How Workable CEO Spyros Magiatis grew to $69.5M revenue and 20K customers in 2024.

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 nikos muratakis he's the ceo of workable makers of the popular recruiting software used by 20 000 companies in 100 countries he led the company from its inception in 2012 to a fast growing organization with 300 employees in the u.s and europe raising 95 million of venture financing from top european and american investors all right nicos you ready to take us to the top nice to see you again good to have you back on all right so give us an update uh and for those that missed the first episode quickly tell us what the company does and are you pure play sass it's a pure play sas workable is a recruiting solution for employers mid-sized companies mostly we're operating all over the world we have about 20 000 customers what the software does is it helps you find evaluate and manage the whole process of hiring people and because just because they're all 20 000 paying customers correct that's significant growth when you came back on in may 2018 you were at 6 000. is that right that's a lot of growth yes what's happening is that we also have an smb product that is um appealing to smaller companies let's say 20 50 100 employees uh which is pay as you go um they can just go and just pay for the highest they're making so we have a lot of small customers about three quarters of our customers are companies with fewer than 100 employees i see okay so if you then took a kind of an average right of your entire base what's the average customer paying you per year per month to use the technology would you say i think the average customer when i slide to be low than g it's slightly white uh slight and i slightly bolted here i'm sorry a slightly above 10k annually yes okay that i mean that's up significant all right so last time on the show you said ac was about 3 000 across the base so you've more than tripled your average acv yes because in the last couple of years we've seen a lot of traction from mid-sized companies let's say a few hundred or a few thousand employees and these tend to come with higher cvs obviously i got it but but when you look at the average i mean if you opened up top of funnel that would pull your average down because you're getting more customers in that are paying way less you said two-thirds of your customers have less than 100 employees it's it's happening both ways actually but the fact that it's normal in such companies that affects us you get bigger companies in the mix typically the acv goes up even if you have an smb product yeah yeah well i mean the reason i'm asking is if i take 20 000 customers times that acv you just gave me i mean that would put you at like 16 million a month in revenue which i i know you're doing well but not that well i don't think no no no for a year but yeah i'm sure but yeah yeah no i know yeah so if i take 20 000 times a 10 000 ac that's 830 per customer per month 830 times 20 000 right is 16 million a month in revenue which i know is again i know you're doing well but that would be like i don't know it's it's a tenth of that it's a twelfth of that it's a twelfth of eight hundred dollars a month yeah i'm sorry we must have done something wrong in the calculation no the carbon revenue is in the tens of millions not in the hundreds of millions yeah yeah when do you when do you break 30 million in arr uh i think it's going to be this year okay so you're close i was going to say i was guessing that's what it would be about you have three months left in the year you think you can break 30. around the end of the year we're going to be somewhere there okay and what is that up from so a year ago what was the run right you finished with uh it was uh it was about to it's slightly below 20. okay so so i mean good growth not a hundred percent year over year growth though were your vc's uh not happy with that yeah absolutely absolutely because they it's it's a it's a huge market um the international part of the market is uh uh is seeing a lot of growth i mean we're seeing in asia and europe a lot of people are switching on to these sort of solutions um and there's more stuff coming down the line right now we're launching uh video interviewing capabilities with launching assessments we've launched add-ons recruiting marketing so basically the revenue of the customers themselves are growing because we're doing more for them but but again once you've raised 95 million dollars i mean at this scale i mean you want to see a 100 year over year growth right so going from 20 to 30 i imagine was not exciting for your vcs how do you manage their expectations to be honest with you you know i i think you know the the growth obviously is is one parameter but it's also you know how you're growing how much money you're spending how efficient your sales are uh so actually we're we're happy to be at 50 60 growth uh it's the whole picture of the pnl obviously yeah now when you raised that that last round was recent right because last time we came on you had about 39 40 million raised so you've raised like 50 55 million recently we we raised another 50 million last summer last summer okay we still have a long way to go with that actually to be honest with you we raised quite a bit for how much we're ready quite a bit for what compared to how much we're burning what does that mean help me understand that i mean we have a long runway even after a year uh following the the fundraise i see what you're saying when you raise that 50 million you race for like 24 months of burn versus like 12 months of burn nearly three years i mean okay that's a lot why'd you go i mean obviously you take dilution the more money you take today the more dilution you take