How Sevenrooms CEO Joel Montaniel grew Sevenrooms to $43M revenue and 1K customers in 2024.

hello everyone my guest today is knish patel he's the cto and co-founder of seven rooms where he leads the engineering team in development of the software before founding the company he was team leads uh scientific computing at exxon mobil he also received his bs and electrical computer engineering from the university of texas at austin and an mba in finance and strategy from the new york university uh stern school of business connection ready to take us to the top yeah for sure all right what is seven rooms and how do you guys make money sure uh so seven rooms is a reservation seating and guest management platform with a real focus on guest experience and guest data so one thing that we found when we started the company back in 2011 my co-founders and i was that we saw a lot of reservation systems out there that didn't put a focus on gas data we thought that was super odd because these these customers are in the business of providing hospitality and it starts with people and so we thought guest data was the missing component and we wanted to make sure that whatever we built we made that a focus point so what we build is what they call in the industry is a front of house system uh we help the technology the technology managers help the entire guest experience so discovery and booking in dining room experience and then the post signing follow-up okay and is it a sas model these folks pay per month it's a sas business yes okay what do people pay on average for this thing on average we charge about 500 a month per location that's great and and what are they getting for that is it a number of seats number of weight staff number of volume how do you price like what utility-based pricing do you use well i mean essentially price based on location so um so we have a lot of hospitality groups that work with us that have multiple locations that pricing is really on a per location basis it's unlimited users it's unlimited usage um one thing that sort of makes this unique is that a lot of the reservation platforms out there have both the consumer offering and the operator-focused tools we very much intentionally do not have a consumer offering so we've been entirely focused on the operator so just be clear if someone's using you and it's a restaurant that maybe has 20 people come through every night with two waiters and a different restaurant you at a different location with 200 waiters and 2 000 people every night it's the same price point yeah that's correct yep okay interesting um all right got it and then put this on the timeline for me when did you guys launch we started the company in 2011. uh we had done sort of nights and weekends prior for a few years but uh failing at different things but then finally succeeding on this on this concept how do you go from exxon to this i mean how'd this start boiling in the back your head it's a really good question um i started out my career very much on the science side of things so spent a lot of time in exxon's research labs focused on physics simulation high performance computing um but a lot of what i did did not do anything with the internet and so i've always had sort of this burning idea in the back of my mind that i wanted to start something i wanted to build something but i was missing on this thing called the internet and so when the opportunity came along uh with my two co-founders and joel in particular who's our ceo um i've been friends with him since i was in uh like 12 years old so we've been friends for a really long time um so i was sort of his first call when we were first discussing the idea and uh couldn't pass up the opportunity interesting how did you taught yourself to code via exxon yeah exactly so i was a professional software developer there and i led software teams over there and um one of the things that we focused on there a lot was uh was data and processing data understanding data people talk a lot about today machine learning and data science and those types of things the oil and gas industry has been doing that for years and years and years before it was popular with the modern cloud platforms and modern tech businesses but taking that concept and providing it to hospitality so this was the appeal for me hospitality historically has not been a data-driven business it's been restaurant owners who provide hospitality cooking food and providing hospitality and they haven't thought about their business in a very deep way from a data-centric viewpoint and so the opportunity here was can we build technology that doesn't really replace the human touch but just enhances it while all the while providing the operators the opportunity to have a data-driven business for the first time so launched in 2011 how many customers have you scaled to today we have thousands of customers today across the globe uh across 250 cities okay and how many locations uh we don't disclose the exact number but it's in the thousands okay got it um what i'm trying to get to is when someone signs up with you on average are they managing one location or they're it's actually enterprise sale yeah they're managing 100 locations there's there's sort of it's sort of across the board so uh we have independent operators that are sort of the neighborhood mom and pop shop uh we also have large multinational hotel chains yeah yeah i totally get that right you're gonna have customer co-works all over the place i'm just trying to get a sense so your sweet spot is what is it the long tail mom and pop or the enterprise marriott deal it's definitely multi-unit groups but i think the sweet spot is sort of a red herring because we're just as useful for a group that has 10 locations versus one that has mm-hmm so but but definitely multi-unit groups is our sweet spot yeah and just to be clear though i mean someone that has 300 locations versus someone who has 10 they have basically the same needs but there are things you can go deeper on if you really chose to only focus on one of those exclusively sure that's right um and i do think like the more locations the better so we definitely we trend in that direction um but one thing we always talk about is punching above your weight class we want to give restaurant operators the ability to have the capabilities of a much larger organization uh through the data and the tools that's something they haven't had before yeah have you guys decided to bootstrap the company or raise uh no we've raised capital so the first uh we're sort of untraditional in many ways uh the first five years of our company we had raised from private investors and angels and kind of built the product and built the company initially that way and then we took our first institutional raise in the end of 2017 from comcast ventures okay so total into the company today is what uh a little bit over 20 million dollars a little over 20 and how much was from comcast uh so comcast funded about a quarter of that and um and why comcast and was it strategic or what um it's a little bit of both so one thing that's interesting that people don't realize about comcast is that they actually do own a lot of hospitality outlets and they're connected to them through nbc universal theme parks and other things uh so we thought that was an interesting strategic thing uh but more importantly uh the partner that we're working with dinesh morgani um he's someone who understands local he built city search back in the day we thought he was a really great partner to work with and he looked at our business and shaped the team for me today what are you guys at team size-wise and where's everyone based uh so we're about 90 people today uh the vast majority of us are based in manhattan here in new york city and chelsea and that includes pretty much every department from engineering sales to customer success and on onwards uh we do have a few folks sort of scattered in different parts of the u.s from the sales perspective but most everyone's here in new york let's talk more about the sales right so so what is your and you're the engineering side it's probably wrong conversation now with you but your your sales machine right now is it kind of an abm approach inside sales what's it looking like it's primarily inside sales so we have all of our sales reps here in new york uh we do have a few folks doing outside sales but it's primarily inside sales okay so your first 100 customers walk me through how you guys hustled to sign those folks up um through a lot of manual effort yeah but tell me the pain i mean what was manual what'd you do yeah so the first set of customers that we got in the early days we really spent a lot of time building relationships in the industry so one thing about food and beverage and hospitality in general is it's sort of an incestuous industry everyone kind of knows everyone and there's a little bit of a herd mentality as well and so breaking into that sort of club of people that know each other that was really difficult at the beginning how did you do it though like specifically yeah so we did everything from shadow host stands uh to work at nightclubs in the wait what is that shadow host stands uh so when you walk up to a restaurant and they're checking you in for your reservation um the people that work there the reservation is the hosts we would actually go to those restaurants and spend entire shifts dinner and lunch shifts uh behind them asking them hey can we just see how you guys do this and let's see what happens in the restaurant and through that experience we built relationships and started connecting people and that's actually we got our first set of customers interesting okay they're available because they have...