How Solides CEO Gente e Gestão grew to $46.7M revenue and 20K customers in 2024.

guys solo days today is doing 2.6 million dollars per month in Revenue that's a 31.2 million dollar run right up from a 15.6 million dollar run rate a year ago Alessandra believes they'll finish 2023 at a 60 that's 60 million dollar run right but it wasn't all easy he launched in 2010 pivoted to a subscription model in 2015 and then it took him four years to hit his first million dollar year that was 2019. he just finished last year raising a series B for about a hundred million dollars at around an 800 million valuation is looking at making additional Acquisitions in hopes to IPO in a couple years once he breaks 200 million dollars in Revenue hey folks my guest today is Alessandro Garcia he's the founder of solidase the number one HR tech for small medium companies in Brazil the company provides a basic holistic talent management software where you can attract develop and retain Talent using people analytics artificial intelligence and Behavioral Management Alessandra you ready to take us to the top yes um that's just for having me here thank you very much you bet so just to be clear you're not a traditional recruiter that takes 30 to first year salary you're a fixed SAS fee monthly correct yes it is that's great so tell us more about a customer that's using you today and how they use you sure we have uh almost 20 000 companies as subscribers and uh they used to implement the AGR process in the the company uh regularly the smaller media companies doesn't have a job process already in the company so we help to introduce the process of hiring talents developing and retaining and engaging talents to increase productivity and reduce your number costs and so just to be clear so you've got 20 000 paying customers today yes 20 000 paying customers small limited companies in Brazil that's a that's amazing and how many employees those 20 000 companies manage via your platform close to two millions wow 2 million okay so we could take 2 million employees divided by 20 000 customers the average team size there is about a hundred is that right exactly okay tell us more about the back story here um when did you launch the company what year yeah the company was launched in 2010 but we run a very traditional way of selling software at that time it was a transactional service so in 2015 we dropped everything out in the start the business again with a subscription change the the way of doing marketing and sales and since that we started to count the customer from one in 2015 uh and with triple triple double double in almost double in the 50 year uh we run four years uh bootstrap in the fourth year we got the investment from dgf so how much how much how much did you this would have been in 2019 how much did you raise in 2019 it was uh close to four million dollar uh it's a very small round we were able to not have a great delusion at that time and it was a lot to to grow company to continue to grow the company to to last year when we made a series B and that series B I think was for 103 million right yeah strong a lot of people's 100 million dollar 100 million dollars and most folks in their Syria you know most series bees last year companies were signed you know around 10 percent of the company were you in that same range a little more uh because we are planning to the company uh very close to the IPO phase so uh it was to make a lot of sense to us to go with this uh giant investor uh a little more yeah far so 100 million raised at a little under or sorry you sold a little more than 10 percent of the company that would mean your post money value yeah on the first round you'll see yes yes 100 million raised and your series B last year you sold a little more than 10 to the company which would mean your post money valuation was somewhere around like 800 million dollars exactly I see okay and then take me back because I think you did did you do a series a or like a two or three million dollar round in 2019 the three million series a in 2019 what valuation was that at do you remember well maybe 15 million uh million dollars I think that's something like that oh what's going on there YouTube good to see you guys now imagine this you love watching these interviews with SAS Founders but imagine if we took all of the valuation data out from over 2807 interviews I've done manually saves you a lot of time well we've done this we've built the into the beautiful interface inside of founder path check this out I'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for evaluation this year now the secret valuation is there's many different ways to value a SAS business so the reason you're going to see three or four different evaluations inside of your founder path dashboard this is all free by the way is because depending on who's doing the buying of your SAS company you're going to get a different valuation a VC is going to pay a different valuation private Equity Firm is different if you're going to do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when I hover over here here right so the teal is what a VC would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on YouTube all these datas are built from real-time valuation data points Founders share with us on the show so traction 1.2 million seed