SaaS Interviews with CEOs, Startups, Founders
Bootstrapped to $25m Revenue, Won't Sell for $250m to Manny Medina and Outreach
14 Feb 2021
Chapter 1: What does it mean to be bootstrapped and profitable in business?
Yeah, we're bootstrapped. We're profitable. Our TAM is obviously everything in the world. We don't like giving up control to people who don't know how to run companies. We think that's ridiculous. You are listening to Conversations with Nathan Latka. Now, if you're hearing this, it means you're not currently on our subscriber feed. To subscribe, go to getlatka.com.
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Or bootstrap founders like Vivek of QuestionPro. When I started the company, it was not cool to raise. Or Looker CEO Frank Behan before Google acquired his company for $2.6 billion. We want to see a real pervasive data culture, and then the rest flows behind that. If you'd like to subscribe, go to getlatka.com.
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He's building a company called Connect and Sell, and he's a software technologist that really has now turned into a sales geek, helping reps 10x their conversations when they use his software. Chris, you ready to take this off? Yeah, yeah. All right. So were you in sales or something and built this for yourself or how'd you get the idea? No, I stumbled on this.
A former employee asked me to talk to Sean McLaren. It was the guy who came in and made Connect and Sell real. Five minutes later, I was at breakfast with the guy and I said, I'm in. And he said, what do you mean? What if I'm not hiring? I said, it's a free country. You can choose to pay me, but I'm working for you now. That's amazing. When did you join the company? 2011. Okay.
Okay, so you've been there a while, yeah, because you came on back in, I want to say February of 2019, I believe, right? I do believe so. I was just in my new house in Reno. I remember that. Yeah, it was a while ago. So give us an update on the business, right? For those that are not familiar with what you do, are you selling in any specific niche or it's any sales organization anywhere?
Any B2B, although we do some B2C, pretty astonishing actually how well that works. But it's B2B organizations. They got to want to grow. So we call it curating dominance. We look for companies who want to dominate their industry, dominate the market.
And we help them have 10 times as many conversations at the top of the funnel so that they can simply eat up all the opportunity before their opposition makes a move. You had 400 customers in 2019. How many today? Yeah. It's pretty similar. We don't really grow that much in terms of customers. We kind of grow in the intensity of them. We're consumption based.
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Chapter 2: How does Connect and Sell help companies dominate their market?
Yeah, we're bootstrapped. We're profitable. Our TAM is obviously everything in the world. We don't like giving up control to people who don't know how to run companies. We think that's ridiculous. We have very low capital requirements. Our backend may have hundreds of people.
We have 500 people inside the system making it go, but we've arranged to have zero capital required to grow that from 500 to 1,000 to 2,000 to 10,000. It's amazing. And you told me you were making about $166,000 a month back in 2019 to the bottom line. Is that still the case in terms of profitability? Yeah, it's a little bit better than that now. Yeah.
So, you know, we don't track profitability super closely because we can just dial up, go to market and R&D as we want and kind of manage it. But we like to make sure we got enough on hand to, you know, enough flow and profitability wise to do what we want to do in the market. We think there's going to be a big growth here for us for two reasons. COVID is great for us.
I hate to say it, but, you know, work from home came kind of attractively packaged in a global pandemic that also hurt the economy. And when the economy is hurt, people pay attention to capital efficiency and that's us for sale. So that's good. People got to figure out how to manage work from home teams. That's not easy. We give them perfect visibility and control and the reps love it.
So it's kind of a combo plate that's working really well right now. And COVID has all been tailwinds for us. So we're looking to put on a big growth here and we've added a new product. We call it Flight School. So believe it or not, we finally figured out that we got to teach people how to talk on the phone. Manny Medina asked me to do this about four or five years ago over a bourbon.
