The Exchanges

Q The 18. Yeah. That makes a lot of sense. It sounds like there's a story there. Did you have a white level partnership with a partner and then they went out of business and then you took it over or what do you mean inherited?

A No, so the story was there's a Swedish company called Fort Knox that does, uh, small business accounting and invoicing, uh, and they used to have a CRM in, in, in their product, which they wanted to discontinue. Uh, so we made a partnership deal where we offered up sales to, to these customers who were using their own product. Um, and, uh, we had that partnership for, I think two or three years, uh, but we realized that Churn was a little bit too high and, and the growth was, was not really coming from this, these customers. So we, uh, just renegotiated the contract and, and migrated these customers to, um, to become direct customers of up sales.

AI assessment note: “renegotiated the contract and migrated these customers to become direct customers”

Q And where's the growth today coming from? If you've shut down the partnership channel, how are you getting more direct customers?

A So, I mean, we, we divided our, our sales team into a new sales team and an expansion sales team. And, um, we also, we have a kind of deliberate land and expand pricing model. So, so I think maybe two thirds come from, from existing accounts and one third from, from new accounts. Um, and I mean, we, we're actually spending some time now thinking about our pricing because we realized that Companies up to a hundred employees for those companies are, our pricing makes total sense. And, and a good customer pays us around one percent of their revenue. Um, but as you go up looking at bigger customers, we tend to have a lower and lower take rate. Um, so now we're working on, on, um, differentiating the pricing to have more of a kind of an enterprise offering for larger customers. Uh, so when I talk to investors, I usually say that we think that we can triple our revenue without bringing in a single new customer, uh, because the, the, the potential in the existing customer base is still massive. Um, and, and in our kind of Target list of new customers, uh, in only in Sweden, I think we have like three or four percent of those customers today. So there's also like a massive opportunity and a long runway of, of new customers to sell to.

AI assessment note: “maybe two thirds come from, from existing accounts and one third from, from new accounts”

Q Over time. Yeah. Well, we'll see what happens. Oh, that's great. Where's most of, um, where's most of, as we sort of wrap up here, where's most of the growth coming today, right? You inherited a bunch of customers, but how are you adding new customers today?

A Um, yeah, so we do a lot of, I mean, we, we have two teams. We have the expansion team and the new sales team. So dedicated for, for bringing in new customers. Uh, and we launched a, um, a UK expansion, uh, like, uh, 1214 months ago. Uh, so now we're adding like maybe 20, 25 customers every month in, in Sweden and in the UK. Um, Um, and we, we really try to, I mean, we've had this kind of very deliberate land and expand strategy, uh, the last three or four years. Uh, so we, we don't try to kind of, we almost try to kind of decrease the deal size when the customer joins us, because it makes everything easier and it decreases the risk for the customer as well. Um, so, so, uh, yeah, we just try to add as many customers as we can and then grow them over time.

AI assessment note: “we have two teams. We have the expansion team and the new sales team.”

Q Yeah. See, people never, people always forget this. See, now you're growing great, but like people, people don't forget the early years, right? What, why was it tricky for you in the first seven years? What took you so long to, I mean, I don't say this in a negative way, but what took you so long to break a million dollar run rate?

A I mean, I think, um, you know, I was 22 years old when I founded the business. So, you know, The first years, a lot of the stuff we were doing, we're just experimenting and trying to figure out how to run a business, you know, SaaS or any kind of business. Uh, and I think, um, you know, the early days, we, we never raised any capital. So, uh, you know, our first 10 years were like, Barely breaking even, you know, struggling to pay the bills every month. Uh, so we used to do a lot of, um, customized, uh, consulting stuff for our clients. And I think that kind of helped us in the short term to survive, but it also kind of slowed down our scalability. Um, so it took us a while to kind of get the guts to, you know, decide what we wanted to focus on.

AI assessment note: “we used to do a lot of, um, customized, uh, consulting stuff”

Q or at And then use those as comparables in your 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. And why IPO? I mean, how much revenue did you have back in 2019?

A Uh, so yeah, 2019, we had, uh, I think, uh, five and a half, six million dollars in revenue. So, I mean, the, the, the story about that, we had, we had, uh, plenty of discussions with, uh, a couple of private equity firms and, and, uh, and, you know, other players, but all of them, you know, the valuation was okay, and, and, uh, we felt that some of them could, could really contribute to the business, but, I think I would have felt kind of, um, you know, working with my hands tied behind my back. Um, so going public and, you know, I'm still the majority shareholder, uh, turned out to be like the easiest way to continue running the business the way I want to do it. Uh, so, so yeah, it was, um, we're very happy with that decision.

AI assessment note: “2019, we had, uh, I think, uh, five and a half, six million dollars”

Q Yeah, fair enough. Now, do you regret anything about that or was that the right move?

A No, that was absolutely the right move because the story was, you know, I, I, as I said, like the, the early years are really hard. So in, in, in 2012, I, I felt like I needed a break. So that's when, when Johan, the former CEO, he, he became CEO, was the CEO for five years. And, you know, the plan back then was to sell the business, but, um, that didn't really happen. And, and, uh, you know, I started to kind of, uh, Rediscover my motivation for the business. Um, and, and then after a few years, you know, being the backseat driver is really hard when you founded, founded the business. So I decided to, you know, I want to, I want to push more for growth and be more aggressive, but I don't want to be in the backseat anymore.

AI assessment note: “No, that was absolutely the right move because the story was”

Q Oh, wow. Okay. That's great. That makes tons of sense. Um, before, well, actually, I guess, talk to me about where you want to go this year. So, so you're at caught a 13, fourteen million dollar run rate today. What do you hope to get to by December this year?

A I mean, our growth rate has been around 30% per, per year, our era growth rate. Um, and I mean, we don't, since we're a listed company, we don't have any guidance, official guidance of where we want to go, but we, we've, we've been able to increase the growth rate for two years in a row. Um, and I mean, I think the opportunity in the market is just massive. So it's, it's all about just scaling the organization. That's the bottleneck for us. Uh, and us being still a really small company, actually, I think that, you know, Just finding five or 10 more good salespeople can, can bring us from 30% to 50% in growth rate. So, I mean, that's where I spend all my time just thinking about how to scale the sales organization as, as, as effectively as I can.

AI assessment note: “since we're a listed company, we don't have any guidance, official guidance”

Q Give me an example of that. What's something you've built for the manufacturing vertical that your competitors don't have?

A Uh, so for manufacturing companies, for example, uh, you have this huge problem with, um, if you're selling a complex product that, that, that you can sell in like a thousand variations, um, you have this huge problem with, with, uh, proposals, uh, takes a lot of time for salespeople to create. Uh, and, and some of the time, you know, you, you, you, you offer something that's, that's like erroneous to the customer. Uh, and then you build that stuff and you ship it to the customer like eight weeks on a boat. And then the customer calls you and says, this is not, this is not working for me. Uh, so, so that, that's one problem we address to, to kind of streamline, uh, the proposal and, and automating for, for complex sales.

AI assessment note: “that's one problem we address to, to kind of streamline, uh, the proposal”