Socialoptic Revenue (2023)

hello everybody my guest today is benjamin ellis he's worked with companies including cisco juniper networks during their fastest periods of growth he's a technologist and serial entrepreneur who's worked at the cutting edge of tech for over three decades and is passionate about what technology can achieve particularly particularly at the intersection of people data and software he's now building a company called social optic benjamin are you ready to take us to the top i absolutely am nice and great thanks for coming on man i appreciate this tell me about the company what do you guys do and are you a pure play sas company so we are a pure placeness company and what we do the clues in the name so social it's all about people and people interactions optic it's about transparent measurements and really what we do is take those measurements and present them back to people to help them make better decisions okay give me because when people hear social they assume like some consultant that doesn't know what they're doing right so like tell me tell them why you're legit okay sure we had a funny time once somebody we kind of went in and they said are you here to install the socialist system it's like no no no no this is not a political thing it's really the fact that the business you've got the capital but the biggest asset you've got is the people right and what happens in the business is they interact and that's what social means to us is the interaction of people my background originally was i was an engineer and then i retrained about 10 years ago and did a psychology degree so i kind of sit on the bound of those two things looking at people and how they interact kind of like a lot of people would look at a software system i look at people that way if that makes sense interesting okay so you've got a couple products surveyoptic this before that decisioneer milestone planner are these all serving the same customer base or they're all different cohorts so they there is a there is an overlap and they're all different takes on that that same thing so milestone planner takes people's goals and presents that back as data this before that helps people map out the dependencies so it's all about getting things out of people's heads into a web-based stash where they can look at that and make better quality decisions and interact around it right so you can get the whole team to see kind of what's inside your head and then say optic which right now is our fastest growing product um is a is a more general exposure of the platform that's a sas product let's people take any question set and turn that into something that gives you real-time data that you can present in the dashboard so it could be customer satisfaction it could be employee engagement and it kind of drives the the team then around those metrics is like a survey monkey kind of layout mps score things like that yeah kind of so those tools will focus on collecting the data and that's great and useful but what makes data really powerful is being able to present it back to your team in a clear and consistent way because if people know that something's going to be measured that's when it starts to drive behaviors right so that's really what we're about is making people think about what they're saying get a really accurate map of the territory to make decisions around so it's it's not just declaring it it's really how you personalize that data to make better decisions interesting okay so average customer because i'm sure you have a bunch of different cohorts i don't want to go down every single one but on average what is somebody going to pay to get access to all this are we talking a grand a month 10 grand a month a million per year i mean where are you at yeah so the the middle is 1k dollars a month that's like kind of median a thousand yeah okay and so there's a really big range then because we've got you know on one hand like a small veterinary clinic and and on the other hand you know a big pharmaceuticals company so there's a whole kind of spread of different folks in that but we we kind of aim for that one care a month medium okay makes a lot of sense and that that could be them using any combination of products or any one product but that's kind of the median yeah interesting okay we want to talk about more about that later um in terms of how you drive expansion across multiple product lines but first when did you launch the company what year so we we've actually the original idea was eight years ago but we spent a good few years kind of uh went off and did other things and then came back and realized that this was the kind of one good idea that we wanted to put energy behind um and really built a set of tools that we as a team wish that we'd had when we were founding other companies if that makes sense and who's we how many people on the team today so the the kind of cool team is a dozen folks we've all built and set up our own businesses so it's a very unusual team uh older folks and and we run the business in a way that's kind of compatible with that and that's kind of one of our ad differentiators nobody works full-time every works a maximum of four days a week and we really encourage folks to have other interests outside of the business so that when we're talking to customers and it's mostly kind of cxo level we're talking to we can have a peer-to-peer conversation with them so interesting just to be clear it sounds like you guys are your own power users and because that allows you to get inside your own head you then spend four days a month basically building these systems which you all then use to automate your systems and the other stuff you do three days a week that's exactly it so we kind of break some rules there in terms of kind of building the product that we want but we realized you know it gives us really good customer insight and then we keep that up to date by by making sure that we have in-depth conversations with customers around what they do benjamin that's to me that feels like such a smart model uh like a really intelligent model now hold on i'm trying to think about practically how this would work do all 12 people have are they all in the cap table uh yes they are and wow kind of employee ownership is is an important thing to us that was i'm i my early career was in silicon valley i