The Exchanges

Q Yep. Yep. Talk to me about integration, Salesforce, Microsoft Dynamics, HubSpot, Zoho, et cetera. Is any one of these like the clear winner in terms of the leads they drive you per month?

A Um, yeah, I'd say Salesforce is definitely the, the largest in terms of like, uh, leads and people interested, which makes sense, right? Like, I think it's, it's the, A, the largest CRM, like they have a bigger footprint, but they're also the one that, By purchasing Salesforce, you are indicating that you are fine spending money on, on these types of problems. So if you have, you know, we, we integrate with Salesforce, we integrate with Zoho. The integrations are just as good. I don't have a horse in this game, but so if someone who's purchased Zoho is, is showing that they're more cost conscience, they're, they're willing to take shortcuts. They want the cheaper thing. Um, and so it, it, uh, It, they're less likely to purchase add-ons of this nature. So, and that's, you know, we, we bring routing and mapping to the CRM for the field team. Um, it's, it's very clear like, uh, well, you had your CRM and this is like an extra thing that makes it useful on the field, makes, makes, helps you out. But it's, it's, uh, if you, if it was already a heavy lift to buy a CRM, maybe you don't want add-ons, you know?

AI assessment note: “I'd say Salesforce is definitely the, the largest in terms of like, uh, leads”

Q Before we wrap up, you've taken capital a couple times from FounderPath. We're obviously friends, so it's gonna be hard for you to give an unbiased opinion here, but I would push you to try and be as unbiased as possible. You work with a lot of sort of capital providers like FounderPath. Where do we, where are we very different or very similar to other providers you've worked with?

A Well, I'd say that there are, there are, Ten-ish SaaS focused, uh, providers. Some, I, I, the first break I, I put first lens I look through is, is do they want an equity kicker or do they not? So do they, do they want warrants or not? Um, and so, you know, the, the trade-off being there that, that often, if you're doing well, that ends up being a much, much more expensive debt. If you're, if you don't do well, then that ends up being cheaper debt because the, the exchange in exchange for the warrants, you don't, You, you pay a much lower, uh, APR, but there, if you do well, then it becomes much, much more expensive. So for me, the warrant route has never been a good one. And so I, I, you know, I've, I've kind of stuck on the side of, of, uh, of the SAS debt providers that don't ask for warrants. Um, I guess I, The, uh, the positioning that I would say, if I were going to describe FounderPath's position, I would say, well, it's, it's very quick. And they, because the way that FounderPath has leveraged technology to kind of get insights into the business, like obviously you're a data guy and a numbers guy, you guys are able to, through integrations with my existing infrastructure, you know, I use ProfitWell, I, I, you know, I use QuickBooks, um, you've integrated my bank account, like you, Very quickly you're able to understand exactly what's going on, going on in the business a…

AI assessment note: “if I were going to describe FounderPath's position, I would say, well, it's, it's very quick”

Q Who's buying that? Like utility companies, HVAC pool cleaners?

A Yeah. Things like that. Exactly. Um, people that have to go out to houses, people that have to go out to places of business and, and in our interact with the stuff that's there somehow. But the key is for us is that it's not a perfect schedule. Like if you just had. 20 customers and you, you know, we're going to two a day every in a 10, a 10 day loop, you wouldn't have a mapping and routing problem. Right. It's, it's, if you have to make decisions in the field or, or when you're preparing to go to the field about who you're going to see, because you have. 200 places you could be going and you have to choose which one's the most important. That's really where we come in and that's whether you're a field salesperson or a field service person. The problem is very similar. It's a little more common, I think on the sales side, and that's where you see more of our business. Um, You know, because by nature, field salespeople, you know, are making decisions about where they're going to allocate their time with which customers and with which prospects.

AI assessment note: “Yeah. Things like that. Exactly. Um, people that have to go out to houses”

Q Oh, that would be, that'd be huge. What's that sales motion like? How long?

