How Smartling CEO Victor Fisyuk grew to $39.7M revenue and 500 customers in 2024.

hello everybody my guest this morning is jack weldy he is the co-founder and ceo of a uh a company called smartling he's a technology early adopter serial entrepreneur software patent holder product evangelist and combat decorated air force pilot before founding smartlink he serves served as an svp of product at e-music and ceo and cto at she speaks and runtime technologies jack are you ready to take us to the top i am it's a long bio thank you nathan hey yeah of course we're glad to have you so you go from the air force to translation services how the hell does that happen i'm not sure actually that's a great question so uh you know i think there's a there's probably a pretty good explanation of that for one thing in the air force i grew up in the air force as a military dependent my dad was air force and then i was in the air force myself and i traveled all over the world i lived prob lived and worked probably 25 of my life outside of the u.s and so i think at some point the correlation between uh you know language and culture and how important those things are became very very clear and it became very obvious that hey there's a big wide world out there of people who are buying products and services and translation is important to that well thank you for your service jack now tell us about smartlink so so you hinted about what it does but what are you doing what's your business model how do you make money yeah so smartling is a software company we're a software company and we are we provide a sas platform a software as a service platform that helps companies to translate their digital content more effectively and more efficiently and so what does that mean it means companies have websites and email and support content and other marketing materials that if they want to reach customers around the world they need to translate into multiple languages and if you're doing that at any kind of scale it's just too hard to email things back and forth between an agency and then try to figure out where to put these in your content management systems in your marketing platforms and with software we can take care of all that for you the moment you create content that needs to be in 50 languages we can capture that content we can organize it we can route it to the right translators around the world and then we can deploy it right back where it belongs and put it in the hands of your customers faster that's what we and give me a sense of kind of customer sizes you like to work with what's the average customer paying you per month or per year yeah so our you know our customers pay us anywhere from you know ten thousand dollars a year all the way up to you know a couple million dollars a million million dollar plus a year and so it really depends on their particular needs um you know if you are a company that's producing a ton of content across 50 different languages and you're doing this a lot around around you know a dozen different channels then you're going to need more software if you're a smaller company or a two-person mobile app that's just starting out and you've got something that could potentially be a hit in the future and you're really just getting started with smaller content a smaller number of languages it doesn't cost quite as much so it really depends on what your particular needs are and how does the tech actually work are there humans involved or is it all kind of ai and natural language processing yeah so it's a little bit of both there's definitely humans involved and while while ai and machine translation you know computer generated translation like something like google translate you know has gone undergone some really incredible advances in the last year or so um translation is still one of those things that really requires humans particularly when you're talking about marketing content and high impact content that's mission critical to your operation but that said you know there are certainly things that we do to help to facilitate faster and better translation and we do that through a combination of software and people so we've got you know we have you know thousands and thousands of translators positioned around the world who understand full-time like what's your full-time team size we've got 200 people full time okay the rest are contractors yeah 10 000 contracted translators around the world yeah so the full-time people are largely around software and sales and customer service but you know when you're translating into french you probably want somebody who's working out of his or her home in paris if you're translating into chinese you want somebody who's working out of here's your home and say beijing and so it just makes more sense to be working with contractors who are working out of their home and wake up in the morning and say hey i've got eight customers eight clients that i'm working with i understand their brands i see the content that's coming in and now i'm ready to translate for that particular company and when did you launch the company eight years ago eight years ago we started the company 2009 huh 2009 yeah so we're just coming up on our on our eight year anniversary right now and uh it's been an exciting ride and what have you have you bootstrapped the company or raised capital uh we've raised capital we raised four rounds of capital we've raised 63 million dollars uh over this entire period um you know we started bootstrapped and if you remember 2009 that was a really challenging financial time so we definitely bootstrapped i put money in and my own experience as a software developer and we started building a team of other developers started building the platform