round 3.7 raise they sold 22 percent of their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of SAS valuation than what you can get now inside of founder path and we're thrilled to bring it to you all right we're gonna go back to the YouTube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your evaluation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform I hope to see you there all right let's jump back into the interview well then you're you are quite the Enterprise Value Creator going from a 15 million valuation to an 800 million dollar valuation last year help us understand what drove the growth how were you what was your growth strategy in terms of getting new customers during those years uh uh the product itself is generating a lot of uh impact in the small ability companies so it make it make for us easy to to get customers and uh and generate results uh on that just to have an idea uh on average we save close to 700 000 Rises maybe 107 000 a year in savings on uh turnover costs and the customers pay us close to eight thousand dollars a year so there's a lot of saving and the the argument to to sell our software is very good and today we don't have other players uh providing a job software for small ability to composition Brazil in U.S you have a bamboo in jar and you know the players but here we are playing this this game alone so we have to to explore this opportunity and run fast as well as we can so Alessandra did I hear you say the average customer today pays you eight thousand dollars per year yes so could we take that would be 650 per month on average if we multiply 650 dollars times twenty thousand customers it puts you at about 13 million dollars of ARR is that accurate is less than that because there is two groups of software and when we talk about this redution of the turnover costs we are talking about the the whole platform and we have a group of uh close to 10 000 customers using the scheduling point it's what's up from a company that we acquired last year uh called tangerino they deal with uh scattering time and uh and uh patch clock electronic bench clock it's like that so uh there is two groups in that group we have the holistic platform we safe uh close to to 700 000 rise and they paying us eight thousand uh dollars a year well I guess just to be clear so so monthly recurring Revenue today across the entire company you said is a it's about a million dollars a month or is it more uh more more okay got it yes yes so the average company that is not paying you eight thousand dollars per year they're paying you something much higher yes they pay less just to be clear I have this those customers use the whole the whole platform and half of them use just a piece of the software uh to take care of the scheduling times no I understand Alessandro but but if you take it just because to keep it simple the the across your entire company the average customer today pays you about how much per month oh let me check it uh okay it was our arpu is 100 130 dollars a month okay so I'm some some I'm doing some kind of math wrong if you have 20 000 customers paying 130 per month that means you're you're doing you know 2.2.6 million per month is that right yes oh that is correct okay yes okay so if you're doing 2.6 million a month today where were you exactly one year ago so we can calculate growth rate um oh wow how how did you do that well Facebook ads inside sales team what was your go to market strategy there uh using important marketing and inside sales uh the whole process and we have a major portal where we can get a lot of the job professionals uh searching for content and how to to deal with things and we have also uh an academy where we provide uh courses in HR to help people uh in both smaller media companies to press the HR in the company and generate results because uh the companies the the job professional doesn't have a lot of information and they don't are very experienced in running uh we can help them and teach them uh how to do the HR and we can introduce our software in this process that makes a lot of sense so going back to the early days do you remember what year you hit a million dollars of ARR Ange oh no I don't but it was uh two years ago curious from now yeah I think it's that it's a 20 2019 yes wow okay um so 2019 a million now last year 15.6 million today you're at a 31.2 million dollar run rate the one question I've got for you because you're unique obviously you're not based in the US but in the U.S a lot of employees that had options valued at last year's valuations are now underwater right because valuations have come down if you were doing 15.6 million last year when you did a 800 million post money valuation that would put your multiple over to 51x which today would seem very expensive how do you manage employee morale if they feel like their options are underwater uh today we're not have this problem even with this uh lower of the multiples in valuations uh because with real a lot since from them so uh we don't have to deal with this problem we have a lot of problems but not least are you thinking about an IPO yes uh maybe in three years we are trying to to build a solid business to to offer this in the public market and would you go public in Brazil or in the US or somewhere else we don't know we don't know