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Why we turned down 3 acquisition offers for our SaaS
Episode 282nd February 2023 • B2B SaaS Podcast • Upendra Varma
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Shownotes

Ruben Naverette, Founder of Empowerpoints, talks about how they have grown their employee engagement tool to $3MN ARR with major customers like Starbucks.

  • What Empowerpoints is all about
  • How they’ve grown to 12 customers ( with 68000 users ), including Starbucks, doing approximately $3MN in ARR
  • How they got their first customer while providing services to them through their development firm
  • Why cold outreach didn’t really work for them & how they are betting on affiliate & white-labelling in the future
  • Why they turned three acquisition offers & what’s their vision
  • How they are completely bootstrapped

Transcripts

Ruben Naverette:

But I do see an exit.

Ruben Naverette:

Probably the team.

Ruben Naverette:

I mean, we've been doing this a long time and I think the honeymoon is, is over.

Ruben Naverette:

It's been over for a long time.

Ruben Naverette:

Um, but I think that our goal is to, um, you know, we already had

Ruben Naverette:

three organizations approach us this year for an acquisition mm-hmm.

Ruben Naverette:

, um, cuz they're looking to, to, you know, get, move into this space and

Ruben Naverette:

we're an, we're an established player.

Ruben Naverette:

Yeah.

Ruben Naverette:

And we've turned those down, but we're not gonna be turning

Ruben Naverette:

them down in two or three years.

Upendra Varma:

Hello everyone.

Upendra Varma:

Welcome to the B2B SaaS podcast.

Upendra Varma:

I'm your host, . Today we have Ruben Nav with us.

Upendra Varma:

Ruben here runs a company called Empower Points.

Upendra Varma:

Hey, Ruben, welcome to the show.

Ruben Naverette:

Thank you for having me.

Ruben Naverette:

I'm pleased to be here.

Upendra Varma:

Absolutely, Ruben.

Upendra Varma:

So let's, let's get started and let's try to understand what your company does and

Upendra Varma:

you know, why do customers pay you money?

Ruben Naverette:

Sure.

Ruben Naverette:

Well, and PowerPoints is all about employee engagement and one of the

Ruben Naverette:

things that we do, really our core, you know, competency is that we

Ruben Naverette:

help employees create a system where they can recognize reward, um, and,

Ruben Naverette:

you know, take surveys with their employees just to keep them engaged.

Ruben Naverette:

Alright.

Ruben Naverette:

Uh,

Upendra Varma:

makes sense.

Upendra Varma:

And who are you primarily selling this to?

Ruben Naverette:

That's a great question.

Ruben Naverette:

You know, and PowerPoints is so broad because it really applies

Ruben Naverette:

to anybody who has employees.

Ruben Naverette:

That said, we find ourselves mostly in insurance logistics

Ruben Naverette:

and in the service industry.

Upendra Varma:

Got it.

Upendra Varma:

Got it.

Upendra Varma:

And, uh, so, uh, just help me sort of, uh, complete the

Upendra Varma:

conversation on the product, right?

Upendra Varma:

So I want you to pick any of your, you know, uh, most ideal customer

Upendra Varma:

and just sort of walk us through, you know, how they sort of use your

Upendra Varma:

product and how they derive value from

Ruben Naverette:

your product.

Ruben Naverette:

Sure, yeah.

Ruben Naverette:

You know, our most, uh, you know, ideal customer is somebody, you know, a business

Ruben Naverette:

or an organization or a leadership to, um, you know, for that matter who

Ruben Naverette:

really values their employees and wants to help make their experience better.

Ruben Naverette:

And so it's all about elevating, you know, a, a good culture within the organization.

Ruben Naverette:

And so our ideal customers really have an eye toward that, and not just, not

Ruben Naverette:

just in a lip service way, but in a way where they really, genuinely want to.

Ruben Naverette:

You know, their, you know, just their environment, their culture.

Ruben Naverette:

And so they will, um, reach out to us and we will help them on, on many

Ruben Naverette:

different levels, uh, with their culture.

Upendra Varma:

All right.

Upendra Varma:

Uh, so let's talk about the pricing model and your business model here, right?

Upendra Varma:

Is it just the software that you're selling, right, which includes a bunch

Upendra Varma:

of features, or do you do anything apart?

Ruben Naverette:

We do do other things apart from that, but

Ruben Naverette:

everything is included in the price.

Ruben Naverette:

So when you are, uh, in a PowerPoints customer, you'll pay a fee based

Ruben Naverette:

on the feature set that you employ.

Ruben Naverette:

So, you know, you have your basic, you know, recognition piece, and then if you

Ruben Naverette:

want to add surveys and customer surveys and a wellness, You know, feature, of

Ruben Naverette:

course that costs a little bit more.

Ruben Naverette:

However, we do do a lot of consulting with our customers and we do a lot

Ruben Naverette:

of advisory type of activities.

Ruben Naverette:

We spend a lot of time with them going over their analytics and taking a look at

Ruben Naverette:

their culture, and none of that is extra.

Ruben Naverette:

All of that is included in their monthly price.

Ruben Naverette:

Okay.

Upendra Varma:

Okay.

Upendra Varma:

Uh, got it.