A Um, you know, it actually hasn't been, well, I guess it depends how you, depends how you count it. They, like most companies that purchase us, they've had a few reps, like 10 using it for a while. So if you want to count that as the beginning of the sales cycle, they've been using it for years, but, um, they engaged with us meaningfully maybe four or five months ago as a company. And, uh, and it started out pretty small. Like they wanted to go from 10 to Um, maybe getting, getting like a hundred for this one division. And then that division, then it became the whole division, which was 200 seats. Now that's a pretty meaningful deal, right? You're talking a hundred grand a year or something. Um, and then, uh, Then whoever, whoever that person, whoever the boss of sales of that division was, they were like, wait, if this is so good for the Northeast, why, why doesn't, why doesn't the whole country need this? Why we have five divisions. Why are just you getting this? Why aren't we looking at this as a country? And so it expanded pretty quickly from a 10 seat deal to a hundred seat deal to a 200 seat deal to a thousand seat deal.

AI assessment note: “they engaged with us meaningfully maybe four or five months ago as a company.”

Q I see. What is your, what is your, like, if you look at the actual industry that all these field sales reps are in who use Badger Maps, what is it? Is medical device sales the top one?

A Um, that's among the top. Yeah. That, that, it actually might even be the top. What's interesting is there's not one vertical where you find field salespeople. Um, It's a, it's a, but it's also not horizontal, right? It's not all over the place. It's not email or, you know, text messaging or something that you see everywhere. It's really, it's a, I call it a collection of verticals. So, um, med device, pharmaceutical construction stuff. Really, if you walk down main street anywhere in the world, right? Um, you'll see a dentist office and you'll see a tire store and you'll, You'll see a bar. So the guy selling beer to bars, field salesperson, the people selling medical devices and materials to dentists to fix teeth, field salesperson, the person selling tires to tire stores, field salesperson. So a lot of these little, I call them end nodes of, of consumption. There's probably a better economic term for that, but I don't know what they are, but it, you know, walking down main street, all these places, they didn't make You know, they didn't, they didn't smelt the metal to make the thing that they're giving you, right? They bought, you know, a semi finished good or even a completely finished good. And they're putting a markup on it if it's retail or, or maybe they're, you know, doing some service, but that, you know, the tire sort of didn't make the tires good.

AI assessment note: “that's among the top. Yeah. That, that, it actually might even be the top.”

Q Were you burned by VC in the past or what?

A No, I've never been burned by VC there. I think I just, I, and, and I have nothing against VC. I don't, I don't speak, speak ill on their house or anything, but for the vast majority of SaaS founders, they're not the right fit, right? They only want to invest in a very small slice of the world of SaaS, right? The super high growth, you know, huge companies, um, Um, you know, and there's the, that 90, I don't know, you, you might know the numbers better than me, but I'd guess north of 90% of SaaS businesses just aren't going, aren't pursuing a big enough business, um, or they're too niche or their, or their growth is too small. It's too hard to get the word out, but they're great businesses right there. And, and when I've talked to VCs, I think that's basically the feedback that I've gotten from them is, Hey, this looks like a great business. It's just, you know, it's not going to grow fast enough or be big enough for us. We, we want to, we, we, we're looking for, we're hunting deck of corns around here, you know?

AI assessment note: “No, I've never been burned by VC there.”

Q So when, last question here before we wrap up with the famous five. So when Lighter Capital is analyzing whether or not to do a deal with you guys, they're looking at cash flow, not kind of MRR. Is that accurate?

A I think a company like Lighter is looking at both cash flow and MRR. They're, they're, they're looking at the whole business pretty carefully, I think. When they, when they're Determining what, what rate to give, to give one of their, to do a deal with. They're, they're looking at the, they're, they're evaluating your ability to pay them back and you're paying them based on revenue coming in, which is why it's hard to give. It's, it's not perfect to say, oh, it's exactly this percentage in terms of the loan costs. Cause they're, you're paying more if you're making more or less, if you're making less, but they're, they're looking at your, they're looking at your bank statements basically and saying, well, you know, how much money is coming in the door? And what's their churn rate look like? They, they know the right met. I mean, they, they only work with SAS businesses. They really know the right. Metrics to look at and dig into, to get a feel for, are these people going to be able to service this loan or, or, and how quickly are they going to be able to service this loan? Um, or are we going to, are they going to go bankrupt? Cause if they're going to go bankrupt, we don't want to give them money.

