How Smartassistant CEO Markus Linder grew Smartassistant to $12M revenue and 100 customers in 2018.

hello everyone my guest today is Marcus Linder he's the chief executive officer and co-founder of smart assistant the leading global technology provider for digital advice and guided selling technologies for online retailers manufacturers and service providers over the last 11 years on their marxist guidance the company's guard internationally with offices at several locations and three continents markets are you ready to take to the top Gary decided okay good you have a new title tell us about the new title and what prompted the change yeah I'm president and CEO of the company so we decided to bring a new CEO on board like an external very experienced CEO because we see a huge opportunity and we're growing like crazy and at the same time none of us to be honest a proper job before founding smart assistant and now was really the right time to print some professional management into the company and that's why from now on serving as president as you know I want to talk more about how you kind of made that transition of smooth one a little later in the interview but first take us to the top right smart assistant what are you guys doing how do you make money so smart assistant is a software service solution that allows brands and retailers to build and optimize intelligent sales assistance so our software would do the job that millions of great salespeople do out there every day figuring out what your needs are what the requirements are in recommend the right product explain why there's great fit and you know allow you to take choices so just to give an example if you today I want to buy a new mattress and you're not an expert in mattresses you really struggle on life figure out hey - I need a format for mattress Latics mattress but what smarter system does it engages with you would ask you questions like do you sleep on the back on the side on the front what's your rave do you suffer from allergies and then make that those needs onto the right product features and recommend the right products to you and we do that not on the website but also through chat pod on Facebook Messenger or even through voice on Virtual Assistants like it's just almost question based selling especially for e-commerce products yeah I would say need-based telling but it's not only free commerce product so our customers our banks our customers our telcos our customers our retailers brands it's a very project because if you think about it we as consumers we need to every day we take choices in so many domains and we are confronted with a huge amount of choices and at the same time we are expected to almost become an expert in between each damage of those domains before we can choose next obviously leads to a lot of abandonment people don't buy stuff at all they go so markets just to be clear though all your kind of questions you're asking your or your needs you're identifying it's the goal is to drive to a sale in orange are not doing like customer support for a bank with automated chat BOTS yes we do that as well so there's a marketing product or become a sales product and you can use smart assistant for customer service as well for guiding traffic routing like hey ever promise my card what's the problem lost stolen rejected which country are you in then it guides you to a solution since digital advice okay I got it and walk me through give me a sense of kind of what the average customers paying you for this product per month they're difficult to learn the question because you can start with smart and free of charge with a freemium product that allows small brains we tell us to start completely free of try free of charge and our large customers you know it goes up into the millions so it's difficult yeah I understand I understand a nuance but we're short on time and I don't want to go to on every customer cohort just give me a minute general average are we talking 100 bucks a month ten thousand bucks a month generally what are folks paying per month no it's right a lot of debt so like to pretend to a hundred thousand and more okay 10 10 200 thousand per month so very much in the enterprise space yeah okay very good and then walk me through some of the backstory here what you did you launched something in sorry say what year did you launch the company in where when the company correct yeah we launched a company back in 2006 as an agency building and optimizing guided telling solutions for our customers so we really hard coded those solutions and about four years ago we decided and I got the first investors in we decided to really make a software service platform out of it allow our customers to build and optimize those advisors instead of always us being the ones who have to build an optimize those prices and since then things move into the very right direction so you raised four years ago that was would've been in 2014 how much did you raise so we raised about three million dollars from angel investors the original founders of ICP Hybris so Hybris is an e-commerce platform that consult 2sp for 1.5 billion dollars and their former CEO and a couple of folks around him as invested into us any moments was that it was that a convertible note or was it actual equity that was that was equity and that was were multiple citrons and lasso 16-17 we got ABC on port UK west based DC within a six million dollar round so today you raise nine million total yeah okay and and then give me a sense of kind of what you've scaled to in terms of customers how many customers are using you now yeah we are with more than hundred customers we have in terms of the teams we are more than hundred team members across US Europe and we are growing at triple triple digit percent year-over-year so what was the growth last year we're talking like a hundred percent or four hundred percent LuAnn okay is it can we put a row began is it fair to say you're going somewhere between a hundred percent to another percent year-over-year is that fair okay very good and and so walk me through the transition why bring in a new CEO yes mentioned onion none of us really had experience in a company before starting smart system decided to model system to students and we had to learn everything by heart and we figure out that you know it takes a lot of energy a lot of pain if you really need to learn everything by ourselves and we figure out that there are people out there that have built already magical companies that have already lots of experience in scaling a sales team and with this huge amount of growth you know obviously that also brings that's super exciting but also shows showed us that it was the right time to make that transition and yeah we're very happy about it was it part of a round was a part of the six million round around we went to a board and said hey guys we had to convince them actually and say hey you know you really think we have I mean one thing that I learned as an entrepreneur is that you need to focus on your strengths and I have a lot of strengths in going out there angel eyes in the world exciting people in building and maintaining a very strong dish but I'm not necessarily the best manager I'm not the best you know scaling person out there and I [Music] am too excited about our mission and burnt through too hard to make that happen that I you know just because of ego reasons would say hey I need to remain as CEO of this company forever what's the team size today so we're more than hundred modern hundred people okay where it was everybody based New York City Vienna Austria and Bratislava Poland from yeah from West East god I hope you can see I mean kind of disability men yeah and you mentioned you mentioned you did some expansion to Austin Texas what was an awesome that you liked so initially actually sales we started in New York right away I wanted to say send my first till two records up to Chicago but she said it's way too cold there I want to go to New York or else I won't go so I had another chance to say okay and in Austin that was also like a fine situation because we hired a girl in Vienna as our first professional services team member for the US market and she wanted to go back to Austin and so that was the obvious choice for us to start our professional services team in Austin and later we figure out that we need to bring the team together and really focused on New York City we also have sunny whale but the core team is New York tell me about charm cheering we have a single figure generate in terms of annual charm Anna's logo or revenue both so in both eras it's it's it's one one one two one two your percentage number yearly here customers we see Cheung and I'm sorry is that is that gross or net that's our our gross terms so we have a positive net retention rate so a customer is going quite nicely in spite of that we churn customers and Charlie really completely comes just from one sector which is we can't be up to our early weekend customers are in serious troubles at the moment and just simply can't cool that strategy off anymore to become their customers trusted advisor and don't have the manpower and resources to pull that off and unfortunately some of them are also going out of business and this is where we see the generators when you look at net revenue attention annually I mean how far above 100 re are we talking 1 105 110 130 yet in the range 110 plus temp okay that's great and most the expansion revenue where is that coming from as upselling additional seats or upselling additional products or something else so we sounds with my drivers we have Isis starts...