SaaS Interviews with CEOs, Startups, Founders
869 SaaS: Almost 1m Employees Paying $4/mo Use This Time Tracking Software
10 Dec 2017
Chapter 1: What is the main topic discussed in this episode?
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 Matt Ristel.
He's the co-founder and CEO of a company called TSheets, T as in Tom, TSheets. The top rated and requested time tracking and scheduling software on the planet. He's founded six companies and he's done it all from the unlikely tech hub of Boise, Idaho. More than anything, he loves helping small businesses win, especially the underdogs. Matt, are you ready to take us to the top?
Well, I'm ready to go to the top with you. Yes. Good.
Well, listen, I have to hit you on this because it's a big thing that you said here. OK, the top rated and requested time tracking and scheduling software on the market. How do you know that?
That's a good question. And, you know. There's, there's a couple of reasons. One, I mean, in every ecosystem that we're in, we're the top rated out, but also, um, give me an example of one of those ecosystems. So the, uh, apps.com. So you've got APPS.com, which is into its ecosystem, their apps marketplace. I think we're almost twice number two and is getting the number of five-star reviews.
And that one alone, I think we have like 22 or 2300 five-star customer reviews. Also, some information just came out and I guess we are working to validate this, but of all of the SaaS B2B companies that are out there, In the world, we are the eighth most reviewed SaaS business-to-business platform in the world, with Salesforce.com being number one or number two.
Most reviewed across what channels?
Good question. And the statement was online. So we're working to validate it. But back to your answer. I mean, usually companies, especially employees, if you ask them, hey, Do you like your time tracking system? I mean, they get a visceral response, let alone any type of affection or love. And that is a massive difference from TSheets.
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Chapter 2: How did TSheets achieve rapid growth and customer acquisition?
Okay. Okay. So the, the, if a business, like if I sign up, I run a company called the top inbox with four employees. If I sign up for T sheets, I will pay $16 base. And then four seats times four is another 16 bucks per month. So $32 per month. That's exactly right. That makes a lot of sense. Okay, good.
So now that we understand kind of the business and, and kind of how you've driven these reviews and what you do, uh, tell me the backstory here. When did you launch this company?
So we started in, uh, in 2006, I owned a company prior to this. I had, um, I had 35 employees. I had four locations and a couple of delivery drivers and a couple of salespeople. And, um, what was that company, Matt? Uh, it was called cartridge world. So we were a franchise and we sold printer cartridges. Um, it was a great little business at the time.
And, uh, one day I was working late cause that's what you do. And one of my employees, she was, she was walking out and she said, you know, good night. I said, good night. And I had never once checked anybody's time sheet ever. And it's, For some reason, I thought, you know, should I check her timesheet? No, she would never. I mean, she was like one of my most honest employees.
She wouldn't steal anything. Anyway, I got myself up.
Wait, wait, hold on, hold on, Matt. I didn't follow that. She was leaving late. So you questioned if she was working hard, if she was checking in?
Not even close. So for some reason, I was working late. She was just closing up the store and she was leaving and I was working in the back of the store. So she left and I thought to myself, should I check her timesheet? For no particular reason.
Oh, you thought maybe she didn't check out.
Or maybe I didn't, she didn't check out. I don't know. I don't know. I had never checked anybody's timesheets.
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Chapter 3: What unique features set TSheets apart from other time tracking software?
I mean, I put in a few hundred thousand dollars. We got a couple of hundred thousand dollars of some seed capital. Uh, but then, so once you burn through that, you really don't pay yourself for a while. Right. And so, uh, you start burning through all your own cash reserves. And so, um, you know, that's, that's what we went through. And then in 2010, we really started to crack the code.
Uh, and, and then we've been, been doubling every year since.
So I want to talk about that more in a second about the kind of 2010, but give me a sense, like in 2008, what was total revenue? Do you remember?
Oh, I don't have any idea.
Less, definitely less than what? Um, In 2008. When you're still struggling.
Oh, I mean, it was, you know, I would say less than $100,000 of ARR. Okay.
And you didn't really pass that $100,000 ARR mark until things started clicking, you'd say in 2010?
I mean, then it was just, I think in 2010, what we did is we really started to crack the code. And we figured out what was causing us to grow, what wasn't causing us to grow. And so we really got laser focused on the things that were working and have had ridiculous results since.
What was the number one thing that was working?
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Chapter 4: What was the backstory behind the founding of TSheets?
What I mean by that is, did you have a big financial success before this, where this was really easy for you in terms of if this fails, you'll be okay. Or was this something where are you the kind of entrepreneur you like to put your back against the wall and say, I have to make this succeed. Otherwise I'm screwed. Well, it's too, it's too very different.
Do I like to put my back against the wall?
Uh, yeah, that's the basic question.
Right. And I, I, Prefer not to have my back against the wall, but we ended up putting ourselves there. So we had an outcome. You know, I had sold my last company and it was a pretty it was a good outcome for myself and for my family. It wasn't like, you know, unlimited funds where you never have to work again, sort of a deal. But it was, you know, it was certainly a good position to be in.
And then when we started this, and you invest the first couple hundred thousand, and then you start working into your reserves, pretty soon your back is against the wall really quickly. How much capital have you raised to date? A few hundred thousand seed capital, and then we raised a $15 million Series A exactly two years ago.
Got it. And I assume you're profitable ever since?
Yeah.
Um, well actually since 2010, when we really started to crack the code, we've been cashflow break even ever since.
Got it. And you've just basically looked at every month and said, Hey, we have this much going to the bottom line. Let's reinvest that next month on new marketing.
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Chapter 5: How has TSheets managed its pricing strategy over the years?
Times 12 is about 303 point or sorry, $36 million annually. So I'm going, Oh, I'll throw the question out and see if he's about 40 million yet. That's why that's a magic number.
So that's not a magic number that I'm not aware of. Like the magic sales number.
No, you would, you would not be aware of that outside of me making it up on the spot and calling it the magic number.
That surprised me. Uh, so, um, you know, again, that would kind of give you probably more information than, than what I would feel comfortable sharing. Um, but obviously you're, you're pretty good at math.
Okay, good. So we'll take that as generally in the range. Let's wrap up with the famous five here, Matt. Number one, what's your favorite business book?
Uh, I read, you know, two books a month. Um, I, one of the books I just read recently, um, that was probably one of the best books, best book I've ever, I've ever read the change T sheets forever is, um, the lean startup.
the lean startup number two, is there a CEO you're following or studying currently? Yes.
Brad Smith with Intuit.
Yep. Good number. Uh, by the way, if he comes and writes you a $250 million check, do you sell the company?
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