AI assessment note: “I think a company like Lighter is looking at both cash flow and MRR.”

Q behind the scenes? You know exactly what levers to pull, and that's why your badger ops is so predictable in terms of growth? Or would you say it's like accident, you've stumbled into it? And my, my next question is, have you tried to say, hey, let me see if I can actually grow 30%, you know, this quarter versus the consistent You know, five, five, 10%. You always do.

A I mean, you know, we're, we're, we're not as stable as you make us out to be. I mean, we grew more last year than this year. We grew like 29% last year. Uh, I think we're around 15% is where we'll come in for this year, but so it's, but it's off a bigger number. And we, we, we did a really, one really nice big deal last year, as you know, so, um, kind of screwed up the numbers, but in a good way. But no, I wouldn't say, I wouldn't say, no, I wouldn't say I'm a master genius. I don't value predictability. I wouldn't say, uh, it's, you know, we, we just do the best we can. We sell as much software as we can and we treat our customers as well as we can to keep as many of them as we can. And I think it's, it's just, uh, a lot of them pay month to month. And so even when we get a decent size new deal, it doesn't really move the revenue needle. So everything kind of It ends up from an MR perspective being a very smooth business this whole time.

AI assessment note: “we're not as stable as you make us out to be... I wouldn't say I'm a master genius”

Q What's the sales cycle? How many months typically?

A Oh, uh, it's three weeks for an individual person, you know, two to three weeks for an, for an individual and a company can be anything. I mean, we've had companies, I mean, I was just meeting with a big company the other day, uh, that I flew to meet with and they have 2000 sales reps and, you know, they've been kicking the tires for a year and a half. Right. But so, so a big company is going to, they, they take longer to, to make decisions often, but we've also, we've had big companies decide within a month that they, that they want to get this for their whole sales team. So it really, it kind of depends, but, We do reach out to even as just someone who looks like a single seat deal will at least reach out to them and, and, and ask them if they have questions about how to, how to use the product. You know, we'll set it up for them, get them successful. That call usually takes 20 minutes or so, and, uh, even 15 minutes. And, and so it's not that big of an investment. And if, if they buy an annual product, a product that's worth 420 bucks a year, it's worth the salesperson's time to, to get them on the phone and, and walk them through that.

AI assessment note: “two to three weeks for an, for an individual and a company can be anything”

Q How do you deliver that message though? Like, is that part of your salesperson script when they reach out as an automated intercom pop-up in the app? How do you deliver that message?

A Um, it's, it's the salespeople talk it through. So I guess, and this, this gets back to, you know, when you were like, oh, it's so expensive to have salespeople talk to each one of these people that are only giving you a 420 bucks a year. It's like, yeah, but you know, if you, that's one of the benefits of having salespeople and having that personal touch is they can, they can have the message. Hey, you know, if you, so I'm not even sure how they're delivering this, but it's definitely in their scripts. We wrote it out. So it's like, No. Well, do you think you're going to be using this for the next year? Okay. Well, if you think you're going to be using this for next year, you should probably take advantage of the 20% off that you can get if you buy annually.

AI assessment note: “it's definitely in their scripts. We wrote it out.”

Q What's the sales cycle? How many months typically?

A Oh, uh, it's three weeks for an individual person, you know, two to three weeks for an, for an individual and a company can be anything. I mean, we've had companies, I mean, I was just meeting with a big company the other day, uh, that I flew to meet with and they have 2000 sales reps and, you know, they've been kicking the tires for a year and a half. Right. But so, so a big company is going to, they, they take longer to, to make decisions often, but we've also, we've had big companies decide within a month that they, that they want to get this for their whole sales team. So it really, it kind of depends, but, We do reach out to even as just someone who looks like a single seat deal will at least reach out to them and, and, and ask them if they have questions about how to, how to use the product. You know, we'll set it up for them, get them successful. That call usually takes 20 minutes or so, and, uh, even 15 minutes. And, and so it's not that big of an investment. And if, if they buy an annual product, a product that's worth 420 bucks a year, it's worth the salesperson's time to, to get them on the phone and, and walk them through that.

AI assessment note: “two to three weeks for an, for an individual and a company can be anything”

Q What did you say in terms of the product that needed to exist that didn't exist?

