noCRM Revenue (2024)

[00:00] Hello, everybody. My guest today is Sonny Paris. He is a French Internet pioneer. He's got a PhD in theoretical physics, cofounded Webarama in 1998, survived the Internet bubble crash, got listed on the French stock market back in 2006, founded a company called ULink in 2008, and then pivoted to no CRM four years ago. Now he's got more than 2,500 customers worldwide using his SaaS software to close more deals. Sunny, you ready to take us to the [00:27] top? [00:27] >> Yeah, of course. [00:28] So I've interviewed thousands of SaaS CEOs and I think you win for most unique URL. You don't need a crm.com. Alright. So how are you different than a traditional CRM? [00:39] >> Basically what we say that CRM are boring and they slow down the salespeople. And they slow down salespeople basically because before start to work, a salesperson has to create a company, other contact, then the deal and to do so. It's a lot of stuff to do and we are much more faster than that. [00:56] Okay. But but so how? Where are you pulling your data from? Their inbox? Where? [01:00] >> Yeah. There are several points. The idea is really to focus everything on the lead and all the the lead contains all the information and it's really quick to create a lead. So you can forward the mail to us. It creates a lead. You can take a picture of a business card with the mobile app. It automatically creates a lead and recognize everything inside it. You're on LinkedIn on the page, you click on the button. [01:23] >> It's really, really super easy. And then we have also something to manage what we call cold prospects. You can import list of cold prospects into the software. It's like at that time, like an Excel sheet and you click just on a button after qualifying the prospect with anything truly. So the idea is really that you click and you have a lead. [01:42] Okay, and walk me through me. Are we talking enterprise SMB mid market? What's the average customer paying per month for this? [01:48] >> It's clearly SMB, okay. We're focusing on company for, let's say five, our main target will be company from five to 30 salespeople, okay. And the price is starting [02:06] >> at around 12 US dollar per user for the starter edition and 19 for the expert edition. [02:13] Okay. So again, when you sign up an average logo, when you take into account the number of seats that's kind of average for you, is the average kind of company paying $12 a seat times 15 seats, so about 180 a month? [02:26] >> Yeah, a little bit less than that. Let's say the average is five people paying $15. Let's say $60 per per month. [02:36] Okay. So maybe call it $70.80 bucks per month across the company. [02:39] >> Yeah, yeah, exactly. [02:40] I see. That's great. Okay, put this on a timeline for me. When did you launch the company? What year? [02:45] >> We launched this product at the end of twenty thirteen. [02:49] Okay, and why get into this space? It sounds like you've had some exits and you go, Oh, let me just throw my hat in the CRM, you know, the hyper competitive, super fragmented, maybe being commoditized CRM space. Why? [02:59] >> Okay. Because before that, we were in a quite more hype market that was the corporate social network. And in fact, it was quite difficult to sell the product. First of all, we didn't find any CRM that we like to sell our product. And we realized that the market was not that big. So we check our product and say, okay. Why why don't we do something where we're sure there's there's a market? And can we bring something [03:25] >> new to that market? And we thought, we can bring something new and it's a big existing market and people are are searching for for software that helps them close more deals. So we say, okay. Let's go. Even even if it's as you know, there's a the guest from PayPal say competition is for losers. So even if it's a loser's way to we lose well. [03:46] Yeah. Well, I mean, no. I mean, it's just it's difficult space make money in. Right? HubSpot's got their free CRM, then you have Salesforce on the very other extreme. It's just difficult. It sounds like you have some nice traction, You said you've scaled about 2,500 paying customers to date? [04:00] >> Yeah. Yeah. We have a good traction. We are more than 50% [04:06] >> raise year to year. So That's great. Yeah, that's really But just to [04:12] be clear, though. So but but right now you've got about about 2,500 different companies paying you for the software. [04:18] >> Exactly. [04:18] That's great. I mean, so look, 2,500 companies at that price point you gave me $75, $80 a month. That means you're doing call it 180, $200 a month right now. Is that about right? [04:27] >> Yeah, exactly. Yeah. [04:28] Okay. And 50% year over year growth would mean you were doing it back in November 2017 about $120 a month? [04:35] >> No, even less than that. [04:37] Call it a $100 a month, something like that. Yeah, that's great. And where's most of the growth come from? Is it adding additional seats to the old customer base or is it adding brand new customers altogether? [04:46] >> No, it's adding brand new customers. That's one of the problem of this kind of product. Basically you sign a company and those companies do not hire much more salespeople, you