SaaS Interviews with CEOs, Startups, Founders
Guess what this $3.6m ARR Timesheet SaaS Profited last year
26 Jul 2022
Chapter 1: What is the current revenue model for HMS Software?
280 customers paying $15,000 a year on average would mean your MRR today is what, about $300,000, $350,000?
Yeah, just under that actually, about $280,000.
You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
We've published thousands of these interviews, and if you want to sort through them quickly by revenue or churn, CAC, valuation, or other metrics, the easiest way to do that is to go to getlatka.com and use our filtering tool. It's like a big Excel sheet for all of these podcast interviews. Check it out right now at getlatka.com. Hey, folks. My guest today is Chris Vandersluis.
He's the founder, president, and CEO of HMS Software, founded five years before I was born, 1984.
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Chapter 2: How has HMS Software evolved since its inception?
He's a prolific spokesperson on enterprise, time machine, and project management systems. And his writing has appeared in a number of publications, including Fortune, the MA's Handbook, and Microsoft TechNet. Chris, you ready to take us to the top? Absolutely. All right. I aged the company a little bit there. But tell us what HMS is selling today. What are people paying you for?
Yeah, so our fundamental product is called Time Control. It's an enterprise timesheet system.
Chapter 3: What pricing strategy does HMS Software employ for its services?
And it's a little different than some of the timesheet systems on the market. We make a multi-purpose timesheet system, which can be used not just for time and attendance, but also for project-oriented time. for R&D tax credits. So an auditable timesheet system that can be used for billing, for attendance, and for tracking people's time.
We've also added to that now, because we were so strong working on historical time, we've added to that the ability to look forward and do project scheduling and project planning in something we call time control projects. So that's a premium version of our online system.
Very interesting. Now, what are folks paying on average per month or per year for this?
Yeah, so the average per user is somewhere in the $50 to $60 range. Per month?
Chapter 4: What factors influence customer acquisition for HMS Software?
And we charge it annually. So it can come down to as little as $3, $4, $5 a month per user, depending on what number of people are subscribing for.
And what are the team size usually signing up? Are we talking 10 people or 10,000 people?
Well, yeah, 10,000 would be at our higher range. We have a couple of 10,000 plus clients, but probably the average is in the 300 to 600 range.
Okay. So 300 folks at 50 bucks a year, that's an ACV average of like, what, 15 grand is a sweet spot for you?
Yeah.
Yeah.
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Chapter 5: How does HMS Software ensure customer retention?
Yeah, that's amazing. Okay, so you get going back, you said in 1984, right?
Indeed, yes, back in the day. Wow, that's incredible. I was younger then, Nathan. I was like your age.
Yeah, that's incredible. What were you back then? I assume you've pivoted a couple times.
Yeah, we've pivoted.
Chapter 6: What is the impact of remote work on HMS Software's operations?
It's a very good question. We've pivoted several times. We started off as a couple of guys doing custom programming. We were in the project management space by luck of the draw, I guess, because we started working for companies that needed project management software. Then we became a distributor for a project management product in Canada. And in 1994, pivoted again
I bought my partner out of the business, pivoted into being a publisher, and time control was the result. And I'll be honest, time control was the result because it was for me low-hanging fruit at the time. We had written several timesheets. I knew what that was about.
Chapter 7: How does HMS Software manage its profits and dividends?
I was sure I could sell it. And we did as an on-prem solution in 94.
That's incredible. And so do you own 100% of the business today?
Yes.
Wow.
Okay.
So you bought back your co-founders. There's no outside investors.
I bought back the co-founder way back in 94, a deal we were both happy with.
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Chapter 8: What future growth strategies does HMS Software have in mind?
And then we had some investors in 99, bought them out in 2006. And so now you're just stuck with me.
That's amazing. Okay. And what's the team size today? How many folks full time?
Yeah, we're just under 25. So it's a, you know, so it's a very tight team, mostly located in Canada. But now, you know, with things being remote, people are a little further afield, depending a little bit on how you count the size. We're talking about staff size.
So yeah, between 20 and 25, if we're talking about people who may be doing consulting or implementations or other things, they may be almost anywhere in the world and the numbers probably double that.
Interesting. So 25 people, how many are engineers?
Yeah. Third, eight.
Eight.
Okay.
Very interesting. Okay. Eight or nine. Okay. Got it. And how many customers do you have today?
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