest technical services organization on the planet that has over 10,000 support agents around the globe and so the interesting thing is our software and our infrastructure didn't really have to change we just had to turn on more instances in our you know does in AWS as your data centers around the world and now that we've sort of gone live with the largest technical services organization on the planet we're kind of going back through the large enterprise customer list very diligently so and you I mean you'll have people obviously on both sides of this equation but yeah you know typically most people will double down on either enterprise or lote and you know touch kind of freemium based SMB Sci it sounds like you are really trying to do more of the enterprise size team sizes yeah I mean we have an online no touch offering at screen me.com but it's much more interesting to go into the large enterprises and rip and replace 15 year old software with screen meet because one it really drives compelling value millions of dollars of savings on day one and two we go in with some of the largest CRM platform providers in the world as part of a you know full suite session now I get we by the way I totally get the product you have to convince me on that it makes perfect sense I just want to understand the kind of economics and how you how you've gotten the customers you've gotten so because we can't talk about every core I mean is it fair to say maybe the average team signing up with you guys is what a hundred people or something like that from a support agent perspective yeah hundred you know 50 seats - nope ok 50 ok fair enough so so then can I write a fifty times twenty the average the average folks are signing up fifty to twenty bucks to see higher seat or higher or higher than your average deal you know like under 25 grand is kind of not that interesting at this stage of the company we're not gonna walk away from it I mean if that's you're going ya know what I'm trying to do is basically get out of talking about per seat and talk more about what kinds of companies you're targeting which would which would basically manifest itself in a CVS or a number of seats per company what you're saying is we want to have companies that are signing up at least a hundred seats at twenty bucks a month let's put you north of a 25 thousand dollar ACV yeah yeah that's right and so you sort of build the hiring plan and the revenue in the financial model and you know sort of the go-to-market marketing stuff around those metrics versus let's sign up 10,000 customers that's right what's this what's the backstory here when you launch the company what year yeah sure the company got started in 2014 we incorporated in 2015 I had previously sold a company and to GoToMeeting which most people you know it's pretty logical there was a product called go to my PC and another product called go to assist and so I mean was literally you know I was the entrepreneur they brought in I was at GM ran a division hundred people twenty-five million dollar P&L I started like I said you know yeah this is SAS but it's not really SAS it's not really cloud native and in the 15 years since you started this company this thing called the cloud has sort of grown up and so we need to reap lat form all this stuff as cloud native and I went to my boss who was the GM of the 500 million dollar division and he said yeah you you go do that I I don't have five million dollars in three years to you know do a science project mm-hmm so so that that was the back story you know it's sort of the incremental innovation of re-platforming a billion dollar a year business in the cloud the cloud versions gonna win yeah I talk about what Eric did this right I mean he did the basically I'm a same story and and the guys didn't want to let him build it internally so he said fine I'm gonna leave and launch zoom and basically now zoom is you know cannibalizing his other product he sold into that company previously so and I know Eric I mean Eric and I you know cuz I was the audio layer for GoToMeeting that was the company that they bought and so you know I we talked I said go for it man you know like having spent 10 years you know getting punched in the face by you know 10 millisecond packet drops I don't want to do audio or video anymore yeah so I'm gonna do the screen sharing part oh yeah okay talk to me talk to me about what you've scaled to today in terms of team size how many folks ya know so the other thing that's very interesting if you're going after large enterprise deals and your SAS company is you almost have perfect economics so we're you know we're under 20 people why do you say that like it's a negative I I have nothing wrong with small - no no no my point is it's a positive yeah yeah I have nothing wrong with that wait so less than your time we're like 10 11 how many people actually 15 ish that's great so what's the sales motion look like on those did you have any like SDR AES folks hit or no no no and I mean we have one Technical Account Manager okay but it's me and my CEO Oh between the two of us you know we have 50 years of running enterprise software companies doing sales are you both doing sales yeah we're both do it yeah we're both doing sales and what we do is we go in with the large platform companies sales for service now Microsoft Dynamics and sit there with the executives and say you know this is an executive level this is a platform decision now that you've made the platform decision what's the application to solve this use case