Latest / The Official SaaStr Podcast: SaaS | Founders | Investors / 5 Interesting Learnings from Monday at $1 Billion in ARR

Transcript

5 Interesting Learnings from Monday at $1 Billion in ARR · The Official SaaStr Podcast: SaaS | Founders | Investors

• 0:00
  SPEAKER_01: We are in for a treat today.
• 0:05
  SPEAKER_01: We have one of my favorite founders,
• 0:07
  SPEAKER_01: and I think one of the SaaS leaders that I think is one of the most interesting,
• 0:12
  SPEAKER_01: luckily,
• 0:13
  SPEAKER_01: to study in 2023.
• 0:13
  SPEAKER_01: Now, Aran is a SaaSter annual veteran.
• 0:18
  SPEAKER_01: You were here in 2017.
• 0:20
  SPEAKER_01: Yeah.
• 0:21
  SPEAKER_01: Yes.
• 0:21
  SPEAKER_01: You weren't even called Monday back then, were you?
• 0:23
  SPEAKER_00: Yeah, we were.
• 0:23
  SPEAKER_00: Let me tell you a story about that.
• 0:25
  SPEAKER_00: Okay.
• 0:25
  SPEAKER_00: Yeah, yeah.
• 0:26
  SPEAKER_00: So I went to my first SASTR in 2017.
• 0:30
  SPEAKER_00: I think it was February 2017.
• 0:33
  SPEAKER_00: Dead of winter.
• 0:34
  SPEAKER_00: Yeah.
• 0:34
  SPEAKER_00: Yeah.
• 0:35
  SPEAKER_00: It was in the city.
• 0:36
  SPEAKER_00: And when you registered, you had like a pin or a badge that said, how much ARR do you have?
• 0:43
  SPEAKER_00: Oh, yeah, we have those.
• 0:45
  SPEAKER_00: So there was like a...
• 0:46
  SPEAKER_00: Five million dollars there are, one million, 10 million, and I remember, I think we had seven back then.
• 0:53
  SPEAKER_00: Yeah,
• 0:53
  SPEAKER_00: it was six years ago,
• 0:54
  SPEAKER_00: we had seven million,
• 0:56
  SPEAKER_00: and I thought,
• 0:57
  SPEAKER_00: should I take the five million or the 10 million?
• 1:01
  SPEAKER_00: So,
• 1:02
  SPEAKER_00: I don't remember what I took,
• 1:04
  SPEAKER_00: but I just want to say thank you,
• 1:07
  SPEAKER_00: Jason,
• 1:07
  SPEAKER_00: because it's been such an amazing conference back then,
• 1:09
  SPEAKER_00: and the community has grown so much.
• 1:13
  SPEAKER_00: You know,
• 1:14
  SPEAKER_00: I'm sitting here today,
• 1:15
  SPEAKER_00: for me it's a kind of a closure as a founder,
• 1:18
  SPEAKER_00: because I was in the audience,
• 1:20
  SPEAKER_00: like all of you right now,
• 1:22
  SPEAKER_00: and I remember that we have seven million,
• 1:25
  SPEAKER_00: and you know,
• 1:26
  SPEAKER_00: it was very hard to imagine the future.
• 1:27
  SPEAKER_00: I'm here now, which is amazing.
• 1:30
  SPEAKER_00: So, maybe some of you will be in the next Sastra speakers in a few years.
• 1:34
  SPEAKER_01: Some will be.
• 1:35
  SPEAKER_01: Hold on, can we put these slides up for a second?
• 1:38
  SPEAKER_01: So $7 million in 2017.
• 1:40
  SPEAKER_01: Let's look here.
• 1:41
  SPEAKER_01: Yeah, because you hit 2011 during the year.
• 1:44
  SPEAKER_01: Yeah.
• 1:44
  SPEAKER_01: So I want to talk about this slide in a second,
• 1:47
  SPEAKER_01: but let's just think about the sheer power of compounding revenue for a minute.
• 1:51
  SPEAKER_01: I mean, Monday is an outlier.