Upendra Varma:

So let's, let's talk about, you know, let's try to understand a

Upendra Varma:

bit about your customers and, you know, uh, customer base of it.

Upendra Varma:

Right?

Upendra Varma:

So how many customers do you have on your platform as of today?

Upendra Varma:

Approximate numbers Totally work, by

Ruben Naverette:

the way.

Ruben Naverette:

Oh, wow.

Ruben Naverette:

It would be, you know, we have some, you know, we probably have about 12

Ruben Naverette:

really good core customers, and all of those are, you know, high employees.

Ruben Naverette:

So we have thousands and thousands of users.

Ruben Naverette:

. Um, and that really resides within, you know, a small pool of

Ruben Naverette:

customers that we really focus on.

Ruben Naverette:

You know, we include some of our customers include Starbucks and

Ruben Naverette:

Chick-fil-A stores, uh, you know, on that service industry end.

Ruben Naverette:

And then we have everything from select health to large logistic firms

Ruben Naverette:

who employ then thousands of people.

Ruben Naverette:

All over.

Ruben Naverette:

Yeah.

Ruben Naverette:

So let's,

Upendra Varma:

let's qu I, I got the sense, so let's quantify, like how many

Upendra Varma:

users do you have on your platform?

Upendra Varma:

I mean, total employees approximately?

Ruben Naverette:

We probably have about, um, And I, you know, last

Ruben Naverette:

I've looked probably about 68,000.

Upendra Varma:

68,000.

Upendra Varma:

Mm-hmm.

Upendra Varma:

, that's around 5,000 approximately.

Upendra Varma:

And an average per customer.

Upendra Varma:

Right.

Upendra Varma:

Exactly.

Upendra Varma:

Mm-hmm.

Upendra Varma:

, that's pretty, uh, awesome.

Upendra Varma:

Right.

Upendra Varma:

So, and in terms of revenue, I mean, you can choose not to disclose it

Upendra Varma:

if you're not comfortable with, and just wanna get a sense of where

Upendra Varma:

you are as a company as of today.

Ruben Naverette:

Yeah.

Ruben Naverette:

You know, as a company, um, we are, You know, growing, of course we do about,

Ruben Naverette:

um, just shy of 3 million a year.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

. Um, so that is, um, I dunno what that breaks down to be about a month.

Ruben Naverette:

And then per user, you know, we have our, um, you know, we have our, our

Ruben Naverette:

card price and then we have different prices that we've negotiated with our

Ruben Naverette:

various customers, depending upon mm-hmm.

Ruben Naverette:

what types of, um, you know, what type of.

Ruben Naverette:

You know, staff that they need or what type of of services they need.

Ruben Naverette:

Yeah.

Ruben Naverette:

And

Upendra Varma:

okay, so I just, I just wanna understand

Upendra Varma:

your growth as well, right?

Upendra Varma:

So 12 months before, right.

Upendra Varma:

So where were you in terms of your revenue approximately?

Ruben Naverette:

Um, we were probably, maybe, you know, we

Ruben Naverette:

didn't grow a whole lot this year.

Ruben Naverette:

That's a really good question.

Ruben Naverette:

We thought we were gonna grow a lot.

Ruben Naverette:

Out of Covid, but that didn't really materialize and primarily just because the

Ruben Naverette:

sales cycle in SA is so long as you know.

Ruben Naverette:

Yeah.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

. And so we, um, you know, coming outta Covid, we felt like there was gonna

Ruben Naverette:

be a real, um, A real thirst and a hunger for employee engagement.

Ruben Naverette:

And there is, but it just takes a long time for that to

Ruben Naverette:

really hit your bottom line.

Ruben Naverette:

And so I wouldn't say that we've grown, we've grown maybe 10% this year.

Ruben Naverette:

Got it.

Upendra Varma:

Alright.

Upendra Varma:

So there are a lot of things here to understand, right?

Upendra Varma:

So let's, let's sort of, uh, deep dive into your go-to market, you know,

Upendra Varma:

strategy and your journey so far.

Upendra Varma:

Right?

Upendra Varma:

I just wanna start at the top of funnel, right?

Upendra Varma:

So you've got around 12 customers, so you absolutely know where they

Upendra Varma:

come, where they came from, you know, what was that first touchpoint?

Upendra Varma:

So just walk us through, you know, that first, first couple of customers, right?

Upendra Varma:

So how did they sort of ended up, you know, becoming your customers?

Upendra Varma:

How did you know them?

Upendra Varma:

Right?

Upendra Varma:

What was the process like?

Upendra Varma:

So the, during those first 0 2 1

Ruben Naverette:

journey.

Ruben Naverette:

Okay.

Ruben Naverette:

That's a great question.

Ruben Naverette:

Well, our first customer came, um, as a result of the fact that

Ruben Naverette:

we weren't even in PowerPoints.

Ruben Naverette:

You know, we had a small software development firm and we were developing

Ruben Naverette:

software for, for the banking industry.

Ruben Naverette:

And, um, one of our large customers, which was at that time, MetLife came

Ruben Naverette:

to us and said, we have a problem with, um, employee engagement in our, in our

Ruben Naverette:

loan division, our home loan division.

