SaaS Interviews with CEOs, Startups, Founders
1241 His New Way to Prospect Just Passed $1m in ARR, $5.4m Raised
17 Dec 2018
Chapter 1: What is Greg Segall's background and how did he start Alyce?
got a new way to prospects coming at you with alice essentially sending out gift options it helps you helps you control your cost and only pay for what your prospects accept they launched back in 2015 really had their spaghetti on the wall year as he said in 2017 they also that year passed a million bucks in revenue more importantly they now have over 500 customers sending gifts they've been able to change 500 of those customers and convert them into sas product customers right so about 50 folks there have converted a team of 40 based in remote locations all around the world
This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn. Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple hundred thousand dollars to 2.7 million.
I had no money when I started the company.
It was $160 million, which is the size of many IPOs. We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everyone. My guest today is Greg Segal.
He's the founder and CEO of Alice, an AI-powered corporate gifting and incentive platform. Founded in December 2015, Alice tells a corporate gifter exactly what to send and the most impactful times to send. Before Alice, he was founder and CEO of OnePika, one of the premier global e-commerce agencies. He also invested, scaled, and aided the acquisitions of several smaller retailers.
One Pico was successfully acquired in December 2012 by a holding company in San Fran. He received his BA in graphic design from Boston University in 2001 with a strong focus on computer science. Greg, are you ready to take us to the top? All right.
Last time we spoke, if I remember correctly, you were very much in this kind of stage of figuring out if, you know, the revenue stream that Alice was kind of going to grow is going to be, you know, relationships with gift vendors that you'd recommend to these corporate buyers or an actual technology, pure play SaaS kind of company. Where are you today?
So it's actually evolved a lot since we talked about a year ago. So the whole company obviously still makes a lot of money off of the gifts itself and the transactions, but a majority of the money is coming in from SaaS. So we've actually built this out because the product and the platform that we've built, we've just learned has a lot more value than just the actual sending the gifts itself.
It's evolved since just being, hey, this is a gifting platform. I can go into more on the use cases if you want to hear more about that, because that's been one of the big things that we've done. Also, we've raised a big round of funding, which you probably saw as well.
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Chapter 2: How has Alyce evolved since its launch in 2015?
And the most expensive is probably, you know, 10 K plus.
Okay.
And it depends on the size of the company, amount of gifts.
I was going to say, that's what you're doing. It's, it's, it's dependent on the size of the company, number of gifts. Right. Okay. And give us a little more about the background here. So launch year was which year?
So we launched in December of 2015 with a very alpha product. We officially went live at the end of the holiday season in 2016. And, you know, 2017 is what I call sort of the spaghetti on the wall year.
That was sort of when we when we talked where we were talking about all the different use cases on how people were using it from like, you know, work anniversary gifts to, you know, closing gifts to, you know, what we found out, you know, the prospecting side of things to customer appreciation gifts.
Um, and so we've just really tried to double down on one specific use case and that's really what's, what's catapulted our growth.
And what have you scaled to today in terms of total customers?
Uh, it's about five times what we talked about last time. So we're probably in the, in the five to 600 range right now.
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Chapter 3: What recent funding has Alyce secured and how will it be used?
So we try and track that very closely with each individual customer. And then, you know, as a whole across the different industries that are actually doing that as well because that really is what the fundamental success and what the SaaS platform is built off of.
Because if we're able to get you a meeting right now, which, which will happen anywhere between, you know, a third to an eighth of the cost of what it is now, uh, then that's a huge reason for you to be able to pay. And there's, there's a lot of value in that beyond just saying, well, it's a gift. Like to us, we're not a gifting company. We're a software company.
Yep. So in 2017, how many options for gifts were sent?
Oh my God. In the tens of thousands. Um, I don't know. I mean, our average customer right now is sending at least at least a thousand gift options, you know, to folks, you know, per year.
And then again, there's a certain conversion, you know, that's on that as well, because, again, the beauty of the model that we built is that when you send the gift option, they only pay when the gift is accepted. Yeah. So instead of you saying, hey, I'm going to send off, you know, 50 or 100 Yeti coolers, you know, to these folks and we can say, well, cool, send those same hundreds of
you know, a hundred Yeti coolers or a thousand Yeti coolers off to these folks, but do it using Alice. And then you're only going to pay for about between six and 30% of whatever's accepted.
Yep.
So you end up saving money overall.
So let me ask you a different question. In 2017, what was GMV for you?
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Chapter 4: What is the revenue model of Alyce and how does it work?
Yeah. Very good. And I'm curious when you went out and because you just raised when you were obviously negotiating your valuation, how did you try and convince investors to give you more of a SAS valuation versus a lower margin GMV model valuation?
Yeah.
Well, I looked at, first of all, we were very lucky. We had 15 investors that wanted to come into the round. So we were very lucky, and I did a lot of due diligence. I spent almost between four to probably closer to six weeks doing due diligence on every one of the funds.
And if you look at all the funds that we ended up choosing, I was very mindful of bringing on all funds that had operators as the folks that I'd be working with.
So if you look at like Eric Paley from Founder Collective, or you look at, you know, Larry Bond from General Catalyst, or you look at, you know, Peter Blacklow from Boston Seed, for example, you know, all these guys had run businesses before. So they had empathy and understanding for what the business was all about.
So when you talk about valuation, I also looked at it in terms of, you know, I was optimizing for the investors instead of the valuation. Like we probably could have eked out another two to $3 million on valuation, but we decided not to.
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Chapter 5: What are the main use cases for Alyce's gifting platform?
And I decided to go with the investors. that I wanted based on, you know, what they thought, you know, in the stage that we are in the business, um, to, to go from there.
So from my perspective, the evaluation and looking at it from a SaaS business was just like, look, there's a huge opportunity here because of the early indications of what we were able to do with prospecting and all the, and the early indications of what we're able to do to generate ROI for our customers.
So when I backed out my numbers and I showed them what we thought we can be, that was an easy way for us to be able to justify the valuation.
And what was your, over your growth rate in terms of revenue?
Uh, we had done like eight times. So we were, we were in a really good position. We were growing. I think at the time that we raised anywhere between 25 and 50% month over month growth.
Got it. And now Greg, I have to be fair here, obviously too. I mean, these you're growing, but you're not in, in the millions and millions of revenue per year yet. So you're doubling call it a hundred to 500, 500 to a million, et cetera. Correct.
Yeah, yeah, correct. I mean, we're in the millions now, but yeah, that's a good indication of why it's easier when you're earlier on to be able to apply that.
Of course. Now, was 2017 the year that you passed a million in revenue? Okay, good. Very good. All right, last question here on team size before we wrap up. What do you guys have to say now in terms of team?
We're at 40 right now.
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Chapter 6: How does Alyce ensure high conversion rates for gift acceptance?
They launched back in 2015. really had their spaghetti on the wall year, as he said, in 2017. They also, that year, passed a million bucks in revenue. More importantly, they now have over 500 customers sending gifts. They've been able to change 500 of those customers and convert them into SaaS product customers, right? So about 50 folks there have converted.
A team of 40 based in remote locations all around the world. Greg, thank you so much for taking us to the top.
Awesome. Thanks a lot, Nathan.