He said, Chris, you're the only guy who can start a training class or training program that will fix these darn reps out here. And we need that. And I said, no, no, no, we're not going to do that. Well... We kind of got dragged into it, kicking and screaming, and now we love it. It's a big part of what we're doing, and we're launching it as a brand-new product that's simple.
It's six people, four big sessions. They make money while they get trained, which is amazing, and it's all in $9,500. Are you still close with Manny? We haven't spoken for a little while. He's such a busy dude. He takes all that capital. He's building that big thing, but we're neighbors up there in Seattle now, so when COVID's over, I'm sure we'll get together.
If he offered you 250 million bucks to sell a whole business, do you take the deal today? No. Really? I was fit. That was quick. No, this is much bigger than that. This is, this is big, big. This isn't kind of big. Do you think you grow up bigger though? Be, you know, if it was part of outreach. It's tricky.
When you get acquired by anybody, it's very tricky to maintain control of where you're going. I mean, you're part of their thing instead of part of your thing. And this is a very distinct way of looking at the world we have. We believe conversations are the key to business. We know how to produce them at scale and at a cost that is unbelievably low.
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Chapter 3: What is the significance of customer consumption in business growth?
Spell it. Coditas. Can you spell that? C-O-D-I-T-A-S. Interesting. Coditas. I'm by a gentleman named Mitul Bid. It's the best leading edge software development firm on earth. I don't know, out of Pune, India.
People, this is like, people are gonna hear this and go crazy because people try to find these teams and they never know how to find, they go to Argentina, they go to Krakow, Poland, they go to Bangalore. I mean, how did you find this team in Poon? Well, what we did is my CTO, Hitesh Shah, is IIT Bombay, double degree guy. Three companies, maybe four of them, depending on how you count.
And one day we were having a beer and talking it over and said, you know, we got to help something happen that's leading edge development in India. And he happened to be living in Pune for a while. And so... We, you know, we help nurture something into existence and now it's 300 plus people and it's just simply awesome, but no maintenance, none of the BS that they do in some places.
That's fine stuff, right? But all leading edge development, all product. How fast are you hoping to grow this year with Flight School getting added? You know, I'm trying to double it. I'm thinking- You think you need to 50 million this year? Yeah, I want to go on a double.
Maybe, you know, maybe get to 40, but it's hard to say, but Flight School looks like just an incredible engine to grow the company. Does it have sales yet? No problem. Have you sold any of Flight School yet? Yeah, yeah. We've been selling it for years as part of the product. We're just going to bring it out and make it the product. Oh, interesting. And it's a coaching product, really.
It's a professional productized service. Yeah, it's actually like a training class, except instead of going to training and coming back with a bunch of stuff in your head, go to training. You actually talk to customers. You make money. And you come back knowing how to do your job. So it's all live fire. And literally, folks make money.
They make thousands and thousands of dollars during the training itself because they're really doing selling. They're setting meetings at the top of the funnel and driving business during the training process itself. Hell of a story here, man. Let's wrap up, Chris, with a famous five. Number one, favorite business book? Still crossing the chasm. Never will be anything else.
Number two, is there a CEO you're following or studying? Oh, good Lord. You got to look at what Jeff's doing because he's not a CEO anymore. Yeah. Jeff Bezos. Number three, what's your favorite online tool for building Connect and Sell? For building it? Yep. Oh, man. Gosh, I don't know if I have one of those. That's a terrible thing, isn't it? What do you use the most?
If I open up your internet browsing history, what's going to be the most common site? It's going to be our own thing, Connect and Sell Lightning, because I'm always checking to see what people are doing. Besides your own, though. Besides your own. It's a terrible thing, right? What do I actually use? I'm a very boring guy, right? I build tech. I don't use it. So I've used like Gmail.
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Chapter 4: How does the COVID-19 pandemic impact business operations and growth?
They've just launched a new product called Flight School. Again, they sell based off how many dials they set up for customers. Processing over, ready for this, $50 million. dials last year. Chris, thanks for taking us to the top. Nathan, always fun.