How Wrike Reached 18,000 Customers and Over 2,000,000 Users with $27M Raised (Interview with Andrew Filev)

Hybrid Land and Expand Sales Model

Nathan Latka

00:00So you said we have two hybrid models. Start there.

Andrew Filev

00:02>> So we we have our hybrid model, which and and we have a typical land and expand sales process. So when when the cost when we get the customer, it's usually inbound. We have about 40,000 trials starting every month. And trial typically, it it it creates a new company. So it's not an individual trial. Right? It's it's an organization. And we qualify them, and for their bigger and better ones, we provide sales assist. So the sales rep

00:28>> is calling the company. And then if the company is below 2,000 employees, it's very usually very quick sales cycle. And if the company is above two two thousand employees, it's usually longer, sometimes might include proof of concept. But in any case, when we land the deal, we we don't try to delay it. We we we don't try to artificially inflate it. We take the deal that there is. And then if oftentimes, it might be a team

00:55>> or department in a much larger organization, and that's when later the expansion picks up. Or, like, if we landed our smaller team in in a company like Google, then later we can grow that account. So some of our customers might start as 15 users and become 2,000 users four years down down the road. So a lot of accounts kind of grow grow with us.

Nathan Latka

01:17And the minimum price again on that seat, is it is it what you said? $50 is a good average per on the per seat basis?

Average Seat Price: SMB vs Enterprise

Andrew Filev

01:23>> On on a per seat basis, I'd say the average is between twenty and thirty. So the SMBs are usually below 20, and their enterprise are usually above 30 companies. I don't mean the plan. I mean the companies. So the average is between ten, twenty, and and 30 per user per seat per month.

Nathan Latka

01:42Yeah. That that's fair. Launched in 2006, you have 600 people on the team today. Break that team down for me. How many of them are kind of sales marketing?

Team Breakdown by Function

Andrew Filev

01:50>> So in terms of our R&D organization is between two and three hundred people. Our support team is 50, and then our sales organization is north of 100 employees, and then we got about another 100 in customer success and professional services because which please don't confuse it with support. We we we actually have amazing support team. But on top of that, we offer additional help to our customers because a lot of them go through transformation.

02:26>> So so it's not just buying the tool. They're trying to figure out how to change their work processes. So we and we we try to help them both providing free customer success management service and paid professional service engagement just to help them better achieve their their business goals.

Nathan Latka

02:42Yeah. And is that free or they pay for that?

Professional Services and Customer Success

Andrew Filev

02:44>> As I mentioned, it's both. So so there is a free customer success manager on on on for for most of our medium and large businesses. And then on top of that, there's a paid professional services organization. Yeah. You know?

Nathan Latka

02:57Sorry. I got that because you just said that. But so when people are actually paying for it though, like, I'm trying to get a range. Are are they paying, like, as a percentage of first year ACV as basically onboarding, is it actual code you know, customization of the code?

Andrew Filev

03:09>> No. There's no

03:12>> there's no is very configurable and very, very, very user friendly. So a lot of those services are focused on change management, process mapping, user education. They have less to do with with the technology and more to do just with with the kind of a business consultant, if you will. And so their their professional services engagements, they're usually scoped scoped and priced, so they don't depend on the subscription. They more depend on what the customer wants to

03:43>> achieve accomplished. But they usually correlate with the subscription, meaning, usually, if you have a bigger account, right, if you if you're deploying thousand users, you usually try to kind of achieve more business outcome. You know, like, you want a savings or additional revenue of millions of dollars versus if you if you're onboarding, like, dev users. Yeah. Andrew, that makes sense.

Nathan Latka

04:02Walk me walk me through the revenue mix. Right? So over the past twelve months, like, are we talking, like, 10% professional services or more 30 to 50%?

Andrew Filev

04:14>> Nathan, I'm sorry, don't know if it's on my side or yours. Andrew, the

Nathan Latka

04:17question was, if you look at the past,

Andrew Filev

04:19>> if you look at

Nathan Latka

04:19the past twelve months, I'm trying to get a sense of what portion is professional services versus pure play SaaS. So it's like 10%.

Andrew Filev

04:25>> Oh. Oh, yeah. It's it it it is it is fairly small. We're pure play SaaS.

