How Theomx CEO Nicole Verkindt grew Theomx to $2.2M revenue and 40 customers in 2024.

hello everyone my guest today is Nicole vork n she's the founder and CEO of Canadian technology company called omx previously she led a high-tech manufacturing business selling to governments around the world Nicole is on the board of the Canadian crown corporation that performs government-to-government can contracts between Canada and other countries around the world she's a dragon on CBC's next-gen Dragons Den which is dedicated to early-stage technology businesses and joined gimlets media show the pitch as the fourth investor in the 2018 season Nicole are you ready to take us to the top all right good so so first question first you have your hand in a lot of media related stuff with your show with gimlets thing but you're also kind of running your own company they have to compete from our priority perspective or if not how do they feed each other yeah they definitely compete that is that is the constant battle is trying to balance those two things but we with omx we sell to government but mostly big industrial companies traditional corporations so the work I do I'm also on the board of the Canadian Chamber of Commerce well so that kind of stuff is really good because we do get we do position ourselves as thought leaders in the space I'm digitizing traditional businesses and it does help our business and it's really good from a from a positioning perspective so give us kind of give us a customer example of what omx you know maybe who you sell to Raytheon General Dynamics etc walk me through how they use you guys yeah so we do a lot of work in what I call the regulated market so energy infrastructure mining aerospace defense and they essentially use us to it's basically CRM for supply chain and then it's Expedia for supply chain opportunities so b2b a procurement opportunity suite data from from sa P from RFQ to go from Bravo solutions jaggers and largest e-procurement solutions plus our own exclusive ones and send them out to all the different companies that that matched by essentially building AP eyes to a whole bunch of different solutions in different data feeds so I would say it's CRM for supply chain it's Expedia for supply chain and then one of the big innovative things we do is actually rolling up all the socio-economic impact data so we're competing against the KP and DS of the world who will traditionally manually go out and do this you know half-a-million-dollar study for a company to say this is the job creation and the impacts you're having and it sounds like a weird esoteric thing that you would need the average person but all the companies in our sectors are required to do this reporting back to government and they have to do it when they go out to bid for new projects like a new major infrastructure project for instance so we're digitizing that whole process the CRM aspect makes me think pure-play SAS you think helps buy you things Salesforce the Expedia makes me think of a much tougher market which is a marketplace market where you're taking cuts of fees in between you get data and use that data to do bigger studies which one of those revenue streams make up makes up a larger portion of your business it's just all SAS based but you're right it is unique to have a SAS model in a marketplace that's actually been a challenge which came first actually the marketplace came first ok and and what advantages to launching assassin sorry because what brings the buy-side the big industrial corporations that are releasing their procurement opportunities is our reporting functionality when we release the solution they were they were both there ok and what year was that when was your one the solution was released in early 2012 2012 ok and then let's just focus we'll focus in here on the south side of things and then we'll shift it got in the media stuff you're working on so in 2012 you launched omx a big portion actually all of it is SAS there's a marketplace model on top of it give me a general sense these companies I mean I'm sure you have many different cohorts but on average what's customer paying you per month the buy-side on average is paying about 3,500 not on average the low-end is about 3500 a month and that's in Canadian dollar so be more in US and then on the sell side it's about 150 ok ok 150 bucks so very much you're representing by side mostly that's where most the revenues coming from that's right about 90 percent yep ok great and and bootstrap Trevor you raise capital we just raised a small amount of capital about a million dollars from friends and family and we got some government loans that we paid back okay that you know once you're on kind of the raised train it's a whole different ballgame so why give up even if it's a little bit why give up even a little bit of control why not keep bootstrapping yeah exactly I mean we thought we were getting on the race train I went out to raise us to do a significant VC race and I just had a lot of challenges with that process and I mean you and I spoke earlier about how much I feel the community has changed especially in Canada in the last eight years but we had there wasn't really any early-stage venture capital when we were going out and so I don't feel that we got on the race trade and we tried to and we did it and stumbled and we took a little bit of friends and family money and in the grand scheme of things a million even that million we paid back some of it I wasn't here at or equity it was equity but I'm just saying some of it was structured as convertible that we were able to pay back yeah our option so I feel that we didn't actually get on the race train because I still have control just over 50% yep did you have co-founders in the business no but our CTO came in very early on and he has equity in the company I see okay great and what's a team size today uh there's about 20 people but and then a group of contractors that work in Europe India on New York and Ottawa there's full-time folks they mainly there in Canada in Toronto yeah the 20 other full-time are all in our office in Toronto okay great so you're building this tool your billion sold 2012 now did it take a lot of R&D to get to kind of your first sale and if so how many years would you have to go with kind of no revenue in other words hello were you supporting it with no revenue before you closed deal that's that's the thing right we went out to raise some real money and we weren't able to so I said you know what we need to release a feature that we can sell immediately and we were generating revenue than a few months after release okay 2012 that's great and then fast for today so six years later how many customers are you working with really does just focus on by side on the buy side there's about sort of 40 that are significant yeah 30 40 so is this I mean this is at the price point you're at and at 40 that screams to me kind of enterprise sales model is that accurate you have field reps inside sales team yeah and some of our deals are a lot bigger than the three grand a month that I indicated but yeah the sale cycles are two plus years which is you know that that's that's the big challenge there is that you have to be these things because they are complex sales they have to be bit bigger deals three thousand in Canadian is about twenty six hundred USD in terms of kind of your MIT you so it was a lower end average revenue per customer a month and we say that per program per country so if we get a big enterprise client that's got mostly they're managing supplier data across multiple major complex program so if I'm an investor company you know one road program so I'm basically managing all this data I'm producing on this real-time reporting on what's going on in the status and all that kind of thing so it depends on you know usually they'll start with one as a beta and then and then grow from there but we the other thing that we had to learn was we were very scared of the word services you know it's it's like a bad word in startups to have any consulting or you know ever sell anything by the hour but we what we had to learn very quickly why do you say that why do you say it's a net who who where'd it where did that impression come to you from I think investors give you that impression right so they'll only give you a multiple on your reoccurring revenue they only want it to be software related revenue so interesting though because if it's positioned we've had you know about three thousand these interviews and the ones that come on where they say are onboarding fee instead of our professional services revenue it's like so what we found and so we never chart we never charge for any of that stuff you know you've bought the software you know here's some training good luck but what we found with especially the enterprise because you'll get a senior level person that says we need this for the ROI and this and that we gotta go to the future and then the people that are actually supposed to be using it well they have their manual ways they have their personal ways of doing things and their relationship with the consulting firm it doesn't manually all that kind of stuff and so to get them to use it is it can be a big challenge in one training session isn't enough and then you're not gonna get your reoccurring usage of the platform and for us it's more valuable for them to be posting their procurement opportunities on top of them continuing to give us the revenue so the one of the most important takeaways I got from the first couple years was no you need to saw...