it's not buying a box and putting in your data center you know that's what one vendor will do it's not buying desktop software it's buying the cloud version of of the tool yeah so no again I get the benefit of the product I'm sold on it I'm after you guys no but my point is that the selling motion is also not sort of a quick and dirty of selling at the conceptual level you know you're not quite selling the swipe your credit card and you're done kind of about those enter Oh God you you you anything above 5,000 bucks a year you're not having a no touch swipe your credit card on a website deal but all those companies typically they have still sales motions built out around STRs / ayee and then customer success reps / a to support onboarding I'm just wondering if you have that system built out yet yeah well we we don't and we're not entirely convinced that we need like even to scale like we can probably get there without invest like I mean a big head sales kind of yes are you bootstrap today or you decide to raise capital we've raised capital but we haven't taken any institutional money okay so we I mean kind of done the like after 25 years you know you sort of know the venture community and basically to a person they've said will give you money privately but don't take money from our fund because we're just gonna distort what you're totally half so how much how much into the company today you're talking like 200 300 grand no closer to 5 million bucks okay but all from all from kind of made more like an angel versus traditional yeah friends and family you know cuz like look I don't know how fast this markets going to move and I don't you know and I don't want to have to bet my sweat equity that's gonna happen sooner but it's gonna happen and we're the number one we are the disrupter in the market so y'all it's like well we'll get it we'll get a look at every deal so you've been at this since 2014 over the past five years what do we scale it to in terms of just total customers you're now serving well I'd let I mean I think the more interesting question is how many support agents use screen me today no III actually specifically don't want to know that answer because that is that is a per seat thing I'm trying to actually understand how many companies have adopted you just that got a company low under 100 okay under 100 okay and now feel free to share the the number you like which are number of others agents that have adopted you oh I mean tens of thousands okay got it so tens of thousands across a hundred companies I mean you're looking at team sizes in on average north of a thousand well there are a couple pretty big ones there but but the interesting thing is you look at how many sales for service cloud seats are out there how many service now CSM or ITSM seats have been deployed and you sort of do the attach rate it should be one for one or you know - right so the addressable market for us is millions of seats deployed and we're still in the tens of thousands yeah less than LS but across right now less than a hundred customers that's right okay fair enough and then he said earlier kind of average a CVS where call it 24s range that would put your mor right now it's somewhere around 200 grand a month is that generally accurate we don't disclose that but you know you're you're in the ball yeah yeah by the way I don't want to disclose things you don't feel comfortable but I'm just taking two numbers and multiplying which was your average ACV times your customer count yeah you know I get yeah yeah cool what about growth so if you're at around that area today where were you about a year ago a much significantly lower like triple in your rear double in your every year yeah at least at least doubling or at least tripling or at least quadrupling I mean look we sort of crossed the chasm over the last 12 months yeah been these are all very generic terms people define chasm in their own way Geoffrey more defines it one way for different companies okay that's fine again just because I'm taking numbers you've already given me right so so if any of those numbers you want to change your update definitely do that so that they're accurate yeah no you're okay we're good okay what what and I mean when you raise even if it is from angels out of five you know five million you've put yourself on a track basically saying we're not gonna be bootstrapped which means there's generally it kind of a flow you have to go out which is you know two or three X the first couple years and then obviously two and or 1x even after that it fine so I mean this year what are you hoping to grow at are you targeting like a 2x or 3x or more I mean again we don't manage the market the you know we can't sort of forecast that demand well you just said that you're the number one player in the market so how can you say that or the NAM year we are the number what we are the only cloud replacement for the desktop incumbents so at what rate do people switch off of their long in the tooth renewal solution and move to a to the cloud platform I can't forecast well you have five years of cohort data so you should have at least a prediction that's what I'm asking for is what's your prediction in terms of what that switch rate looks like over the next 12 months it's only it's gonna accelerate I mean I can tell you that what does it historically been very very incremental tiny tiny tiny I mean no more measure I mean think of it 50 companies over four years so that's ten customers a year right will it be 25 to 50 customers over