The Exchanges

Q Okay, interesting, and what's driven most of the growth over the past 12 months? Is it expansion across the, you know, the old cohort, or is it new customers?

A Yeah, it's about a sixty-forty split between new and expansion. We're seeing really healthy expansion simply because of the viral, the viral nature of the software. I think a lot of tools that are product-led growth, just like we are, have found ways within the tool to do the land and expand model. So we start with a few seats, make a few champions, really successful, and then from there we see other product managers who are our target primary audience for this tool, then go and talk, since they have a lot of influence within the organization, whether it's on the executive branch or towards other, um, You know, cross-functional teams that work and need visibility into what's going on in the plan.

AI assessment note: “it's about a sixty-forty split between new and expansion.”

Q healthy expansion have really smart CS teams. And I'm trying to understand how CEOs like yourself are motivating these CS folks. Cause these aren't people you're just hiring off the street. I mean, these are very talented people, right? So when you say you motivate them, that like there is a target, But it's not, it's not a quota carrying role. Like what, what does that target actually sound like?

A Yeah. So for example, um, so they have a portfolio of customers, so we have to start there. They, they own a segment of, let's say somewhere between two to 400 customers, depending on the tenure of that particular CS rep, the experience and the relationship, the relationships they've built with customers. Um, so they own that and what they have, they're responsible for on a month to month basis is both the expansion and contraction. So it's a ratio So basically let's say, you know, in the quick ratio world, you want to be aiming for, for every four dollars you bring in, um, you don't want to be losing more than a dollar. That's sort of like the sweet spot. So let's say for example, they're comped on that and they get X amount of dollars each month or quarter. If they shoot over, let's call it 4.25. But if they get between 3.75 and 4.25, they're then comped another dollar amount. Um, so this has been working sort of early on in the business. But as we continue to grow, we're looking at new models that are not just focused on both expansion and contraction or churn. It's also like saying here is The expansion business as a dollar amount that we want you to focus on. So we're seeing, we're starting to experiment that transition, um, but we haven't fully gone over to that side just yet.

AI assessment note: “responsible for on a month to month basis is both the expansion and contraction”

Q That's great. And a bootstrapped or have you guys raised?

A Uh, we've raised a little bit. So we raised a two and a half million us. Um, and we are Been really, so there's a couple of things on the economics side. Number one, we're in Canada, so we just get that 30% exchange rate. Number two is we collect the majority of our contracts, call it just the eighty-twenty rule annually. So if you were in the valley and you, instead of collecting eighty-twenty, you were collecting fifty-fifty annual and monthly, I ran the numbers. We would have had to have raised two years ago just over ten million dollars, right? So just the dynamic Dynamics of those two levers alone completely changed the way we can increase our valuation, allow the founders and the team to be more focused in on the business operationally and not have to worry about doing an early series A, but doing a later A or B when we choose such that we can inflect growth. And so there is just a couple of levers that have given us those advantages simply by our geography and the way we've collected cash.

AI assessment note: “we've raised a little bit. So we raised a two and a half million us.”

Q So let's see if again, generally, and hypothetically, if a company like that was around your size, uh, was raising, I mean, are you thinking, I mean, what, if you did raise, what kind of capital would you want to bring in, in a traditional kind of series A, series B? I mean, five, 10, 15, less.

A So for, yeah. So for us, I would do more than less just simply because one, we've raised so little to date. So we just hold such strong metrics. Two, I love the market we're in, so I would be raising well over ten million, I would think would be the number for us. Uh, and then, yeah, so 10 to, 10 to 15 would seem like a really great raise. We also just don't have the, the expenditures and burn rates that typical valley companies do, just simply based on the cost of an engineer. Um, it's, it's like, One and a half X less or at least two X less than it is in the, in the Valley. And also the loyalty in Canadians market, the Canadian market is just really high because people's reputations are really big here because the communities are just so small, even though the city is big.

AI assessment note: “10 to, 10 to 15 would seem like a really great raise.”

Q It's just funny to me. It's basically, it's basically, you know, revenue or sorry, churn plus like retention, right? Like they equal a hundred percent, no matter which way you cut the dice. It's just which side you want to focus on. Okay, good. So healthy, healthy expansion there. And then walk me through, I mean, you launch in First hundred customers, where'd they come from?

A You know what, Nathan? We had no idea where they were going to come from. We just put up a website, we had a product, and we connected our Stripe, uh, you know, the Stripe API. Within the first 90 days, we had 50 customers. I remember on December 31, 2014, at like, we wanted to get from 49 to 50, and we called a couple people that were in trial, we'll sell them, we'll give them a heavy discount, just so that optically we could, when we were starting to raise capital, we just showed them that we got 50 customers in 90 days. So it really just came simply by SEO and marketing. That was the channel we had. We had written some content. We hadn't obviously done a full throttle because it had been only just, uh, 90 days. But we had, I would say on average at the time, probably about 10 to 15 signups a day. So very modest compared to where we are today. And then from there we were able to do some pretty great conversion because tools on the market were still, um, very early on in this particular space.

AI assessment note: “So it really just came simply by SEO and marketing. That was the channel”

Q And generally, uh, more tenured CS folks are getting the larger ACV accounts?

A Um, no, actually, I think No, we like to actually spit it amongst them, and especially if there's somebody, we don't actually have too many juniors on the team, but if we do hire someone junior, or for the ones that are kind of moving on towards intermediate, we do actually give them a big account. Um, we just make sure to walk them through them, because they need the opportunity to learn as well. And so, before we hand them that account, we actually go through an education process of handing them off. We teach them about managing champions, relationship building, understanding how to Navigate that type of organization. So we do give them the tools and the education so that they can move their career forward. That isn't. And so, you know, we have tier one, two and three customers, tier one being the largest. And so we try to distribute that evenly across our CS reps. And so that's not just all the big accounts owned by one person or a couple or a handful of people. Um, there are some key accounts that do involve multiple CS reps, generally because of the size of those organizations and the number of seats they have today.

AI assessment note: “no, actually, I think No, we like to actually spit it amongst them”