SaaS Interviews with CEOs, Startups, Founders
943 Bootstrapped and Rich, $14m 2017 From Helping Suppliers Accurately Print
22 Feb 2018
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.
Chapter 2: What inspired Reuben Malz to start GlobalVision?
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 guests today are Ruben and Mike. Ruben founded Global Vision in 1990. He's a friend of the printing industry.
That was after a friend of the printing industry told him about quality issues he was facing, and Ruben became interested in solving that problem. He founded the company to respond to the lack of quality control in commercial printing. The company has since grown from there, moving with the changing technologies and adding inspection capabilities that now cover the entire printing process.
Ruben, Mike, are you ready to take us to the top? Okay, so yeah. So kick us off first. The relationship is what? Mike, you're the son of Ruben? Yes. I started working here a couple years ago. That's good. He started you off as a janitor, right? Yeah. Michael, basically, you know, one comes with business, but I said, no, go out there in the world and get some great experience, which he did.
He became a creative director in New York City, did three years of that, and then it was time for him to come over at Global Vision and share the experience. Well, I'm going to guess then the website, Mike, had something to do with you because for the printing industry, you have a very web 2.0 look.
Yeah, that was definitely one of my first goals is to kind of, you know, get global vision going in the online market and really, you know, have that be front of mind in terms of how we, you know, talk to customers. So we work on it every day. And yeah, it's our prime focus. So Ruben, the risk in this interview is that people are going to wait, Nathan, the printing industry.
Why are you having printing guys on? Tell us about your business. Like what does it actually do? Okay. So basically we basically take the, uh, the risk out of people's business. So if you're printing and you're, you get a big order and that job goes to the customer and they give you a bad call saying it's wrong.
You're, you know, you got a sinking feeling in your stomach and you go, Oh my God, I just lost a lot of money. So, uh, the way that the company started was with that problem. A company came to us and said, you know what, we are getting fired, we're getting killed when we send a bad job out, help us. So who are you selling to? Okay, so basically anyone who has a printed package.
So if you've got a drug or if you've got a product like a Coke can in your hand, if there's something that's wrong with it, it's where Global Vision fits in. So are you selling to Pepsi who's buying the printed Coke cans or are you selling to the manufacturing company that's doing the printing? It's usually the supplier. So we're in the supply chain.
Somebody who is printing it has to send it to the customer. So you're printing it, you're the supplier and you want to get a perfect job, great quality to send to your customer and make sure that they can use it in production and it works for them.
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Chapter 3: How did GlobalVision evolve with changing technologies?
We're actually transitioning into a, we started, I started off 30 years ago as really a hardware company with a little bit of software. What year was launch? 1990. 1990. Wow. No, I'm not going to, I don't want to age you at all, but that's the year I was born. Yeah. And that's, they had something called DOS. You probably don't know what that is. It's disk operating system.
So that's how I built the first system. I do know that. I do know that. And now have you guys bootstrapped the company to date or have you raised capital? We don't raise capital. We bootstrap. I love it. Totally bootstrapped. How many folks are you at today? What's your team size? We're about 60 now. 6-0 or 1-6? 6-0. 6-0. And where are you guys based? Montreal. Montreal. It's beautiful.
By the way, I visited Montreal very recently, and I was expecting to enjoy the cobblestone streets, but I guess they're pulling everything up because of the anniversary. Construction was insane. It was. Yeah. We don't do so well in that park. Yeah. Are you on that strip with all the historic district there?
No, we're actually close to the border of Ontario and the U.S., so we're far from the city. Got it. Okay, good. Okay, so back to the business. You launched in 1990. You're totally bootstrapped. Sixty people now. You're selling to suppliers to make sure they're printing right, whether it's printing paper or printing wraps on Coke cans or printing anything really for any kind of product.
How many suppliers are you working with now today? There's hundreds and hundreds, but actually it's not just their suppliers. We sell actually more to their customers. What are you selling to their customers? The same software. So they have to protect themselves at both ends.
So a printer, a supplier wants to make sure that he's delivering or she's delivering a high quality product to their customers. The customers could be all these chocolate bar companies or beverage companies.
They need in turn to check to make sure the quality of the receipts of those goods are acceptable to put in production because what will happen is if they're wrong, imagine you're filling up your Coke with soda and syrup and it's going to get thrown out or worse. It's in the market already. It's on the shelves and it has to be collected and destroyed immediately.
And then we bring it so the costs get higher as you get further down the chain. So do you, I mean, it sounds like a big advantage to me. Do you have the suppliers? Essentially they are your sales force to the Pepsi's and the Hershey's of the world because it mitigates risk for everybody. Yeah. So we're a big, uh, we're part of their,
Tours, when they have their customers come in, they walk by and show it off saying, this is how we're protecting you. This is the quality tool that protects all of our suppliers, all our customers. We just had that last week.
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Chapter 4: What is the business model of GlobalVision?
I think he was three, two years old. Yeah. So I've seen the whole thing. You were launching a company and pumping out kids. Is Mike the only one or is there more? I don't know. There's lots more. Right now we have seven children.
Chapter 5: How does GlobalVision mitigate risks for its clients?
