In this insightful episode of the B2B SaaS Podcast, we delve deep into the success story of Vivantio, a leading enterprise service management platform, with CEO Greg Rich. Discover the strategies, insights, and metrics behind their remarkable achievement of surpassing $5 million in Annual Recurring Revenue (ARR) by selling $25,000 deals to customer service teams.
Here are the key topics covered,
Hello everyone.
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:Welcome to the B2B SaaS podcast.
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:I'm your host Upendra Varman.
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:Today we have Greg Rich with us.
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:Greg here is the CEO and co founder
of a company called Vivanteo.
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:Hey Greg, welcome to the show.
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:GregRich: Yeah.
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:Nice to meet you.
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:Thanks very much for having me.
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:Upendra Varma: Yeah.
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:All right, Greg.
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:So let's try to understand, right, what
your company and product does and like
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:why customers are paying you money.
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:GregRich: Why pay this money?
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:Okay.
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:So Vervancio is an enterprise
service management platform for
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:customers, service and support teams.
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:Um, so we predominantly sell
into the mid market space.
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:So these are typically teams that are
either growing or scaling, um, in terms
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:of service and support, and they're kind
of moving away from either legacy or, or,
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:um, entry level case management solutions
and looking for the, you know, their next
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:evolution in terms of service management.
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:Or, uh, it's going to be sort of
enterprise systems that are looking to
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:find products and services that can, um,
still allow them to do what they want to
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:do from a service and support perspective.
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:Um, but they're trying to remove the
burden of management of those systems.
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:You know, they, they're typically using
enterprise systems that are difficult
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:to maintain, difficult to look after.
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:Um, you know, not a great return on
investment from that perspective.
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:And they're looking for the new, you know,
a new range of products and services that
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:can allow them to do what they want to
do, but at a much more cost effective way.
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:Um, yes, that's pretty much it.
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:So the types of people, the types of
people that use Vivantio, you know,
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:it, it, you know, we predominantly
sold into IT, uh, for, for many,
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:many years, but, uh, you know,
Vivantio is a very scalable solution.
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:Uh, we have customers, uh,
right across the enterprise now.
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:Um, and you know, one of our areas of
focus is in customer service and support.
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:So people providing support.
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:To external customers, whether that's
MSPs or, um, you know, support for
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:customers of their organization.
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:And right across the business,
HR, finance, you know, everyone's
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:a service team these days.
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:Everyone's providing service either
to the business or to customers.
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:And they all need a service
management solution like Vivantio.
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:Upendra Varma: and, uh, and just one
products like serve everybody is that
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:how it is or you've got like sort of
products, you know, serving for various,
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:you know, customer profiles that
you have, like, so does your same it
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:solution, you know, work well for, for
example, uh, external customer facing
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:like customer support team was, you know,
helping out my customers, for example.
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:GregRich: That's it.
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:So, yeah, it's a very
great question, actually.
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:So we, this is something we've
changed relatively recently.
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:We did used to have a lot of
products, lots of different solutions.
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:And actually what the market was
telling us was that it was too
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:confusing, you know, difficult to
understand pricing difficult because
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:it's such a comprehensive product to
understand which features they needed.
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:Uh, so actually what we did, um,
this, uh, this year was we, we, we,
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:we moved away from that completely.
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:Uh, we simplified our license model.
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:Uh, we just have now a single
platform, a single price that's
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:designed to be used across.
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:All service teams.
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:Um, and the idea of the platform is
that it's a no code, low code product.
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:It allows those customers to turn on and
off the features that they need, um, and
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:to run it across multiple service teams.
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:So through roles and permissions and
things like that, um, everybody can be
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:using the same platform, uh, but obviously
have their own, you know, consolidated
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:view, um, into their part of the business.
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:Upendra Varma: Got it.
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:Right.
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:And then I have a couple of questions
here, but I'll come to that after a while.
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:Right.
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:So just want to understand the sense of
your customer base as of today, right?
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:Like how many customers are you
serving on your platform today?