know, they grow, but they don't grow at high speed. So you can't rely on the growth of your customers. [05:04] Yeah, what is that? What's your churn today? [05:07] >> Around 3%, a little bit less than 3%. [05:11] Okay, that's logo churn per month? [05:13] >> Yeah, exactly. [05:14] What about revenue churn? [05:16] >> It's revenue churn. Oh, very user churn. [05:20] Yeah. Well, sometimes though user churn and revenue churn are very different if you have low price point, that kind of low ARPU customers churning. [05:26] >> So we have a might have a higher customer churn, but at the end, the user is equal to the revenue because we are really a multiplier of the the [05:35] Okay. So 3% revenue churn per month would mean you're churning about 35% of your sorry, 36% of your revenue per year. Are you expanding that same cohort at all? Or is your net revenue retention again, one hundred minuteus 36? [05:49] >> Sorry, I didn't understand you went too quick for a Frenchman. [05:52] That's okay. My question is, are so if I look at your net revenue retention annually, obviously, you're losing 36%. [05:59] >> Yeah, exactly. [06:00] Yeah. Right. So that that puts it at 64% right now. But we haven't added back expansion revenue. Do you have any expansion revenue? [06:10] >> Yeah, of course, we onboard a lot of new customers. [06:13] No, new customers, expansion revenue from that same No, [06:17] >> that's quite low. We have some [06:22] >> company growing, we have some company upgrading from the starter to the expert editions. Okay, but basically that does [06:31] >> not change that much. [06:32] Okay, got it. So if you're turning 3% revenue per month or 36% per year with no expansion, that means your net revenue retention is about 64% annually. It sounds about right? [06:41] >> Yeah, yeah, yeah. If you go like that, yeah, exactly. Yeah. [06:43] It would, do you measure it a different way? [06:46] >> No, no, no, that's correct. We have several way to measure churn. We are quite [06:53] >> precise on that. We measure the churn also depending on the duration of the contract, you know, because the churn of the new coming customers is always higher, much higher than the churn of the longer customers, as well as the churn of the higher, the biggest companies lower than the churn of the smallest companies. [07:14] Sure, of course. Yeah, that's and that's to be expected. Talk to me about like tools you're using to measure this. So what do you use like for your billing platform and your reporting platform? [07:24] >> We use Stripe as a billing platform and over all that we have designed our own statistics stuff. [07:33] Okay, so you didn't use like Chartmogul or one of these kinds of companies? [07:36] >> No, no, no, no. The fact is I'm quite comfortable with data because of my scientific background and WebOMA was a company that was doing ad tech and stuff like that. So I was quite good. I'm quite good in tracking and stuff like that. [07:49] Always, but you always build it internally even at that company? [07:53] >> At that company, build the software. So it was a software. It was our product, I mean. [07:57] Oh, that was the product. [07:58] >> Yeah, that's what the kind of product. [07:59] Oh, see. I see. And have bootstrapped this company to date or have you raised? [08:05] >> We've raised a little bit of money on the Yulin Pro, the social network. But when we decide to pivot, we pivot without raising any money. So it's really bootstrap. [08:16] Okay. [08:16] >> My point of view. [08:17] Had those people that you raised from early on, they're still on the cap table? [08:23] Yeah. Yeah. Yeah. Okay. And how little are we talking? Are we talking like 50 or less? [08:28] >> Sorry? [08:30] Little are we talking that initial raise? We're talking like $50,000 [08:34] >> No. The initial raise raise more about €600,000. [08:39] Okay. I mean, that's not a I mean, something that's small to some people. It's really big to other people. So $600,000 raised even though it was on the old product, but those people you pivoted with, they're still on your cap table. [08:49] >> Yeah. [08:50] Yeah. That's great. Okay. Very good. I'm sure they appreciate, by the way, that you you did that versus shutting down and, you [08:55] >> know Exactly. This is one of questions, you know, start but okay. In France, we are trying to be cool with our first investors and so, okay. Yeah. Yeah. Some risk. Can we continue on that? [09:04] You have to treat just like your customers, you have to treat those those investors, you know, they're buying you obviously, not the idea. Talk to me about your team today. How big is the team? [09:13] >> We are 10, and we tend to extend to 20 this year, and opening new countries where we'll open Italy and Germany in January. And after that, we hope to to continue with Russia and to open an office in New York. [09:28] Okay. Very good. So you're 10 today, and over the next twelve months, you plan to double? [09:32] >> Exactly. [09:32] That's great. [09:33] >> And we have people in The US, in Argentina, in London, in Portugal, and in France. [09:38] So pretty remote. [09:39] >> Yeah. Exactly. We are a remote company. Work remotely and we meet each other in Paris sometimes or at some event that we do each