Ruben Naverette:

Um, and we were wondering if you could help us develop a small tool that we

Ruben Naverette:

could pilot within one of our branche.

Ruben Naverette:

and help us, you know, kind of understand why the employee environment was so toxic.

Ruben Naverette:

And so we just started with that.

Ruben Naverette:

And then when we built that tool, we, we retained ownership of a course.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

. Um, and it was really successful and it really grew rapidly

Ruben Naverette:

within that organization.

Ruben Naverette:

And then we really focused on making that product work well in that organization.

Ruben Naverette:

And then we slowly started branching out to similar organizations like.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

. And you know, it, it is with any place, you know, employees, they'll work a place

Ruben Naverette:

somewhere and then they'll go to another place and then they'll recommend us.

Ruben Naverette:

So most of our stuff has come word of mouth.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

. In fact, one of our large customers, uh, they just had an acquisition

Ruben Naverette:

that's just taking place right now and we'll be bringing on 17 new

Ruben Naverette:

companies, almost doubling our, you.

Ruben Naverette:

Because of that word of mouth.

Ruben Naverette:

Yeah.

Ruben Naverette:

And, and so, you know, primarily that's where we found most of

Ruben Naverette:

it's, we've met people, you know, at conferences, at workshops, and

Ruben Naverette:

it's that personal relationship and connection that's helped us close deals.

Ruben Naverette:

And so anything, any advice that I could give to people who are.

Ruben Naverette:

In the SAS field is you really have to get out there mm-hmm.

Ruben Naverette:

and, um, I mean, it's great to depend on, maybe it's Google Ads or some

Ruben Naverette:

other approach that you're gonna take to, you know, bring people

Ruben Naverette:

into the top end of your funnel.

Ruben Naverette:

But we have found that the most effective way is to build

Ruben Naverette:

relationships with the people, the customers that you see out there.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

the type of customers that you feel are important to you.

Ruben Naverette:

And, and that is, I mean, I have to say, those relationships are

Ruben Naverette:

the most important customers.

Ruben Naverette:

Like I have a.

Ruben Naverette:

Who, um, lives just, you know, across the way, and him and I talk all the time.

Ruben Naverette:

He's a CEO of a, of a large credit union in our state.

Ruben Naverette:

And, you know, they're coming on board as a customer, but

Ruben Naverette:

it's about that relationship.

Ruben Naverette:

So if you can be going to, if you can go to different mixers, uh, CEO events,

Ruben Naverette:

um, events where your ideal customers are, attend those events and talk to.

Upendra Varma:

Right.

Upendra Varma:

So, so you mentioned something right, that, you know, MetLife came to you

Upendra Varma:

to, so sort of solve their problem.

Upendra Varma:

Like who exactly was, was that you, right.

Upendra Varma:

So were you a firm, like what were you doing back then?

Ruben Naverette:

Yeah, I had a little, you know, it was just me at that time and

Ruben Naverette:

I had a little software development firm that I had, and this was a while back.

Ruben Naverette:

This is back, back, back in like 2000.

Ruben Naverette:

It's been some time now,

Upendra Varma:

so it's been 13 years approximately since,

Upendra Varma:

since you got that first deal.

Upendra Varma:

Okay.

Upendra Varma:

Got sure.

Ruben Naverette:

Yeah.

Ruben Naverette:

But you know what, we had an exclusive deal with them for quite some, for a

Ruben Naverette:

number of years because they were our first customer and because, um, we had

Ruben Naverette:

developed the product for them, um, and I just had a small little, uh, software

Ruben Naverette:

development firm and I had, you know, developers working for me that I was

Ruben Naverette:

outsourcing to, and I was developing small little communications tools in the.

Ruben Naverette:

Area didn't even see this coming, so,

Upendra Varma:

so you were essentially building software and selling it

Upendra Varma:

to, you know, these banks, right.

Upendra Varma:

So essentially sort of outsourcing their development needs, something like that,

Ruben Naverette:

sort of, yeah.

Ruben Naverette:

They were at, you know, they were our customer.

Ruben Naverette:

They were kind of our only customer and we were only developing software for them.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

. Okay.

Ruben Naverette:

So we were just u we, they were just using us as their shop to

Upendra Varma:

develop.

Upendra Varma:

Yeah.

Upendra Varma:

It only made sense naturally.

Upendra Varma:

Right.

Upendra Varma:

So from that journey, you know, transitioning.

Upendra Varma:

So they naturally would come to you to sort of ask to build that product.

Upendra Varma:

Right.

Upendra Varma:

So that made sense.

Upendra Varma:

Exactly.

Ruben Naverette:

Cause all of our, all the tools that we were developing for

Ruben Naverette:

them were all based around communications.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

, um, but they were, you know, tactile communications.

Ruben Naverette:

Um, and, and so we.

Ruben Naverette:

Then they just wanted to take it a little step further because they had a

Ruben Naverette:

communication problem that was employee engagement and, and how communi, um,

Ruben Naverette:

employees were engaging with one another.

Ruben Naverette:

So we built a small peer-to-peer platform for them where p peers could recognize

Ruben Naverette:

each other, and that's where it started.

Upendra Varma:

Got it.

Upendra Varma:

Alright, so 2009, you got that first customer, right?

Upendra Varma:

So now you essentially built, you, you took that product.