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:GregRich: Serving on the platform,
hundreds of thousands a day, actually,
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:uh, we have several hundred customers,
but you know, if you think about,
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:uh, the technology and the types of
customers they're providing service
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:and support to, um, you know, these
are large enterprises, um, that, that
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:have customers, either thousands of
customers internally or hundreds of
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:thousands of customers externally.
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:So yeah, we, we have hundreds
of thousands of people using
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:Upendra Varma: you talk about these,
like I asked you customers, not users
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:in particular, like the customers
who are actually paying you money.
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:GregRich: Yeah.
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:So we have about 400
customers at the moment.
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:Yeah,
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:Upendra Varma: And that's a hundred
thousand is approximately the users or
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:the, you know, the end users essentially
who will end up, who will end up
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:GregRich: right.
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:Consuming, consuming those services.
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:Exactly.
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:Yeah.
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:Upendra Varma: And then how big of
a deal are we talking about, right?
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:On an average, how, how much
your customer typically pays you?
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:Are we talking about a 10, 000
mid market deal or are we talking
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:about a 100, 000 enterprise deal?
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:Just give us a
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:GregRich: Yeah.
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:So, I mean, it ranges, as you can imagine
as a, as a product and service like ours,
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:you know, we, we have customers, uh,
you know, that are relatively small and
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:we have very, very large customers, um,
like, uh, Texas Correctional Institute,
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:you know, who have hundreds of thousands
of users actually, in fact, um, our
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:average deal size sits around 25, 000.
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:Upendra Varma: Makes sense.
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:And like, are you comfortable, you know,
letting us know like where you are as
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:a company in terms of revenue, right?
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:Approximately.
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:GregRich: Yeah.
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:So we're now, uh, so we're,
we're, we're an old company with
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:a, with a new startup mentality.
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:So, uh, you know, without getting
into the backstory, you know, we've
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:been bootstrapped up until about a
year ago, um, just over a year ago.
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:And, uh, you know, that
was for various reasons.
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:Uh, we're now sort of
poised for, for growth.
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:We see a huge market opportunity,
uh, especially in the service
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:and support part of the industry.
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:Um, we're sitting at just around 5
million in terms of annual current
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:revenue at the moment, a little bit higher
than that in terms of actual revenue.
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:Upendra Varma: Got it.
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:Right.
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:So, and just, just, let's move on to
your growth journey here for a while.
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:Right.
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:So like, where, where are all of
these customers or enterprises or,
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:you know, your deals, like where are
they finding you in the first place?
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:Right.
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:How does that top of
funnel look like today?
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:Over the past 12 months, for example.
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:GregRich: So the past 12 months
has been far more predictable
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:than the previous 12 months.
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:I have to, or the previous,
uh, years, in fact.
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:Um, so what we've been doing,
uh, is investing a lot of
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:time and effort into SEO.
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:So, you know, one of the things
that we've wanted to do, especially
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:as it relates to the customer
service and support market is try to
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:educate, um, operations teams about.
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:What service management has meant
to IT for the last two decades.
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:Um, you know, there are
best practice frameworks.
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:There are technologies that IT have
been using that really haven't been
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:leveraged across the entire organization.
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:So we've actually spent the last 12
months, um, releasing white papers, you
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:know, putting out tons of blog posts
every week that talk about how, uh.
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:Operations teams can elevate
service to their customers.
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:Um, looking at service efficiency,
service optimization, um, thinking
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:about integrations across the
business and things like that.
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:So that has been really the
route that we have taken.
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:And that that's where we're seeing
most of our growth at the moment.
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:Upendra Varma: And like, was that
like, um, uh, did you invest a lot in
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:those past 12 months on SEO or were
you already been doing for a while?
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:And like, that's what given you most
of the results over the past 12 months.
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:GregRich: Yeah, we've actually been,
uh, yeah, actually it's one of these
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:strange things that, you know, we
have a very diverse set of customers,
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:you know, everything from education
through professional services,
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:through finance, through FinTech, I
mean, it really is a very broad, um,
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:Upendra Varma: let me, let me
rephrase that question, right?