year. [09:47] And so how actually, that's interesting. Right? So when you're when people aren't all checking into a physical office every morning at eight or 9AM, I mean, how do you run the company in terms of just here are all the tasks, I don't care when you do them, just let's make sure we get them done. [10:01] >> No, not exactly. We believe that we're just like you office, everybody comes in the morning where we have what we call the three goals a day routines. I ask every people to think before starting to work to what will he ask what what does he want to achieve today? And then he he shared that on the social network that we have, the international social network. And then we we use the international social network to to share [10:25] >> a lot of things like that. And, also, we use collaboration video tools like Skype or stuff like that. I see. But we try to build the office around the corporate social network. [10:36] Got it. Very good. And then in order to get a $75 a month customer, what do you typically spend on fully weighted customer acquisition cost? [10:44] >> Basically, [10:47] >> we're spending, we try to spend one third of the lifetime value of the customer. [10:55] Sorry, one what? [10:57] >> One third, one third of the lifetime What [11:00] do you assume lifetime value is? [11:02] >> Last time I was around €2,000. [11:06] Okay. So €2,000. I mean, I divide that by by three, that means you're spending Yeah. 6 would get it somewhere around yeah. [11:12] >> 5 try to be maybe a little bit lower than that, but let's say not not more than 500, I would say. [11:17] Okay. So €500 to acquire a $75 a month customer. So what your payback period is about eight months, nine months? [11:23] >> Yeah, exactly. [11:24] Okay. That's fairly healthy. And where are you spending that money when you do spend it? [11:28] >> We do spend a lot of on AdWords, which are still very expensive, but still it's a for us, it's a premium source of traffic. [11:34] Like how much per month? [11:36] >> We have around $15 maybe $20,000 [11:43] Okay, so yeah, pretty healthy there. Very good. All right. Any plans to raise initial capital? [11:48] >> No, the company is profitable and we don't want to for the moment we find like that. There's a way to raise some money without touching the capital in France. So we are using this kind of mechanism. [12:02] Is it a grant or venture debt or what? [12:04] >> Yeah, it's a grant, but by government stuff. So it's really much easier to manage. [12:10] That's great. All right, let's wrap up here with the famous five one word answers. Number one, what's your favorite business book? [12:17] >> What's my favorite business book? [12:21] >> Probably the one on automation. [12:26] >> Predictable revenue. Yeah. [12:27] Sorry. What's it called? [12:28] >> Predictable revenue. [12:30] Really Predictable revenue. Yeah. Number two, is there a CEO you're following or studying? [12:35] No. Number three, what's your besides your own, what's your favorite online tool for building your company? [12:45] >> Our corporate social network, which is not on the market anymore. But I would say any corporate social network is really important for us. [12:51] Number four, how many hours of sleep ticket every night? [12:56] >> Wow. Something nine. Okay. Nine. [12:59] And which situation? Married, single, kids? [13:03] >> Divorced, two kids, and with a new wife that has also two kids. So all women. [13:11] So not married, four kids altogether? [13:14] >> Yeah. Exactly. [13:15] And how old are you? [13:17] >> 47. [13:17] 47. Last question. What do wish your 20 year old self knew? [13:23] Sorry. What do wish what do wish you knew when you were 20? [13:29] >> What do wish I knew? [13:33] >> Nothing because if I knew how hard sometimes it was, maybe I would have have done this kind of stuff. [13:39] No. Give me give me something. You've learned a bunch of the point here is to give someone else who's 20 Okay. A [13:45] >> A lesson. [13:47] >> Okay. Give me just one second to find something that is more or less interesting. [13:53] >> Yeah. Okay. [13:56] >> Don't believe in the existence of Google or Facebook or company like that. They are not existing. So build your company, grow at your own rates, and don't look at the exception. I know that all the people that raise money do only looks at the the exceptions, but you can have a great life, build a great company [14:18] >> with a normal life raising so much money. [14:22] Guys, there you have it. Ignore the exceptions. You don't need a crm.com launched in 2013, went through a pivot $600,000 raise now serving 2,500 customers, paying about $75 per month. They're doing about a $180,190 grand per month in revenue. That's up from about a $100 a month just a year ago in November 2017. They've got 3% revenue churn per month. About 64% net revenue retention per year because they don't have any expansion revenue yet. Spending up [14:46] to $500 to get a new $75 a month customer, so payback period is about seven months with a lifetime value of around $2,000. Team of 10 in remote locations all around the world doubling to 20 over the next twelve months. Sunny, thanks for taking us to the top. [14:59] >> What a great synthesis. Thank you very much. [15:02] Take care.