Solidesrevenue, valuation & funding

hello everyone my guest today is alessandro garcia he's the ceo from solidades a startup that provides an hr behavioral management software platform to improve performance and reduce turnover costs it's a sas company with 100 employees and more than a thousand customers in brazil he's a statistician from ufmg with courses at stanford and berkeley alessandro are you ready to take us to the top okay thank you very much for having me here you better so tell us tell us more about the company is it a thousand customers today what's the company do we provide a software using official intelligence to identify behavior and reduce turnover costs uh we know that the people are hiding for this the hot skills and fired for their behavior and then we are trying to figure out how uh people will have have a better fit to the curtain company got it and what is the tell me understand what does the average kind of company pay per month to use this technology in highs 600 highs it's closer to uh one and a half hundred dollars a month 150 a month yes yes okay so it's a very cheap software just to a small and medium business sure you know 150 bucks per month and you said most these customers are in brazil yes we have some customers in portugal in uh us we have one and some cultures in america latin america but uh our focus today is in brazil okay and behavioral management software so if i take 150 kind of monthly price point times a thousand customers you guys are doing what about and fifty thousand dollars per month right now yes close to that okay okay i i believe uh one uh yes uh um a little more than one one million and a hundred and five hundred you mean 150 000 u.s yes yes okay just want to make sure it take me back a year what were you doing a year ago in terms of monthly revenue uh half then that half yes we are uh tracking the triple triple double double double uh we are growing this year two times uh what we got last year that's great now are you doing this bootstrap drop of your race capital uh alvia bootstrap you are bootstrapped that's great and when did you launch the company what year in 2015 uh we we we had the software before but in 2015 we change all the strategy to uh sas software and starts to provide some features in hdr uh basis like employee records and climate survey and etc and uh starts to correlate this information to identify uh some patterns some some kinds of uh correlations in information about the behavior and performance to to find that uh very good information to radio people and provide some benefits on that you're in a very crowded space kind of behavior management platform for internal teams what do you do that's unique to other tools that you're competing with we are correlating behavior with performancy and turnover in the world ibm is doing something like that with watson and uh what we are doing is to make the software to learn on what uh will perform better in employee management and turnover and see and provide this kind of information to improve performance and reduce to normal i believe no one in the world is using behavior algorithm to you to to make that it's only to see how people works in hiring process yep it's interesting um i'd like to understand more about kind of how you've grown to a thousand customers so what are you paying right now fully weighted cac to acquire a customer it's close to five hundred dollars okay 500 which and if they're paying 150 bucks per month your payback is between about four and five months is that right yes exactly and where are you spending that five hundred dollars uh in marketing we are using inbound marketing uh basically uh our strategy is focused on small and medium companies then about marking this work it's working very well and in inside sales process i believe that it's all of our costs to to acquire a customer and what's your team look like today how many people one hundred five fifty people win come in sales one five zero yes so 150 people total on the team and how many are sales no no sorry at 100 in total uh the team huh 50 is in the sales i see that's a lot of people in sales are they all quota carrying yeah they are doing good uh we are trying to improve the performance in the sales process but today it's giving us a very good uh performance now you said you're bootstrapped which means you're cash flow positive today right yes correct how do you pay a hundred people when you're only doing 150 000 a month in revenue we start to grill the the team uh in while we get money and then uh today we hire people when we have money to do that and uh but just to be clear you if you have a hundred people today and 150 000 a month in revenue that means on average if you use all that money for a head count you're only paying them about 1200 bucks per month yes so that okay so labor's just really cheap where you're hiring uh yes we have a cheap labor here in brazil uh i believe uh it's close to the market it's because the market where we are then we can hire people in the the the the low costs okay so is there are all 100 people based in brazil yes okay everyone everyone's in brazil okay um last few economics questions here so churn is critical in a sas business what's your turn today 1.5 1.9 a month and that's revenue churn that's logo sure revenue is 1.2 percent a month okay so 1.2 1.2 times 12 months so you're turning about 14 of your revenue each year yes okay and what are you growing customers by what's your expansion revenue uh sorry i didn't understand the question that's okay do you have expansion revenue so if someone that signs up a year ago for 150 bucks do you expand them to 300 or 400 the month of the week sorry the year after uh we are taking the march of uh 15 of the lifetime value to uh to to to retain the those customers okay wait sorry you're expanding the account by 15 year-over-year uh 15 the year over year of the lifetime value then we got the the the price where the people were paying in the monthly basis and we are getting 15 to retain these customers okay i'm not sure i follow you you what do you mean you get 15 to retain those customers we are allocating uh that money to to make the vacation you're allocating 15 percent of the revenue to retain them exactly oh i see you were saying very cool all right and those are like on like customer success representatives or something like that yes okay that's very good and you said you're bootstrapped are you looking at raising capital yes today we are uh receiving a lot of uh proposals but uh we are trying to select what uh fund will uh boost our company to an other stage yep so if you do raise capital how much would you want to raise in an ideal world chill three million uh dollars at the first round okay so if you raise three million bucks what valuation would you want to raise at ten million i don't think we are looking uh well do you think sorry do you think 10 million is pre-money or post money pre-money free money yeah we we are looking the market uh here in brazil they are paying six times in average of the arr then uh i believe i believe we are growing faster to to look for some multiple like that yeah that makes a lot of sense to me makes makes perfect sense very good well let's alessandra let's wrap up here with the famous five number one what's your favorite business book oh i love books let me see um i i can't mention just one book but uh there is a book of the that um let me remember the name but they talk about the comfort zone and how will improve but i i don't remember the name okay number two is there a ceo you're following or studying uh today i'm studying uh the i'm sorry i i'm i'm having problem with that the don't make somebody up you can say none yeah they're back sorry i i forgot the name warren buffett yeah exactly great buffett it's a biography uh very cool and i love how he does the things number three what is your favorite online tool for building your business online online online okay i love uh pack drive is for me one of the good things and we use a day station here in brazil a lot to get leads and it's uh it's very helpful for us good number four how many hours of sleep do you get every night well six seven hours i live and what's your situation married single do you have kids married i have kids it uh let's make the entrepreneurship very how many kids chill kids two kids and how old are you six years and 11. how many how old are you uh 41. 41. okay alessandra last question what do you wish your 20 year old self knew sorry what do you wish your 20 year old self knew oh um uh working only working no no but what what's something that you wish that he knew a lesson you wish you knew okay i would like to learn about how to create a big story and make a bigger big difference in the world that's what i'm looking for and that's what i'm trying to do guys there you have it make a big difference faster founded his company solids.com.brb in uh 2015 today 100 people they're doing about 150 grand per month a thousand customers paying 150 bucks they've doubled year over year up from about 75 000 bucks a month just a year ago they're bootstrapped 14 revenue churn per year that's on a gross basis spending 500 bucks to get 150 a month account so five month payback period there again growing in a super healthy way down there in brazil again helping people with uh reduced turnover costs increase employee productivity alessandro thanks for taking us to the top thank you nathan