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:So you've got around 400 customers, right?
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:So just like a big chunk of them,
where did they discover you?
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:Like, how did you end up?
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:GregRich: Yeah.
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:So 50 percent of our customer base, we're
actually using Vivantio for external
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:customer support, uh, to support end
users of their products and services.
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:Um, and, you know, coupled with that
and the fact that we're now seeing
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:that, uh, customer services teams are,
uh, are being, you know, looked at
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:as profit centers for organizations.
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:You know, they really can help
drive growth of businesses.
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:You know, they're part of retention.
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:They're part of renewals.
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:They're part of helping
with upsell and sale.
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:Um, And, you know, there's a lot
of demand that's been put on those
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:teams, uh, in, in these modern days.
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:And so we, we've really seen that
there's an opportunity now to leverage
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:that and to make sure that we're, you
know, we're providing tools and services
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:to those teams that can really help
them elevate the customer experience.
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:Upendra Varma: Oh, sorry, Greg.
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:So what I was trying to
understand is where did they
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:discover you in the first place?
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:Like, how are they finding you?
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:Like, is it SEO or is
there something else?
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:Are you doing any outbound sales?
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:Like what's that first touch
point look like for all of your
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:GregRich: Well, you have to
remember we've been around 20 years.
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:So of course it's, uh, you know, it has
varied, um, considerably over that time.
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:Um, you know, as, as a relative as
well as a small company, uh, you
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:know, we've had to be quite nimble.
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:We've had to be able to react to, you
know, the market in the early days.
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:We were one of the first
adopters of Google AdWords, you
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:know, it was fantastic for us.
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:And of course, now we can't compete,
uh, in, in that because, you know, our
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:enterprise peers, um, you know, dominate
that space and it makes it impossible.
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:So, you know, you have to be nimble.
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:You have to learn how to kind
of adjust to market conditions.
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:Um, but to us, like I said, the SEO
piece is a big one for us because
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:it brings people to our site.
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:They're inquisitive.
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:They want to understand how they
can improve service without spending
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:enterprise dollars in order to do that.
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:Um, and that's typically what
leads, leads customers to us.
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:Um.
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:Upendra Varma: essentially SEO is
the one that's really been driving
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:most of the growth these days.
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:Is that how you can
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:GregRich: Certainly.
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:Yeah.
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:I mean, we, we back it up with, uh,
with, with, uh, you know, we, we think
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:about it as a multi channel approach.
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:So of course we use LinkedIn, we use
display, uh, uh, you know, advertising
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:and things like that, um, and, uh, to,
to try and ensure that we continue to get
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:that message across, you know, we don't,
it's not just a fire and forget mentality.
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:Uh, obviously we have, uh, email, uh,
marketing sequences that we use to
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:keep people informed about, you know,
changes to the product service and
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:other white papers that we're releasing.
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:So, you know, we have a number
of tactics that surround.
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:Our messaging, um, but, but predominantly
it's really that, that education pieces
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:is what we're pinning everything on.
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:Upendra Varma: And you do any
outbound sales or no today?
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:GregRich: So we are doing some,
it's, you know, it's proven, uh,
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:positive in the past, and then
it's not proven to work so well.
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:Um, but we are fortunate we brought in
an EVP of sales, uh, recently, um, under
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:the, uh, remit of our chief revenue
officer, um, who has a ton of experience
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:in building out, um, outbound sales teams.
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:And it's very new, you know,
we've, we've literally had that
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:position in for a few months.
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:So, uh, in fact, the first employee, uh,
working under Jim started this, this week.
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:So, so again, that, that is something
we're starting to look at now.
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:Yeah.
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:And again, it's, it's
part of the same thing.
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:It's like, how do we get
our message out there?
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:How do we actually communicate to people
about what our value proposition is?
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:Upendra Varma: Got it.
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:Right.
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:So yeah, let's, let's move on.
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:Right.