yet what do you think you have to hit from a revenue perspective in order to have a successful IPO foreign close to close to 200 million uh dollars uh a year yeah before you IPO yeah so I I think we have a business if we open the company in Brazil we can do that a little less maybe 150 could make sense for us yeah and if you're doing a 31.2 million dollar run rate today we're recording this March 22nd 2023. what do you think you'll finish at this year in terms of Revenue our expectation is to do well again it says you want to finish this year at a 60 million six zero million dollar run rate yes uh 80 percent death will come from organic growth and uh we are looking to inorganically to do the m a um but close to 20 percent of the growth will become from a minute and Alessandro how many folks are full-time today at your company 700 wow how many of them are engineers a little more than 200 okay and tell me more about how you've structured your sales organization how many people carry a quota uh today we have uh maybe 150 uh sales person they are divided in schemes we have an expansion team um medium business team and the small medium and we are trying to uh vs be a very small business uh this thing is running very well but I don't know why because does that company from 15 to 30 employees so uh basically the the owner take care of the managed people so uh that the churn is very good 2.1 for a very small business in the that's monthly or annually okay so 24 gross churn annually but how much expansion do you have uh in this uh field I I don't have this information on the BSB okay uh in general it's close to five percent uh in expansion so a 105 and uh match also so as a company you've got 150 105 net dollar retention annually but as a company what's gross churn per year oh uh 1.9 per year no no sorry at 1.9 per month or okay so 24 gross churn annually which means you've got 30 expansion so net revenue retention is 105 percent yeah wow okay those numbers work that's very exciting um yeah we have a lot of opportunity in growth from 105 to 130 we are working on that uh on this place we have a lot of opportunities to explore as we wrap up here you mentioned Acquisitions how do you think about what companies to go acquire uh sorry I didn't get the question uh talking about companies that you want to go buy Acquisitions how do you think about what companies that you could potentially go by awesome uh we are looking to we have opportunity on products that are very hard to build and we reward we would lose a lot of time if we expect to to make to develop the starter so uh and we also are looking to opportunities in cross-selling and between the companies so it was very important for us in The Next Movement very good well Alessandra we're out of time let's wrap up here with the famous five number one what's your favorite book now I like every time I use the the 48 Laws of Power that's a good one Robert Greene number two is there a CEO you're following or studying okay I am trying to understand uh Parker from uh Ripley he are doing a Nelson job Parker Conrad number three what's your favorite online tool for building solidase I use every time a Google Calendar number four how many hours of sleep do you get every night uh eight dollars I don't have much problem with that and Alessandra what's your situation married single kids I married uh two kids uh over 10 years and 15 and how old are you 45 last question what's something you wish you knew when you were 20 years old in terms of business uh stand uh to know the power of the the subscription model I think this is this is very interesting and I could exported better my friends guys so it is today is doing 2.6 million dollars per month in Revenue that's a 31.2 million dollar run right up from a 15.6 million dollar run rate a year ago Alessandra believes they'll finish 2023 at a 60 that's 60 million dollar run right but it wasn't all easy he launched in 2010 pivoted to a subscription model in 2015 and then it took him four years to hit his first million dollar year that was 2019. he just finished last year raising a series B for about a hundred million dollars at around an 800 million valuation is looking at making additional Acquisitions in hopes to IPO in a couple years once he breaks 200 million dollars in Revenue Alessandro thank you for taking us to the top thank you very much much it's nice to talk to you one more thing before you go we have a brand new show every Thursday at 1pm Central it's called Shark Tank for SAS we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back-end dashboards their expenses their revenue our poo CAC LTV you name it they share it and the buyers try and make a deal live it is fun to watch every Thursday 1 p.m Central additionally remember these recorded founder interviews go live we release them here on YouTube every day at 2PM Central to make sure you don't miss any of that make sure you click the Subscribe button below here on YouTube the big red button and then click the little bell notification to make sure you get notifications when we do go live I wouldn't want you to miss breaking news in the SAS World whether it's an acquisition a big fundraise a big sale a big profitability 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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