The Exchanges

Q Monthly ARPU. Okay. Let's get more into the founding story. So, 20 11, where was your head? I mean, did you just quit a corporate job and your back is against the wall and you got to make something work? Where were you?

A Yes, I was actually graduating out of school. And, um, it was, uh, you know, just really the height of the recession. So businesses around the world were struggling. Um, my family actually had a furniture store in Niagara Falls, Canada on Main Street. And, you know, grew up in the store. My great grandparents started it. It was really the pride for us in the community. And, you know, when, when the recession hit, we had to shut it down. Um, and that really kind of, you know, marked me in saying, you know, the, the opportunity for entrepreneurship, you know, in the, you know, early, you know, Um, on the other hand, we came to visit, uh, my co-founder, uh, who at the time was a gaming company in San Francisco, and we kind of saw the opportunity that cloud services could bring to really help empower business owners around the world. And the biggest gap that we saw in the, uh, market is that, uh, from my family experience, I remember that buying software was a major decision, and that we knew the people who sold us the software. I still remember the, the person's name who sold my family the ERP solution. It was Rick Stark. Um, and he knew the furniture vertical really well. So we really sought to build this global network that connects the developers of applications with the end businesses. Um, and thus, you know, we've become this, uh, you know, ecosystem for, for distributing ser…

AI assessment note: “I was actually graduating out of school. And, um, it was, uh, you know, just really the height of the recession.”

Q Yeah. Today, well, I mean, I'm sure you have an inside sales team, this kind of thing. Is there a specific cohort you're focused on today? Are you generally moving upstream or downstream?

A Yes. We started, you know, the highest of upstream, um, Um, and then we created beach heads in different verticals. So we've rolled out from telco to VAR and MSP. Um, and now actually what's a fascinating vertical for us is, uh, manufacturing. So even traditionally you wouldn't have thought of a manufacturing firm as one that is at a core, a software company, but many firms are looking to, uh, digitally transform themselves through IOT. And therefore if you used to, you know, produce hardware, it's not, the value is not necessarily in the hardware itself. It's around the connectivity and the software and the ecosystem we can provide. Um, so we're seeing, you know, a lot of growth in our manufacturing vertical.

AI assessment note: “now actually what's a fascinating vertical for us is, uh, manufacturing”

Q And so tell us the story about Comcast specifically. How do they use you?

A Yeah, definitely. So if you can, um, one of the opportunities that's emerged over the last several years with the growth in cloud is that, um, businesses want to be able to access cloud services from people they trust. Um, and going back to the early founding of AppDirect, we always had this fundamental perspective that most businesses don't necessarily want to just go online and subscribe to services. They want to buy everything they need from a trusted provider. So Comcast is an example of a brand with Comcast business that offers, uh, you know, telecom services, uh, you know, internet, um, and is a great trusted provider to also offer things like collaboration services, uh, email, Backup, uh, and others. So that's how we help them. We enable them to get access to a portfolio of services that they can sell to their customers.

AI assessment note: “We enable them to get access to a portfolio of services that they can sell”

Q is obviously fairly aggressive, right? A lot of people are arguing that you can actually stay private now with so much kind of VC money out there. Is that generally the plan for you guys? You're kind of out of the, I mean, you'd have to do some very drastic things, I imagine, and prepare yourself to go public and get out from under kind of liquidation preferences and things.

A Yeah, so we've always had a long-term approach to the business and have, uh, you know, clean terms from investors. So, um, you know, I think for us, it's really about when the market opportunity makes the most sense. And for now, uh, you know, we're seeing a lot of growth and trajectory in the private markets. Um, but at the same time, we do see, um, it being more attractive and there's a bigger opening than ever for enterprise companies of our profile to go public. So I think that we're, um, you know, investing ahead of the curve and, and, uh, you know, Hopeful that, uh, we, we continue to focus for the long term, whether that means, you know, private or public down the road.

AI assessment note: “whether that means, you know, private or public down the road.”

Q Talk to me about just the enterprise side there. What do you see? Don't talk about your specific numbers, but when you do try and benchmark, who are you looking at and what are those paybacks you're typically benchmarking against?

A Yeah. I mean, I think the way that we'd like to see it is, um, you know, because we have low churn, um, or net dollar retention, and because we can generally get long sales cycles, um, what we, what we see is that, um, if we pay more upfront from, Compensation perspective or cost of sales perspective, um, over time, you know, we make that back pretty, pretty significantly. Um, and we've played around with different levers in terms of, uh, you know, what you want to look at. But if my advice to anyone who would be looking at setting, you know, comp and, and, uh, expectations is to really think about, You know, what are the, what are the behaviors or drivers that will happen no matter what? So if you know that your customers are signing up, there's a lot of value. You're going to stay for a long time. Um, then you can afford to be more flexible on the, on the upside, um, providing the market opportunity is really big.

AI assessment note: “if we pay more upfront from, Compensation perspective... over time, you know, we make that back”

Q cetera, to understand which kind of levers are most effective for driving expansion revenue. You probably get a lot of feedback from your sales team on this, but what have you found to be the most successful kind of pricing axes to drive the expansion? Is it a utility metric, like a number of Whatever build contacts or is it a product add on? Where do you see that falling?

A Yeah, definitely. I mean, I think that, um, when, when you think about pricing, the way I look to look at it is always, how do you create the most value for the customer stakeholders that you're working with? Um, so we've really, Kind of kept the same pricing framework, uh, but really always anchored it based on value. So as we roll out new products, we look at, you know, what value would I create for our customers and how do we make it work with their business cases? So oftentimes for customers, uh, you know, of ours, they want to move to a predictable recurring model. Uh, but at the same time, they may have some, you know, CapEx or want to do certain integration. So what we've focused on, um, is a really automating a lot of the components, our platform, To reduce the cost, uh, to deploy and launch. Um, and that makes for a much more predictable revenue stream. And we can do that through a lot of product automation. So yeah, you know, if you go back to some of our first customer launches, it would have taken thousands of custom engineering hours to get that going. We've gotten that down to point and click, which adds huge value in the ecosystem. So for our customers, it reduces time to market, um, drives more predictability, uh, and thereby adds a lot more value for them.

AI assessment note: “when you think about pricing, the way I look to look at it is always”