why raise for three months a runway are three years um we got the right investors um we have a long-term plan um i think also right now the markets are pretty good for raising money so if you get a good deal you just pick up the extra money so so far in all the rounds we ended up picking up a little bit more than we needed and we needed it yeah okay now i think i'm not the only one who will say this no no there's a lot of people that would say that they're raising more than what they need right now because they think the macroeconomic conditions are really good for raising um so i mean i'm i'm not hitting you i'm just trying to understand where your brain was at um 50 million raised on for a three-year kind of runway wait that would be that mean burn is something like 1.4 million a month or at least that's what you're comfortable with is that about where you're at right now 1.4 a month quite a bit less right now actually uh at the end of the day we're burning less than that maybe a year less than okay good so i mean that's in less than 800 grand per month basically we have the ability to use additional money to do acquisitions to um invest in r d in the next couple of years there's a lot of new stuff we do yeah so i mean most is 50 million you probably still have sitting in the bank then correct exactly yeah is it all of it sitting in the bank well most of it yeah okay so when you think about acquisitions using that capital what kind of acquisitions would be interesting to you um right now we are very interested in the recruiting marketing space and what's happening with uh job sites that deviate from traditional job sites and create communities uh and have you know richer audiences in terms of the data their intent um and where you can help people actually source uh better candidates there are a lot of local ones there are a lot of vertical ones um and these are closer to ats's that they are to job sites so okay so you're looking for for more kind of hr tech tools whether it's like you know doing interviews via chat bots instead of putting a human on it or just things like that that sort of thing too interesting okay so 20 000 companies using you 70 million candidates how many hires have you placed over the past year uh over the past year it must have been something like a bit less than half a million okay and over your total life about a million hires correct about a million actually must be nearly about a million and a half thousand hires that's i mean that's that's pretty good um really good now your revenue model uh are you charging a flat sas fee or is it somehow tied to like a percent to first year salary of the of the employee you're placing which are the flat size fee um in in some of our products it would perhaps make sense to mimic the recruiter and agency uh business model but we try to stay away uh from it um it's it's it's a it's a complex discussion uh over there but but in fact what we're trying to do is essentially to replace and automate some of what agencies do in the future uh and we felt that following their business model uh would not say the right message yep what's your team size today how many people it's about 300 people right 300 okay how many engineers uh things must be 90 to 100 people yeah okay and any do you employ a lot of uh like quote quota carrying sales reps uh yes absolutely um about a third of our team right now are you know sales related how many must be how many carry quota though about 20-25 okay 25-ish and what's their motion look like is it field sales inside sales demos we typically do um transactional inside sales um meaning sales cycles below 20 days uh very often just like a few days uh but lately we have a lot more uh consultative inside sales or occasionally sales for bigger customers yeah yeah i mean when you look at whoever your largest customer is are they paying you more than a million a year no no okay so you have no one yeah we don't have steak dinner sales though yeah yeah that's a fly out and do a steak dinner so what what i mean what would you put your largest customer at like half a million a quarter million a year customers are like uh low six figures lose okay so you're your customer paying you the most right now annually is caught low six figures okay do you think do you think there's opportunity to three four five x that helping them place more candidates or no your growth is gonna come from getting more customers like new brands all together to be honest with you we're not so keenly interested in million dollar contracts because that would necessarily mean that the product would become less appealing to the smaller customers right now the way the market is uh we are the leading player with companies with fewer than 500 employees and we don't want to lose that who's the leader above 500 employees um i think that you will find people like i seems perhaps taller the non-software from oracle isibis is probably the leader over there but people like green house and smart recruiters are also doing good work in that area yeah colin now has private equity behind him at isims are you in any acquisition talks with him even if i were i couldn't tell you uh let's let's go to hypothetical land here for a second does that marriage make sense um who knows maybe maybe would i have no idea i don't believe you haven't thought about it ah it's too early all right fair enough uh talk to me about churn so churn's critical obviously in a sas company last 12 months what's gross revenue churn been around well for we have two categories of customers the the the the bigger customers that go through inside sales uh more typical sales customers uh are about 100 95 to 100 the smaller customers uh the return is a lot bigger like 15 to 20 percent across sorry