• 1:52
  SPEAKER_01: I mean,
• 1:53
  SPEAKER_01: it's one of the best,
• 1:53
  SPEAKER_01: but $7 million when you came in 2017,
• 1:56
  SPEAKER_01: and today you're coming up on $700,
• 1:58
  SPEAKER_01: right?
• 1:59
  SPEAKER_01: Yeah, over $700.
• 2:00
  SPEAKER_01: $640 last quarter, over $700.
• 2:02
  SPEAKER_01: So that's a hundred.
• 2:03
  SPEAKER_01: Let's just slow this down.
• 2:05
  SPEAKER_01: Let's enjoy the moment.
• 2:07
  SPEAKER_01: A little bit of respect here.
• 2:12
  SPEAKER_01: I mean, did it feel like in 2017 you could be 100x bigger?
• 2:15
  SPEAKER_01: I mean,
• 2:16
  SPEAKER_01: even though you were growing like a weed,
• 2:17
  SPEAKER_01: did you really feel you could be 100x bigger in that amount of time?
• 2:20
  SPEAKER_01: Six years, right?
• 2:21
  SPEAKER_01: Is that six years?
• 2:22
  SPEAKER_01: It's crazy.
• 2:24
  SPEAKER_00: Well, I remember you had a phrase that says 1 to 10 is improbable.
• 2:28
  SPEAKER_00: Yeah.
• 2:28
  SPEAKER_00: So 10 to 100 is inevitable.
• 2:31
  SPEAKER_00: Inevitable.
• 2:32
  SPEAKER_00: You're inevitable.
• 2:32
  SPEAKER_00: How much is it from 100 to a billion?
• 2:34
  SPEAKER_01: I don't know.
• 2:35
  SPEAKER_01: I don't think there was a SaaS company that a billion at that time, so we have to, yeah.
• 2:42
  SPEAKER_01: I think it's more than inevitable.
• 2:44
  SPEAKER_01: I don't know.
• 2:46
  SPEAKER_01: I think it gets less pithy because it's like you've got to go multi-product.
• 2:51
  SPEAKER_01: Yeah.
• 2:51
  SPEAKER_01: Inevitable, super inevitable if you go multi-product, if not, so yeah, force of nature.
• 2:57
  SPEAKER_01: And what,
• 2:58
  SPEAKER_01: we'll get into it,
• 2:58
  SPEAKER_01: Monday's NRR today is roughly what,
• 3:00
  SPEAKER_01: even from SMBs,
• 3:01
  SPEAKER_01: it's almost 120,
• 3:02
  SPEAKER_01: 115 something?
• 3:03
  SPEAKER_01: Yeah, 115, yeah.
• 3:04
  SPEAKER_01: And just think about this craziness of the 100X, right?
• 3:09
  SPEAKER_01: Do you remember what it was back in 2017, selling to SMBs?
• 3:13
  SPEAKER_00: What, the NRR?
• 3:14
  SPEAKER_01: No, the NRR.
• 3:16
  SPEAKER_01: How much of a boost did we get of this NRR?
• 3:18
  SPEAKER_01: Was it over 100 back then?
• 3:19
  SPEAKER_00: How much our NRR was in 2017?
• 3:21
  SPEAKER_00: Yeah.
• 3:22
  SPEAKER_00: Much less.
• 3:23
  SPEAKER_00: I don't remember exactly how much it was, but maybe around the 90s.
• 3:27
  SPEAKER_00: 90s, yeah, that'd be my guess.
• 3:30
  SPEAKER_01: So, okay, there's a bunch of stuff I want to talk about on Monday.
• 3:32
  SPEAKER_01: It's so interesting.
• 3:33
  SPEAKER_01: And the title of this presentation, which I unskillfully fast-forward, but I think it was steering...
• 3:41
  SPEAKER_01: Not turbulent times, because that's not the Monday story.
• 3:44
  SPEAKER_01: Unpredictable times, is that what it is that we're going to get into?
• 3:48
  SPEAKER_01: Monday has,
• 3:49
  SPEAKER_01: you've had your challenges the last few years,
• 3:50
  SPEAKER_01: but we really,
• 3:51
  SPEAKER_01: as we'll talk about,
• 3:52
  SPEAKER_01: we haven't really missed a beat.