A What didn't exist, well, I mean, the products that exist were more expensive, for starters, but they were also, they weren't willing to loan very much, right? So I think Leiter would do, like, three, and I'll get into this in my slides, I don't want to blow my slides, but Leiter would do, like, three or four X MRR, which is like, you know, I think I was doing, like, two million a year or something at the time, and I was like, really? Like, you're going to give me, like, 300 K. Like, I make a million bucks a, two million bucks a year 300 K isn't, and a lot of money, man. and Like, you know, cause real, real companies, they'll let you lever up, you know, pretty aggressively, right, to, to, One turn or something at least, but, and so that, that's, I guess that's the real key difference is how much they'll give you, at what rate, and a lot of the lenders also had a really short duration, which now I'm really ruining my slides, but that's okay. Alright, these are my slides. Beautiful.

AI assessment note: “the products that exist were more expensive, for starters, but they were also, they weren't willing to loan very much”

Q That's unique. How have you been able to convince customers to pay for multi-year deals up front?

A Well, I mean, you give them a discount, and Like how much? If they, 20% is the kind of the standard, if they're, if they're gonna, if they, if they're gonna come in, For a year at a time, we, we knocked 20% off the, off the cost. So it's, you know, it's moving it from a 42 dollar a month price to a 35 dollar or a it's, uh, I mean, I think if people feel like this is something that's really useful to me and I'm going to be using it for I mean, they wouldn't have started using it if they weren't going to use it for at least a year. So if you, if, if they are, if they, if they're like, yeah, I'm gonna be using this in a year and you're like, Hey, you know, you get 20% off if you, if you buy it for a year.

AI assessment note: “Well, I mean, you give them a discount, and Like how much? If they, 20%”

Q How do you deliver that message though? Like, is that part of your salesperson script when they reach out as an automated intercom pop-up in the app? How do you deliver that message?

A Um, it's, it's the salespeople talk it through. So I guess, and this, this gets back to, you know, when you were like, oh, it's so expensive to have salespeople talk to each one of these people that are only giving you a 420 bucks a year. It's like, yeah, but you know, if you, that's one of the benefits of having salespeople and having that personal touch is they can, they can have the message. Hey, you know, if you, so I'm not even sure how they're delivering this, but it's definitely in their scripts. We wrote it out. So it's like, No. Well, do you think you're going to be using this for the next year? Okay. Well, if you think you're going to be using this for next year, you should probably take advantage of the 20% off that you can get if you buy annually.

AI assessment note: “it's definitely in their scripts. We wrote it out.”

Q founders need. He was one of the big reasons I actually launched founder path. And Steve, it's great to see the fast forward today, you know, a hundred and fifty million dollar fund, 160 founders using it. We're having a blast. So I appreciate the extra push on that. You are really one of the early advocates of Debt financing. Why is it so important to you to keep equity?

A Well, I mean, I, I would, I guess there's two answers to that. One, um, I, I don't think that SaaS companies are always a good fit for, for venture capital. And I'd say a lot more often than not, they're not a good fit for venture capital. There's so many small problems in the world that, uh, don't have, aren't, just don't have the explosive growth that you need for, to, to really satisfy the venture model. And certainly, um, certainly I'm in one of those, and I think a lot of SaaS companies are in, in those. Venture needs very specific things to, to make their, their economics work. Um, so debt's really a much better way to go, debt and bootstrapping, I think, for, for many, many SaaS businesses. Not all. Obviously there are, there are, You know, SaaS businesses that start out, they seem small, but then they pivot a little bit or something happens, they become really big. Um, then they're, you know, they seemed niche, but they're actually not. There are some that you didn't think would win, but then when it's, they end up a lot bigger there. Uh, so there, there's a lot of different situations you can find yourself in. So there, certainly there's lots of places venture is appropriate for, but there's also lots of places that venture would say, ah, you guys are, you know, you're, you're growing a little too slowly or, ah, the TAM's a little too smaller. Ah, this is, This is not …

AI assessment note: “I don't think that SaaS companies are always a good fit for, for venture capital.”

Q Yeah, no, this makes sense. This makes sense. So, so how, how many today, um, paid field rep seats are on your platform?

