SaaS Interviews with CEOs, Startups, Founders
Course Creation Tool Doubles in 6 months to $7m ARR
29 Jul 2021
Chapter 1: What is the main topic discussed in this episode?
Hey, folks. Good morning. My guest today is Casper Spiro. He's the CEO of Easy Generator, and he's both the initiator and driver behind the employee-generated learning trend. He's made an impact on the field of learning as a blogger at casperspiro.com, so good distribution channel there, and author of trainingindustry.com, Learning Solutions Magazine, CLO Magazine, and others.
Also, he's a speaker at various e-learning conferences around the world. Casper, you ready to take us to the top? Yeah. All right. Very cool. So, hey, you came on the show back in November of last year, sort of middle of COVID. How was COVID impacting you at the time?
Yeah, it was a big boost for our business. Everything went online. Basically, I think it moved everything forward a couple of years.
Interesting. And you had mentioned at that time you had about 1,200 customers. I want to learn more about what you're giving them, but how many customers today?
Yeah, we're a bit over that. So I actually made a mistake at that time. It was like $1,100. Now it's around $1,250, something like that. Oh, great.
And why are they paying you? Tell us what you do.
So what we do, we have a SaaS solution with an e-learning altering tool that allows supplementary experts, employees to capture their knowledge and share it with their coworkers.
And so are you selling to heads of HR typically or the employees directly?
No, we're selling to the companies directly. So they facilitate their employees with the tool. So very often we make enterprise-wide deals.
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Chapter 2: How did COVID impact Easygenerator's business growth?
And so if you sell into an enterprise and they buy 100 seats, what's that sort of HR manager after they purchase your tool, what email are they sending to the team to get them to start using Easy Generator? What's it sound like?
What do you mean? What does it sound like? What the pitch is?
After a head of HR purchases your platform, how do they get their employees to use your platform? Why are employees excited to use it?
Yeah, well, there is already a need for that. People want to share their knowledge. They want to do that. And there are no real simple tools for that than we are. But it's a whole program where we help them, onboard them. We do webinars with them. We help them communicate around Easy Generator, give them best practices. And that way we build out the audience.
And it's all about creating courses. Is it just internally for teams or can someone like me, an influencer, create a course to sell to my community?
Yeah, you can. So you can just subscribe for a license and buy a subscription and create courses. We even include hosting a result tracking for free. But that is where the business started. But we now are moving more and more into the corporate market and bigger corporate deals. But we still do that. Why is that?
So if you sell to an individual, if, for example, it would be you, and something happens with you, you will cancel your account. So initially, the churn was relatively high, like 25% or something like that. Now we have moved up market with bigger contracts, and the churn is below 10%.
10% monthly or annually? Annually. Annually, got it. Yeah, I think you told me churn annually was about 10%. Expansion was 32%, and your net dollar retention was 122%. Have any of those changed?
Yeah, so I think that we've grown significantly. We've grown harder last year than we expected. So we ended up like we were planning for around 90, but we ended up on 94. We still are on the same pace, which means the MRR is now in dollars over 600,000. So we made quite a step there.
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Chapter 3: What is Easygenerator's customer acquisition strategy?
You're doing $600,000 a month, 7.2 million run rate?
Just crossed the 500,000 euro line. So that is the $600,000 line as well.
Okay. I mean, that's actually, that's impressive growth over six months. You've almost doubled over the past six months revenue wise. Where'd the growth come from?
So, well, we had a huge loss score, but especially December was like a record-breaking month. So our best month in growth terms ever was 90K in new MMR. And last December, just that month, we did 47K growth in one month net. In December? Yeah, just December. So it was a huge jump that we made.
But why? I mean, success is good, but if you don't understand why it happened, you can't replicate it.
It happens almost every year that December is like by far our best month. But this was like exceeding all our expectations by far. And I think it was partly driven by COVID. So we really thought that people at that time noticed. So working from home. Even COVID will go away, working from home will not. So we now need to make choices and commitments.
When COVID started, we started selling a lot of pilots. So we just gave them a pilot for $1,000 a month with unlimited capacity during the first month of COVID. And that really paid off in the end of the year because then they had to sort of renew that. And a lot of those companies went to enterprise contracts in one go.
We actually had companies going from a six-month pilot straight into our maximum enterprise deal. Normally, we expect them to take two or three years to grow into that.
You told me in December your largest customer was paying $105,000 per year. Is that still your largest customer?
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Chapter 4: How does Easygenerator onboard new users effectively?
No, we have a new one. One of those pilot customers went over that. I think it's like $130,000.
Wow. Okay. And why are they paying so much? What are you upselling against? Is it number of seats? What else? What else are you upselling?
Yeah. So the upsell is more facilities, better guidance, higher SLAs. But the key thing is unlimited seats.
So people upgrade to get those unlimited seats.
Correct. Yeah. If they buy an enterprise license, then if they go over a certain number of seats, they can buy an unlimited license. And then it doesn't really matter if it's like 1,000 or 5,000 people altering, the price will remain the same.
When you say better SLA, you mean going from 99% guaranteed uptime to 99.9% guaranteed uptime, or you refund them?