• 3:53
  SPEAKER_01: The growth is epic.
• 3:54
  SPEAKER_01: But before we get there, I was thinking about this.
• 3:57
  SPEAKER_01: Monday's got to be the SaaS company that more people think they know about that don't.
• 4:02
  SPEAKER_01: Between YouTube and the Super Bowl,
• 4:03
  SPEAKER_01: everyone thinks they know what Monday does,
• 4:06
  SPEAKER_01: but they actually probably only understand part of the suite.
• 4:08
  SPEAKER_01: And so give us just in a couple minutes,
• 4:10
  SPEAKER_01: give us a sense of where it started and everything that Monday does today,
• 4:14
  SPEAKER_01: just so we can triangulate on where you're at coming up on a billion in revenue.
• 4:18
  SPEAKER_00: Yeah, so as you can see, ever since we've been in SASTR, we had hyper growth since 2017.
• 4:26
  SPEAKER_00: And I think your statement is pretty much correct.
• 4:29
  SPEAKER_00: I think a lot of people probably saw an ad about Monday or read about it.
• 4:35
  SPEAKER_00: But I feel a lot of people don't understand the full depth of what the platform is.
• 4:40
  SPEAKER_00: If I ask a random person,
• 4:42
  SPEAKER_00: even here in the audience,
• 4:44
  SPEAKER_00: what is Monday,
• 4:45
  SPEAKER_00: you're probably gonna get a variety of answers,
• 4:47
  SPEAKER_00: anywhere from project management to work management,
• 4:50
  SPEAKER_00: maybe some will say CRM.
• 4:53
  SPEAKER_00: But in essence, if you can see the graph and all the features that we added,
• 4:57
  SPEAKER_00: From day one, we built a platform.
• 5:00
  SPEAKER_00: And a platform in the deep meaning of that,
• 5:03
  SPEAKER_00: which is a software that's very flexible,
• 5:07
  SPEAKER_00: not rigid,
• 5:07
  SPEAKER_00: allows everybody to build their own solution.
• 5:11
  SPEAKER_00: And the first use case that we kind of focused on was project management.
• 5:15
  SPEAKER_00: And that's what you saw most of the ads.
• 5:18
  SPEAKER_00: The reason behind it was that nobody went on Google and searched for a flexible
• 5:23
  SPEAKER_00: software to manage my business,
• 5:24
  SPEAKER_00: right?
• 5:25
  SPEAKER_00: Like nobody does that.
• 5:26
  SPEAKER_00: People search for project management, they search for CRM.
• 5:29
  SPEAKER_00: So we had to change from,
• 5:32
  SPEAKER_00: like there's the company vision on one hand,
• 5:34
  SPEAKER_00: but there's the go-to market on the other hand.
• 5:36
  SPEAKER_00: And you need to balance the two.
• 5:38
  SPEAKER_00: You need to understand what people are searching for,
• 5:40
  SPEAKER_00: what their intent is,
• 5:42
  SPEAKER_00: and what is the product you're building on the other hand.
• 5:44
  SPEAKER_00: So money's always been a platform.
• 5:47
  SPEAKER_00: And now we, as you mentioned, we transitioned into multi-products.
• 5:50
  SPEAKER_00: So we launched Monday CRM, we launched Monday Dev, but that's an evolution of our platform.
• 5:55
  SPEAKER_00: It's all built on one platform.
• 5:57
  SPEAKER_01: And how, thinking through that, now that I hear you say it again,
• 6:02
  SPEAKER_01: When you have something this rich, especially to SMBs, how do you communicate that?
• 6:07
  SPEAKER_01: The Google search is an interesting example.
• 6:10
  SPEAKER_01: How do you communicate this depth?
• 6:13
  SPEAKER_01: It's so much functionality.
• 6:15
  SPEAKER_01: How do you do that without overwhelming or how do you expose a small business to it?
