SaaS Interviews with CEOs, Startups, Founders
You should hire him to be your SDR. He's crushing it for 45 B2B SaaS founders already.
19 Aug 2022
Chapter 1: What revenue growth did the company achieve last year?
This month, we'll probably do between 135 to 140K MRR. That's great. And last year, I know you're going to ask me what we did last year, probably around 100.
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 Andrew Jacoby.
He's an entrepreneur focused on tech-enabled productized services designed to help companies grow sales. He co-founded his current company, NextSales, in 2018. And after hiring a CEO, currently serves as the chief innovation officer. Andrew, you ready to take us to the top? I'm ready, Nathan.
Chapter 2: What challenges did the founder face when stepping down as CEO?
Let's do it. All right. First, get me in your head. What does a founder have to go through or think to go, you know what? I don't want to be the CEO anymore. Let me replace myself.
When you suck, really? Actually, what it was, was that I'm 49 years old. And as you get older, you gain a little bit of humility and you start to realize you can't do everything. When I was younger, I thought I could do everything and I could... And as I got older, I realized I'm good at some things. I'm more of a creative zero to one kind of person.
And once I got the thing to a certain level that it went from ideas to, hey, man, spreadsheets, HR, finance, I had to tap out and bring somebody else in who can operate at that level better than I could. Interesting.
And what level was that?
Chapter 3: How does the company utilize technology in their sales process?
Was it a revenue figure you passed or got too complex, a team size?
Right. It's a good question. We're a tech-enabled service, so we obviously use a lot of tech, as does everybody. But we're a human-based business. I mean, we rent out human labor, essentially. I mean, obviously, there's IP parts of it as well and IT as well. But ultimately, it's people. So when you're scaling with people, it's not as easy as saying, hey, Nathan, you want to buy 1,000 seats?
Here's 1,000 logins. Go get them. Yeah.
So what margin do you like to make per, by the way, I obviously don't like the people model. I like SaaS, but if you can do the people, you can do the people model efficiently. It's a whole different story.
Chapter 4: What is the model of sales development as a service?
So like what margin do you like to make per hour of human time? That's on your team. That's it.
We don't do it. We don't think of it that way, but to answer your first question, our year one. So we did in 2020, Our first year was 2019. We did about 129,000. Year two, we did about 450. And it started to get a little bit raggedy around the edges, around that half a million mark. Year three, we did about a 1.2 million. And that was when I tapped out at the sort of around that level.
So around a little bit north of a million bucks. And luckily, we had an executive coach at that time. And he was a successful entrepreneur in his own right and had built and sold multiple companies, but was doing coaching and consulting on the side.
Chapter 5: How many SDRs does the company currently employ?
He was getting an itchy trigger finger to get back in the game because consulting, you're not actually in the cockpit. And he was looking for an opportunity. And luckily enough, he joined and finished that story.
So 1.2 million 2021. What do you think you'll do this year?
That's a good question. I don't know. This year, the first thing that he did was, hey, guys, we got to put on the brakes because we were basically like, I'm a sales and marketing guy by background. And so I'm a hammer and everything is a nail. More top of funnel, more leads, more meetings. Let's print meetings, close business, print meetings, close business. And that's great.
It works to grow the company, but it operationally can get messy that way. So he just said, look, guys, this year, 2022, we've got to slow things down. We've got to clean up the churn problem.
Chapter 6: What is the churn problem and how was it addressed?
We've got to clean up the ops problem. Tell me about that.
What's the churn problem?
Well, no, right now, he's been in place for six months and we have no more churn problem. We think of it a different way, Nathan. We think about it as net revenue retention. So that's how we look at the portfolio, the health of the portfolio. But tell me how bad it was. I mean, I like that metric.
Oh, it was bad.
Right. It was bad. I mean, it wasn't, let's put it this way. It's bad in the first six months of our kind of business because you're stroking a check to me for a while before you're getting an ROI and people freak out. Nobody likes to stroke checks and nobody likes to do that.
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Chapter 7: How does the company measure success for their clients?
They want to like get ROI immediately. Everybody wants to put, we live in a push button world. And what we're doing is- How big is the check? Well, for us, it's 3,800 a month per 1,000 contacts works that we consider a seat of SDR service.
So essentially what was happening was that people were coming in in the first six months, there's a high churn rate because they'll freak out and it's hard to keep them calm. Once they hit the six month mark, once you hit the nine month mark, once you start seeing a return, those meetings turning into pipeline, that pipeline turning into business, then all of a sudden- You're you're you're fine.
The churn goes away, essentially. I mean, it goes almost goes to nothing and you start going to expansion. Right now we have net positives or, you know, we're probably one hundred and five percent. We'd like to improve that. But, you know, our business expands now and that's all due to the operational.
So I would say just to give you a sense revenue wise, because I know you're going to ask me because I know your show this month. Yeah, right. I'm a big fan.
Chapter 8: What advice does the guest give for selecting a sales development partner?
Awesome, dude. This month, we'll probably do between 135 to 140K MRR. That's great. And last year, I know you're going to ask me what we did last year, probably around 100. Yeah, that's good growth. So it's still growing. But as you saw in the first three years, we were growing hundreds of percent.
I love it when I have someone who comes on. You can always probably do this interview yourself. You got my favorite book. I got everything, man. I'm good. That's awesome. You're a good person to ask this. People always go, Nathan, I freaking love your show, but why would I ever come on? And what I tell them is, well, first off, we just passed 20 million downloads.
So your episode will get 20,000 downloads. There's a lot of investors that listen. There's a lot of potential customers that listen. So you'll see an influx. But for you, not knowing all that, why agree to come on?
Well, I mean, number one, I respect what you're doing. I think it's great. And number two, you're a gatekeeper to an audience that we want. We work with B2B SaaS companies and the consulting cloud around them. And that's who we're trying to reach.
So tell me more about that. We skipped over that, right? So what is the product? What do people pay next sales for $800 a month to do?
We staff up, we built a sales development as a service engine that we bolt onto companies. So essentially, if you're saying to yourself, hey, man, I want to go hire a bunch of SDRs or I'm going to go hire an SDR to build top of funnel for me, we staff up.
go ahead go do that if you want to do it when you've gotten beaten up punched in the face 1500 times trying to do that then you come to us and we say okay we have the intellectual property it's all we've done we've built the hr engine it's a tough job to hire for as you know nathan it's high churn you're dealing with young kids and it's not it's a hard emotionally difficult job every single day i started in the business that's how i know what it's like
How many are on your team today? Actually, believe it or not, our CEO, I was his SDR in 2008.
That's amazing.
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