and as we added more and more customers you know we said i know you like numbers here in the yeah this in this talk section of me jack yeah we started out uh you know we started out and said you know boy look i think if we could build a prototype and if we could get three customers three customers to use it and try it out and say you know hey this has actually been really really helpful to us it's helped us to grow our business internationally then we could use that to be able to go raise our first series a that's exactly what we set out to do and we didn't know how much to charge so we sort of tried to look at you know things like well how much costs are we avoiding for that particular company how much time are people spending managing this process by hand in a manual way that's just you know not very conducive to the kind of fast-moving you know bay area startup companies that we would typically work with how much time would be saving them how can we turn that into dollars we got three customers then we went out to the marketplace and were able to raise four million dollars and then from there we said okay now let's see what evaluation with those three customers that many years ago um well i think by the time we finished it up by the time we started the round you know i think we were and you know and we had by then about uh you know seven to ten customers paying us you know you know many you know tens of thousands of dollars on a on an annual basis up to you know a hundred thousand dollars then we you know that we were sort of in a six to ten million dollar sort of value in in that range that was a note or an equity round it was an equity round you know i think it was an equity round and uh and so we've just continued to grow from there and at every step in the process we've looked at what is the next thing we need to do and first it was about getting a prototype that worked and solved people's problems then it was about really perfecting that product and making the product better then it was about you know taking that that uh that product and making sure we could build a repeatable sales process and you know now we're at the stage we're really trying to uh you know to perfect things like you know every sas business is a subscription business you're asking people to pay you on a monthly or annual basis and the commitment we're making is we're going to continue to add new product features and capabilities to make our customers happy and the commitment we want back from our customers is keep paying us by the way jack what are you at today now in terms of total customers yeah so we're at we're at you know let's let's call it rapidly approaching about 500 enterprise customers right that's fine yeah seven to ten in years one and two that's pretty good not bad right it's great um but you know every year we churn some customers some customers leave for any number of reasons they churn because they are going out of business or because they you know they're having other troubles internally are you talking like five percent logo turn annually or 10 20 what is it yeah so that's a great question so you know we think about it both in terms of logo churn and we think about it in terms of revenue churn and realistically because we have a spread of customers that might be paying us ten thousand dollars a year all the way up to a million dollars plus what's really more important to us is revenue churn and so what we're trying to do there is make sure that we can retain as much revenue as possible from here and so look we're always targeting something in sort of the exemplary sash range of about you know eight to twelve percent something in that sort of sort of range is a really great place to be by the way we haven't always been talking gross revenue churn i'm talking about yeah i'm talking about that i i accept that we will not be able to keep every single customer so jack are you giving me the reason i'm asking this is because you can drive expansion revenue so you can actually get to net negative revenue expansion if you're if you're giving me a revenue churn right now are you giving me customer logo churn or revenue churn yeah i'm actually giving you a revenue term but what i'm actually saying is is we expect that of our existing customer base we hope that we will retain 90 to 92 of that revenue every year in addition to that we will be selling more customers we'll be selling more customers and we'll be adding them to our base of revenue i know you love numbers here so the idea is that you know think of it like a bucket and if if in that bucket i am pouring more customers with the top of the bucket but i've got customers and customer revenue dripping out of the bottom of that bucket i want to make sure that the volume of of water inside that bucket is always increasing you haven't spoken to yet which i believe you probably have maybe not expansion revenue so not not revenue from new customers but how are you growing current accounts in a given year is that predictable growth it is predictable growth and because like every sas company we offer a product that you will pay more if you need advanced capabilities if you need additional capacities if you need different infrastructure where are those actual metrics is it number of languages number of countries number of seats what are the utility metrics you price on yeah so there's two products we have and so to answer that question there's really two products that we have one is a product that we call our translation management system it is a workflow management system to help companies to translate content more efficiently the metric there is how much content are you pushing through the system so if you're putting a little bit of content