Verbliorevenue

you're gonna love this interview just got done editing it i'm glad i got it live for you i'll be in the comments for the next 30 minutes hanging out answering any questions you have in fact leave a comment below about data points or what you think is going to happen to the company and i will respond to every comment additionally if you're just loving the content click the thumbs up and i will go and check out your profile as well and give your videos some love as well in the meantime enjoy the interview hello everyone my guest today is steve pacros he has brings 20 plus years of startup fortune 500 and nonprofit experience to his role as ceo at a company called verblio he's also served in leadership roles at live ops tendril western union and many other companies he received his mba from kellogg's school of business and his m.a from wesleyan university stevie you're ready to take us to the top i'm excited to be back all right yeah thanks for coming back on if people missed your first episode just quick overview what does verblio do verbalio is a content creation platform we provide content through our network of three thousand us us-based writers and we do that through our sas platform that's focused on how to deliver content at scale yep and you were on a couple months ago and shared that uh again you're swimming about a thousand customers pay on average maybe 500 bucks a month or 6 000 acv so people can kind of back in obviously to five or six million in arr how's the virus impacting you guys oh cool so first of all i was on a couple years ago just to make sure that went by really fast yeah uh versus months and um so so a couple things one is we're all going everyone's going through tough times we have a unique view um i can go through customer accounts and all the data pieces that are kind of important to you to the show um but we have a unique view because we do have around a thousand clients on our platform and we see what's happening to them so the big trends for us is that we're seeing uh it's a packed in kind of different constituents in different ways our larger clients who are mostly agencies and large publishers of quality content are mostly doing fine if not increasing the amount of content as they see this is a pretty one of the few feasible channels in this age our smaller clients and agencies that work with the verticals most directly impacted are definitely bleeding and going down significantly so we've seen a drop of about 10 of them so far uh we reach out to all of them and the stories are pretty crushing um and so we're kind of in between those two trends right now verb leo itself is about even um in terms of in terms of cash flow monthly cash flow it's first as far as monthly clash monthly cash flow i feel pretty fortunate to be in that position and i know that many aren't yeah okay so when you just help me understand in my audience know what 10 means so you've seen 10 percent revenue churn over the past 30 days from this particular small business cohort so we've seen about a 10 drop in our small businesses so our smallest accounts that are maybe uh that are averaging more towards the 100 to 200 accounts versus the much larger and our average is still around 500 so uh so the the nominal number of small businesses our accounts have dropped by 10 yep are you so when i was preparing for this interview i could see a use case where you know you help people find writers to write more content i could see a scenario where people are now doubling down on digital because they're there there is no in person really anymore right now are you seeing some of your larger accounts you know double and triple expansion revenue over the past 30 60 days so not yet i think everyone's kind of in shock mode we're still in this uh you know right now we're on april 3rd just so everyone knows because every week is so important at this juncture everything could change in two weeks i think right now everybody is mostly trying to do a reset and an applause so most of uh most of the revenue that we did lose turned into paused revenue so our paused revenue went up by 50 in three weeks so they're not officially cancelled um but i think what's going to happen uh and i'll give insights into i've been talking as many industry leaders as possible i think there is going to be a lot more towards the trend of content marketing digital marketing are two of the few avenues that still remain relevant and it's one of the few ways that you can market in a way that is that fits the right tone and the appropriate tone for the times that we're in which is you don't have to be aggressive you prepare your your story for when people are looking for it as opposed to when they're not ready for it so when you say your paused revenue how much mr right now is in your paused bucket 65 000 okay 65 out of a total of what like 294 300 something like that 500. uh around 460 to 470 a month yeah okay interesting and how when will those account like have you set up a structure of when those accounts will unpause or is it indefinitely for now so we have a limit on the number of paused pause modes you can have one of the reactions that we had to covet is to expand the number of months that a customer could pause it used to be three months and now we're up to four and we're looking at all options as far as we want to make sure that our clients have enough time to come back to us for when they're ready oh so you already had this pause function built in as part of your pricing plan pre-virus and now you're just editing the length of that plan to help handle virus effects actually yes we did but we only launched it last july so we're just learning about it now and we feel pretty fortunate that we got that in before this happened yeah interesting okay what about i mean what about people are you making any any cuts or anything like that to you know stay at breakeven so we are we had a pretty aggressive hiring plan we grew by 50 47 last year with pretty much the same team supporting it and some additional contractors that went aboard and so we actually had a hiring plan moving towards