Upendra Varma:

Now you got a nice product out there, right?

Upendra Varma:

So what happened after that?

Upendra Varma:

I know you mentioned networking and all of that stuff.

Upendra Varma:

When was that next?

Upendra Varma:

That you ended up listening?

Ruben Naverette:

That's a really good question.

Ruben Naverette:

Well, I think first, before we got the first customer, remember it was just me.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

and I realized I needed help on this.

Ruben Naverette:

And so I brought on, um, a at that time he was a gonna be our coo, and then we

Ruben Naverette:

brought in a ux UI guy and then we brought on a sales guy and I gave them equity.

Ruben Naverette:

To partake, participate through the years.

Ruben Naverette:

We eventually transitioned to where I took a backseat as the, the, um, chief

Ruben Naverette:

Innovation Officer, and then our, who was firstly our coo, he became our c E O.

Ruben Naverette:

So we swapped roles there a bit, just because I'm more on the

Ruben Naverette:

creative end and he's more a leader.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

. Um, which was a really good transition.

Ruben Naverette:

Now in terms of our next customer came actually as a result of, I was on a.

Ruben Naverette:

And there was a wine tasting on the cruise.

Ruben Naverette:

And um, we were going around the table and people were asking, what do you do?

Ruben Naverette:

And I said, oh, I have a little employee engagement customer, or an

Ruben Naverette:

employee engagement, you know, company.

Ruben Naverette:

Now granted at this time we only had one customer, so at that point then,

Ruben Naverette:

The guy sitting next to me said, I have a logistics company and I need you,

Ruben Naverette:

And we exchanged numbers and then he became a really good customer,

Ruben Naverette:

still a customer to this day.

Ruben Naverette:

So that was our second customer.

Ruben Naverette:

And then we went into Google Ads.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

. So we thought, how do we expand this?

Ruben Naverette:

And so we started running Google ads and that's how we

Ruben Naverette:

got Starbucks and Chick-Fil-A.

Upendra Varma:

You got Starbucks from Google Ads.

Ruben Naverette:

Yes we did.

Ruben Naverette:

And we don't have like the big Starbucks, like the corporate Starbucks is.

Ruben Naverette:

We started out with a couple of independently owned Starbucks, um,

Ruben Naverette:

in Miami, Uhhuh . And then once we, once we got, had our foot in the

Ruben Naverette:

door and that company that owned that Starbucks also owned Chick-fil-A

Ruben Naverette:

and Einstein Brothers Bagels.

Ruben Naverette:

And they had a few stores in the Miami area.

Ruben Naverette:

And then we just, um, Took that seriously and then, you know, took that forward.

Upendra Varma:

Got it.

Upendra Varma:

So I wanna talk about the conversion funnel as well, right?

Upendra Varma:

What happens after, you know, let discuss here, but I just want

Upendra Varma:

to ask you one question, right?

Upendra Varma:

So like, it's been almost 12, 13 years, and you're saying you got it on 12,

Upendra Varma:

obviously very big customers, right?

Upendra Varma:

So why is that number so low?

Upendra Varma:

Was that strategic?

Upendra Varma:

Or, you know, like, because you, you had all of these top of

Upendra Varma:

funnel potential channels, right?

Upendra Varma:

So why, why is that number looking so low for me?

Upendra Varma:

Obviously the revenue is still higher.

Upendra Varma:

Just wanna understand the backstory.

Ruben Naverette:

It's looking so low because this is a very difficult process.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

, like probably about, um, uh, to a magnitude of a hundred, you know,

Ruben Naverette:

more difficult than we anticipated.

Ruben Naverette:

Okay.

Ruben Naverette:

We've, uh, we're kind of on our third salesperson, you know,

Ruben Naverette:

our head of sales right now.

Ruben Naverette:

The sales cycles are so tough.

Ruben Naverette:

Um, you know, employee engagement is a want to have, not a need to have.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

. And so it's really important that customers see their pain points.

Ruben Naverette:

It's an extra expenditure kind of, that they don't see as a necessity so much.

Ruben Naverette:

It's, it's somewhat of a competitive marketplace right now, so we're

Ruben Naverette:

competing often against going up against some really big players in

Ruben Naverette:

the space who, who do things well.

Ruben Naverette:

I mean, and we do everything well too, but, um, so that, I mean, there's

Ruben Naverette:

just been a confluence of factors.

Ruben Naverette:

We've tried a lot of things, you know, in.

Ruben Naverette:

This year we tried a cold outreach program.

Ruben Naverette:

We invested a lot of money into a big cold outreach system.

Ruben Naverette:

We had, um, Salesforce, high velocity sales plugged in, ready to go, and, um, we

Ruben Naverette:

had, we hired a firm to come out and do a cold outreach with phone calls and emails.

Ruben Naverette:

We bought Zoom info so that we could get their intelligent, um, data.

Ruben Naverette:

We did all that and didn't really make any traction with that.

Ruben Naverette:

So what,

Upendra Varma:

so why is it so, like, I just wanna understand it so you.

Upendra Varma:

You send a bunch of cold emails to the relevant persons, right?

Upendra Varma:

Something's gotta happen.

Upendra Varma:

I know.

