How Seven Lakes Technologies CEO Sowmya Murthy grew Seven Lakes Technologies to $7M revenue and 30 customers in 2021.

hello everyone my guest today is swemia murthy she is the chief customer officer at seven lakes technologies that leads to go to market teams and bringing to market join a sas leader in modernizing oil fields with a fluency and mission critical systems and galvanizing change-resistant organizations she served on ceo's top council for 20 plus years so um you ready to fix the top absolutely nathan let's do it i'm glad you're here all right if folks want to follow along it's j-o-y-n-a-i join.ai what does it mean swimming to modernize an oil field great question so for for fundamentally oil and gas industry has two parts one so super technologized that they're drilling in ways that are uh that has changed the entire oil and gas industry and made us the united states more energy independent a phenomenal story of entrepreneurialism that actually outbeats even technology industry right they grew from zero to 70 to 80 billion in a matter of few years and it was a phenomenal story now track it all the way down to up to 2015 that's the evolution happened at the drill bit but when you move past the drill bit the market there was funded with a lot of private equity and a lot of funding uh and financing went into it because when it makes its energy independent two it gets um uh really the there's a way for upstream oil and gas to move in now what ended up happening is for all the places around production human resources were being used they were using grease sheets and paper to be able to drive millions if not billions of oil production data from the place of where the oil is produced to the office space so your entire inventory and production and everything else is run on grease sheets and you've got this dichotomy is that a physical cheap that's printed off yes sir in a mason jar in a mason jar and and what's mind-boggling because i've spent four years boots on the ground with hard hat and in these uh trucks with pumpers and noticing this unbelievable technology that's happening right next to a mason jar right and so i'm giving you that picture because what now fast forward in the last five years this industry's been punctuated by two not one oil oil price madness which by the way also has inhibited our trajectory in a way but here's the thing what's beautiful about this if i may call it beautiful is there is no other way now for the industry to grow with that so what the market is now saying to the industry is hey look you can't just do production you need to show me free cash flow you need to be able to demonstrate operational efficiency which means what you can't just when the oil price goes down just you know take out the human resources you need to now figure out technologies that allow for your production to happen without needing without needing to go to those wells that are um that aren't producing as much right this is what your software is sort of when did you launch what what year the company launched well the company was doing services in 2009 all the way till 2015 we this is before the first oil price dip and we raised 20 million dollars in series a i came to 2015 okay 2015. and i was brought on board uh to be able to drive specifically marketing back then nathan and with the intention of uh revenue growth uh towards analytics and the market shifted and a whole new world opened up for me as well as seven lakes and my role over the years has shifted from marketing to owning all of sales and bringing in our uh largest enterprise deals and also to own customer success and customer operations in 2015 it was still services business what were you selling on a consulting basis yeah great question um analytics services because uh most of what uh the fundamental issue with the industry was there all these siloed stovepiped erp and legacy systems none really talking to each other and at the time yeah you had spot firing those but none that understood the complexity of uh the industry so we our bread and butter has always been understanding the core structures of all the systems data structures of the systems underneath in fact our ceo on his his passion is around data architecture and you know he's a if i may call him a data geek that's that's his core passion um that's where we started give me a sense of how large this services beach that was in 2015 do you remember what school of services revenue was um i know up until that point uh the company had sold around 100 million dollars in services so he had uh of course of years right so i don't have an annual number but uh shiva had already accomplished what many entrepreneurs would love to see and was doing it in a services business and his intention at the time was come on let's productize so we can get out of the you know services business and actually create products that then drive as you know better evaluation so most sas owners are shutting down a 5 million dollar agency to go full time into sas shutting down 100 million dollar revenue line to bonus that's a whole nother story like that couldn't have been an easy decision i'm sure it was and so by the way that was a total but you're right uh shiva shiva's choice to go and do this and by the way this is one of the reasons i love working with this guy he's just phenomenal um uh he makes some of the most maverick bold moves because at the end of the day what he cared most about and what he saw coming down the pike was services wasn't going to solve the cup industry's problem because here's a two a big thing that was not happening in the industry nathan the industry stalwarts or incumbent uh software companies not innovating taking in 18 plus support dollars literally showing up with powerpoint presentations that 12 18 months later wasn't even productized so he saw that and went holy i can do data all day long but fundamentally if the data being captured which is complex readings and the scada instrumentation big data none of these are being put into mobile applications i mean imagine it was 2 000 freaking 15. yeah and industry still hadn't who were some of those companies who was the biggest company and and they still are p2 uh energy solutions um uh peloton is another player quorum is another player and and fundamentally when we dug under the covers and start to do research and i'm hesitant to throw a particular percentage but let's just say we have about 90 employees 50 of them are engineers because we knew there was so much innovation we needed to do and we're today today yeah whereas uh when we spoke to folks on the other side 300 million dollar business p2 though i i can't quote the exact number but i know it was in the low 20 percentage points a 20 point in terms of again i'm hesitant to quote a number because i don't know yeah so tell me so your software today what are companies paying on average to use the technology um they're about uh two three buckets because of the size of the company so uh a a large size deal would be anywhere from 300 450 000 to a largest customer would be around a million a year yes yes and and uh they the that that directly connects to reduction in their downtime downtime means they're not producing oil and uh significant cost reduction in the number of people needed uh once we install our software our customers claim themselves not us uh each uh pumper reduces two hours of their day in their workload two of the eight hours and how many of these folks are you working today how many customers um we have about uh 30 customers and today we show 25 but here's what's happening in the industry of those five we've really actually lost two because three others have merged and um what we consider lost another big company will buy another company so uh we end up gaining in some other areas does that make sense so our overall revenue has remained um uh flat in 2020 yep interesting uh okay and and so if i take 30 customers i'm sort of a 300 400 thousand dollar average hd i mean what you guys are doing i mean you might be close to a million a month right by the way 304 and then there are a couple of uh uh there then there's a 75k mark and a 150 mark usually people fall into one of these three buckets yeah so have you guys broken the million dollar a month mark yet on the recurring sas business uh not yet not yet so we are at 7 million arr today can you break do you think you can break 10 12 this year uh this year is going to be uh we've budgeted it no so it won't be this year and i'll explain a couple of reasons why last year when we remained flat this year what we did last year what we did was uh sitting down with shiva we said you know what we're going enterprise and this is the part of the story i wanted to share up until last year nathan we were doing we went from services to enterprise not true sas and what i mean by that is we were still falling in line with the way the customers were buying these long rfp processes laborious you know uh uh pricing negotiations all of these other aspects that are really not sas based and doesn't allow you to grow in that trajectory right and also on the back end our systems weren't allowing for single deployments true ability to push out features at least a monthly reason because we were being held back by hey our customers don't move so last year we made a tremendous shift internally we took 68 months to re again re-gut ourselves another bold move from 2017 to go oh man we've got to go through sas so three big things we changed we completely upended our pricing it was traditional p2 what our...