Simplycast Revenue & Funding (2024)

hello everyone my guest today is holly he's the president and ceo of simplycast a leading provider of multichannel automated marketing services which empower businesses of all sizes to create manage and track their own marketing campaigns all right so you ready to take us to the top absolutely all right so for having me nathan yeah so is this help me understand who you're selling to so i'm selling to be b2b businesses around the world okay give me an example of a customer how are they using you so one of our top customers is a university and a bank both of them are using us to engage their clients in a multi-channel approach okay be specific so the university does what so the university is basically helping students before they come on campus to understand the type of services that they're going to be offering and how to basically fit in within um you know the university community uh when they get on campus sms email and voice that's what i say so the channels are sms media and voice um that's good okay so what i mean give me a general sense your sweets but here on average what are companies paying to use your technology annually yeah so uh the large enterprises are probably paying anywhere is between 100 to a couple hundred thousand dollars a year and the small clients are paying on average about a thousand dollars a year okay okay so very different kind of market segments right if you if i forced you into an average is it more like a thousand or like a hundred grand uh average about fifty thousand okay right in the middle fair enough okay and then put this on the timeline for me when you get the idea when you launch yeah so uh simplycast has been around for about 10 years we're celebrating our 10-year anniversary on the 20th of september and how i came up with it is i used to be in the canadian armed forces back in the in the good old days and the armed forces didn't have a way to communicate on a dime and i said there's going to be a huge opportunity for companies uh to basically put together a complete platform of 30 applications and channels and that's how the idea came about so 2009 you'd get going how much did you invest in the technology the platform before your first dollar of revenue uh we've probably invested less than a quarter of a million dollars okay so did you bootstrap this with your own money or did you raise uh we bootstrapped it without my own money and we had about 11 investors uh um basically friends families and fools um that put about 750 000 in the early days to get to where we're at today but that's pretty much the all the money that we put in we don't have any uh any venture capitalist or uh um you know institutional financing that's great so 750 of your own money plus friends and family and how many customers are you serving now today uh there's probably over 300 000 on the on the platform today you have 300 000 universities and yeah okay so how many people how many customers do you have today uh custom uh customers we have never actually shared that information online so i wouldn't probably want to share that today so okay well give me a general range are we talking like a handful of like 10 or like a thousand oh oh thousands yes okay okay so thousands of paying customers and on average um like you know a university when they sign up or your typical customer they're going to sign up a team of like 10 people on the platform or a team of like a thousand users yeah so uh the last university that just signed on board i think had about 180 users is that average i know that's that would be uh from uh you know from a small business perspective it's usually in the five to tens um and the universities is usually in the 50s to 100 this one was a little larger than than most because it became a campus-wide initiative okay so i mean if you've got 300 000 total users right and maybe 10 seats per account that would put you at something like 30 000 paid customers uh yeah sure if that's what you want to guess go ahead yeah well i'm i'm speculating here because you said the you know a sweet spot size might be 10 seats per per customer absolutely i would say thousands for now nathan okay um good uh moving i mean by the way the reason i'm asking is because if you're saying thousands which implies more than a thousand right but less than ten thousand right two thousand times that price point you just gave me obviously you can do the math and that puts you at four million dollars a month in revenue potentially well no no those are the numbers you gave me you just said fifty thousand dollar acvs was your arpu so that's two grand a month times north of two thousand customers is four million dollars a month yeah and uh that's a guess from your perspective but i'll share that information to be clear it's not it's not a yes you just said your rpoo was fifty thousand dollars in in annual revenue that's two grand a month and you just said thousands of paying customers our poo times customer account equals mrr so i'm not guessing i don't like being accused of guessing i'm using numbers you told me and i'm multiplying so if you want to correct one of those you can correct them yeah i don't at this point we don't like sharing that information online well you already shared it so it's clearly inaccurate do you want us do you want you either don't have two thousand customers right or your product is way lower than fifty thousand yeah i don't wanna i don't wanna correct it either so go ahead any other questions okay so well just to be clear when i'm asking you questions i'd like to get honest answers i don't wanna make my audience go a different direction right so understand if i'm going to ask very different questions if you're selling to enterprise versus smb yes right or if you're going for a university market versus an smb two-seat market sure but i can i can't really share that information i'm sorry as a private company syed you did share data points that's the issue you shared them you misled and when i asked the multiplication question you then said they're now not accurate i'm not trying to get you to cut you to share information you don't want to share i'm taking what you already chose to share and multiplying yeah i don't understand no okay and they're not accurate so if you don't if you don't want to correct them i want to just be clear for the rest of the interview please don't give me numbers and mislead because those were not accurate correct okay so growing from 2009 you bootstrapped the company 750 into the company what does a team look like today and how do you kind of differentiate what they're working on yeah so we're developing the roadmaps based on customers and what they're basically providing us nathan uh we're focused on the growth of uh each