through a couple different languages very small if you're putting hundreds of millions of words of translation across hundreds of languages that's on the back so that's one product the other product we have acts like a content delivery network in other words what we're doing is is when somebody has a website and they say i've got a website in english and we figured out that it's going to take us i don't know 12 to 18 months to be able to recode the application to be able to support multiple languages it's a massive project instead of that what they do is they call us up and we use a product we call our global delivery network and essentially the company all they have to do is let's say their site was you know mysite.com they can create fr.mysite.com for french or d for mysite.com domain management sub domain management and then what we will do is we will deliver then as traffic as a request is made by an end user to the site on the french version we will take that english version of their site and very rapidly we will parse all that content rip out the english look inside the database for the professional human expert translated content put the whole page back together in french or german or chinese or whatever deliver that back to them and so the advantage of that product is you can get to market very very quickly across five 10 50 languages with minimal engineering help and the capacity that we charge for there is how much traffic are you pushing got it so this is that this additional product and the traffic related to that as your number one kind of driver of expansion revenue absolutely that's right so if you are you know if you're if you're pushing a ton of content through this and a ton of people are showing up at all of your multilingual sites and we're helping you sell more then you probably should pay more and now we're starting kind of at the end of the customer journey but let's go back to the beginning what are you paying to acquire one of these bad boys and what do you like to optimize payback period for well it's a good question i mean look when if you if we are we're an enterprise company and so while most of our accounts are you know somewhere in the range of sort of say let's say you know uh you know in sort of the 80 000 plus range 80 000 to 200 000 range so we're an enterprise company that requires enterprise sales and marketing and so that means we have a an incredible marketing team and we're running real marketing you know um programs where we're spending millions of dollars a year on events on more or less than five million um let's call it right about in that range okay that's about five million and that includes that includes google ads facebook ads conferences all that stuff all of that yeah all of that stuff and you know we're smart about how we run things we're smart about where we invest our money but we use the very typical channels that enterprise customers use we use linkedin we use facebook we use google we use events we use seminars we use webinars when you add all this up jack what's your fully weighted cac i don't actually know the answer to that but the way i think about it is i think about in terms of payback periods and so you know i think great sas companies great great sas companies are paying something back inside of a year you know acceptable sas companies are paying something back inside of between two to three years look we fluctuate like many companies and we operate sometimes in sort of the you know 18 month range and sometimes in about the 24 month range as long as i'm somewhere in that range i'm generally happy with it and at an acv of kind of between 80 and 200 and 18 month payback period you're you know you're happy somewhere between call it 130 up to 300 grand in terms of spending that on cac depending on which cohort you're closing yeah i think that's a good way to think about it unfortunately we've got some fluctuation between what our deal sizes are so it's not always that cut and dry i'd hate to spend you know 130 thousand dollars to bring in a 10 000 customer but if i can bring in the right kind of customer and with a revenue with a revenue churn of let's call it you know around 10 something like that what that really means is i've got a customer that's going to stay with me for four five six years and so if i can bring in a customer for 130 000 that pays a hundred thousand dollars a year that's a six hundred thousand dollar lifetime value customer and that's really what we're going for it makes a lot of sense requiring customers and bring them and bring them and keep them customers for life it's great jack now as we wrap up here running out of time i just want to go back a second here so you mentioned 500 customers again 10 grand a year minimum if i divide that by 12 that's about what is that 830 bucks a month times 500 puts you somewhere around what 410 grand a month in revenue is that generally accurate um no i think that's a little bit off but i'm not going to share that number with you so that's okay am i are you am i not giving you enough credit or giving you too much are you above that or below that uh we're about that yeah you're above if i did the math right on this yeah yes so then yeah when do you when do you when do you break the magical kind of 10 million ar mark do you think that's next year or 2019 2020 uh we've already broken that we're waiting oh then you're then you're then you're doing well above 416 grand a month yeah i i think in terms of annual now we're not thinking about it on a monthly basis because our contracts are annual and our customers generally commit to this on an annual basis so i think about it annually but i got it yeah i mean let's not talk about about any more revenue nathan i've given