Nathan Latka

04:31So what what percentage?

Andrew Filev

04:34>> Give me give me a quick minute.

04:37>> I I believe it's less than 2%.

Nathan Latka

04:40Oh, less than two. Okay. Really small.

Andrew Filev

04:42>> Oh, no. Wait. Wait. Less than 5%. Less less less less than 5%.

Nathan Latka

04:45Okay. Less than 5% professional services. That's helpful to understand. Look. Another reason people do professional services is because it drastically drives up retention, which is, you know, on those accounts, which is critical in a SaaS company. So when you look at your retention today, how do you think about it, and what is it? Are you over a 100% net revenue retention?

Net Revenue Retention Over 100%

Andrew Filev

05:02>> Absolutely. Yeah. So we we are over a 100% net revenue retention, which is very, very big for us. It's actually one of their main well, like, basically, you look at their numerical goals for the company, which I will not disclose, the the two main ones that are driving the organization is their top line, their overall recurring revenue, and their net retention number. We're very much focused on making customers grow with us.

Nathan Latka

05:28Yeah. Yeah. So net retention is obviously a function of two things, your ability to drive expansion and also making sure, you know, you don't churn revenue as well. So when you look at when you look at both of those elements, because those are different strategies, which one do you think you're most effective at?

Andrew Filev

05:43>> Right right now, we're we're effective at driving both, but we focus, usually focus more on expansion. It's just just a function of limited resources. You know, you you think six or 700 employees is a lot, but it's still there's only so many hours in in in the day. So we're, right now, we're mostly focused on on on, again, growing the accounts, but there's a lot of programs in the that we're gonna address in '19 that actually

06:13>> help will help us programmatically make even even more customers even more successful, which will affect their the growth retention as well.

Nathan Latka

06:24So, Andrew, if someone if if today I sign up for your tool and you onboard me and I'm paying, I'm gonna make this up $10 per year. What can you pretty predictably guess that I'm gonna grow to in year two?

Andrew Filev

06:35>> I will not share the exact number, but you will be north predictably north of 100% your your your revenue. So because at that point, you will get incredible product. You will also get free CSM service. You will likely buy paid professional services onboarding from us, which will almost guarantee that you'll be quite successful. And if you're successful, you you you'll grow with us. So So

Nathan Latka

06:58I would say I would say best in class net revenue retention based off the 3,000 B2B SaaS CEOs I've interviewed is probably a 140, 150%. How close are you guys to really hitting that number consistently?

Andrew Filev

07:09>> We have some cohorts that are pretty close, and then we have some dependent on the size and product that are not not there yet, but but but growing.

Nathan Latka

07:19And and what is an strategically, what's enabling you guys to get there faster? And, specifically, what I mean is pricing axes usually are a critical driver. Where you choose to set up the axes is a critical driver of expansion. So when you do drive expansion, what do you drive them around? Number of seats, product lines, data, or usage metric? What is it?

Expansion Axes: Seats and New SKUs

Andrew Filev

07:36>> In the last past two years, it's mostly been just organic growth of accounts, so number of seats. Okay. In the coming year, we are launching several new SKUs, so we we might see additional additional SKUs bought by the customers. But in the in the last two years, it's mostly been just just growth of the accounts.

Nathan Latka

07:56That's great. And then funding, I think you have raised capital. Total to date was how much?

Total Funding Raised

Andrew Filev

08:03>> We we've raised north of $27,000,000.

Nathan Latka

08:0627. Is that all equity, or did you do venture debt as well or some convertible notes?

Andrew Filev

08:11>> That that that is that is equity.

Nathan Latka

08:14Okay. That okay. All equity there. And then walk me through in terms of you as a CEO and your level of kind of aggressiveness in terms of growth. If you do go after a $10,000 ACV account, what is CAC on that typically? How aggressive are you willing to be to get that account?

CAC Payback Targets by Channel Maturity

Andrew Filev

08:30>> Yeah. We we for their at scale and established programs, we try to get to gross sales and marketing efficiency of one, meaning a one year payback. For the new investments, so the channels that are actively growing, we're exploring them. We are ready to to invest, so sometimes it means up to two years payback. And and and even in case of small test, it could be even even less predictable. But in the stable state, when something works

08:58>> at scale, ideally, we'll like one one one year payback.