Upendra Varma:

I mean, it might not be 10%, but you've gotta have some, some percentage of

Upendra Varma:

them sort of expressing interest.

Upendra Varma:

Right.

Upendra Varma:

So what didn't work out there?

Upendra Varma:

Yeah.

Ruben Naverette:

Well, what happened is, you know, because of our ideal customers,

Ruben Naverette:

like a higher number of employees mm-hmm.

Ruben Naverette:

, it's not like, you know, um, a mom and pop place that has 20 employees

Ruben Naverette:

where they can make quick decisions.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

, what happens is you have large organizations and you're offering

Ruben Naverette:

enterprise level software, and you have to jump through a million

Ruben Naverette:

hoops in order to close those deals.

Ruben Naverette:

Yeah.

Ruben Naverette:

Those deals are significantly harder to close than smaller deals.

Ruben Naverette:

I'll tell you what, the deals that we did for Starbucks and Chick-fil-A because.

Ruben Naverette:

Smaller organizations really on the ground in terms of we were doing

Ruben Naverette:

store by store, were easier to close.

Ruben Naverette:

, um, than some of these companies that you've never heard of.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

, just because these companies operate, they have a lot of, you know, when you operate

Ruben Naverette:

on the security, on the, um, enterprise level, you have a lot of security, you

Ruben Naverette:

know, hoops that we have to jump through.

Ruben Naverette:

A lot of vetting that has to happen and there's just, it's just brutal.

Ruben Naverette:

Yeah.

Ruben Naverette:

And you know, that's probably

Upendra Varma:

one question.

Upendra Varma:

Is it a project thing that you really.

Upendra Varma:

Don't wanna sell to, you know, uh, customers of, you know, smaller number

Upendra Varma:

of employees, customer, or is, is it really producting that your product

Upendra Varma:

only makes sense for companies?

Upendra Varma:

There's a lot of employees.

Upendra Varma:

It

Ruben Naverette:

really, we found that it only makes sense for large

Ruben Naverette:

organizations who really can execute a system and a program of this type.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

. Um, simply it does work in smaller organizations.

Ruben Naverette:

It, it needs synergy.

Ruben Naverette:

Yeah.

Ruben Naverette:

This kind of thing needs synergy and for there to be a lot of people on board.

Ruben Naverette:

And so we've been o you know, marginally successful, you know, in smaller

Ruben Naverette:

organizations, but we found that our churn is much higher in smaller organizations

Ruben Naverette:

than it is in our larger organizations.

Ruben Naverette:

Our larger organizations.

Ruben Naverette:

Those relationships last years.

Ruben Naverette:

Yeah.

Ruben Naverette:

and at some point, you know, we're getting to decades now.

Ruben Naverette:

Yeah.

Ruben Naverette:

Whereas some of those smaller ones, they don't make as much money.

Ruben Naverette:

The churn is higher, they're more maintenance, more customization for

Ruben Naverette:

fewer people and for fewer dollars.

Ruben Naverette:

So, so it's really, you know, our sweet spot really is

Ruben Naverette:

actually, is kind of between, you know, 300 employees and 2,500.

Ruben Naverette:

And that's really a sweet spot for us.

Ruben Naverette:

Yeah, I mean, we're just, we're bringing on our organization of

Ruben Naverette:

4,000 here pretty soon, but, you know, which will be a challenge, but

Upendra Varma:

yeah.

Upendra Varma:

Yeah.

Upendra Varma:

So, so talk about the sales cycle, right?

Upendra Varma:

So you mentioned it's really, really tough to sort of close those deals, right?

Upendra Varma:

So, so how does the sales cycle look like as a pretty, how much time does it take?

Upendra Varma:

for that, you know, lead to get converted to a customer, for example.

Ruben Naverette:

Yeah, good question.

Ruben Naverette:

Well, usually the sales cycle starts out with some kind of a cold outreach

Ruben Naverette:

or some kind of inquiry that comes in.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

. And then what we'll do is we'll immediately go into what we call,

Ruben Naverette:

uh, our initial discovery, and that's where we have a conversation with

Ruben Naverette:

the customer, the potential customer, and find out what are their needs.

Ruben Naverette:

Because our product is really broad and it, we can customize

Ruben Naverette:

it down pretty narrowly.

Ruben Naverette:

So it's really important that we understand what.

Ruben Naverette:

So once we get an understanding of that, once we have that discovery meeting,

Ruben Naverette:

then we usually schedule another meeting.

Ruben Naverette:

If, if it's a good fit with, you know, more stakeholders within the organization.

Ruben Naverette:

And it's at that point that we'll do an en entire custom build.

Ruben Naverette:

It's like a demo.

Ruben Naverette:

Build that with their colors, their theme, and then we'll take them through that.

Ruben Naverette:

Now, that usually takes around, you know, sometimes.

Ruben Naverette:

Two or three or four, uh, different demos that we'll have to do as different

Ruben Naverette:

people within the organization take a look at the organiz, uh, after to think.

Ruben Naverette:

Then we'll get to the quoting phase, and then we negotiate that.

Ruben Naverette:

Then we have to get a con, you know, a contract in place, and then it

Ruben Naverette:

has to go through a legal process.