• 6:20
  SPEAKER_00: Yeah,
• 6:20
  SPEAKER_00: so I think the main point that we've done,
• 6:24
  SPEAKER_00: which I think is important,
• 6:25
  SPEAKER_00: you don't need to tell the whole story from the beginning,
• 6:29
  SPEAKER_00: especially when you sell to SMBs.
• 6:32
  SPEAKER_00: I think that we focus on giving them value as soon as possible.
• 6:36
  SPEAKER_00: So if you were searching for a project management or CRM,
• 6:40
  SPEAKER_00: we wanted to serve them a CRM or a project management.
• 6:42
  SPEAKER_00: Don't need to explain the whole depth of the platform.
• 6:45
  SPEAKER_00: And then as they scale the product and use it more and more, they're exposed to all the features.
• 6:50
  SPEAKER_00: So we call it like gradual discovery.
• 6:52
  SPEAKER_00: Don't overwhelm them.
• 6:53
  SPEAKER_00: Don't tell them the whole story because it's confusing, especially when you're an SMB.
• 6:57
  SPEAKER_00: You want to understand what you're buying.
• 6:59
  SPEAKER_00: So that was our focus from day one.
• 7:02
  SPEAKER_01: Is there some sort of...
• 7:04
  SPEAKER_01: metric you guys use in terms of how much of the product portfolio folks use over time?
• 7:10
  SPEAKER_01: Do you track percent of features or functionality?
• 7:12
  SPEAKER_01: Do you think about that?
• 7:14
  SPEAKER_00: Yeah,
• 7:14
  SPEAKER_00: so one thing we've done since the beginning of the company,
• 7:18
  SPEAKER_00: we actually built a BI tool called Big Brain.
• 7:21
  SPEAKER_00: First year, first year.
• 7:22
  SPEAKER_00: First year.
• 7:23
  SPEAKER_00: I'll tell you a story,
• 7:24
  SPEAKER_00: we were seven people in the office,
• 7:27
  SPEAKER_00: literally seven people,
• 7:27
  SPEAKER_00: including Ray,
• 7:28
  SPEAKER_00: myself,
• 7:28
  SPEAKER_00: my partner,
• 7:29
  SPEAKER_00: so I think like three developers,
• 7:32
  SPEAKER_00: and that was back in 2014,
• 7:35
  SPEAKER_00: and we built a BI tool called BigBrain back then.
• 7:38
  SPEAKER_00: It was a major investment.
• 7:40
  SPEAKER_00: for that size of a company.
• 7:42
  SPEAKER_00: But from day one, we said we can't fly blind, like we have to know what's going on in the product.
• 7:47
  SPEAKER_00: So we built this tool,
• 7:49
  SPEAKER_00: like internal tool,
• 7:50
  SPEAKER_00: that helped us track revenue,
• 7:52
  SPEAKER_00: marketing expense,
• 7:54
  SPEAKER_00: and also usage of the product.
• 7:55
  SPEAKER_00: So from day one,
• 7:57
  SPEAKER_00: we focused on engagement and usage,
• 8:00
  SPEAKER_00: because otherwise people will churn,
• 8:01
  SPEAKER_00: people won't recommend to the product,
• 8:04
  SPEAKER_00: so that was a big focus for us,
• 8:06
  SPEAKER_00: and until today,
• 8:06
  SPEAKER_00: Big Brain is a major part of the company.
• 8:09
  SPEAKER_01: Yeah.
• 8:10
  SPEAKER_01: And even like,
• 8:11
  SPEAKER_01: I think you said even in year one,
• 8:12
  SPEAKER_01: selling to SMBs,
• 8:13
  SPEAKER_01: the customer lifetime value was highly instrumented,
• 8:15
  SPEAKER_01: right?
• 8:15
  SPEAKER_01: And I think you had like an eight-month CAC you and Roy targeted,
• 8:18
  SPEAKER_01: and you had it sort of targeted down to the last decimal point or something like that?
• 8:22
  SPEAKER_00: Yeah,
• 8:23
  SPEAKER_00: so when we started the company back then in 2014,
• 8:29
  SPEAKER_00: there wasn't a lot of money that you could raise as a startup.
• 8:32
  SPEAKER_00: Maybe similar to today, I think.