you said the middle the smaller customers are 15 to 20 gross revenue churn yeah okay does expansion revenue on those cohorts more than make up for the churn actually expansion makes after return um pretty decisively but okay i thought you asked for growth well yeah i know what i was asking for so ignore over the past 12 months ignore all the new customers you added if you just look at churn revenue on your old customers plus expansion on the old customers is your net revenue retention above 100 uh if you add expansion then that every mutation is above 100 for annual customers for the monthly the small ones it's about 85 percent okay got it good how do you um okay i guess that makes sense the reason i'm asking is because as you back into cac right i'm sure you're willing to spend a different amount for a small customer versus a larger one but regardless of the cohort are you optimizing for a 12-month payback yes typically the payback is for the small customers it's actually six or seven months and for the bigger customers is 12 to 14. okay 12 now are you hopefully are you generally getting more aggressive there or less aggressive er what has happened over the years we've we've been very successful in the past with the content marketing operation right now i think we have the most popular hr website in the world with about 25 million uniques a year for hr professionals so a lot of our leads are coming inbound through organic challenge and seo so for the smaller customers we don't tend to spend a lot of money so it's you know it's it's a it's a net profit from the very beginning for the bigger customers obviously you have sales costs um and there you know it's it's a choice actually right now we're trying to run which means we're spending a little bit we're willing to take a bigger attack to accelerate the growth that's good yeah that's what i was asking and you have the money to do it right you can be aggressive that way um are you planning on raising an additional capital no 30 times soon just because you don't need it right yeah absolutely i mean uh we have played the right way right now yeah when you um that 50 million was that a series b it was a c actually it was a c okay so this is a little old data because it's you did it over a year ago but generally speaking when founders are thinking about their series c round how much of the company are they gonna sell usually i think in c rounds i think typically some of it below 20 it's not like a and b rounds it's usually like 10 15 that sort of thing mm-hmm okay so like if you sold less than 20 of your company for the 50 million series c you're saying valuation there was obviously i mean you put your valuation there at like 250 million basically yeah can you break next year i mean i would say if you double from 30 to 60 at the end of next year you could potentially start pushing that billion dollar kind of valuation mark is that reasonable is that too aggressive i guess so but to be honest with you the theoretical valuation of preference talk is not my main concern it unlocks as we saw with mr newman at wework it does unlock additional capital for you that's non-dilutive of course having a good valuation generally is a good thing but for me the primary thing is to have a company that grows a state of there there are plenty of companies in the hr space uh which because of a mix of a good growth with uh low burn uh and a steady big market have achieved remarkable outcomes paid for bamboo for example um they they've had remarkable outcomes because their whole pml um was not just focus on you know growth at all costs yeah i mean the tricky thing is even with you right so if you burned right 10 million right on 30 top line that's negative 30 ebitda margin on growth of 50 to 60 percent right so your if your rule of 40 multiples actually below the target e40 exactly you don't you don't want you don't want to be much below that depends then what margin because we have margin of eighty seven percent yeah which is softer yeah yeah okay let's wrap up with the famous five number one what's your favorite business book my favorite business book i think it's fooled by randomness by taleb you said alchemist fooled by randomness by nicolas fooled by randomness number two is there a ceo you're following are studying um number three what's your favorite online tool for building your company [Music] i don't have a favorite one okay number four how many so many i like that's what i can't speak but how many hours of sleep are you getting every night uh i am getting consistent eight hours of sleep every every night i i used to uh i i used to sleep for five hours and and think that was clever but it wasn't getting good is very important and uh nikos what's your situation married single kids i'm married i have two kids two kids all right and how are you i'm 43 43 last question what do you wish your 20 year old self knew oh i wish i knew how easy it is to create a company and you know build whatever product you like and you know make a career out of it guys there you have it workable.com finished last year and a 20 million run rate we'll finish this year at a 30 million run rate so caught 50 to 60 year-over-year growth burning about 10 million annually again to drive that growth working at the economics race 50 million last year to bring the total fund raised to about 90 million they still have most that 50 million sitting in the bank as nikos looks at smart acquisition on both of customers right they have less than a 12 month payback period on most their base but also can you deploy that capital do some strategic m a work we'll see what happens in the meantime nicos thanks for taking us to the top thank you very much 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