doubling the team from 12 to 24 in a very short period of time what we did was we moved a lot of those to contract higher so three of the key hires got moved to contractors but we still brought on everybody so we're done with hiring but i don't plan to change that or to let anybody go so how many people are full time now 12 plus three contractors so we have 17 or 18 full-time hires right now and seven so we're 23 uh with with the additional full-time contractors too i see and how many of those total are engineers of those total sticks are engineers okay and any do you use kind of outbound sales or any quota carrying reps we don't we only have an inbound sales lead we just brought on a fractional vp of sales that was one of the one of the positions that we moved to contractor who's figuring out our messaging right now and kind of how do we move to outbound in the right appropriate way at this time okay none of them carry quota though no one carries quota yeah yet yet yes yeah very good all right and talk to me a little bit more about how you've capitalized the business obviously you were not the original founder and you went into how that kind of changed in the last episode so we won't rehash that but are you raising additional capital or has your vc backers are they saying hey steve do you need more uh we are fully bootstrapped so we have no we have no capital much less additional capital at our hands and so i think that that comes with pros and cons uh in this crisis it is a particularly good time to be a bootstrap company because we had to learn to live lean for a really long time uh and so um we the the one access to capital that i'm looking at i'm waiting for a call right now is from the payment protection loan program um which the government made available we're all trying to figure out and how that can give us an extra level of assuredness to to keep the staff that we have for as long as humanly possible so the the math behind that is essentially taking your total payroll expenses excluding 1099s between february of 2019 and january of 2020 and then dividing by 12 to get it monthly and then multiplying by 2.5 right so whenever you get that number obviously you then felt the forms and things did you already actually submit with your local bank or are you still waiting on instructions from your bank so first of all i learned thank you so much for sending out proactively guidance to your audience and how to do it i learned more from you than i did from the government on how to do this thanks i am in this very interesting point where i am currently looking at my phone and waiting for my banker to call me to do the application over the phone because she personally has 800 applications she's trying to submit on her laptop today and didn't know as of yesterday what the process would be jesus which bank are you with we're with bok financial they've done a great job of just immediately following up in uh in a way that i think is going to create a hell of a week for those guys yeah i mean so i like the spirit of the federal government of get this money out as quick as possible it's kind of like the mentality we take at software founders like ship it even if it's not perfect but like for context last year all the sba when you add up all the loans done across the country was 25 billion the federal government is basically asking that same network now to distribute 350 billion dollars right in a week or two week span it's a nightmare it's gonna be crazy and uh i do like their approach of doing more sooner and knowing that they're going to accept mistakes that they're going to make versus the opposite of making sure they got it perfect i do have a funny do you have time for them yeah you can edit this give me a funny story in 1999 i was living in brazil and i had to apply for a cell phone and at the time uh brazilians like state-run phone company was a total disaster and so they would give you a giant phone and the way they activated it is you walked around with the phone for three weeks and they could call you at any time to activate and if you didn't answer it you never got your phone activated they might never call back and so this is reminding me of walking around with my cell phone in brazil for three for three weeks waiting for the phone to call that's crazy it would that you when you ran your calculations i'm gonna do some guessing here i mean two three like what check are you expecting if it gets approved i think it should be around a half a million dollars it could it depends on how they categorize our freelance writers if they include those as well um then it would be uh possibly double that but i expect them not to so i think it'd be around a half a million if they if they can do the formula that they're saying that they're providing for companies and that the pot doesn't run you know if it runs out i'd be they're gonna have to manage it in some way yeah there's not gonna be enough in there for the first round um they're either gonna have to reduce the amount or find some other way to funnel through or offer a heck of a lot more so yeah are you saying are you saying there's 350 million of a billion available and it's going to run out quickly yes yeah yeah and i totally agree i mean if you take that number and just assume that each company only gets a hundred grand that's only 3.5 million companies okay there's 30 million small businesses in the u.s right so it's definitely going to run out um and so what is your let's just let's fast forward a week or two weeks let's assume that you do get 500 000 is your intent to then spend that to cover payroll for the next eight weeks or will you use it to make other investments so we run pretty we run super lean so which means our cash account we don't try to bolster as well we try to invest as much as we can moving forward already so i think my first account will be just the the extra assuredness that we don't have to make any changes and then we'll think about strategically can we even add more once the dust settles but i think the the point of the loan is to make companies feel more confident of keeping their exact