• 8:35
  SPEAKER_00: Our first round, just so you all know, we raised $1.4 million.
• 8:41
  SPEAKER_00: in two million pre, okay?
• 8:43
  SPEAKER_01: So that was... Let's not think about the math of deletion.
• 8:46
  SPEAKER_00: Let's not even think about that math.
• 8:47
  SPEAKER_00: For about 30% of the company.
• 8:50
  SPEAKER_00: 1.4 million for 30% of the company.
• 8:53
  SPEAKER_00: That was our seed round.
• 8:54
  SPEAKER_00: So money wasn't in abundance.
• 8:57
  SPEAKER_00: We had to measure everything.
• 8:59
  SPEAKER_00: We had to track everything we've been doing.
• 9:02
  SPEAKER_00: And I think it stuck with us,
• 9:04
  SPEAKER_00: efficiency.
• 9:05
  SPEAKER_00: We always think about expenses and we think about how do we measure things.
• 9:11
  SPEAKER_00: And I think it's very healthy for companies to do that.
• 9:14
  SPEAKER_00: Yeah.
• 9:14
  SPEAKER_01: So I want to dig in more,
• 9:16
  SPEAKER_01: uh,
• 9:16
  SPEAKER_01: to some of the interesting about money,
• 9:17
  SPEAKER_01: but just on this history,
• 9:18
  SPEAKER_01: the one thing that I don't know is as you guys started to take off at that seven to 70,
• 9:24
  SPEAKER_01: what was the 10 X feature?
• 9:26
  SPEAKER_01: Like what was the magic thing at the software level that Monday did, uh, that others didn't do?
• 9:32
  SPEAKER_01: What w if there was a 10 X feature, what was that?
• 9:34
  SPEAKER_01: What was that aha thing?
• 9:36
  SPEAKER_00: Yeah, so initially it was the boards, which is kind of our Monday database, if you like.
• 9:43
  SPEAKER_00: But I think every time we made a leap in terms of product features,
• 9:47
  SPEAKER_00: it wasn't because of feedback we got from customers.
• 9:49
  SPEAKER_00: I always like to talk with customers, but actually the major leaps was things they didn't expect.
• 9:54
  SPEAKER_00: So, for example, automations was a huge driver of growth.
• 9:59
  SPEAKER_00: We added automation, even though not a lot of customers asked for it, but just automate manual work.
• 10:04
  SPEAKER_00: That was a huge game changer.
• 10:05
  SPEAKER_00: That's everything today, but that was way ahead of its time, right?
• 10:08
  SPEAKER_00: Yeah, yeah.
• 10:08
  SPEAKER_00: Now it's very common, but back in the day and how we built it was very unique.
• 10:12
  SPEAKER_01: And did they...
• 10:14
  SPEAKER_01: So they're doing the Google search for project management software, which isn't even all of Monday.
• 10:18
  SPEAKER_01: You're getting them into a trial.
• 10:20
  SPEAKER_01: What got them to convert in the early days?
• 10:24
  SPEAKER_01: It wasn't just that.
• 10:26
  SPEAKER_01: Maybe it was the automation, but what would get them to convert when there are more vendors out there?
• 10:30
  SPEAKER_00: Yeah.
• 10:32
  SPEAKER_00: So I think Roy and myself, my partner, are kind of unique because we're both engineers, okay?
• 10:39
  SPEAKER_00: So none of us is like the business person.
• 10:42
  SPEAKER_00: And to be honest, since day one, I didn't like selling to customers.
• 10:46
  SPEAKER_00: Like it's something I'm not good at, you know?
• 10:48
  SPEAKER_00: Like I always felt it's not my skill.
• 10:51
  SPEAKER_00: I'd rather write like 100,000 slides of code than to pick up the phone and cold call somebody.
• 10:56
  SPEAKER_00: There's probably a few in the room that have felt that way.
• 11:01
  SPEAKER_00: So maybe it was a coincidence,
• 11:04
  SPEAKER_00: but it just forced us to build a product that kind of automatically converts
• 11:09
  SPEAKER_00: because we're product people and we wanted the customers to become paying customers
• 11:15
  SPEAKER_00: without talking to anybody.