Nathan Latka

09:02Got it. So that's interesting. So you would go as as high as spending $2 to get a new dollar of ARR on a new channel, but over time, you wanna see that drive down and stabilize around one to one.

Andrew Filev

09:11>> That that's correct.

Nathan Latka

09:12Interesting. That makes sense. And when you are spending that money, like, name name a test that you're running right now that you're excited about.

New Channel Tests: Social Media

Andrew Filev

09:21>> We are actively test testing social once again. You know, it's kind of up up ups and downs depending on how those those platforms work. If if it's more oriented towards social gaming, it's very hard to drive B2B sales through that. Right now, I think their social networks get a little bit more curation, so we're running another test, which right now is too early to speak about it, but it it it might turn out into

09:47>> some something interesting.

Nathan Latka

09:49Yep. No. That makes good sense. And then you mentioned in the introduction, I think 15,000 customers, I believe those aren't seats. Those are actual logos, right? Organizations?

Customer Count: 18,000 Paid Logos

Andrew Filev

09:58>> Those are logos, yes. 18,000 to be more correct.

Nathan Latka

10:01Sorry, 18?

Andrew Filev

10:02>> That's correct.

Nathan Latka

10:03Okay, 18,000 logos. And how many seats across all the accounts?

10:12Andrew, sorry. You cut out there. How many?

Total Users and Free Plan Disclosure

Andrew Filev

10:14>> We have more than 2,000,000 users.

Nathan Latka

10:17Okay. And just to be clear, because I know you have a free plan. All those 2,000,000 users are on they're under one of the paying logos.

Andrew Filev

10:24>> No. So some of those are either free users or collab free collaborators in in in the paid logos. So we don't disclose the number of paid seats.

Nathan Latka

10:32Okay. But you have 18,000 18,000 is the paid customer number. Correct?

Andrew Filev

10:36>> It's paid pay pay paid customers. That that that is correct.

Nathan Latka

10:39Yes. Okay. I'm I'm actually, I'm curious. Why would you why do you hold the seat number back, but you reveal the logo count?

Andrew Filev

10:48>> Just because

10:52>> for for because we don't wanna disclose the revenue. Right? If we if we disclose their number of paid seats, it gives a pretty direct pro proxy of the revenue number versus if you with their our distribution of their contract prices. If we disclose the number of accounts, we're we're not yet disclosing the revenue, we're we're not ready to to disclose the revenue yet.

Nathan Latka

11:13Yeah. Most of freemium models, like a Typeform, for example, that have call if they have 2,000,000 users, you know, they're typically converting call it five to 6%, right, of those to paid. So, I mean, I could still I mean, we can still kind of back into a number which would put you at 120,000 paid seats across 18,000 logos at a $20 per seat price, which you talked about earlier, puts you at about $2,400,000 per month in

11:34revenue, which sounds a little bit high. So instead of asking you about specific revenue, let me just ask you, at this stage of the company, are you kind of in the triple year over year stage target, or are you happy with doubling?

Andrew Filev

11:47>> Well, for for I I I the exact revenue number, will not disclose, but I I can tell you that your math underestimates it. And in terms of revenue growth target Well, hold on.

Nathan Latka

11:58Just to be clear, so you're north of 2,400,000 per month.

Andrew Filev

12:03>> Yep. Okay. But again, we're not disclosing the exact numbers. I will not answer further questions. That's But I'm just telling you that you're

Nathan Latka

12:09No, no, not fine. A minimum is helpful, right? So $2,400,000 per month, obviously, we can we can, you know, glean some value from that. Obviously, it puts you at north of kinda $26,000,000 to $27,000,000 bucks in ARR. That's helpful.

Andrew Filev

12:22>> Yeah. And then again, as as I mentioned, you you're grossly underestimating it, but I won't disclose their the exact Look.

Nathan Latka

12:28I'm gonna I'm only I'm not gonna make up numbers. I'm only gonna go off what you tell me. So unless you wanna give me a more accurate number, we'll stay right at $28,000,000 in ARR.

