How Teampay CEO Dustin Renn grew Teampay to $11.2M revenue and 100 customers in 2024.

hello everyone my guest today is andrew hoag he's currently the founder and ceo of team pay a venture back company transforming b2b purchasing software as an advisor consultant and serial entrepreneur he's worked with both small startups and large public companies on product strategy innovation operations and growth andrew you ready to take us to the top i am let's do this all right team pay now are you guys a pure place sas company or more like transaction based um we have a little bit of both so we're sas first so software is what we sell to our customers and then we also help customers move money and make payments okay so let me let me let me get to this answer really quick last 12 months revenue what percent was pure sas first transaction uh ninety-five percent okay good deal you're basically a sas company all right you are and so tell me what the product does for people not familiar yeah so basically it was a problem that i'd experienced as a founder which is i constantly had people coming up to me and asking to make purchases and once you start to scale if you have 200 500 people in your team you can't give everyone a blank check and you can't have everyone turning in expense reports for their monthly buffer subscription and so what we realized is that the fundamental way that companies do purchasing has changed uh more software is being bought bottoms up more is being purchased by everyone throughout the organization and other departments have great tools right you have tools like octa and one login which do single sign on you have tools like github which controls access to your source code and there's not a tool that actually controls access to the company's money and so that's really been where team pay is focused and the vision for us interesting okay and what's the company going to pay on average just the flat fee ignore transaction revenue just the flat sas fee per year on average what do they pay yeah so i mean our contracts range anywhere from 4k up to kind of mid to upper 5k figures depending on the volume and the features and those sets of things so sorry you said 4k did you mean four figures four figures yeah sorry four figure to five figure acv so kind of if you follow the rabbit's deer and elephants theory of zazz we're very much focused on rabbits and deer yeah perfect yeah this is that is the christophe chance thing that we put him on the kind of the cover of our last magazine specifically for that model first off i worked with when i was in berlin oh on which company um when he was at point nine i worked with a couple of their portfolio companies oh good yeah no he's still at point nine that's great so just to be clear an average for you would be called a hundred grand something like that yeah somewhere in that ten to hundred grand range okay ten to okay got it ten two hundred four to five four to five figures got it very good all right and so what's the difference if someone's gonna pay you a grand per month or grand per year versus 90 grand per year what pricing x's are you using to get higher price points yeah so we price on a couple different dimensions so we price based on capacity um so roughly how much customers use then we price based on features um so features can range anywhere from like if you're on quickbooks or zero you're at the lower end of the range and if you're on sap you're at the higher end of the range because it's a more complex integration okay and when you launch the company what year um we launched the company in january of 2017 to the public um we started building the product in september and you were there and you're one of the founders right you're there from the beginning i was there from the beginning i started working on it six months before the company existed that's good now were you so are you developer background i am yeah i started my career building super computers for nasa interesting very cool okay so talk to me about customer growth today if you're the if you're the engineering guy do are you also handling all the first you know five customer sales too or what i handled the first five but i've outsourced asked and brought on a professional team last year and they were able to grow us 26 month over month um you know we've had some really good logo growth and we've also seen expansion within our existing customers they're very happy with what we're doing that's great so how many customers are you working with um we just crossed over 100. oh congrats okay very good and then let's break down the team i want to understand kind of how you got that growth so team size today is how many people um so today we're 16 we just started ramping up in january um but you know in terms of the growth trajectory we were we were four people for the first year i was doing all the selling um then we added demand gen and an account exec on the sales side and that was 2018 and that's what kind of really put the inflection point in the curve and now we're starting to to you know basically replicate that out across the sales team and teams so the team says 16 everyone's based in new york yeah we're all in new york got it and bootstrapped have you raised um we raised uh about four million a venture okay so we raised a million before we launched three million um post revenue all equity or any debt or convertible notes that's all equity all equity very good and then how aggressive are you being today in terms of growth are you burning today or you break even um i mean we're still burning because i get to grow 25 month over month and if you follow kind of the j curve of sas um that growth begins to pay off a really nice annuity in the out years and we're already seeing that um so we've continued to invest on growth because it's really efficient our magic number is north of one um a dollar of cac for a dollar new arr uh it's divided by four right so the sas magic number is times four so yeah it's it's roughly a quarter i don't know i don't know what you're talking about yeah so it's one of kristoff's things in terms of the sas magic numbers so you take your sales and marketing investment in your current quarter and then you look at the the previous quarter's growth and you run a ratio on that um and so that's a measure of your sales and marketing efficiency so let's have the equation let me yeah yeah well the reason i asked everyone everyone we say sas magic number everyone has a different magic number kristoff just called it char you know identified this formula as his magic thing so that's why i asked so you're basically comparing new bookings new bookings i lost the internet there so that's okay you're comparing new bookings this quarter to basically marketing spend last quarter yep yeah got it and you're saying it's a one to four ratio so you're putting in 25 cents and essentially getting a dollar out yeah that's the well it 1.0 be it could be flipped though as well are you putting a dollar in and getting 25 cents out the next quarter no we're putting a dollar in and getting a dollar in a cv got it so you're putting it just to be clear you're putting a yeah that's that's a one-to-one ratio yeah yeah yeah so it's just that's the same thing as exactly why it's that's a cac payback of 12 months same thing yes okay we made we made that way more complicated than it needed to be all right 12 months 12 month payback period that's good and then um churn's critical in a sas company tell me about how you're measuring turn and how you keep it low um so i mean we haven't really experienced any churn so far out of two years so we're pretty happy with that are you happy with that shouldn't you have some churn or your price too cheap um well people don't churn in our in our business people don't churn because of price right so you know if you think about who we sell to right we sell to finance teams and the things they care about is does this screw up my organization and does this screw up my process well andrew but if you don't churn because if people don't drink is the price why wouldn't you forex your price point we have been every quarter it goes up by about 50 percent but you still haven't seen any churns so why not increase it by 10 10 why why are you here's my 10x the second you end this interview talk to me in a quarter no no but this is a serious question people get stuck on this all the time why aren't you why are you only going up by three or four i mean you should have my point is i think people should have churn otherwise you're leaving money on the table right but all of our customers are paying annual contracts so why would they churn if we increase the price if they if we increase the price they don't buy so they churn no but churn is when a customer buys and leaves yeah so if someone signs up this year and next year they come back and for the same thing you have four i haven't had any renewals yet yeah we haven't any renewals yet didn't you say you launched in 2017 yeah those were all monthlies and they've all stayed on monthly so we haven't gone back and re-upped the price on the monthly users today but certainly going forward i mean that's something that we think about but frankly customers hit bumpers and they upgrade themselves so i don't really have to go raise prices on them because they just bring us expansion revenue yeah my basic question is though is people always come on the show and brag about...