of the enterprise clients and the various uh capabilities that they're looking at so what is the team total team size today yeah so today we have about 40 people 40 folks and do you have an inside sales motion or is it organic or outbound what's that look like yeah so a lot a lot of our customers come to us based on word of mouth and we do have a lot of uh you know inbound coming in as well and we do uh some advertisement okay when you look at again your enterprise cohort with the higher acvs obviously they're not just going to put a credit card in online for 50 000 ace fees there has to be an inside sales motion there's to some degree how do you set up kind of your inside sales team today how many folks are you know quota carrying yeah so we have about seven inside sales folks that are working uh with our various customers and some of those folks are also account managing the clients depending on the size of of them but the majority of them are basically taking the leads as they come in the referrals are coming from some of the clients and then once that happens those customers are basically upgraded into account management do the how do you how does it go is it like an sdr to an ae to customer success manager or what's the flow there yeah no we've actually reduced that so that's the typical in the industry as you can imagine uh we've reduced it from sales to account management and pretty much everything happens within that account management role okay so you don't have sdrs uh there's no customer success reps there's just account executives and account managers correct and they are usually x account success folks but we've upgraded them into a single so every single customer in our company has a single point of contact and has multiple alternatives okay so you have seven again you have seven kind of aes right now correct okay how do you how do you figure out what the right ratios in terms of like portfolio managed per ae like is it a thousand is it account based like number of accounts or is it size or geographical uh location basis smart questions uh so uh no more than a hundred per uh per account for example um once they sorry a million dollars 100 what per account 100 customers or users 100 100 customers so one one customer for example let's say one of the universities at 180 uh that would be one account manager um and in that case there's a specific quota so an account manager can't have more than five to ten million dollars of of accounts that they're managing and they could hire multiple smaller um you know juniors to support them but the main contact is with the account manager okay so let me repeat that back to make sure i understand other seven account managers right now used to essentially say okay we're gonna be some distribution of our current customer base but it won't exceed five to ten million dollars in terms of annual revenue um if uh why is that an important metric in terms of capping why did you come up to five to ten yeah so basically we found that once the accounts get that large they require a lot of support and lots of potential flying down to see clients and and and so on so basically one a cat one person is not able to manage more than you know five million dollars of accounts based on what we've seen and we've had major issues uh when you know the accounts get larger and larger there's more uh requirements of support we have a service called hands-free for example that we manage and consult on behalf of the client to do a lot majority of the work on their behalf and that's all project managed through the account manager okay guys i know we have other people working on behalf of that account manager got it got it got it okay so you again you you learn through trial and error or five million in bookings again per a is basically the max there so if you scale the company one of the things you know you'll have to hire are more a's exactly yeah that's the there's the the the future of the company where we're going to hire more and more people it's probably going to be a lot of account executives yeah um what will fund that growth uh in other words is you know do you have enough free cash show to fund essentially new ae hires or do you think you'd potentially raise to do that uh we're actually looking at both uh you know for the last 10 years we haven't raised any capital as you can imagine so the organization is organically supporting itself well you raised 750 grand early on yeah correct correct which is not a lot of money as you can imagine it's a lot of money to some people uh absolutely um uh so in the at the beginning of the company we didn't have a lot of money 750 was a lot of money today when we're looking at 10 to 20 million raises i see that as a considerable amount with a company that's been been around for a few years and that's the goal that we're looking at is you know raising some of that capital in the in the near future to allow us to scale up some of the bigger accounts that were uh where we believe that we can capture on the market so you feel like if you do go out and target a raise and you're going to spend the time to do that you'd want to target something in a like 10 to 20 million raisers range correct why take that much dilution um it doesn't have to be it doesn't have to be equity it could be convertible to venture it could be i've never seen a convertible i've never seen a debt line in the 10 to 20 million range with no institutional backing uh yeah and again i i haven't gone to markets i don't know if that's the case or not but if you're saying it i'll believe what you're saying nathan from that perspective we have a couple of firms that have come to us and looked at about a five to ten if uh if the uh if the numbers look right from their perspective and uh you know there's there's opportunities out there you're talking banks looking at five to ten uh like soft bank and things like that but not not a traditional event yeah uh five to ten is not 10 to 20. um i do know softbank cibc there's a lot of companies doing venture debt or some form of it term loans that would potentially do up to you know 6x your current mrr so potentially that's 5 to 10 million but again north of 10 million bucks with no institutional i i've rare i don't think i've ever seen um someone come in that's good to know would you would you only would you do them both or would you try and maybe only do debts you can preserve equity um i think you know at the end of the day it's not just about preserving equity it's about the growth of opportunity and uh you know the right numbers the right partners and the right growth is what we're looking at the dilution is not something that we're too worried about well if you weren't worried about it you would have raised already you actually i