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:So like I was trying to understand this a
lot more because like at 5 million, right.
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:So at 5 million ARR, like what, what
would you, what would you bet on?
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:Right.
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:Is SEO your primary thing?
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:If yes, like how do you, like how much
of your growth is coming from SEO?
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:Just, just want to get a sense there.
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:Can you just quantify here?
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:Like.
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:GregRich: yeah.
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:Upendra Varma: Just put a number there.
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:For example, how much percentage
of your new leads just come from
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:GregRich: I would say
it's a large proportion.
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:I would probably say 60 to 70%.
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:You know, you have to remember that
we're selling into an industry, uh,
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:where people are, you know, relatively
tech savvy, um, to a certain degree,
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:they kind of know what they want.
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:They do a lot of research before they
reach out to someone like Vavanchio
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:to look at a product and services.
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:Our, our sales cycles are relatively
short, you know, 60 to 90 days because
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:of the amount of time that, um, our
prospects have taken to, you know,
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:evaluate and investigate solutions, even
before picking up the phone or raising a
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:hand or filling out a form on a website.
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:Um, so, so by the time they
actually get to us, they're,
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:they're pretty well informed.
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:Upendra Varma: let's talk
about the sales cycle, right?
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:So what happens on somebody discovers
you when somebody did their research
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:and they can come to you, right?
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:What happens after that?
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:Like how do you convince them to
become a paying customer of yours?
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:GregRich: So it goes, we go
through a number of stages.
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:You know, the first thing we do is we
try and have a scoping call with somebody
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:to understand what their pain points
are, why they're looking, you know,
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:what are they trying to achieve here?
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:Uh, what are they using at the moment?
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:Um, what's not working for them and
what's that kind of current future state
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:look like, you know, what are, what
are they trying to get to as a business
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:and what are their business challenges?
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:Um, and based on the back of that, what
we'll then do is we'll customize a demo
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:for them that I, you know, showcases
some of the features that we have in
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:the product that actually solves those
business challenges that they have.
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:Um, so that, that's
typically the second stage.
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:Um, and then the third stage really,
uh, it can go one of two ways.
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:Oh, sometimes people will ask for
just a trial of the system and
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:we're happy to oblige and, you
know, give somebody a 30 day access.
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:What we try and encourage them to do is
to actually work with our implementation
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:consultants, uh, free of charge to put a.
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:Proof of concept in place.
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:Uh, we, we find that, um, you know,
having the opportunity to hold their
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:hand, uh, you know, just for a couple of
days in implementing, um, certain parts
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:of the solution and for them to realize
how simple and easy it is to configure
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:and how quickly they can actually start
getting an ROI, um, that that's really
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:advantageous both for them and for us,
um, because they really do understand
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:the value of the products at that point.
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:So, so a POC is really where we try
and, you know, try and steer people if
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:they have the time and the willingness
and the capacity to do it, yeah.
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:Upendra Varma: And then like it's
it's 60 odd days is that what you're
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:saying 60 to 90 days It's is that
how your sales cycle typically takes?
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:GregRich: Uh, 60 to 90 days.
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:Yeah.
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:Yeah.
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:I mean, it can extend beyond that
for enterprise customers, you know,
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:uh, those, those, um, that there are
larger buying committees and they
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:have to get, you know, procurement is,
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:Upendra Varma: Yeah
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:GregRich: could be long winded as,
as I'm sure, you know, um, but, but,
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:but typically, yeah, for our ideal
customers, typically 60 to 90 days.
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:Yeah.
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:Upendra Varma: Got it.
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:Right.
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:So, so Greg, like, so just
give us a sense, right?
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:So, I mean, I see a lot of your product
or, you know, your reviews, most of them
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:are around, you know, it, you know, it
service management, something like that.
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:But I recently also see that you, you
switched on to this external facing
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:customer support teams and all of it.
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:Right.
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:So how's the journey going on?