Ruben Naverette:

And then once that, you know, once that's all been done and everyone's

Ruben Naverette:

signed on the dollar line, then we can begin with our implementation.

Ruben Naverette:

And

Upendra Varma:

approximately how much time does this take on

Upendra Varma:

average from that initial point?

Ruben Naverette:

Okay, that's, uh, on average it's probably

Ruben Naverette:

about four to six months for us.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

got

Upendra Varma:

it.

Upendra Varma:

It's not fast.

Upendra Varma:

Yeah.

Upendra Varma:

Obviously it makes sense.

Upendra Varma:

It makes a lot of sense.

Upendra Varma:

So, so I wanna understand your deal win rate.

Upendra Varma:

For example, tomorrow if I bring in, bring in, let's say a hundred, you know, cus

Upendra Varma:

a hundred sort of leads to you, right?

Upendra Varma:

Mm-hmm.

Upendra Varma:

. So how does the CU deal win rate look like?

Upendra Varma:

Right?

Upendra Varma:

How many of them actually do you end up converting to, uh, paid?

Ruben Naverette:

Um, I would say like, you know, we are conversion rate.

Ruben Naverette:

Um, that's a really tough one.

Ruben Naverette:

I'm just trying to think of what it was this year.

Ruben Naverette:

So, so yeah, go ahead.

Ruben Naverette:

Go ahead.

Ruben Naverette:

Yeah.

Ruben Naverette:

So yeah, I would say that, you know, two outta 10 maybe.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

. Upendra Varma: Yeah.

Ruben Naverette:

So, yeah.

Ruben Naverette:

So my next question naturally is like, if I pour in more leads in into

Ruben Naverette:

that funnel, can you, can you still maintain that 20% conversion rate?

Ruben Naverette:

I think we would actually probably improve on that

Ruben Naverette:

just because as you go, you learn.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

, you know, as you have more at bat, you do, you know, you do learn better.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

. And so I think that we would, um, I, I think, I think so.

Ruben Naverette:

Yeah.

Ruben Naverette:

I think we, yeah.

Upendra Varma:

So, so if, if that is true.

Upendra Varma:

Right.

Upendra Varma:

My next question obviously is basically you've got a bunch of companies,

Upendra Varma:

obviously I think you must have that big a network that you can just even

Upendra Varma:

handpick these customers, right?

Upendra Varma:

So tomorrow you could just pick these 50 odd customers, right?

Upendra Varma:

Is the path from 12 customers, so let's say 20 or 50.

Upendra Varma:

Is it, is it an easy one?

Upendra Varma:

Is it as simple as saying, okay, let's, let's just pour them

Upendra Varma:

into the funnel and we'll end up converting them, or is it not?

Upendra Varma:

Well, I

Ruben Naverette:

wish we could do that.

Ruben Naverette:

I wish we could just go out and grab people and put 'em in the funnel.

Ruben Naverette:

And

Upendra Varma:

what's stopping that?

Upendra Varma:

What's, what's, what's really the hurdle there?

Upendra Varma:

, Ruben Naverette: what's stopping

Upendra Varma:

those people to put in the funnel.

Upendra Varma:

Once we get 'em in the funnel, then we're good.

Upendra Varma:

But finding, you know, organizations that are number one, open

Upendra Varma:

to what you have to present.

Upendra Varma:

Mm-hmm.

Upendra Varma:

have the budget for it, have the appetite for it.

Upendra Varma:

Have also the philosophy behind, um, the whole idea as employee engagement

Upendra Varma:

and paying money to help workers work harder when you're already

Upendra Varma:

paying them money and then giving.

Upendra Varma:

Like gift cards and things like that and spending that extra money, that's

Upendra Varma:

a real hard sell in today's business, especially with the recession.

Upendra Varma:

And so finding those people who are like willing to take a meeting.

Upendra Varma:

and who are like in that space, you know?

Upendra Varma:

And also, here's another real interesting point.

Upendra Varma:

We start often with HR departments.

Upendra Varma:

Mm-hmm.

Upendra Varma:

. And that's kind of where a lot of this begins.

Upendra Varma:

And that's a real hard place to start because they're so busy, they're

Upendra Varma:

so overwhelmed, they're slammed.

Upendra Varma:

Especially this time of year with open enrollment and things like

Upendra Varma:

that, you can't even get a meeting.

Upendra Varma:

Mm-hmm.

Upendra Varma:

. Um, so it's a real challenge.

Upendra Varma:

And so we've.

Upendra Varma:

All kinds of different things.

Upendra Varma:

And this next year we're doing an affiliate program, um, and

Upendra Varma:

we're doing an ambassador program.

Upendra Varma:

So we're in, we're gonna invest in, um, some new ways and some new things.

Upendra Varma:

We're always looking at new things to do, and one of the things we're

Upendra Varma:

also thinking about doing is some, um, what they call, um, Was it user

Upendra Varma:

generated content where some of our users we're gonna, you know, offer them

Upendra Varma:

a really significant commission to, you know, put content out there for us.

Upendra Varma:

So we've got a couple creative things up our sleeves that we're gonna try cuz

Upendra Varma:

we just haven't Ha we've not had much luck with the cold outreach and we've

Upendra Varma:

had good luck with, um, Google ads and so we're gonna start, we're gonna put

Upendra Varma:

an some new money into that this next.