the next 12 months probably okay got it so 50 customers today that you've landed over the past four years that's right okay got it whereas most the growth coming from so how are people finding it like that switch that kind of motion of switching you just articulate are you guys doing kind of a BM stuff are they finding you naturally what's that look like yeah no it's really going in through existing channels like the CRM platform riders and being the cloud-based replacement for the desktop solution mm-hmm so so as they sort of say okay now that I have this CRM platform in the cloud what are the key features that are missing and a nose like repaying those folks a kick back or is that just organic ranking in like the Salesforce AppExchange for example you know Salesforce takes a piece of every field that they refer is that was your number one of her no but also like that's kind of stuff we don't really disclose ok I'm simply actually you're following a model a reseller model is that something that your margin a reseller model it is a sort of channel distribution great and so let's not talk specifically about any one thing but on generally speaking under that model you're gonna take a hit to your margin immediately because you got to pay for that lead from you know you're gonna pay the mile yeah my question is just simply what is that typically are we talking ten percent forty percent or something less the average app exchange commission rates about twenty percent perfect super viable yeah I didn't know that so you but but but again just to level up you know you either pay the channel or you pay your own sales team but it all works out to be about the same you know the channel is less risky because you don't have to hire the sales guy get them up to speed and then see if they what the sales sales force doesn't close your deal used to have to put a sale yourself to put touch on it after they drive you the lead totally okay and and the app exchange is not a legion place don't I mean for any SAS entrepreneur out there don't think you're gonna put an app in the app exchange and people are gonna beat down your door yeah you then really have to mark it around we're worrying a time here but quickly returns critical in any SAS company so so how do you look at your churn and and how do you make sure you're always driving at to more healthy place as it is today yeah well I mean we have negative churn and we do it through just you know outstanding customer satisfaction so what does expansion look like typically on a customer that signs up a year ago you're talking like forty percent fixed eighty percent less oh no less less probably you know single double digits Tenace percent okay well that's still ten percent expansion is still pretty good and it sounds like that's more than god if they onboard additional teams that then grows higher well you'd include that in whatever the expansion is that that's what expansion revenue is so you're saying total expansion revenue on account is typically ten percent from year one to year two yeah i think that's fair and then and then this thing over that same period of time that same core gross churn is about what gross churn I'm just trying to nap my head price single digits yeah I mean it less than 5% yeah so it's still net positive yeah yeah and that's that's less than 5% annually correct correct yes you're saying net negative revenue Turner just fine it's the same as saying net revenue retention of north of a hundred percent because your ten percent expansion more than makes up your five percent churn yeah right I mean we generally don't lose customers and the ones we do are replaced by more seats at the games you're still though you're still investing them pretty heavily and growth right I mean you race capital your cash flow negative at this point right we're getting to break even yeah yeah you think about having this year uh yeah and you'll raise you think when that happens or no yeah I mean look you know what I've learned doing this is you've got these windows to gain gain market share and like if you can raise money you know while there's still money to be had you might as well go and gain market share because then you can manage the cash flow just offer revenue right especially if you're not constantly feeding new sales fires yep no makes a lot of sense very good let's wrap up here Ben with the famous five number one what's your favorite business book crossing the chasm and number two is there a CEO you're following or studying [Music] no number three what is your favorite online tool for building your business besides your own my favorite Gmail number four how many hours of sleep DK every night six to eight okay and what your situation married single kiddos married and first child due in four weeks oh wow very I'm that's exciting and how are you forty-six last question what is your 20 year old self new ah trust your intuition more guys trust your intuition more coming from screen meet 50 customers paying north of twenty five thousand bucks in terms of a CV again helping people transition to a cloud solution for their remote support teams especially the ones located in call centers right now has about fifteen people on the team five percent gross churn ten percent expansion hundred five percent net revenue retention they're still burning a bit but they have cash flow positive insight hopefully this year five million dollars raise launched in 2014 as they look to scale Ben thank you for doing us the top great Thank You Nathan I appreciate it