The Exchanges

Q Yep. Interesting. Well, you go, you obviously know me well, you know what, I'm always biased towards debt, but how do you think about debt versus equity if you want to raise money next year?

A I think it depends what you want to do, right? So I think that if, um, if you, if you really genuinely think that you could build a hundred million dollar business, then you're probably going to want to go out to venture money because you're going to need to raise two or three times. Um, and debt probably won't help you do that over the longer term. I think if you, if you think, and you're happy to build out a twenty million ARR business, um, and flip it for the two hundred million, um, Um, then debt could be a really good opportunity for you because you don't have to go out and raise all those venture rounds and you retain the equity.

AI assessment note: “if you really genuinely think that you could build a hundred million dollar business”

Q decks to argue and debate and get a higher valuation and less dilution, which is the name of the game, less dilution. Check it out today at founderpath.com forward slash products. That's plural forward slash valuations. Again, both plural founderpath.com forward slash products forward slash valuations. So it's now you've spun it out as its own entity. Do you have customers on that that are not from your other companies?

A Oh yeah. All of them are. I mean, I don't have any repeat customers. We've had to go out and build out a sales motion from scratch and all of our, all of our prospects and all of our customers are new. It's very different. We're, we're talking to different types of customers. Um, so with deal pad, our sweet spot, um, our company, software companies, again, B to B. Um, but where there's, Anywhere between five and fifty million ARR. Um, we, we think that we can really help that segment. Um, where there's an enterprise sales motion, but also where there's complexity in the sales process, where you're managing multiple stakeholders, um, where you are, you've probably got an average contract value, annual contract value of 10 K upwards. Um, so it's, you know, not transactional. It's not, you know, kind of You know, you know, DocuSign who are just kind of trying to, you know, sell 50, 50 dollar seats. Um, it's, but it could be DocuSign if they go into enterprise and start to sell, you know, their enterprise suite. And so, yeah, so, so our, our, our ideal customer is very different to, uh, although they're both B to B SaaS, very different to Charlie.

AI assessment note: “Oh yeah. All of them are. I mean, I don't have any repeat customers.”

Q What does that mean? What do you do on LinkedIn?

A Um, Um, so we've got a really nice hack, um, where we will find, um, somebody that we believe is our ideal buyer and is an, is, and can be an influencer. So they're not just a, you know, chief revenue officer. They're a chief revenue officer with a big network. And we, we gauge that by how many followers they have. And then we'll, we'll, we'll link in with them and we'll follow them. Um, and the way that most people have, particularly the high people with the high followers is you don't connect to them. Now you follow them. But what it means is that, um, you do follow them. So you don't have to wait for a connection and now you get all their posts. And so what we're, what we're looking for is who's commenting on those posts, who's liking those posts, how relevant are they to us? And then we build out and expand our, our kind of sphere influence that way.

AI assessment note: “we've got a really nice hack, um, where we will find, um, somebody”

Q Yep. If you had to pick a book that most accurately captures what you believe about how sales should be done at deal pad, what book would that be? For example, at founder path, it's definitely Neil Rackham spin selling.

A Yeah. Um, so I think it would be challenger. The challenger said, Um, you know, we are, uh, you know, particularly in our market, um, our buyers don't necessarily know they've got a problem. Um, and so we need to, we need to challenge them on it. We need to challenge them on what they're doing today because we know that we can optimize what they do. And, you know, you'll have a sales team. Um, we'll say we've got all the software we need. So you're hitting quota. Well, no, we're not. All right. So there's a gap, right? Where, where, where is the gap here? Is it top of the funnel? Is it, is it inside the deal in mid funnel?

AI assessment note: “so I think it would be challenger. The challenger said”

Q Oh, wow. So, I mean, that's impressive. In eight months, you set up a hundred customers. How are you, what's your go to market, right? I assume you're using deal pad for your sales motion, but what's your go to market?

A Yeah. Deal pad helps a lot. Um, so all outbound at the moment, we've not really focused on any inbound because for me, that was an investment. We weren't really sure what we need to produce to them, what would work. So we've just really focused on outbound. Um, and we've got a team of SDRs. We, um, deploy I guess three software, um, kind of vendors in our, in our sales stack that will help us go out and prospect well. Um, and, and that's been it really. It's just been a case of let's get leads in. Um, let's sit great qualification and discovery calls. It's really understand the pain we're solving. Um, and, and, and let's solve that pain repeatedly for our customers.

AI assessment note: “so all outbound at the moment, we've not really focused on any inbound”

Q Interesting. Okay. Very cool. All right. So then take me through the transition. How did that take you into churn?

A Um, so, you know, I, I guess that, um, every company that, so both companies I've had with, with churn customers, and as a SaaS business, it's, it's, it's very painful. Um, and kind of, when you look at, um, kind of CAC and, and, uh, and LTV, and it's, it's really expensive to acquire customers, it's, it's really painful to lose them. Um, and then as I've kind of evolved my career, and I've become more, more of an investor in other companies, uh, in, in kind of early stage businesses, uh, Um, churn is a big problem, you know, in every boardroom and every meeting I, I sit in, um, it's all about how we reduce churn, you know, um, how we understand churn better. And so it was, it became very apparent that there was a, there was an issue here, particularly with, with, with SAS businesses. Um, and, uh, and, and so I thought that I would try and look at addressing that particular problem.

AI assessment note: “so I thought that I would try and look at addressing that particular problem.”

Q Okay, interesting. And what are the, what are the major sections of that document? Is it like call scripts, um, call objection handling? Like what are the headers in that document?