Upendra Varma:

we put all of our money into cold outreach this year and we're, we're,

Upendra Varma:

we're stepping away from that.

Upendra Varma:

Mm-hmm.

Upendra Varma:

. And we might keep a little bit on that cuz that, you know, does path marginally,

Upendra Varma:

but we have to try other things.

Upendra Varma:

So what does your gut say?

Upendra Varma:

You, right.

Upendra Varma:

So which of these investments that you're gonna make, right, which of

Upendra Varma:

them are actually going to take you from let's say 3 million to 10 million?

Ruben Naverette:

I don't think it's Google Ads.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

, I'll say that.

Ruben Naverette:

But I think that what's gonna take us there is going to be, um,

Ruben Naverette:

some sort of affiliate program.

Ruben Naverette:

Where we pay a really high commission.

Ruben Naverette:

And then we also, um, you know, get some influences out there who love

Ruben Naverette:

our product and who promote it with some kind of user generated content.

Ruben Naverette:

that's what I think is gonna get us there.

Ruben Naverette:

Just because I, I, I've noticed that that's really a, a direction people

Ruben Naverette:

are going and a lot of people are looking for ways in which to earn money.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

. And so why not, you know,

Upendra Varma:

put a, the, the whole point of affiliate marketing makes sense.

Upendra Varma:

But the question is, does it apply really to you because you are targeting,

Upendra Varma:

uh, Companies with 300, 500 employees.

Upendra Varma:

Right?

Upendra Varma:

So who exactly are you trying to convince here that your product

Upendra Varma:

is going to make sense for you through, through your affiliates?

Ruben Naverette:

Yeah.

Ruben Naverette:

That, yeah, that's a great question.

Ruben Naverette:

Well, are you familiar with Sensei, the candle maker?

Ruben Naverette:

Uh, no.

Ruben Naverette:

Um, they have an amazing affiliate program and what they, why that makes sense for

Ruben Naverette:

us is because we are gonna associate our pro, our, our PowerPoints with

Ruben Naverette:

the ability for, uh, uh, an individual person to, to make it their own.

Ruben Naverette:

Sort of like being able to go, okay, I'm now in the business.

Ruben Naverette:

You know, your mom could now be in the business of employee engagement.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

, she could build a business on our platform.

Ruben Naverette:

She could earn an income, she could have a career.

Ruben Naverette:

You know, not, it's not just an affiliate program.

Ruben Naverette:

And I said affiliate program, but really what I mean is our ambassador

Ruben Naverette:

program where you could build your own business within PowerPoints you

Ruben Naverette:

can be the representative you're

Upendra Varma:

talking about white labeling it, essentially

Upendra Varma:

changing the name of it.

Upendra Varma:

Oh,

Ruben Naverette:

a little bit.

Ruben Naverette:

It's sort of like a little bit of a hybrid in, in terms of white labeling it.

Ruben Naverette:

And yes, they do have that ability to do.

Ruben Naverette:

, um, we're really gonna focus more on them being part of the PowerPoints

Ruben Naverette:

family and empowering them to build their own business in that direction.

Ruben Naverette:

I mean, you know, I think there's a lot of people who are looking for non

Ruben Naverette:

unconventional ways to make money, and PowerPoints is such that, you know,

Ruben Naverette:

we've bootstrapped it the whole way.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

so we don't have any debt.

Ruben Naverette:

and we don't have any DC money.

Ruben Naverette:

Um, and so it's all paid for it.

Upendra Varma:

That's that's awesome.

Upendra Varma:

Yeah.

Upendra Varma:

. Ruben Naverette: Yeah.

Upendra Varma:

So, I mean, and the product is built and it's been, you know,

Upendra Varma:

running for the last 10 years.

Upendra Varma:

So it's been, it's it's battle worn.

Upendra Varma:

Um, it's not going away.

Upendra Varma:

It's not fragile.

Upendra Varma:

Mm-hmm.

Upendra Varma:

it's not gonna break.

Upendra Varma:

Um, so we've been through all of that.

Upendra Varma:

So now we just have a product that we can sell.

Upendra Varma:

And because there's high margins on it, we.

Upendra Varma:

You know, leverage that with some kind of an ambassador program.

Upendra Varma:

All

Upendra Varma:

right, so Ruben, one last question.

Upendra Varma:

Right.

Upendra Varma:

So what's the future here?

Upendra Varma:

Right?

Upendra Varma:

So, I mean, you've both traveled it amazingly.

Upendra Varma:

You, you've got, you reached up to that 3 million r mark, right?

Upendra Varma:

So what's gonna happen in the next five, 10 years?

Upendra Varma:

Right?

Upendra Varma:

So what's, what's the vision here?

Ruben Naverette:

I do think the vision is for, you know, we've had a really good

Ruben Naverette:

time building the product and we believe in, in PowerPoints, and we believe in the

Ruben Naverette:

mission of the organization as a whole.

Ruben Naverette:

But I do see an exit.

Ruben Naverette:

Probably the team.

Ruben Naverette:

I mean, we've been doing this a long time and I think the honeymoon is, is over.

Ruben Naverette:

It's been over for a long time.