Oh my gosh. That's a cheap way to get labor. Good point. I got Mike. So seven kids launched 1998. Now Ruben, do you remember what, what year one revenue was? 250,000. You do remember like the back of your hand and what'd you grow it to in year two? Year two was 750. That's amazing. And that was all back then on-prem stuff, right? You're going around to suppliers, installing stuff.
I'm installing, I'm developing, I'm selling. Um, yeah, but I did it together with my wife. So we, She ran the business. She was the one that did the marketing, the administration, the care of all that while I was developing the software. Did you split equity 50-50? Yeah. Right down the middle. Yeah, right down the middle. Wow, that's impressive. You never hear that anymore.
She's the business one and I'm the techie guy developing the products. Okay, very cool. So you grew it to 750 and then are you comfortable sharing like in 2010 what you guys do? 2010, I think we're about 7, 8 million, 2010. Back then. Now we're about double. Okay, good. So you think you'll break 14 million this year? And can you break down for us?
And the reason I'm going to ask this question, it's about the revenue split between hardware versus software. There's a lot of old on-prem companies, you know, where their only SaaS part is the maintenance contract, right? The 30% maintenance contract per year. And all of them are shifting to this SaaS, you know, version because your margins go from 60 to 80 or 90%, right?
What percentage of the 14 million this year will be software versus hardware? It's actually where 50% Wow, that's pretty fast. And when did you launch your software offering? What year? It was really about five years ago. We started off with a strategy to move more towards a SaaS model. And so it's taking root.
We've got a lot more partners that we're working with and we're integrating our technology. We're OAMing. So there's a lot of change going on to increase that software base moving away from hardware. And that's also a huge basis for the web design. We're trying to gear things up to start to really sell online more and get into the SaaS market even more.
As I'm traveling the world on planes, trains, and automobiles, you guys hear it, I'm closing loads of different deals, whether it's buying a company, closing a new account for getlatka.com, you name it, I've got to do it. And part of my issue is signing documents while I'm on the road. So I just found this new tool. I'm using it pretty aggressively. It's called SignEasy.
So you can get started for free at getsigneasy.com forward slash sign. You'll see contracts that I've signed there and boy, oh boy, are they big and they work and the app is so easy to use. Get started today at getsigneasy.com forward slash podcast. Now, if you guys add the suppliers that are paying for you and the actual end products or brands, how many total customers do you work with?
About 3,000. 3,000 total. Okay. And walk me through churn. Do you guys have churn? If so, what is it? Yeah, so like on your software, I imagine you don't have it with hardware, or maybe it's really low on your hardware stuff. But on the software side, if you have 100 customers in month one, how many will stay the month two?
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Chapter 6: What are the pricing options for GlobalVision's services?
If you're using Adobe to create PDF files, our software works. If you're using CorelDRAW, it doesn't work. You know, so at Boulder, if you're using MP software, some companies in Asia will do, it just won't work. Yep. What are you, of the 60 people, how many of them are inside sales reps or doing sales or marketing? About a quarter of them are sales reps. Okay.
And Mike, this is maybe a question for you since the term is more kind of web 2.0. Ruben's going to roll his eyes when I ask it. But in terms of user acquisition cost, right, for new customers, what do you guys factor in when you look at like a fully weighted CAC? So any marketing you're doing plus your salespeople, what's it cost you to get a new customer?
We don't have that number completely figured out, but it is, I would say, you know, 300 to 400. That's a good number. Yeah. Yeah. You know, we go to a lot of shows throughout the year. It's kind of events have always been a backbone for us. Name your two biggest ones where you get the biggest return. Let's see. We have Drupa, which is the world's largest printing show.
And then there's Pack Expo, which is the largest U.S. packaging show. Got it. So you go to those two things and that's where most of your cat comes in from the paid channel. Then obviously you have sales people, which obviously have variable comp based off what they close. Do you have them running like a typical SaaS model inside salesperson?
They have a quota and you have two SDRs for an account executive. Do you have that system or no? Yeah, we do. We have with quotas and then we have SDRs and business development kind of feeding funnel in that way. you know, alongside the marketing channels. But I, you know, I'd say, you know, some of our best, you know, evangelists are our customers.
You know, we have some that have been with us for 15, 20 years and, you know, very often, you know, we hear, you know, that, you know, so-and-so told us about, you know, your products and we, you know, we'd like to take a look, you know, or a lot of these customers go off to new companies and, you know, they bring us with them. So, a lot of the growth does happen to actually just be organic.
So let's say a good example is that like if somebody left their company and went to another one where they didn't have this automation. Now they're taking, instead of a few minutes to do their work, they're taking hours again. And they can't stand the pain of it, so they call us back and they say, look, can you send us a quote I want to present it to my management? That's interesting.
And then in terms of, because you guys are bootstrapped, so you have to manage cash, obviously, very efficiently. If you've got 3,000 customers and $14 million in revenue, of which 50% is SaaS, so $7 million, those 3,000 customers to make up the $7 million pay you, I guess, somewhere around $200 a month. And if your CAC is $200 to $400, you're getting that...
they're paying you that money back to recover that CAC in like two or three months. Is that accurate? It's pretty quick. It's pretty quick. Oh, you're good. Yeah. It's annual contracts. Some of the customers, it's really up to them. We have many different pricing models. We have perpetual. We have the subscription models. They can lease the products.
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