• 11:16
  SPEAKER_00: You know, just use the product and pay for it.
• 11:18
  SPEAKER_00: That's the best way.
• 11:21
  SPEAKER_00: So we put so much focus on user experience.
• 11:24
  SPEAKER_00: We A-B tested everything, and we made the product very simple to start with.
• 11:28
  SPEAKER_00: Again,
• 11:29
  SPEAKER_00: going back to that principle of gradual discovery,
• 11:31
  SPEAKER_00: and then you've discovered the depth of the product.
• 11:34
  SPEAKER_00: But I think that's a great way to build a company if you want to focus on product-led growth.
• 11:40
  SPEAKER_00: Because thinking in retrospect, let's say we had an amazing salesperson in the company.
• 11:45
  SPEAKER_00: Even though we had, in the beginning, a shitty product, that person might be able to sell.
• 11:50
  SPEAKER_00: And then you get a wrong signal.
• 11:51
  SPEAKER_00: You get a wrong signal.
• 11:53
  SPEAKER_00: And because we didn't have a salesperson and people have to convert and sell the
• 11:56
  SPEAKER_00: product by themselves,
• 11:58
  SPEAKER_00: I think just create a very healthy product market fit.
• 12:00
  SPEAKER_00: Not all product market fits are equal.
• 12:03
  SPEAKER_00: So that's, I think, one benefit that happened because of that.
• 12:06
  SPEAKER_01: Yeah, I mean, and we'll talk a little bit about, I mean, Monday has gone up market.
• 12:10
  SPEAKER_01: 50K customers are your biggest growth area.
• 12:12
  SPEAKER_01: But if you can start with a true self-service motion, your product can be magically better, right?
• 12:18
  SPEAKER_01: Versus having humans bridge the gap.
• 12:21
  SPEAKER_01: It's the nature of bigger customers, enterprise humans.
• 12:23
  SPEAKER_01: Humans become the gap fellers.
• 12:25
  SPEAKER_01: It's not all bad, but you can never go back, I think, is the thing.
• 12:29
  SPEAKER_01: Yeah.
• 12:30
  SPEAKER_01: All right, so that's a good background.
• 12:32
  SPEAKER_01: Let's talk about this for a minute.
• 12:33
  SPEAKER_01: Obvious to you, but it'll set the tone for the next pieces.
• 12:37
  SPEAKER_01: I just pulled up, 70% of our customers are in non-tech.
• 12:41
  SPEAKER_01: Real estate, banking, journalism, construction.
• 12:44
  SPEAKER_01: Two engineers that didn't want to talk to customers.
• 12:46
  SPEAKER_01: How'd you get into non-tech?
• 12:47
  SPEAKER_01: How did you make this?
• 12:48
  SPEAKER_01: How did you get out of tech?
• 12:50
  SPEAKER_01: By the way, don't get me wrong, I love our customers.
• 12:52
  SPEAKER_01: No, I know, you do love, you don't like selling, I misspoke, that you don't want to sell.
• 12:55
  SPEAKER_00: I love talking and getting feedback, not selling.
• 12:57
  SPEAKER_00: I get it, yeah.
• 12:59
  SPEAKER_00: Okay, so I think that that's an important point.
• 13:03
  SPEAKER_00: When we started the company, we said that we want to sell the product not just for tech companies, right?
• 13:09
  SPEAKER_00: I think a lot of startups focus on tech, and it makes sense.
• 13:12
  SPEAKER_00: You come from that industry.
• 13:14
  SPEAKER_00: But I think if you can, again, maybe some tech products can, but if you can,
• 13:20
  SPEAKER_00: expand to like non-tech industries, that's a major benefit, major benefit.
• 13:27
  SPEAKER_00: From day one, 70% of our customers were non-tech.
• 13:30
  SPEAKER_00: And non-tech,
• 13:31
  SPEAKER_00: I mean,
• 13:31
  SPEAKER_00: you can see here,
• 13:32
  SPEAKER_00: like real estate,
• 13:33
  SPEAKER_00: banking,
• 13:33
  SPEAKER_00: construction,
• 13:35
  SPEAKER_00: even churches were using us back in the days and now.