came back to the uk and the uk has taken a while to kind of get hold of that from a tax point of view but we're kind of there now so i'm i'm uh here in london um so yeah that i think that people need to own the thing that they're behind so they can bring their full self to what they're doing yeah and and how many customers have you scaled to today over the past eight years so through the kind of range of products it's in the tens of thousands now and those are different usage levels some customers kind of come in and use stuff literally once a year others are in every day because of the the range of different tools but if we if we so instead of looking at kind of historical data we'll just take a snapshot of today like each month how many people are would you say are using it and i'm not talking free plans i'm just talking paid customers per month yeah so we pay at the um the kind of business level which is set to the user so some of our customers might have 10 000 users on the system to kind of give you an idea so for us it's less about monthly active users we're looking at whether each of the companies is engaged that make sense it makes perfect sense yeah so how many companies yeah so it's in the the tens of thousands of and those are distributed um between kind of europe and the um the us and also australia so we've tended to to stick um to english-speaking countries for the most part although we part of our growth path is to do what we do um kind of more broadly across europe um but there's some kind of fun and games in europe as you're probably aware at the moment around kind of uk's position in europe yeah so so we're kind of focusing on going in depth in the uk and then once things are settled will will start to hit europe a bit more so so benjamin hold on help me out here i think i'm missing something so you mentioned that kind of your average your mead price point was about a grand per month and then you just said you had over 10 000 kind of paying customers that would obviously put your mrr at an astronomical level am i what am i missing up there so for us it's a journey of customers going through and you kind of you talked about customer acquisition and one of the challenges as you know with assassin's business is it's getting increasingly expensive to acquire new users so we have a model that is um it's kind of like a premium model but it's really letting people use the tools get on board with the tools to the point that they realize the value and then turning them into paying customers and then networking from that so most of our users because it's b2b will change company at some point in a 12 to 36 month period so what we do is we kind of bridge those gaps and that's that customer acquisition model so it's very organic it's very slow it's not adwords driven and it's purely um you know word of mouth effectively through through those customers and then giving them a way to get the tool in the business help them realize the value of the tool so it's a it's a slow conversion for us from the kind of free users to the paid users okay so which of those two numbers and would you edit would you say the thousand dollar average price point is too high or you're or you're less than ten thousand paying cost paying companies so we we've basically gone through a transition so when we started the business we were kind of down at the you know nine dollars per seat type model and we realized that that's you know really difficult to scale for the level of engagement we have the customers so over the last year or two we're transitioning to to an enterprise model where oh so i see legacy to migrate across and that gives us a much better cash trajectory than where we were at before i see slower churn level as well as you know is engaging with an organization as a business to way way below five percent whereas when we were dealing with individual users as you know in that space the churn rates are much higher and and the costs don't play out so you said your churn today is less than five percent per month yes that's sorry that's overall customers so that is logo churn what about revenue churn um so that would be in line with that probably lower because the um if you're churning cheap if you're churning cheap if you're churning lower rpo customers your revenue turn will be lower than your logo churn yeah yeah that's great look how that makes sense the enterprise move so i appreciate you kind of explaining that um so would it be more fair than just take that nine dollar per month kind of model times ten thousand you guys are doing about 90 grand a month something like that right now may well be in that region yeah okay i just want to understand because those are i mean that's the difference between 10 million a month and 90 grand yeah we're still we're like yeah part of um the kind of uh kind of joy for us is that for all of the founders we've all done big vc backed businesses um and so this is an opportunity to a run a business in in a slightly different way that kind of suits with what folks want to do but also kind of like yourself it's really good fun because we get to talk to really interesting customers who've got these kind of high scale companies with with less of the vcs jumping off their back the whole time can you tell i enjoy this by the way i mean i feel so blessed every day i get to talk to founders at like 30 every day it's great well yeah and i think that's yeah like what you want to do as an entrepreneur like go out and talk to smart people it's fun and you learn that way and it's way cheaper to learn from other people's mistakes which is something exactly so just to do that and just to be clear you so you guys how even though you do have vc kind of in your past you are you have bootstrapped this yeah so literally when we started searching optic it's like we've all done the vc thing and it's kind of okay what could we do with literally the cache in the back back of our pockets that's great okay and so what that was how we stopped as a bootstrapped company i always appreciate getting getting data points on how fast bootstrap companies are growing because it's unrealistic to expect 90 100 110 year over year growth bootstrapped in fact 30 40 year-over-year growth is great for bootstrapped companies so if you're at call it 90-ish a month today in terms of revenue where were you