SaaS Interviews with CEOs, Startups, Founders
1330 This Professor Quit Higher Ed For Learning Management Platform, $24m in ARR
16 Mar 2019
Chapter 1: What inspired Claudio Erba to create Docebo?
He started off kind of teaching, obviously, courses, a guest lecturer, needed a way to give PowerPoint presentations out. Then people started saying, once he open sourced it, they said, we want to buy this thing. So he drew up an invoice, got his first money. That was in 2005.
Today, they've scaled that to over 1,400 paying customers, paying, call it, 1,600 bucks per month, doing north of 2 million bucks per month in revenue.
Chapter 2: How did Docebo transition from open source to a paid platform?
That's up from 1.4 million bucks per month a year ago. So healthy growth there. They've raised $10 million, willing to spend up to $30,000 to acquire a new customer, which gives them a 12-month payback period. And he assumes a 36-month lifetime value at about 90 grand with his team of 250 based in Italy and other remote locations.
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 of hundred thousand dollars to 2.7 million.
Chapter 3: What is the current revenue model of Docebo?
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, everybody.
Chapter 4: How has Docebo scaled its customer base and revenue?
My guest today is Claudio Erba. He is the founder of a company called Ducebo, S-P-A, and has been its chief executive officer since March 2005. He serves as a director at the company and has served as a board vice president at R-Y-S-T-O-S-R-L from July 2013 to December 2014. We're going to jump into the company today. Claudio, are you ready to take us to the top? Yeah. All right.
Tell us about the company. So what does Ducebo do and how do you make money? Well, actually, we are a software as a service company that sell these training delivery platform to mid-sized enterprise companies.
Chapter 5: What factors contribute to Docebo's customer acquisition strategy?
So imagine Docebo as an empty box. Where you can upload your training content and train all your employees also if they have several offices around the world and reach them globally. You are a guest lecturer. Did you use the tool to basically, you know, you know, systematize teaching your guest lectures to teams that you worked with?
Well, the funny story is that Docebo was born as a software because my students needed something to download my PowerPoint presentation after the lesson. So with Fabio, that is my actual partner and CTO, we created this small application that was released originally under open source license. We released it and we went to release it for free online.
And the day after, we've got a big article from the biggest economics newspaper in Italy. And the day after, we start getting phone calls from people that say, we want to buy this software, but we didn't get the company. And the first invoice was issued by me, not by a company.
Chapter 6: What challenges has Docebo faced in its growth journey?
So the company started without any business planner, without an idea to create a company behind the need of my students. That's great. And so today, when customers are paying for your platform, give me a general sense. What's the average of what they're paying per month? Well, we have two plans. One plan is the entry-level plans. It's slightly above $10,000 per year.
Yeah, and the enterprise plan is bigger. Around $30,000. It really depends on which modules you want to add because we have more learning.
Chapter 7: What is the significance of customer success in SaaS companies?
Claudio, give me the average. What would you say the average is there? Are we talking like $15,000 or $25,000? What's the average? Two different solutions, $10,000 and $30,000. Okay, so people don't upgrade from one to the other? Yes, they jump. After they succeed in adoption, usually they jump to a more complex and structural solution.
Yeah, so I want to avoid kind of going down holes on each customer cohort. If you take your total customer divided by your revenue, that gives you an average revenue per customer essentially, right? So what's the average customer paying per month? It's somewhere between 10 and 30. It's slightly below 20 if we needed to make the average. Got it, got it.
Okay, but just to be clear again, two separate plans, they pick one and they can upgrade when they want. Yeah, because the first one is called adoption because they need to adopt it. And the second is growth because they need to grow. And what year did you launch this in? Say it again. What year did you launch in? With these new plans were very recent. When did you launch the company? In 2005.
2005. Very good. So you've been building this for over 10 years. Have you bootstrapped or have you raised capital? We raised capital, but in 2012. Docebo had two different lives. The first one was an Italian company that sold 93% of their revenues, up to $1 million in 2012, then a seven-year growth.
Chapter 8: What future plans does Claudio have for Docebo?
And then we raised capital, we changed business model, and then we started doubling the revenues from 2012 to today with a huge growth and with 93% of the business outside Italy, 60% in North America. Okay, so how much total capital have you raised? Working capital, around 10 million, something like that.
And just to be clear, that's like total capital that the company has raised, including secondary? Yeah. With secondary, we have something more, yes. Okay, got it. Are we talking like double, triple that or is it still around 10 million? It's way below 20. Okay, got it. Very good. So between 10 and 20 raised, mostly working capital.
Sounds like some of it was secondary, which means early founders maybe took some money off the table or things like that. Walk me through what you've scaled to in terms of customers. How many customers on the platform today? As of today, we have 1,400 enterprise customers, mid-enterprise customers. And in terms of revenues, we have doubled since 2014. Okay.
If I take 1,400 folks paying an average price point of 20 grand per year or about 1,600 per month, that puts you at about 2.3 million bucks per month or well north of 24 million per year. Is that accurate? You're very good on that. Yes. Okay, great. That's accurate. So that's great growth considering that you guys have raised a fairly small amount of capital relative to what your ARR is.
The growth you said, you said you've had great growth since 2012. Quantify that for me. So if you're doing 2.3 million per month today, what were you doing a year ago? I think, actually, we would like to start becoming more capital efficient. That means that as of today, we have doubled the revenues, investing only 10 million of working capital.
Probably, it will slow down a little bit, the growth. And improving some other KPIs like margin and so on and so on. What we are very conscious is the cost of customer acquisition. We want the customer to repay Docebo in at least less than one year. Okay, so less than 12 months, which means you're acquiring them for less than 30 grand. Is that correct? Yeah. Okay.
And I want to talk more about that in a second, but I want to go back very quickly to growth again. So if you're at 2.3 million per month today in revenue, if you go back in July of 2017, how much were you doing that month in revenue? July 2017. Let's try to put a 68% growth. 68. Okay, great. So you were doing somewhere around 1,700,000 per month at that point. On top of what we have now.
No, no, no. So I'm trying to get a growth rate here, Claudio. So if a year ago you were doing 1.7 million per month and you grew 60% year over year, that would put you at about 2.3 million per month today. Are those accurate? No, I thought that your question was on the future forecasted revenues. We have added something more. We have added more than 75% this year. Okay.
Compared to the previous year. Okay, so if you've grown by more than 60%, so let's say 70 or 80%, that means a year ago you were doing maybe 1.4 million per month, and now you're doing 2.3. Almost, yes. Okay, got it. Sorry, just to be clear, it's a little bit less than 2.3. Okay, but is it somewhere between 2 and 2.3, though? Oh, yes, absolutely. Okay, very good. So that's great.
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