Growth Rate and Deloitte Recognition

Andrew Filev

12:36>> So in terms of your question was in terms of growth. So we actually, today, their Deloitte numbers were were announced, so so you can check out the growth rate. We were named one of the fastest growing companies in North America four years in a row. In the last three years, I believe their growth rate was five hundred thirty Thirty. Five thirty nine. Yeah. 539% on the last three years. So we're definitely in the double digit growth

13:08>> number right now and kind of in the high double digits. That that's what I can disclose.

Nathan Latka

13:14We're talking to grow We'll put

13:17a big range on it to keep it vague, but between 50 and a 100% year over year is fair. Correct?

Andrew Filev

13:22>> That that that that's correct. On on kind of higher higher end higher end of their double digit growth. And in the last year, we actually accelerated. So we're very, very happy with with the current growth rates.

Nathan Latka

13:34That's great. Yeah. Congrats on that. By the way, it's very rare that I see folks that have raised $27,000,000 where they've actually caught ARR past that number. So your fund your funding to ARR ratio is greater than one is actually pretty rare. So so congrats on being effective with the capital you've raised.

Efficiency as a Competitive Differentiator

Andrew Filev

13:48>> Yeah. I think we're a triple winner there where if you look at our size, if you look at our growth rate, and if you look at our efficiency, I personally don't know any other company in there in the valley, that that that does that.

Nathan Latka

14:02Yeah. No. It's great. What that tells me, by the way, is that you're you're potentially about to raise a massive round of funding.

Andrew Filev

14:10>> I can neither confirm nor deny that statement.

Famous Five: Books, Sleep and Advice

Nathan Latka

14:13Let's wrap up with the famous five. Number one, what's your favorite business book?

Andrew Filev

14:18>> I like Jim Jim Collins. I like Team of Teams, Extreme Ownership, bunch of others. I I read a lot.

Nathan Latka

14:23Number two, is there a CEO you're following or studying right now?

Andrew Filev

14:27>> No. But I have lunches with some public company CEOs here and there who share their wisdom.

Nathan Latka

14:32Name one that you like.

Andrew Filev

14:35>> I I like Rob from Coupa. Great guy.

14:37>> Yep.

Nathan Latka

14:38Number three, what's your favorite online tool for building the company?

Andrew Filev

14:42>> Wrike. No questions.

14:43>> No.

Nathan Latka

14:44Besides your own? We

Andrew Filev

14:46>> we use our partners tools predictably as well. So Google and Microsoft would be their the other two vendors.

Nathan Latka

14:52Number four, how many hours of sleep do you get every night?

Andrew Filev

14:55>> Try to get eight, but usually it's less than that.

Nathan Latka

14:58And what's your situation? Married, single, kiddos?

Andrew Filev

15:01>> I've got two boys who are as stubborn as their parents.

Nathan Latka

15:06Alright. So married, two kids?

Andrew Filev

15:07>> Yep.

Nathan Latka

15:08Alright. And how old are you?

Andrew Filev

15:10>> I'm 36.

15:11>> 36.

Nathan Latka

15:12Last question. What do you wish your 20 year old self knew?

Andrew Filev

15:16>> I believe that the history doesn't have condition also. I think I made good choices back then.

Nathan Latka

15:23Sorry. It's not about what would you change, just a lesson you'd give your 20 year old self.

15:33It'd be something you tell your kids.

Andrew Filev

15:38>> Surround yourself with good people.

Nathan Latka

15:40Yep, guys surround yourself with good people. Again, Wrike launched back in 2006. Healthy traction over a longer period of time, 600 employees across many different offices currently serving about 18,000 logos doing north of $2,400,000 per month. Healthy growth growing more than 50%, but less than a 100% year over year. They're doing this all very efficiently, only $27,000,000 raised each seat price, call it $10, $20, $30, depending on the cohort. Net revenue retention north of a 100%, but

16:07south of a 150% as they work to again drive more expansion year over year. As they test new channels, they're willing to spend up to $2 to get a new dollar of ARR, but over time, he wants to obviously see that. Andrew wants to see that kind of flatline and stabilizer on a one to one ratio. Andrew, thank you so much for taking us to the top.

Andrew Filev

16:22>> Thank you, Nathan.