mean you've done a great job managing dilution over your first 10 years and growing creatively and organically without dilution right if you didn't care about dilution you would have just raised as much as you could as fast as you could um i think it's a it's a different type of company if we're a sas company i think you would you would have been absolutely right but as a platform company it's a longer life cycle to actually build the capabilities that we've been able to build um i'm not sure i understand what you mean by that i think you are a sas company yeah so majority of people think that we're a sas company simplycast is actually a platform uh company over syntax what do you actually mean by that yeah so we have 30 up 30 sas applications built on our framework that we built from the ground up uh so simply kind of spent probably the first uh you know a couple years building this uh framework in the background uh as an organization which we cannot we couldn't have sold any uh you know to customers back in those days because we were try looking at ways to develop capabilities on top of this platform to make us as efficient and integrated as possible so think of salesforce app exchange where simplicas actually built that model day one okay that makes sense um churn's critical in any sas company when you look at your churn historically right last month what what was it yeah so last month it was 1.3 to 1.4 okay and that's a revenue churn or gross or no no this is this is a client churn okay if it's it's kind of pointless to measure client churn when you have rpus as drastically different as yours are most people will use revenue churn in that case is your revenue turn the same as your logo churn at one point four percent per month no no no so it's probably a little higher than that oh revenue turns higher that means you're churning enterprise more valuable customers uh no and that's the this is where it goes back to the thousand dollar uh you know uh clients uh we have a lot of smaller clients as well that we've built up over the years those are where the churns coming from where the uh with the numbers you just gave me that's impossible any if there is no possible way for logo churn to be to be less than revenue churn if you are churning low value customers uh well it depends because if you lose one one customer but anyways we don't have to argue on no i'm not i'm not sure i'm not arguing with you i'm simply digging to understand anytime that revenue churn is higher than logo churn it means you're churning customers that are paying you more money not your lower tier smb accounts uh correct correct okay you were just saying you're churning out thousand dollar smb accounts i'm saying if revenue turns higher than i just want to make sure i got the numbers right if revenue churn is higher than logo churn you're churning higher value accounts not your smallest accounts yeah so if you look at if you look at the numbers in general certain months we don't lose any major customers but we only use lose some smaller customers and we've lost one big customer just in the last three months for example where the revenue churn was higher than the logo churn so that's an example yeah that's exactly why folks try and measure revenue churn especially when there's big differences so it sounds like what you're saying is if it's like two percent a month revenue churn or 24 you know annually or something like that right so it's around 20 do you have expansion revenue on those cohorts that more than makes up that hole yes okay so that's where the account management comes in we've been basically uh growing some of our smaller accounts uh and multiples of threes for example where you know if a client is paying us a thousand we've been able to expand it to 3 000 years that's easy it's way more interesting to go from 100 grand a year to 300 grand a year yes absolutely yeah i think with the what the with the enterprise clients uh nathan we've been uh we've been very lucky that they're expanding their revenue because they're using the product more and more and this is the other part of the how a platform grows as you can imagine um various companies out there um you know only have one product to sell we have actually 30 products to sell so as some of those customers come on board to only do surveys uh for example or only do social media on our platform eventually they'll start asking for other channels and that's where i think there's an increase of uh you know approved from some of those customers but it usually happens after three to six months that's great all right let's wrap up here with the famous five number one what's your favorite business book uh it would be outlier by malcolm gladwell number two is there a ceo you're following or studying uh the ceo that i'd probably focus on uh warren buffett okay number three what's your favorite online tool for building your company uh online tool uh majority would be just google analytics looking at what's happening in the background number four how many hours of sleep to get every night uh about three and a half to five okay uh you're basically killing yourself why would anyone ever give you money or invest in you if you're killing yourself uh i've been doing this for almost 20 years of my life i go to the gym at least three times a week and uh every time i i check in they said look some people can live with four to five hours sleep and others don't but for some reason i've been able to survive at this point so you have taken it look take an average or past a month you've slept about four hours a night and you can do that consistently without any ketchup sleep no big three hour long now ketchup no i do i do catch up on saturdays only yeah okay so sleep is sleep whether whether it's a nap or catch so what do you what's the pattern there what's the ketchup look like on saturday yeah so i sleep probably about eight hours on saturday okay there you go um uh what's the situation married single kiddos uh i'm married with five kids busy guy how old are you i am 39. last question what do you wish your 20 year old self knew um um that's a that's a really good question um how how how fast the world moves and how slow code can change guys world moves fast simplycast.com helping folks like universities and banks manage communications and automations uh currently serving over 300 000 users across their paid customer base we'll call the paid customer base in the thousands right now launched in 2009 built their mvp for about 250 grand they raised 750 grand to grow the company uh from start again 40 people on their team 24 gross revenue turn annually expansion makes up for that so never even retention north of 100 saeed thanks for taking us to the top thank you nathan i appreciate it all the best