SaaS Interviews with CEOs, Startups, Founders
He's stepping down as CEO. Strange move with $6.6m in Revenue?
02 Jun 2021
Chapter 1: What is the main topic discussed in this episode?
We are slowly but surely reaching $7 million in AR arms.
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Hey folks, my guest today is Olivia Simonis.
He is the creator of Qualifio and a few other companies, including 87 Seconds, Europe's leading video content agency, which he sold in 2018 to DataWords. So step down as Qualifio's CEO in July and stay as chairman. He's based in Belgium and started his professional career at PwC. in D.C. and now they're the father of two sons.
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Chapter 2: Why is the CEO stepping down after 10 years?
How many of the sales folks actually carry a quota? Well, it's actually most of them, except we have two SDRs, which are a bit of a different approach, but all the rest, they carry quotas, yes. So how many carry a quota, about 15, 30? At the moment, the sales team is about eight people. Eight people. Okay. One of the big things is scaling your sales team, right?
So how do you think about hiring new sales reps, ramping them up? What quota do you give them in the first year? Yeah, that's a good question. No, because we... We are, as I mentioned, pretty strong in continental Europe or the questions that we are now asking ourselves is what about UK? I mean, biggest digital marketing market in Europe.
And for this now, we are waiting the options of hiring people in the UK. working with partners locally. And to answer your questions, when we have quota-based sales guys, the average monthly MRR that we ask them to bring in is around 3,000 US dollars of new MRR. Of course, with a ramp-up period.
In the first 12 months, if they add three grand each month for 12 months, that's $36,000 of new MRR or about half a million of ARR in the first year. Yeah, except that, of course, there is a ramp-up period. So we... don't accept anything from them the first six months. And then we expect half of the target, the six months that are following.
We really expect... Your fully ramped folks, though, are adding about half a million in ARR. That's their target quota. Yeah, yeah. That's what they should be doing. And Olivia, if they hit quota, what's their full on-target earnings? Is it about 100 grand, 150 grand? Well, don't forget we are in Europe, so it's not, the market is a bit different.
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Chapter 3: What does Qualifio do as a SaaS platform?
So it really depends. I mean, we have senior folks, so we have more junior folks. Yeah, the on-target earnings is more or less, I mean, if I take a big approximation around 50-50, and that would be like 50K, fixed and 50K on-target earnings. Yeah. That would be an average.
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So take me back to, again, personally, you have some ideas you've written down. You want to go build them. You're going to step down as CEO. Are you the sole owner of Quilifigo besides the investors? No, we are actually two co-founders. And yeah, a bit atypical. We were both in our 40s.
We were both reaching 40s when we decided to step out of our employee job to start the entrepreneur adventure a bit on the side.
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Chapter 4: How much revenue does Qualifio generate per client?
At 40. And yeah, my co-founder, Serge, used to be the CTO. And I mean, he has stepped down as CTO. And we have a great CTO who replaced him about a year and a half ago. So he's still working in the company, but as a chief innovation officer. So we're both founders. We still own the majority of the shares. And now the
Of course, the investors that have joined us three years ago, they own the rest. And also the team owns Warren. So we decided two years ago that we wanted to have an employee stock option plan, not limited to a few key people, but open to the whole company.
So we have now about 90 people of the employees of the company that own warrants of the company, and they will be able to exercise these warrants to have shares. On a fully exercised and fully diluted basis, how large is the employee option pool? Uh, we, we, we made it, uh, at 10% of, uh, the cap table. Um, yeah, then it was right. It was a bit diluted.
Chapter 5: What upsell strategies drive expansion revenue for Qualifio?
No, I think in total, it's a, it's about 7.5%. Um, and then investors own something between pot 10 and 20%. And then you and your, yeah, we, we have one kind of friend and family first, our business angel, uh, and then the, the, the investor who joined us for the series, uh, a. They own around 30% of the company. It's a rather simple category.
So you and your co-founder still own about 55% of the company? You're good at math, Nathan. Well, that's good. I'm curious. How do you go about finding a CEO to replace yourself here? Well, no, that's a very good question. And for me, that's a great story because the CEO who is going to be the full CEO from next month has actually joined the company seven years ago.
So he joined the company first as a sales guy in Belgium and then he became kind of the country manager there. a sales country manager in Belgium. Then he became the head of sales. Then he became the COO. And since January, we are both co-CEOs. So it's really someone that knows the product, knows the company, is fully involved align with the values, live the values.
I mean, and I think it's a great key to success is to have someone that is completely aligned with your objective, with your values. There's no bad surprise to expect. He's highly respected by the rest of the team. And honestly, for me, that makes me quite proud to
to be able to build a company that actually can live without the two founders and can really continue without the founders and will not be impacted negatively. On the contrary, I think. Yeah, I think that's great. Before we wrap up here with the famous five, talk to me about churn. What's your gross revenue during the last 12 months? Well, it's quite stable, to be honest.
We have a churn about 10% a year. which is rather standard for this kind of SaaS product. It has gone up a little bit at the beginning of the COVID crisis because of a turn linked to travel sector and cinema companies and attraction parks, etc. But most of it was basically where contractors had to freeze because because people were not just at the office to operate the platform.
So it went up at that time by 50%. And now we are really back to the average churn rate that we used to have around 10% yearly. And how much expansion revenue do you have in the same cohort? Yeah, that's a good question. In terms of newbies, when I say we are growing the business, it's about two-thirds is coming from newbies and one-third is coming from expansion of existing contracts.
So, yeah, upsells that are linked to new countries or new brands or new users that are joining us. You've added about a million in ARR over the past eight to 12 months. You're saying about one third of that new million in ARR is about 350 grand came from expansion of historical customers. Exactly. Yeah, it makes a lot of sense. So is net value retention above 100%, would you say?
Yeah, it's around that, yes. Yeah, very good. All right. And what are you spending to get one of these new customers in terms of capped? Sorry, in terms of CAC, yeah, we are spending around 15K. So we can say that after the first year, the new customers are completely profitable. Yep, that makes good sense. Olivier, let's wrap here with the famous five, number one favorite business book.
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Chapter 6: How has COVID impacted Qualifio's growth?
Uh, married, two kids, 14 and 13. Take us to our last question. What's something you wish you knew when you were 20? Something I wished when I was 20. Something you wish you knew. Um, yeah. Yeah. These are hard questions when you have not prepared them. I want them off the top of your head, not scripted. Probably that I would get so much pleasure and satisfaction by creating my own company.
So I'd probably have done it earlier. had I known how much I would love it. Guys, Coolafio founded back in 2010. They've scaled from 5.4 million bucks in terms of run rate last year to 6.6 today. Healthy growth rate. They've done it pretty capital efficient, 3.6 million raised, and that's it.
in 2017, 78 folks on the team say 38 engineer, eight sales reps, again, helping you understand and collect data across all of your different digital channels due to the interactive content they help you set up. We'll see what happens next. Olivia, thanks for taking us to the top. Thank you so much, Nathan.