Talvista Revenue & Valuation (2018)

hello everybody my guest today is scott sessions he's the co-founder and ceo at tel vista he brings more than 25 years of business management and leadership experience from fast-paced startup companies previously scott ran his own consultancy focusing on marketing strategies serving fast-paced startups in the hcm space before that he was a senior director at higher view scott's a serial entrepreneur having started several businesses over his career he's most passionate about helping people and seeing them succeed and realizing even more than they thought possible scott are you ready to take us to the top hey great to be here nathan thanks for having me you bet all right talk to us about tal vista what does the company do and what's your revenue model are you a pure play sas company we are a pure place ass company we are focused strictly on diversity inclusion as a recruiting platform for talent acquisition professionals we are an effective platform for helping companies bring in more diverse candidates to ultimately hire for better diversity interesting okay and so how do you charge is it like per number of hires per year or what yeah so unlike some others we are not a per seat or per user basis we are focused on number of hires estimated number of hires and then we have an unlimited model so we have a price bucket ban that says you're in this band now you have unlimited access and we we work out a you know business case to get to that price ban but once you're there you have unlimited access to the full platform that's great okay so give me a general idea i mean what are people paying on average per year for this are we talking like a grand or a million bucks or somewhere in the middle what do they spend yeah somewhere in the middle somewhere in that ring it's a big it's a big range help me out a little bit get a little more specific so we're focused on upper end enterprise clients so anyone who's doing perhaps hires from 1500 hires a year to 15 000 hires a year and so we could range from 50 000 all the way to half a million for access to our platform on an annual basis uh with unlimited assets yep would you say would you say a fair average might be kind of 50 60 grand but you have a lot you know two or three big big a couple big accounts doing much much more yeah that 60 to 60 to 120 is an average yeah that's interesting um i want to talk more about pricing here but first put all this on a timeline for me what you launched the company in so we launched earlier this year my partner and i uh april time frame was our launch point since then we've signed two major clients one of which is a global rpos yellow talent formerly pinstripe uh and that's one i can talk about because they went out public with that others uh the other didn't doesn't want to talk about it yet but they are a fortune 100 company and utilizing our platform within integration to their ats okay so two customers call it 50 60 grand a year you guys are doing what 10 20 grand a month right now something like that uh actually those are our higher end customers so we're already uh close to a million uh in annualized revenue okay do you only have two customers so no we've got a handful of others okay so that's that average down but those two that i really want to talk about are are are higher customers i see i see okay but you have you're basically already flirting with the million dollar ar mark we are does it so walk me through like your history you said you've done a lot of other businesses i mean what have you learned about the you know you can either go high touch high price point or kind of low touch low price point you know onboarding you're clearly going you know high touch high acv why well because that's where retention comes in when customers know that they can rely on a partner to come in and take good care of them they're going to renew so our retention uh will increase and continue to grow in the 80s and 90s percentage points versus low touch and having that churn churn burns a lot of calories and frankly i want to focus on those who really want to utilize the tool and improve their diversity efforts yep and so it's it's a little early because there's not a lot of cohort or sample size here yet but i mean do you have any insight into what churn might be and what expansion might be year over year you know you're right it's it's early with you could compare it to other subscription sas businesses that are focused in the talent space uh however uh with with dni because it is early and the results uh may vary uh from company to company we're we're waiting to see what that churn's going to be yeah talk to me about well first off so how many customers do you have today you have two plus some how many total so it's it's a handful like we're talking like 10 yeah okay yeah that's more than five in that range that's fair enough good so we'll stay in that range the reason i ask is i want to understand how did you land these first five customers like specifically yeah so my partner and i as you noted we've been in the space for a long time so we have a deep network in the talent and hr space so we're working off of our name uh for look we provide great service we align ourselves with great product let's talk about that but that's not the only thing they have to have a true problem around diversity and inclusion and when they understand that our sole focus and purpose in life is to focus and help on diversity then the engagement happens and with our pricing model with our unlimited access that helps to close those deals and who when you the first company that you said you could talk about you said the name was cleo cielo cielo okay so who were you replacing when they adopted you as a product oh say that again nathan what what or who were you replacing right in their historical systems when they adopted user product yeah so there wasn't a replacement because there wasn't anything in there to begin with their ceo sue marks signed an initiative uh where 450 other ceos signed on to say look diversity and inclusion is paramount important so much so that we're aligning ourselves to find technologies that are going to help us achieve better diversity and in cielo's case as an rpo they're bringing our services to a myriad of their clients who are facing diversity challenges which is why they signed on with us to use it internally but also use it as a client-facing tool interesting and what's the makeup of your team today how many people total so we've got about 