A Paid field rep seats. Well, our, our average price, our price, like some people buy annual, some people buy monthly, but, uh, you know, 69 bucks, I'm sorry, 59 bucks a month. If, uh, we're, we're, we're playing with our prices. They're about to go up, but, um, but so 59 and 49 right now, annual, annual and, uh, and, and monthly. And so, you know, I think our, our average price is probably around 55. So you could, You could divide our total revenue, which is, uh, right around five million. We're about to cross five, uh, either this month or next month, I think. Um, and, uh, so if you divided that by 55 bucks times 12, you'd get the, uh, I could, I could do it on my phone here if you want me to, but.

AI assessment note: “divide our total revenue, which is, uh, right around five million”

Q so many CEOs right now are thinking about things like how much cash do I have in the bank relative to my runway? If I get no new revenue, uh, should I plan for three months? Is it going to be a quick turnaround or should I plan for like seven or eight months? Is it going to be a little bit longer than everyone expects? What are your thoughts?

A Well, um, I think that the more cash you have on hand right now, the better off you are. And, uh, you know, just hunker down and make the product great for when you come out on the other side, um, and, and kind of turn the focus to that on the sales and customer success side, I would say people, at least what I'm thinking about is how do I make the customers that I have more successful? How do I keep them extremely happy? Um, and, uh, And how do I find new customers who maybe are in a slightly different area than I was working with, um, before the, before the crisis started? So can you, can I pivot to a slightly different customer set that, uh, that is going to have great needs going forward, um, for this, or even short-term needs while, while this is happening? So an example there for us is, Doctors who doctors, nurses, other services that go to people's homes, helping them organize what they're doing on a map. So they're not, you know, historically we hope salespeople do this, but we've had, we've, we've run into companies like this before where a hospital group is doing a bunch of home visits. And so they'll, they'll have their doctors or their nurses organized using our tool. So that's where we're going to be looking for, to pivot towards things like that and Bring in new business from that instead of, uh, to make up for the lost business in other places.

AI assessment note: “turn the focus to that on the sales and customer success side”

Q that have raised debt, especially if it's not Debt that is paid back four to eight percent of your gross monthly receipts, right? So debt that is fixed, that even if you have to give your customers half off, and your revenue drops, you still owe a fixed amount. How are you thinking about that? And how do you recommend other founders with the same structure should think about it?

A Um, I think it's a great time to take on debt because this doesn't last forever, right? This is a, this is likely a, a shorter term bump. Is it, is it a three month problem? Is it an eight month problem? I'm not sure, but, um, it's certainly not a two week problem and it's certainly not a two year problem. So I think, you know, there, there are a lot of fantastic debt providers out there that have, have really gone after the SAS space. Um, you know, and, and I think that, that, uh, I mean, there are, there are 40 of them. And, and, you know, some of them are better than others, but they're, I think I haven't run into any, I haven't run into many terrible ones I've run into, and I haven't run into any amazing deals or anything. It's, it's relatively expensive capital, but, um, but I think it's a great time for people to look to, to bring debt into the business. Uh, and, and kind of get through this period of time.

AI assessment note: “I think it's a great time to take on debt because this doesn't last”

Q How did you, a lot of people listening, they try and figure out how to split equity with founder. So it's a valuable lesson. How did you guys have that conversation?

A Well, I think, uh, you know, the, When you're splitting up equity, I guess the, the key, the key pieces is that everyone gets a, gets a fair deal, but also different people have different things that are driving them at the time. So, um, some people want more money and, and, and, uh, and salary and ability to make money upfront and other people are more comfortable being paid in a more, uh, I guess, equity heavy, um, uh, comp package. So that's kind of the, The, the trade, the, the main trade-off is are people spending all their time with it? Um, will they, and then, uh, I guess the, another major thing to consider is, um, is not, not giving people equity, um, Not giving people equity in such a way that a founder vests over the same, the same way as an employee would, meaning an employee, you know, standard is for them to vest over four years, right? So I would actually, I would, I would, I think it's better with, with founders to not give them, give them their full package vesting over four years.

AI assessment note: “When you're splitting up equity, I guess the, the key, the key pieces is”