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:Like, when did you make the switch
and like, like, is it like literally
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:going from zero to one in terms
of, you know, acquiring this new
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:customer base and adapting to them,
adapting them to a product or like,
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:how's that journey looking like?
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:So, and is that your bet on how
you're going to grow from 5 million
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:to let's say your next big milestone?
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:GregRich: Yeah.
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:So I think in terms of going to, to answer
your first question, thinking about the
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:journey, um, as I alluded to earlier, I
think we kind of fell into it to a certain
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:degree, 50 percent of our customers
were using it for external support.
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:Um, and it wasn't until we started
doing, you know, that market research,
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:um, you know, I'm part of the
Gartner, um, CEO startup program.
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:Um, so I get access to their analysts
and that's really helpful in terms
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:of validating some of the things
that we're seeing in the market.
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:Um, and that was a great opportunity
for us to, to really think about where
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:we could differentiate our products and
services, you know, the service management
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:market is saturated with products.
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:I mean, especially on the it side.
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:Um, and so, you know, we wanted to
find a way that we could carve a
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:niche in that particular market.
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:And we believe for us, customer
service and support is that niche.
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:Um, so, so that, like I said,
that was really a change in focus.
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:So we already have 50 percent of
our customers using it for that.
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:Um, but then on the flip side, we're
actually seeing that, uh, you know,
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:enterprise service management is also
be becoming a big play, you know, is not
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:really thinking about service and support
within a single team, but how can you.
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:You know, holistically think about the
way that you're delivering services
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:across your entire organization.
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:Um, and eventually plays well in,
in, in that, in that area too.
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:Um, you know, we do find, uh, more
often than not, that when we land a new
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:customer, it's not very long before they
start thinking about adoption across
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:the organization, into facilities,
management, HR, finance, uh, governance,
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:risk, and compliance, you know.
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:All of these teams can make use
of a solution like Financio.
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:And there's a benefit in having, uh,
you know, a single service management
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:platform across your entire organization.
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:When you want to ask, when you want to
start understanding or measuring how
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:you're delivering service, both to your
internal and external customers and what,
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:what impact that has on the bottom line.
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:Upendra Varma: Let's talk about
churn and expansion here, right?
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:I think since you've already
touched upon it, right?
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:So how does churn look
like for you, right?
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:So typically how, like, how long does
a customer stick with you and like,
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:what's that percentage look like?
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:GregRich: Oh, forever.
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:They're here forever.
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:No, no, I'm joking.
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:So, so typically the customers, our
average tenure is about six years.
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:Um, you know, and it, it does vary, uh,
depending on the size of the customer.
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:Uh, our ICP customers have been with
us anywhere between nine and 12 years.
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:You know, it's a significantly
longer period of time.
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:It's a very sticky product when you start
getting into, you know, uh, customers
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:that are really understanding and,
and, and, you know, using the value
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:of the product within the organization
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:Upendra Varma: And how does, and
then talk about that expansion
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:strategy you have, right?
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:So you, you, you mentioned that, you
know, one team goes on to, you know, yeah.
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:So just like, how, how
is that working for you?
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:Well, and maybe you can
just quantify that as well.
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:GregRich: Yeah, quantifying is easy.
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:So our, our, our net retention
is about 110 to 115%.
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:So, you know, uh, whilst, whilst we
do lose some customers and obviously
370
:no, no organization or no company ever
wants to lose customers, but that's just
371
:the natural order of things that, that
just happens for, for various reasons.
372
:Uh, you know, we are, um, you know,
the expansion within our existing
373
:customer base is significantly
outweighing what we're, what we're
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:losing from, from customer churn.
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:Upendra Varma: And which
dimension is this along?
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:Is this along the number of users that
they're using or is it along, you know,
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:different product line or different, some
other team sort of adopting, you know,
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:the platform, like which dimension is
this sort of extract revenue that you're
379
:generating from an existing customer?
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:GregRich: Yeah, it does go in both
directions, actually, both sort
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:of vertically and horizontally.
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:Uh, what we find that, um, you know,
as product teams mature, they start
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:making or turning on features of
Avancio that allowed that team to scale.