A Yeah, so it's opening. I think the opening part of a call is the most important because it's going to give you the opportunity to talk. Um, you know, a lot of our, um, a lot of SDRs I see just get hung up on a lot. And so, you know, you don't even have an opportunity to say what you're doing. I think the second thing is, um, how do you cut through people that aren't listening and will just give you a, an answer to say they're not interested, but they don't know what they're not, what they're not interested in because they haven't listened to you. So how do you get them to listen? So what's the value prop? What's the compelling statement that's going to surface some pain that's going to give you another 30 seconds to talk to them? So we look at opening, we look at Um, that kind of, the whole value statement that's going to open them up a little bit. We, we never ask closed questions, so we're always asking open questions to try and open them up.

AI assessment note: “So we look at opening, we look at Um, that kind of, the whole value statement”

Q Okay. 20. And is it still pretty high touch or are you starting to feel like you're systematizing some things?

A We're systemizing things, but it's pretty high touch still. Um, I, I guess, um, you know, the onboarding process is something that we're working really hard at the moment. Um, and, uh, and so there's, there are integrations. Um, so we build connectors to, to, to pull in the data from whatever data source our customers use. Um, there's obviously ensuring that, um, our, our dashboards are, are kind of built for each of our customers. And so the, the, the data that, um, who is used by customer success Teams and folks. Um, it's, it's translatable. You know, you don't need to be a techie to really kind of understand, you know, the, the, the, the kind of the data that we're, we're, we're pulling out for our customers.

AI assessment note: “We're systemizing things, but it's pretty high touch still.”

Q And is that, I mean, are you cool with that? You can sleep at night. That's no problem. It's worth it to you.

A Well, I mean, I'm cool with it for now. I, I, I guess, you know, it, it, it, it kind of crystallizes our focus because, you know, I, I don't want to keep doing that for long. Um, I'm happy to, but I don't want to. And so really it's, you know, how do we get to break even? How do we get more customers? And to do that, it's all about product. What I've realized about this business more, more so than any other, the SAS business or other companies I've worked with Um, four is that this is all about products. Uh, we have to nail products, uh, and it, and it's a really complex problem to, to solve. Uh, if we, if we get it, uh, we get it right on scale, I think we've Isn't a company I haven't sat in front of that said we don't have a churn problem. Um, you know, we, we, we, you know, we don't care about what our customers are doing, behaving. We don't care about.

AI assessment note: “Well, I mean, I'm cool with it for now.”

Q Okay. There's some concentration, right? I mean, with 90 customers, 6.5 million in revenue, you've got some big customers.

A Yeah, we've got big customers. The, one of the things that I like about the business, one of the things I really get frustrated about this business and why I'm founding DealPad, um, is it's extremely complex. And, and so this is not off the shelf software. So we've built our, our models Um, you know, we've, we've got proprietary algorithms, but we have to customize everything. And so when we go into a company, um, you know, our services cost, usually three X is our SAS cost. So we're not, so our, our revenue isn't just on, um, isn't just SAS. It's SAS plus services to implement. I see. And it just takes so long. And, and I get, to be honest, I just get bored with it. And so, uh, we, we're, we're carrying on journeys. Definitely. Um, you know, Building a great company. Um, but DealPad, you know, um, is a combination of my work really over the last 10 years of helping my sales teams deliver quotas and, and make sure that they hit close dates on time so we can forecast well. And, and, and whilst the two companies and two products are very separate, there's definitely a lot of, um, synergy. And I can see that the, the two products unifying at some point. Where we take a, you know, a kind of a, um, a product to market where it's, you know, we're going to help you, um, win customers with deal pad and close deals, and we're going to help you retain them. And we're going to show you ho…

AI assessment note: “Yeah, we've got big customers. The, one of the things that I like about the business”

Q Why do you upsell based off number of customers lost? I mean, any company that's moving up market will have high logo churn, but low revenue churn.

A So we've tried a few models. Um, I don't think by any means we've probably got the right, we've nailed the right model, pricing model at the moment. Um, but it's one that works for us and it works for our customers. So, you know, we were, we were looking at, um, you know, percentage of revenue. We were looking at number of customers they have. Um, we've, we've, we've kind of modeled and tried a few, quite a few. Um, we've, we feel that, um, the price point that we've, we've landed on, which is anywhere to be honest, between seven and 1200 bucks a month. And it kind of, Averages out about nine. Feels about right for us, and it feels about right for the customer. Um, it, I, I don't, I'm not sure if, if in the next 12 months, 18 months, two years, this is going to be the pricing model that we'll stick with.

AI assessment note: “I don't think by any means we've probably got the right, we've nailed the right model”

Q And so when you look at just deal pad, the customers paying for the software you just described, what are they paying on average per year or per month?

A Again, it depends. Um, it depends. So, so it depends on what they buy from us. Um, so we've got, so DealPad has a, a, a kind of a solution set of, um, account planning of, um, kind of buyer alignment. So it's kind of a two way buying process that they can, they can loop into and then mutual action plans. And, and so, um, it depends what they want to buy. A lot of our customers, um, initially go for the middle of that. They, they want to, they want to actually understand what's happening in a deal. And I think this is where, this is where I see that we customers get most excited. So inside their CRM, whether it's Salesforce or HubSpot or Pipedrive, um, you know, they're relying on intuition because ultimately the, the, the CRM can only tell you what's in the pipeline, what base they have, right? They can't actually look into a deal and tell you at what part, what point that deal is at and how it's being evaluated, what, you know, and, and, and, Um, that's what we do. So that's where we, that's where DealPad comes in.

AI assessment note: “Again, it depends. Um, it depends. So, so it depends on what they buy”