How Xactly CEO Arnab Mishra grew Xactly to $288M revenue and 1.6K customers in 2019.

hello everyone my guest today is chris cabrera he found it exactly back in 2005 and has since led the team from startup to ipo now back to private equity owned company at vista previously cabrera was svp of operations for a company called cal caledus acquiring 100 customers and leading a successful ipo heels of bs and an m.a from usc and santa clara university chris you ready to take us to the top i'm ready all right so i'm going to actually just like go right in uh my audience is pretty sophisticated sas one big debate i've had with many of the ceos that have come on my show doing between called 620 million bucks in arr that have really strong expansion revenue muscles is do you incentivize the customer success team like you incentivize the sales team with the base plus commission and expansion revenue they drive because you service this market exactly and you see all kinds of incentive structures what are you seeing right now are these companies incentivizing with company with the commission based structures on customer service teams well they're not all doing that and and you know kind of depends on what you're defining as customer service if you're talking about the renewals teams that we call them cams customer account managers that are responsible to re-up to customers they are absolutely getting paid commissions very much like a sales rep based plus commission we're seeing that pretty pretty across the board if you're talking about customer service people that are more just servicing the the customers ongoing they're not responsible for the renewals uh we typically will see bonuses in that area but you won't see typically you won't see straight-line commissions you know with with multipliers and kickers and presidents club eligibility so a lot of things that are more standard in the in the sales uh roles let me take a step at being more specific these would be for people they're not account executives but when you look at your pricing axes that these sas commands are pricing against there's always a util at least a good one there's always a utility-based upsell for twilio it's number of api calls for hubspot it's number of contacts you have your own upsells so the the the people inside of those teams that drive the usage metric up do you see those people being comped uh like a sales person with commissions uh not always we don't always see that uh you know i think some of the better companies are are recognizing that they should do that and they're recognizing that uh comp can drive dramatic uh behaviors and and whatever whatever it is you're trying to drive whether it's getting the customer to engage more or be online more add more contacts or whatever the case might be uh and so we are seeing progressive companies doing that but i still think there's a lot of companies and a lot of it has to do with the fact that they're hamstrung on excel-based systems yeah when you're in these excel based paradigms it's very very difficult to create complex you know compensation routines to provide the dangling carrot which is the visibility but you know through your your cell phone or whatever and so i think that's one of the reasons that companies just avoid it uh what we find is in our customer base because they have a tool that allows them to do that elegantly easily uh and with great visibility we find them paying all kinds of people the people that you're talking about as well as almost 100 of the population including receptionists at the front desk i mean literally anybody who is seeing a customer or interfacing the customer in any way perform they're using our systems to to motivate behaviors to have that experience be better very cool and those you that are not familiar with obviously chris's platform that is exactly what they helped do which is why i led with some of those questions chris let's take a step back here for a second so you've gone from kind of nothing i believe 2005 was founding here to an ipo to then you know teaming up with with brian and robert and the great team at vista and then go private again let me just get some context where was your head in 2005. were you kind of broke on the street had to make this thing work where why'd you launch the thing in the first place well uh it's a quite a long story i'll try to make it very quick and you can read about it on my book called game the plan on amazon but i was working at a competitive company selling on-premise software the big license the big hardware the big install and uh salesforce.com sort of pushed you know the nest and said we're not gonna buy this from you because we it's the wrong religion it needs to be sas it needs to be the cloud the cloud is the future of course in 2005 there weren't that many cloud companies and so um i tried like heck to get my old company to embrace the cloud unsuccessfully um uh we might have had some bad words that ended in me getting fired and so i was you know going into christmas in 2004 uh without a job but with salesforce saying you know if you build this we will come and i had eight years of experience in this compensation you know realm uh and uh you know it was kind of a no-brainer to go start this company and so that's what i did and salesforce uh true to forum became my very first customer today or our longest standing non-user i love that and now uh obviously you you raised cal poly for the company pre-ipo so up to the ipo not including funds raised on ipo date how how was it going to capitalize total amount in i was like 96 million okay and out of curiosity now obviously when was ipo date what year it was 2015. okay so economics a little different back then but generally speaking what was your ar to funding ratio was it close to one to one or where did you have more revenue than funding it was just it was very close to one to one a little less okay so i'd consider that in today's day and age actually high leverage with the outstanding exception being eric where there's like a two to one ratio which is an incredible story at zoom um but okay so you had obviously uh leverage there so leading up uh first off with salesforce just a customer did they also invest out of the fund they were an investor too yeah okay interesting so your first hundred customers you got did you rely on the salesforce app ecosystem or walk me through how you land of those folks uh we you know we were partners with salesforce right out of the gate so we we worked very closely with them but you know we also we're partners with oracle and everybody else and so we were really just focusing on at that time companies that had three or four or 500 sales people in their sales force that was sort of our sweet spot in the early days and you know what we found in that sweet spot was companies that were definitely using manual based excel based systems they had tons of pain lots of error rates and no web-based visibility or or cell phone based visibility and so it was a little bit like you know shooting ducks in the pond in those early days because you know the rois were phenomenal and fantastic so that's kind of how we started with the first hundred companies were all let's say uh mostly high-tech companies that were embracing sas we were generally either the first or second sas app they were buying back in those days because there just wasn't that many sas chris what kind of contract those team sizes the target you just articulated what was kind of average first year acv back in that day we're talking a hundred thousand dollar kind of plans or north or south yeah probably about a hundred thousand dollars and where have you matured to today are you kind of more upstream or downstream from there well interestingly we sort of done both but but clearly uh you know we just i mean it's only been less than a year since i talked to you last uh in that time frame uh we have done another acquisition so we've done three acquisitions in the last 15 months which is allowing us to sell a lot more products which is getting our asps going uh much higher uh we we just closed the largest initial deal we've ever done in the 14-year history just last month uh so we're starting to see much which company was that oh we can't say it i didn't give any permission to talk about it but it's very large oh it's not public yet no not the name of the company no oh okay okay well i mean look i i harassed the hell out of andre just came on from ping we had numerator on we had bill on at media i go you guys are all getting calls after the 14 billion dollar fund closes you know reggie going you vista going guys listen we got to deploy the capital uh fine find some places to play responsibly and let's rock and roll yeah well that's what's been so much fun about being part of the vista family you know it was part of the the reason we took the company private was you know they sort of said we believe in your vision we want you to go from an icm company just handling sales comp to an spm company which is sales comp and all the surrounding areas like territory management and sales planning and on and on and and so go find those companies that can build up the story that you've been wanting to tell chris and and we'll support you and it's been a incredibly fun ride but the benefit is exactly what you were saying we're seeing these much larger asps we're going back and able to sell we have 1600 customers now all over the globe we're able to go back to them and upsell cross-sell all these different products now that we have whereas before we were kind...