Ruben Naverette:

Um, but I think that our goal is to, um, you know, we already had

Ruben Naverette:

three organizations approach us this year for an acquisition mm-hmm.

Ruben Naverette:

, um, cuz they're looking to, to, you know, get, move into this space and

Ruben Naverette:

we're an, we're an established player.

Ruben Naverette:

Yeah.

Ruben Naverette:

And we've turned those down, but we're not gonna be turning

Ruben Naverette:

them down in two or three years.

Ruben Naverette:

Don't say that.

Ruben Naverette:

So, so

Upendra Varma:

what, so again, this is, it's very interesting, right?

Upendra Varma:

Why did you turn them right?

Upendra Varma:

Is it, is it the valuation?

Ruben Naverette:

Um, well, yeah, that's a great question because we

Ruben Naverette:

really felt like there was still gas enough in our tank mm-hmm.

Ruben Naverette:

that we could ride this out and make the company more valuable with more

Ruben Naverette:

customers over a period of time.

Ruben Naverette:

Whereas we felt like if we sold now, sure we would get a really

Ruben Naverette:

good payout, but we didn't feel like it would be what it could.

Ruben Naverette:

If we put a little more, a couple more years into it and really went hard.

Ruben Naverette:

So

Upendra Varma:

we really, yeah.

Upendra Varma:

So were these, you know, acquirers were, uh, is, was that an, uh, was that

Upendra Varma:

supposed to be a strategic acquisition?

Upendra Varma:

Like they wanna take your product and then a good, they

Upendra Varma:

wanna do something else with it?

Upendra Varma:

Or are they just looking at you as a simple, you know, uh, high margin

Upendra Varma:

business that they could just run and put it on our auto pilot something?

Upendra Varma:

No, one

Ruben Naverette:

of 'em was really looking to accentuate their

Ruben Naverette:

existing tools because they had, they had a limited, they had you.

Ruben Naverette:

A, a basic system and ours was mature.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

. And so they were looking to add a lot of features.

Ruben Naverette:

Like some of the things that we do is we're integrated with

Ruben Naverette:

Ticketmaster Best Buy, you know, Travelocity and stuff like that.

Ruben Naverette:

So we have all these other things that are integrated in our system that

Ruben Naverette:

just came over years through maturity.

Ruben Naverette:

And it was a newer company and so they were looking at a ways to

Ruben Naverette:

expand and add features quickly.

Ruben Naverette:

Another organization had a lot of, had huge.

Ruben Naverette:

With a, a aspect of our, our, our, um, our system that made them money.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

. And so they were not even in this space and they wanted to leverage that.

Ruben Naverette:

They wanted to own our organization because they felt like, well,

Ruben Naverette:

they had another thing going on.

Ruben Naverette:

They were getting some big national customers and they knew

Ruben Naverette:

that our, our tool, um, really made them money significantly.

Ruben Naverette:

And so they wanted to acquire that cuz they wanted to make sure that

Ruben Naverette:

the tool was always gonna be in.

Ruben Naverette:

and they wouldn't lose.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

, um, when they expanded into those other customers.

Ruben Naverette:

So there were weird reasons why.

Ruben Naverette:

Yeah.

Upendra Varma:

You know, makes sense.

Upendra Varma:

Makes sense.

Upendra Varma:

So in couple of years, right?

Upendra Varma:

Is is it gonna be that, you know, what, what's the Northstar here?

Upendra Varma:

So what are you aiming?

Upendra Varma:

Is it that growth rate or is it, you know, increasing the

Upendra Varma:

number of customers and revenue?

Upendra Varma:

So what exactly are

Ruben Naverette:

you looking at?

Ruben Naverette:

It's increasing that revenue because that's going to

Ruben Naverette:

give us the biggest payout.

Ruben Naverette:

And we really feel like with where we are now and how we've grown

Ruben Naverette:

over the last couple of years, and.

Ruben Naverette:

The different things that we, what we're looking for really is we're

Ruben Naverette:

looking for something that where we can scale in terms of, you know, growth.

Ruben Naverette:

Mm-hmm.

Ruben Naverette:

. And we really haven't found that yet.

Ruben Naverette:

I mean, Google ads have been okay.

Ruben Naverette:

Facebook ads, total fail content on LinkedIn, not so much.

Ruben Naverette:

I mean, we've tried, I mean, you know, it's cold outreach, not so good.

Ruben Naverette:

We're gonna try a few other things cuz if we find something that we can really

Ruben Naverette:

scale growth, if we find something that we know is just like a, a.

Ruben Naverette:

Machine that we can put things in and get stuff out and we can guarantee

Ruben Naverette:

and we can do those numbers, then we can scale in such a fashion that in

Ruben Naverette:

two years time, you know, we're we three or four times what we are now,

Ruben Naverette:

that's the goal and we feel like it's out there and we haven't found it yet.

Upendra Varma:

Got it.

Upendra Varma:

Alright, Ruben, thanks for taking the time to talk to me.

Upendra Varma:

I hope you're scaling PowerPoint.

Upendra Varma:

Thank you so much.

Upendra Varma:

Much greater heights.

Ruben Naverette:

Yeah, thank you so much.

Ruben Naverette:

It was great talking to you.

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