SaaS Interviews with CEOs, Startups, Founders
Why Is He Scared to Share Revenue Numbers? EP 235 with Randy Rayess
13 Apr 2016
Chapter 1: What is the main topic discussed in this episode?
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Our guest today is Randy Raiz, and he's the co-founder of VenturePact, a SaaS platform that helps businesses intelligently source and manage vetted software development teams. He previously worked in private equity at Silver Lake Partners and in machine learning. Randy, are you ready to take us to the top? Sure. Let's do this.
So, hey, first things first, Silver Lake and machine learning, they both sound pretty fun. Why'd you leave?
That's a great question, actually. The main reason I left was a good friend of mine from college and I caught up and realized that... Basically, mobile was really taking off. This was 2011, around the time of 2011, and mobile was taking off. And we saw this change in the way companies worked. Basically, everything was going to become software-based.
And we thought that there was a huge opportunity to help companies in this transition in becoming software companies or digital companies or mobile companies, whatever you want to call it. And that was so exciting that even though I had a great time in both
uh working in tech and working at silver lake um and investing in tech uh this was this was something that was too exciting to let go of so venture packed is what you're running now how do you guys make money sure uh well companies will come to us and be like all right we need to you know build sometimes it's just i need to build a mobile app sometimes it's more heavy i need to integrate these three products and i need to revamp my website i need to integrate with this
inventory management system or whatever it might be. And so they'll use our system to find teams and manage them and the entire oversight of that whole implementation process they do on our site. And in exchange for that, they'll pay us a fee, depending on the structure of the engagement. And there's a few nuances depending on like, do they want a project governor from our side?
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Chapter 2: What inspired Randy Rayess to transition from private equity to SaaS?
And they can also source as well. So that's another feature where they can source the team. And they get limited access to the tools. For the most mid-sized and larger companies, we'll pay a monthly fee. We'll use the full-on SaaS platform. They pay a monthly fee. And in that case, it will vary depending on... Do they want a project governor? Do they not want a project governor?
But usually it will be in the low four digits per month for the full platform.
Okay, so call it $4,000 per month on average?
A bit less than that, but yeah.
Okay, $3,000 per month. And how many months do typically people stay with you?
Sure. So, again, here we divide things by segment. But yeah, larger companies are going to stay with us for a long time. They're going to stay with us for over two years because they have so many top products. Smaller companies might come and they say, okay, I'm going to start off building to my MVP or building this. And then they'll stay for around six to eight, nine months, that range.
Okay. Okay. Got it. So, I mean, in that way, are you guys actually a SaaS platform or not really? Because, I mean, this is more like a retainer model, like an agency. Sure.
Sure, good question. The larger companies use us more like SaaS because we have like our code quality tools that they'll use and they always want to keep those quote quality tools, code activity tools, kind of see what's happening in the code implementation. So that's like monthly ongoing.
You're right in the sense that the basic plan that the startups get, they're usually getting it on a, they usually start off with a per project basis because they're either building an MVP or they have a new product. And then they want to, they might use us on an ongoing basis for maintenance, but that's smaller. they're not really building full products, they're just maintaining it.
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Chapter 3: How does VenturePact generate revenue from clients?
I'm saying our revenue, we had a great year in terms of revenue as well. Last year.
Tell me, did you guys make 200 grand? Did you make 500 grand top line after the train?
Like, so we don't, we don't release our specific revenue figures. And that's why, that's why I'm saying like, uh, the,
we have but we've we had a really good year last year and that's that's how we've been able to why do you why do you say really good though but then you won't well you won't help us understand what really good means i mean that's give us a range if you don't feel comfortable giving a specific number well i said because the reason we we we haven't like as a company we haven't specifically been we haven't like gone out and actually mentioned our specific numbers and that's why i that's why i'm saying like but it's because we bootstrapped company you can kind of
get a sense of, okay, we're funding our operations from cash flow. So it's different from a financing company where costs and revenue are completely independent.
What were your total expenses from 2015?
Well, so, well, I mean, you can do the math and get an estimate. We're not giving specific numbers. Like, um, we're not giving specific numbers, but I, I guess the main thing I was trying to present is that like, we, we had a good year and we've been going, we've been going nicely. Um, I think more, it's more important to get a sense of the, what we learned than a specific number.
Well, no, it doesn't because you can, here's Randy, here's what I'm doing this, right? People come on all the time.
they've raised a bunch of money or they've not raised money yeah they have a bunch of employees they don't have a bunch of employees they say 31 team members they're actually like two people are full-time and there's like 18 contractors 31 full-time it's just an example it's just an example my point is when people come on and they say they're doing really really well my audience there's millions of people listening to the show millions it's unbelievable they expect me to get to the real number and you're dancing around and i can't figure out why well
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Chapter 4: What are the differences between SaaS and retainer models?
I'm going to try and convince you to share. That's what I'm doing. That's totally cool. What's the reason you would not share if it's not from the fact that you're trying to hide something or something's weak?
Well, there's no, well, we don't see much. Well, I guess the main thing is we don't see that much value in releasing specific numbers. Like we don't see how that is very valuable to us as a company.
Let me tell you why it's valuable. Because people, so right now in this particular situation with the cohort of listeners you're speaking to, you're speaking to a million listeners. They are entrepreneurs. They are people that are looking to start their own business. They are potentially fantastic customers. customers for VenturePact.
But I can tell you right now, based off how the interview is going, they're not going to go use VenturePact. They go and use in droves. I mean, they sign up in droves to people when they come on and they express as much as they possibly can.
So I won't push this any further outside of giving you one last chance to express what you can in terms of revenue size of the business so that you can convince my audience to go use the tool.
Sure. So I mean, I guess the most thing I can say is that For revenues in the business, we're in the seven figures in revenues of the business. I can say that.
Okay, how can you be in seven figures, though, in terms of revenue of the business if you said that you were in seven figures in terms of total transaction volume processed?
The transaction volume processed... Last year was well into the seven figures, right?
Yeah, so let's say it was the highest seven figure. Let's say it was $9 million.
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