We have 99.5%, and we do indeed refund them if we don't make that, but we're working on going close to 100%, so it will be 99.99% shortly.
So you haven't refunded anybody from that?
Yeah, what we did in the past year is that we didn't refund anything. No, no, no, because we were way, way over that. But we are increasing the quality of our hosting. So we took away every single point of failure that we had in the last year. We're now working on continuous deployment. So we can also go put things live without going down.
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Chapter 5: How does Easygenerator manage customer churn and retention?
You have a rev share agreement. How does that work?
Yeah, very simple. So if we sell the company, I have an agreement with that, that I get a percentage of the sale.
Oh, I see. Got it. So interesting. Got it. So is that more or less than 20%? It will be less. Less than 20%, but more than 10%, hopefully? No, probably not. Come on. So this is what I asked. You've built a great business here. You put in your hard sweat, tears. You spun it out. I mean, do you wish you tried to negotiate for more back in 2013?
Well, maybe if I knew what I know now, maybe. But as I told you last time, it's not really my big drive. And when we will sell the company, so one of our competitors, Articulate, they got an investment in their first investment after 20 years of business. And the investment was $1.5 billion for 40% of the shares.
Mm-hmm.
If you talk numbers like that, if we even come close to that, we will not, but if we do that, then it doesn't really matter if you have like 5% or 10% because it's still too much money.
I mean, when I hear deals like that, and that actually happened just recently, that happened July 1st, but you also have Kajabi growing like crazy, train you all. You have some companies that actually have IPO'd in this space on the Canadian Stock Exchange. Like if you're going to make money in this space, it feels like now is the time to do that. A big secondary, something like that.
Why aren't you guys planning to do that?
Yeah, I think we have to trust that we can do even better in a few years' time. And in the end of the day, that is also because I'm not the shareholder. That's the call of the shareholders, of course, to make. I'm building the business.
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Chapter 6: What factors contributed to Easygenerator's recent revenue growth?
Yeah, so is it now the maximum time, the highest growth, the most noise, the most best valuations? Shouldn't you pull the trigger now?
Yeah, probably. We'll get, indeed, the highest multiplier or anything. So, indeed, that's true. So you want to do it, but the parent company doesn't? No. So even if they would sell the company, I still want to still bring it a few steps further. So that is really what I'm working for. So if the company is being sold to new ownership, that wouldn't really change for me.
Yeah, yeah. How much do you think the company is worth today?
Well, yeah, so we are doing this year probably around 7 to 7.5 million in ARR. So it depends on the multiplier, but it can be anything between 70 and 100. I even heard multipliers of 20 and more. So, well, you can do the math.
Yeah, and I think sometimes that's even conservative. But yeah, maybe between 100 million and 200 million. Of the 100 people on the team today, how many are engineers?
We have like 20, 25. It's a technical team, which is engineers plus QAs and DevOps. And do you have any quota-carrying sales reps? We have a sales rep, yeah. We have like seven AEs and I think 12 BDRs, something like that.
And what is your quota target for those AEs?
So if they start as a junior, it will be, I think, around $3,000. And that will go up to like $3,500, $4,000 mark when they are a senior.
What does that mean? That's the new ARR they have to bring in each month? Yes, new MRR. So each month, they have to bring in $3,000 of new MRR or that $36,000 bucks of new ACV every single month. So $36,000 times 12, they have to bring in about $450,000 of new ARR in their first year.
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Chapter 7: What is the significance of Easygenerator's enterprise contracts?
I think it may be a bit more. So it will be closer to 5.5, I think. We are really increasing our efforts with marketing. So I expanded that team. So let me see. It's 5.8. So $5,800. I love that.
You come on Nathan's show and you have your metrics pulled up, ready to go. I love that. Where are you spending that money?
So I think, yeah, mostly what we already did a long time is on Google, but we are sort of now also paying attention to other sources. So we're doing Bing, we're doing LinkedIn. We also do a lot of webinars that we host and do ourselves. So a lot of content marketing with white papers, working on e-books, stuff like that. So we are sort of broadening the scope of the leads. And we do see that.
The harder leads, like the webinar leads and the content leads, they are actually bringing in more money. They're closer to outbound leads than just the inbound leads that come in through the website.
Last question. The RevShare agreement you originated back in 2013, where you get 5% to 10% of the business on a sale, is that transferable? In other words, if someone's listening right now and they want to come to you and offer you $5 or $10 million to buy that contract, like the right for 5% at exit, would you sell? Would you consider selling?
If I would sell 5% of the business for that?
No, no, no. So you have an agreement where you get 5% to 10% of the business at the sale. Is that saleable? If someone wanted to buy that from you personally for 5 to 10 million bucks, would you sell it?
How would I sell it? I'm not even sure if that's possible. I don't know. No, I think that we're just at the beginning. So I really think that if we will get an investment in, it will be to grow faster, not to sell a majority of the shares. And I really believe that we can grow way faster than 100% per year. So that is the ambition. So I think we can do better than that.
I love the ambition, but I disagree. I think we're in a very special time for firms like Herezen. We are at the peak, peak growth, peak revenue, peak valuation, but we will see what happens. Let's wrap up with the famous five. Number one, favorite business.
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