The Exchanges

Q saved by taking 27 instances of Salesforce and merging them into one. And it, it had like two million in like cash flow immediately. So, and the other, uh, Andre talked about how they restructured the sales team around a Vista playbook, which is very, very, you know, we learned a lot from that. So just like first two moves you made. Pricing increase. I mean, what was the strategy?

A Sure. The first one I would say is that because we're a public company, we're so focused on making sure every quarter we did what we needed to. Literally the first thing it is they gave us a tech, take a deep breath and not worry about quarterly numbers, but more to look at what are we going to look like three to five years from now that drove everything. So forget one like particular technical thing that in itself was like, Hey, take a deep breath. Don't worry about what next quarter, the next quarter is after that. We don't really care. What we focus on is what's the three to five year goal. And then now build your business. So once we did that on a strategic side, Let me give you the tactical, uh, outcome of that. We, we, we, we put Oracle in for our financial system because we are running on basically, you know, another system that wasn't built for scale because, you know, our goal is we will hit a billion in revenue over X years, right? That's what's going to happen with Cvent. And we're very, very open about declaring that to our employees and stuff. And so the question is, what do you need to do to hit a billion in revenue? What are the systems you need in the core systems? Let's say that's an example of a tactical. So another one that's, let's say strategic is, you know, what do you need to let's, let's invest more in your sales and marketing. Let's say we gave you an e…

AI assessment note: “We put Oracle in for our financial system because we are running on basically”

Q How far though? I'd say like world class is one 31 40.

A So it's, um, one 30, yeah, one 31 40 is Incredible. Um, you might come in with a 10,000 dollar contract because you've only sold them a little bit and then expand it to 40, right? And then you could say that's a 400%, you know, so there's a lot of what I call tricks that you can play because you're a public company, there's different ways you slice it. Um, you're right, the one 30 is, is world, world class and depends how mature you are. The more mature you are, I think it's a little tougher to get to the one 31 40 than when you're newer. So we're, we're, we're, we're certainly north of 100. Um, we're not, Approaching one, 15, one, 20. So I'll just kind of just say that.

AI assessment note: “we're certainly north of 100. Um, we're not, Approaching one, 15”

Q You know, when the acquisition happened, we were at a dollar 20 for a new dollar of AR, and now they're pushing up to dollar 50 dollar, 60 dollar 80. Uh, because, and his thesis made sense, he said, basically, if you have confidence in your cohort data, the person that can spend the most to get the customer wins. Uh, how do you feel about driving dollar-based CAC up?

A I mean, I think, um, I think that's one metric. I mean, look, we've been, we've been profitable as a company. We're unusual because, as you know, as our startup store, we almost went bankrupt back in, you know, 2001 and two. So we became profitable, um, in 2004. And so, um, our margins are unusual. Uh, for a SaaS company, especially I'm talking about back then when we were smaller, most of the SaaS companies that are growing fast, which we were, are always losing money, like, 95% of them, but because we're entrepreneur-led, we didn't raise any money between 2002 1013. For 13 years, we didn't raise any capital. We relied on ourselves, so it changes the way you look at a lot of metrics. CAC is one metric, and I think what I know Andre real well, and I think what he says is fair, um, you know, That's one metric. I think some companies though, um, and just in general, they focus too much on too much on CAC because that, that I don't think they're necessarily striking the right balance. In our view, in terms of CAC is, CAC is a big driver because look, we have a massive space where the market leader right now, we want to continue what we call suck the oxygen out of the room in terms of being the strongest player. Um, and so you want to forward invest in marketing and other investments, which we do, but I still think that, you know, I think it's important to obviously balance that Wi…

AI assessment note: “you want to forward invest in marketing... but I still think that... balance that”

Q Reggie, let me try and bring this down actually to a customer level. So, five hundred million plus in bookings, 25,000 customers, that puts average kind of ACV maybe in the 20 K-ish range. In order to acquire that new 20,000 dollar customer, how aggressive are you willing to be in terms of payback period?

A So, you know, we, you know, it's the lifetime, it's the LTV. That's the, the biggest term. We look at the lifetime value of the customer, um, and that's a big drive for what we do. So it really depends on the type of business, and it depends strategically in what That segment. So there's no, I don't have a particular number that we use for a particular segment. So for example, when you get enterprise customers, you know that the LTV is longer because once an enterprise customer buys your, our enterprise software, they tend to stick for a long time and they tend to have a lot of upsell opportunities because you take them global. A midsize customer is a little different. So again, we don't really, when we, when we run our business on, on, I'm looking at the LTV or the CAC or whatever it may be. Um, uh, we don't have a particular number that we run because it depends on the market. If it's like we're willing to spend a lot more, for example, we're penetrating Europe. We just opened an office in Germany, Dubai in the last month. So we're willing to spend a lot more for a customer there because we're building our brand and that's worth a lot. And, uh, but then places like North America, it's more mature where our brand's really well worth it. Then we want to really want to balance that with making it profitable because we're not worrying about being the strategic leader. In that, in…

AI assessment note: “I don't have a particular number that we use for a particular segment.”

Q Reggie, you really know these numbers. It's almost like you're rating off a pro forma. Adobe is gonna buy you for five billion. Is that what's about to happen?

A Well, first it'd be a lot higher than five billion, but I want to get the number five in anyone's head. Um, but, but, but, but, but no kidding aside, um, the way the private equity companies make money, just like everyone thinks they do, but they leverage debt. That's where I think a lot of entrepreneurs don't understand debt. I never took debt. I was afraid of debt because of when we almost went bankrupt, I was like, don't live, don't know, don't pass, don't ski pasture. Don't, you know, don't go past your skis. Right. Yep. Um, so that was kind of what our viewpoint Was I, I think I made a mistake as an entrepreneur, not leveraging debt, um, because you can get a lot out of it. Um, and what I've seen is private equity firms have. Exactly right. So they master two things by a good company. That's undervalued maybe because for whatever reason, and then you think they have strong operational, uh, fundamentals and the market size and so forth. And then the third thing leveraged debt between those three combinations. That's why the ROIs are so high on PE and Vista has mastered it. They've never lost money. And any acquisition in their history, which no company can say.

AI assessment note: “no kidding aside, um, the way the private equity companies make money”

Q Who sold the social tables acquisition to who? Did you have to bring it to them or they brought it to you?

A Oh, social tables, we actually knew them since the beginning because they're in D.C. and we've been talking for years. Exactly. They're in D.C. We're McLean, but they've brought tons to us, but it's not just bringing deals to us, which is helpful. It's the credibility they bring. Whenever a company's being represented by a banker, they know when Vista's involved, That when they say something, they have to deliver, right? And it just gives you a lot more credibility. And frankly, we move at much, one thing Vista is really good at, they look at something, once they like it, they move at speed. And we've learned to do that. Oh, and so that's just an example. But a lot of what we call best practices they brought to us. And so it's been a great relationship.

AI assessment note: “we actually knew them since the beginning because they're in D.C.”