10 folks we've got a handful of engineers uh we've got me as sales and marketing and operations i've got a customer success uh director who is hands on with all of our clients and then a couple of uh customer support folks that's great and and bootstrap to date or have you raised capital we're bootstrapped we are so i love it i was i was i was thought i was to be so depressed because i like you so much i was gonna be so depressed if you said you've raised like a bunch of money this is wonderful you're bootstrapped we're bootstrapped now it doesn't mean that we live a lavish lifestyle nathan it's thin right because everything goes back into the business and and more so into our staff to ensure that our clients are exceptionally happy yeah that's great so bootstrapped and the team attend where's everyone based we're all over we are we're we're remote so i'm in utah my partner's in san diego we've got staff in dc colorado uh in the bay area so we are all over and easily accessible that's great and uh guys i mean i imagine you're bootstrapped so you have to be profitable correct uh we are well or you break even there's tax purposes and then there's uh and how we're running our our our revenue right so we're we're running even right yeah that's code four we're running break even we're reinvesting 100 yeah very very good okay so where where does future growth come from like you again you've done this before so let me ask it maybe this way when you do maybe ramp up some paid channels or you hire some sales people how aggressive are you willing to be in terms of what you're spending on cac and relative to payback period on new customer accounts yeah so so 2019 is going to be a is a focus of big growth we've been so since we started in stabilizing uh the platform which was incredibly stable already but needed to do a few things that's where our focus has been these first several months 2019 we're focused on growth in bringing on very skilled and knowledgeable sales folks so that we can really go after that fortune 500 right now we're focused on fortune 100 but we're going to expand out into fortune 500 and perhaps even into 1 000 with very focused sales individuals that can get into those markets with their relationships talk the talk and walk the walk to really service those clients but scott tell me how aggressive you're going to be if someone's going to sign up for a 60 000 acv account how much that are willing to spend to acquire them in the first place ah we may be we may be looking 40 to 50 percent honestly okay so six month payback something like that yep interesting and you think your your intuition is telling you most of that's going to go towards the salesperson commission are you going to direct you know conferences direct paid spend things like that yeah we're gonna have some direct paid getting the word out there is imperative my experience has been with uh face-to-face events as well as pr really drives that initial learning we're in education mode we need to educate the market that there is a solution people people are spending millions training right now which is great for unconscious bias training but you've got to align it with a tool so that when people go back to the office they normally forget about their training this way they have a tool to implement the trainings and learnings that they've had so we'll do conferences we'll focus a lot of effort on pr and of course guerrilla marketing social but the bulk is going to go into sales and then following on with customer success because we've got to take care of those customers once they've been brought on any plans to raise capital yeah i mean i'm not going to say no uh but you know we want to have good options in the future and if a good opportunity comes up we're seriously going to look at it would you consider ever using venture debt to drive growth so that you don't have to take dilution yes we would consider that got it what do you like about that that we don't have to suffer delusion i guess that was an easy answer i i'm building something that is is going to be a good legacy uh for me into the future yep no i i love that scott let's wrap up here with the famous five number one what's your favorite business book oh i you should have asked me this before i have so many um there's a couple of of marketing books their names they were sitting right behind me but i don't wanna i don't wanna drown do you remember one you read like the most recent one you read you're holding me to a spot here nate grab one grab one turn around grab one all right [Music] switch okay very good by chip chip that's a good one they've been fantastic okay next number two is there an under the radar ceo you're following or studying ah so my former ceo who's a great friend uh former ceo of higher view he he continues to be a great mentor of mine even though he's a few years my junior he's incredibly brilliant what's his name mark newman former ceo of higher view mark newman very good number three what's your favorite online tool for building your company [Music] sorry favorite online tool for building your company uh so salesforce has been fantastic to use in tracking uh from a crm and a a sales point uh tracking and throughput so that's been a great tool number four how many hours of sleep are you getting every night i i usually do five to six um which my wife it drives her crazy how can i survive on such little sleep there are times when i'm at at three to four at max and we'll go on stents of that but my norm is five to six and what you're uh sounds like you're married any kiddos we have three children we just married off our first daughter two weeks ago uh we have one still at home and one uh who's in college lives off leaves lives out of the house oh amazing great and how old are you [Music] sorry how old are you tell how old am i yep i'm 52. all right scott good stuff and last question what do you wish your 20 year old self knew oh my gosh ask more questions guys ask more questions coming from scott founded tal vista really helping to drive more diversity and folks hiring processes working in very much in the enterprise space called five to ten customers right now just you know flirting with a million bucks in arr just launched it a couple months ago totally bootstrapped which is obviously exciting uh you know operating a break even team of 10 people all remote based all over the place too early to talk about economics but again excited in 2019 to focus on growth scott thanks for taking us to the top thanks nathan