payroll not making any dramatic changes and that's exactly what i hope it does for us and phase one in phase two i think it becomes more interesting which is can we expand and bring on more people yeah so again this changing guys we're recording this friday april 3rd this this information is changing regularly but as of now any money that steve if he gets 500 does not spend on like payroll or mortgage utilities or rent he has to essentially pay back and the terms on that again currently is a two-year loan at a at a one percent it was point five yesterday it's now a one percent interest rate which is still pretty cheap money by the way but i think most companies steve are gonna end up spending that money in the eight weeks to cover payroll i think so as well yeah and i actually just learned that from you is what the current rate is as well because yesterday i was looking i didn't even know yeah it's changing it's it's i mean it's literally this is one of those things where you know the government doesn't like to usually move this fast because they want to have everything like other ducks in line but they realize if they don't get this money out like you can't wait eight weeks you got to get it out so yeah as of as of this week we just saw the 6.6 million people registering for uh for unemployment uh so we're kind of in that state of shock i'd be i'll be interested to know where we're at by the time that you we even release this podcast yeah we'll see we'll get it out we'll get out quickly so we're gonna follow your lead in case they want to apply as well um listen anything else that you want to touch on tough choices you have you've had to make over the past 30 days relative to you know responding to the virus i think responding to the virus is something we thought about really deeply we want to make sure that we nailed our tone and provided our clients and our audience something really valuable so we've thought about this in a few ways is which is what can we reach out to everybody with so one of the first things we offered was we uh we reached out in bulk to all of our clients and offered them a guide for how to change your content tone in the modern age is it's so important to get this right right now you just have to lead with empathy and there's it's all about them right now it's not about you and we also offer 10 free topics which we charge 100 for for our top seo topic creation team to redo your topics or offer new topics and we're kind of thinking about our next level of things that we can offer as well and then we adjusted the pause the amount of time that companies could take off too so i think that was one of the things the other thought thing we thought about is what other assets do we have to offer and so i started a new video series on linkedin um that we're sharing out where i'm just interviewing marketing leaders agencies agency coaches on how to guide what are what do they expect to see from the crisis and then what are their best recommendations we're trying to make these really short like five minute videos that people can see three times a week and so you can just find that on your linkedin you can find it on my linkedin and hopefully find it valuable very good we'll link to that in the show notes for sure steve let's wrap up with the famous five number one favorite business book cool so i gave you my favorite business book last time which was switch but i'm going to tell you my favorite current one which is the power of little ideas by david robertson and it's about it really appeals to a company might about like mine which is innovation doesn't have to come from a blue ocean strategy where you have to disrupt the whole world in classic startup style but you can incrementally build out what you've already done uh in a way that's much more similar to apple love that number two is there a ceo you're following or studying uh i'm learning a lot from mark oregon right now who is uh the founder of eloqua and in uh influiative who i spend a lot of time uh talking to and also learning from number three what's your favorite online tool for building your company uh so uh so i think slack is the one that everyone's going to say but i just think it's so powerful and can be used in so many interesting and creative ways that i i can't say enough about it especially in this virtual time our favorite channel right now is quarantine tips where everybody is sharing their tips for staying sane or fun things that they found on the channel we just did a poll on we found out that the average alcohol intake had increased by 42 percent in the bay area since this all started and seeing if you were above average or median average so funny all right number four how many hours i sleep to eat every night last time i said seven now i'm saying seven good hours and now i'm saying nine terrible hours fair enough and what's your situation married single kids married with two boys they're now nine and 12. and how old are you and i am 47 this time 47 last question what do you wish your 20 year old self knew it's the same thing which was i moved to san francisco in 1996 and i joined non-profits and i thought it'd probably be a better time to join the startup movement guys there you have it verbalio again surviving the virus they've seen 46 thousand dollars in paused mrr over the past 30 to 60 days out of their total kind of 460 000 in mrr so again about 6 million run rate right now helping teams scale their content better with their massive army of writers he's applied to ppp we'll see what happens there in the meantime steve thanks for taking us to the top always a pleasure nathan thanks you guys know i fight like heck to get these data points for you from these ceos that rarely do these kinds of shows if you want more shows like this make sure you subscribe right now we're trying to get 10 000 youtube subscribers by the end of september here 2019 and it would mean the world to me if you clicked now to subscribe additionally i've got two more great interviews for you if you want more data points from the world's leading sas ceos click and watch one of them right now