384
:So that's a big thing for them.
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:They start building out workflows,
automation, um, things like that.
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:So, so that obviously helps.
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:Uh, and like I said, the
other is horizontally.
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:They start looking at how those
service, how that tool can be
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:used to have advantage could be
used across their organization.
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:So they can start delivering the same kind
of service to their internal customers
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:as deliver to their external customers.
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:Upendra Varma: Got it.
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:So Greg, talk about the team today, right?
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:It's how many folks you have in your team
working and like, what do they work on?
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:GregRich: So we have, uh, so as you
can tell from my accent, I'm originally
396
:from the UK, uh, and, uh, half of our
team, in fact, more than half of our
397
:team, about 70 percent of our team
are back in the UK at the moment.
398
:We have about 45, 50 staff today.
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:Um, and like I said, you know, uh, a large
majority of those are back in the UK.
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:Um, uh, mainly, you know, the split
of that is most of our sales and
401
:marketing team, uh, here in the U S.
402
:Um, and we have some product support, you
know, implementation, um, professional
403
:services teams that, uh, that reside
here to support our US customers.
404
:And then back in the UK, we have our sort
of, uh, our main, uh, technical support
405
:teams, engineering teams, uh, operational
support, DevOps, that, that kind of thing.
406
:Yeah.
407
:Upendra Varma: And like, what's,
what's the vision here, Greg?
408
:Like, where do you see your company going?
409
:Let's say three to five years.
410
:Like what's going to happen?
411
:Are you going to raise an external funding
and, you know, pump, you know, pump up
412
:the growth or like, what's the plan here?
413
:GregRich: Yeah.
414
:So we, we, we've already gone
through one small round of funding,
415
:uh, at the start of 2022, uh,
416
:Upendra Varma: how much did you raise?
417
:GregRich: Yeah, we raised 2
million, uh, in terms of debt, um,
418
:and that was to help fuel growth.
419
:And like I said, the company has
doubled in size, um, during that time.
420
:And we've seen, uh, growth,
uh, of about 20 to 30%.
421
:Um, and that the plan is
422
:Upendra Varma: But you've
been bootstrapped till:
423
:Is that correct?
424
:GregRich: that's right.
425
:Yep, absolutely.
426
:And then, uh, we've actually, you know,
we employed a CFO a few months ago,
427
:uh, as part of our growth ambition.
428
:And, uh, we've been working with
the CFO now, and we will be going
429
:out to the, to the wider community
at the start of September.
430
:Uh, to look at an equity round,
what that number looks like.
431
:I can't tell you, I don't actually
know because we're kind of working on
432
:the financial model now and we're kind
of finalizing that, that, uh, that,
433
:that's that, um, the, the, the, the
deck and the, and the, and the sort of
434
:go to market that goes along with that.
435
:Um, but, but that's, that's
the plan for this year.
436
:And then in terms of growth,
you know, um, it's a 26 billion
437
:market, uh, which is growing 13%,
uh, year on year at the moment.
438
:Um, so, you know.
439
:We have a huge, there's a huge opportunity
there for us, uh, in, in, uh, in becoming
440
:what I would from, from my perspective,
you know, I've always considered ourselves
441
:to be a customer services organization
that develops service management
442
:software, not the other way around.
443
:Uh, you know, my vision is that, uh,
you know, we're seen as that, that we're
444
:seeing as the leader in terms of like how
our products and services can be used to
445
:really elevate the customer experience
and what that means to organizations.
446
:You know, that, that's a big thing for me.
447
:Um, and, and, and, you know, just.
448
:Yeah, both in terms of product and
in terms of the way that we, you
449
:know, we serve as our customers.
450
:Upendra Varma: That's great.
451
:So, all right, Rick, thanks for
taking the time to talk to me.
452
:Hope you scale your venture
to much, much greater heights.
453
:GregRich: There's lovely
talking to you too.
454
:Yeah.
455
:Thanks very, very much for your time.