exactly a year ago oh like a fraction of that so now we're on it's kind of good to hear those figures so we we kind of track for 100 year and year growth it's kind of what oh wow on track for now so it is and that was the hardest learning i think for me you know when you've got vc money you can you can invest in your marketing you can grow really fast when you're bootstrapped it makes you really focus on like every dollar and everything happens way slower i think for the like the you know the first year or two of the business it was like are we doing something wrong here and it wasn't until we found out the folks bootstrap that you realize that you're going to move at a different pace but benjamin sorry just to be clear i mean if you're going 100 year-over-year that means you're doing caught 40-45 grand exactly a year ago and you've essentially doubled year-over-year that's actually really i mean that's pretty high growth for a bootstrap company now obviously there's our smaller numbers but that's still healthy growth for bootstrapped you're making me happy sir and i think that's that's one of the things as well as a bootstrap founder like the the access to expertise is is much lower but it's been a it's been a real kind of learning experience from that point of view that you you know it's it's harder to move stuff yeah are you are you in terms of running the company in terms of strategy are you basically operating it right at breakeven you're reinvesting exactly everything you make back into the company but nothing more nothing less that's exactly it so putting the money back into the into the growth um which yeah again it's it's interesting how it drives different decisions it really makes you think about how you're investing every dollar not to say i wasn't careful with vc money um but you you when you've earned those those dollars you're you're much more precious around where do we put this it's going to make the maximum impact to the business um a best support team best of all the customers yep and you said all 12 of you guys you're all remote or y'all in one spot yes yeah and so that was that wasn't was another thing of kind of doing an inside out company um you know i think a lot of vcs are kind of we're only going to invest if everyone's in the same room in the same office and i understand that now um but actually you know you know technology is such that kind of where people are doesn't matter if you trust your team you don't you don't need them in the same office yeah that's right and then last economics question here before we wrap up with the famous five you mentioned kind of cac as kind of freemium and then kind of land and expand i mean when you look at your fully weighted cac to get a new nine dollar a month kind of seat is that truly zero or or there's there's no there's no cost there um that you know we still do spend on on marketing but for the kind of b2b model where we're at acquiring the businesses it is really really low because it is is word of mouth because the other thing we've found is a lot of people when they look at that kind of look at what this thing and marketing there's also the issue of what do you spend in on boarding that customer and so one of the things about kind of customer gets customer is the folks who come in and much more up to speed with what we're doing and how the tools work so we don't have to spend so much time with them in terms of onboarding onto the platform because that's an important part of your account obviously it's not just the marketing cost it's what are you spending in support talking to those folks getting them up to speed on the course yeah benjamin very good let's wrap up here with the famous five number one what's your favorite business book my favorite business book is five dysfunctions of a team by uh patrick lentioni you've got to build a great team you've got to make them work really really well together trying to i just read that and i don't know where i set it down but yes that was a i think it's up there that was a great book uh number two is there a ceo you're following or studying right now yeah yeah and it's a familiar name right jeff bezos but more because of the way that he communicates things and i think that's you know it's not just about what you've got there it's how you communicate out to folks he's a very good communicator number two what billing tool do you guys use or number three sorry what billing tool yep uh yeah so we use stripe um for all of our billing i love it what do you use any analytics tool on top of that no we've built because because effectively a part of what we have is analytics platform we use our own dashboards to do that in our own ai to do that as well i see number four how many hours i sleep to get every night so um my kind of minimum uh paint threshold is four hours but if i'm learning stuff then i need more sleep like 10 12 hours if i've if i've read a whole bunch of books learning stuff but otherwise four hours i'm good that's crazy low okay what's your situation married single kids i am married and i have four kids which taught me half of what i know wow and how old are you benjamin uh i am now uh i had to think about that 48. i try not to think about it i pretend i'm 21 still hey that's good 21 years young uh last question what do you wish your 20 year old self knew uh find great people and listen to them really carefully guys find great people listen to them carefully has a lot of tech experience ultimately founded company called social optic back in 2010 they went around a little bit then found kind of their path they started off with like a freemium model call it nine bucks a seat great about ten thousand customers so call it 90 grand a month up from 45 grand a month just about a year ago 100 year over year growth bootstrapped which i love they're now doubling down on kind of an enterprise model so higher rpoos higher acvs land and expand approach team of 12 they only spend four days each on the company the rest of the time they spend building their own businesses and using the tools that they build in the company it's kind of like having all your customers on your cap table which is great they're all remote less than three percent revenue churn per month so healthy economics as they look to scale totally bootstrap benjamin thanks for taking us to the top thank you seth