you a lot of information that folks can probably start to think about this but my competitors would love to know what those numbers hey jack just you know that's the purpose of the show right it's for people to think so that's why i ask but just to be clear i want us to give you credit right i mean you're double what i said you're not at 400 almost at 800 i mean there's a lot of credit here you should study what jack has shared in the show apply it to your own companies in your own industries and and learn from them so jack i appreciate that now um before we wrap up with the famous five you know obviously you've raised capital are you trying to i mean what are your growth targets your are you breaking 50 year over year growth or higher or lower well the bigger we get the harder it is to double the business every year and so you know we we doubled the business for every year for quite some time we're no longer doing that but you know but we were just recognized um deloitte has their you know their annual um fastest growing 500 companies and this is the we did it three years ago we were in their top 500 we actually forgot to do it two years ago and we did it again this year and still in their top 500 so our growth rates are are still really in respectable territories i'd always love for them to be bigger i mean every every company is looking for more growth and we're starting to think about you know frankly where are the new products and services that we might build that are ancillary to the products and services we have right now that we can cross-sell customers to make sure that we're growing in an appropriate way so law of large numbers obviously 100 year-over-year makes it gets really tough but can we say you're doing more than so between 50 and 100 year-over-year is that fair uh we're on the lower end of that again people understand that it's tough it's easy to go from one dollar to two dollars much tougher to go from 100 million to 200 million that's right all right very good uh let's jump in here jack and finish up with the famous five number one what's your favorite business book favorite business book i love the book that's called um thinking fast and slow that helps uh that that identifies um and and i'm you know and i probably should have prepared for this part of the conversation because i know there's something that you do thinking fast and slow is a terrific book that talks about um you know our brains that are thinking brains and our brains that are left over sort of lizard brains and the kinds of parts of where where we are evaluating uh opportunities and circumstances and who we should elect and who we should marry and all those kinds of things and the fact that sometimes we make decisions based on very thoughtful careful analysis but an awful lot of times we're making decisions based on sort of that snap judgment of what happens um you know as we're as we're making uh you know quick decisions on things and sometimes those don't always have it's a terrific book it's honestly one of the most profound books i've ever read and number two is there a ceo you're following or studying right now you know i look i actually really think that uh you know i i really think that tim cook is doing a really pretty incredible job at apple um i think he had some big shoes to fill and i think that he recognizes that the iphone still has a lot of life left into it from a growth perspective but is also starting to think about what's next maybe that's self-driving cars maybe that's some sort of augmented reality i think that uh you know the the transformation that apple has gone under to uh and that you know is under tim cook's leadership where you are you know leasing phones phones now are not really many people are not buying them outright they're actually leasing them and that is becoming apple's own sort of sas service offering i think that's a really pretty tremendous transformation that tim cook is leading number three what's your favorite online tool favorite online tool um you know that's a really good question just and what's your situation married single you have kiddos married kids how many four kids four kids all right and jack how old are you i am 48. 48 and how many hours of sleep to get every night about uh 4.8 that's pretty very specific last question takes about 28 years what do you wish your 20 year old self knew you know i've had a pretty good life i was a military pilot as we talked about earlier for 10 years i'm i've been an entrepreneur you know i'm running my own business here um you know and um you know i mean i i've lived all around the world not a regret though just something you wish you knew yeah something i wish i knew um i probably wish i knew i probably should have spent a little bit more time earlier on in my career really understanding how to sell really understanding sales sales drives business yep there you guys have it from jackie would have spent a little more time earlier on in his career understanding sales contributed was in the again air force for 10 years as he mentioned then got out used that discipline to found smartling in 2009 they've since grown helping many many brands over 500 large brands scale their content online across as many languages really as they want they were doing about 100 year over year growth now obviously closer to 50 year every year as they grow you know doing kind of on the 800 grand ish per month range churn uh payback period all that stuff super healthy he optimizes his payback period for between 18 and 24 months they raised 63 million to continue growing the business with their team of 200 folks uh based in new york and throughout the united states jack thank you for taking us to the top thanks dan that's great