• 13:40
  SPEAKER_00: And
• 13:41
  SPEAKER_00: For me, that's like the real world.
• 13:42
  SPEAKER_00: That's like real businesses.
• 13:44
  SPEAKER_00: And we're probably going to touch it in a few slides,
• 13:47
  SPEAKER_00: but I think that's one of the things that made us very resilient as a company,
• 13:50
  SPEAKER_00: even in what we see now,
• 13:53
  SPEAKER_00: because I think a lot of companies are overly exposed to tech companies,
• 13:56
  SPEAKER_00: took a big hit compared to others.
• 13:58
  SPEAKER_00: So,
• 14:00
  SPEAKER_00: And by the way,
• 14:01
  SPEAKER_00: this was also a coincidence because the fact that Monday is so flexible,
• 14:06
  SPEAKER_00: it allowed us to enter into other verticals that we didn't have experience in.
• 14:09
  SPEAKER_00: Like have no experience in banking or real estate or construction, but our customers do.
• 14:15
  SPEAKER_00: And because the platform is very flexible, they could use it to their own needs.
• 14:19
  SPEAKER_01: And was this, I mean, you said this was from year one or day one, but was this strategic?
• 14:24
  SPEAKER_01: Did you say it's less competitive in these spaces,
• 14:27
  SPEAKER_01: or was it your own DNA,
• 14:28
  SPEAKER_01: or how did you make these decisions?
• 14:30
  SPEAKER_00: So it was a little bit random in the beginning.
• 14:33
  SPEAKER_00: So when we started, we ran a bunch of Facebook ads.
• 14:37
  SPEAKER_00: Yeah.
• 14:38
  SPEAKER_00: And I remember the original banner, it was manage your startup or something like that.
• 14:44
  SPEAKER_00: And we had churches signing up, and we had construction companies signing up.
• 14:49
  SPEAKER_00: It's not a startup, but they've been using it, and they love it, and we can serve those customers.
• 14:54
  SPEAKER_00: So let's strategically choose that path.
• 14:57
  SPEAKER_00: So it was kind of random,
• 14:58
  SPEAKER_00: but just seeing what they're doing with the platform was mind-blowing back in the days.
• 15:03
  SPEAKER_01: So you used, I mean, Facebook ads are an effective way to reach those industries, as we know.
• 15:09
  SPEAKER_01: So you hacked it.
• 15:10
  SPEAKER_01: You ran a bunch of Facebook ads,
• 15:11
  SPEAKER_01: and the ones into more traditional industries were easy to convert,
• 15:15
  SPEAKER_01: and you ran with it.
• 15:16
  SPEAKER_00: Yeah, we had also a lot of tech companies, but we also had a variety of other industries as well.
• 15:20
  SPEAKER_00: Yeah, yeah, that makes sense.
• 15:21
  SPEAKER_00: It's interesting.
• 15:23
  SPEAKER_01: Okay, so let's, for folks, let's slow down this slide.
• 15:26
  SPEAKER_01: And I'm not saying everything for the last two years for Monday's been easy, right?
• 15:30
  SPEAKER_01: There have been some macro impacts overall.
• 15:33
  SPEAKER_01: If we squinted, we could see one quarter was better than the other.
• 15:37
  SPEAKER_01: But let's just step back for a minute.
• 15:40
  SPEAKER_01: And this is just out of their actually very, very good public analyst stuff.
• 15:45
  SPEAKER_01: Go to just do a Google search for Monday analyst.
• 15:48
  SPEAKER_01: A lot of public companies start shrinking the amount of data they share.
• 15:51
  SPEAKER_01: Not Monday yet.
• 15:52
  SPEAKER_01: So it's a gift.
• 15:53
  SPEAKER_01: That's why I write it up on Sastr.
• 15:55
  SPEAKER_01: But look,
• 15:56
  SPEAKER_01: whatever has happened in parts of tech,
• 15:59
  SPEAKER_01: parts of sales and marketing,
• 16:00
  SPEAKER_01: whatever other speakers here will tell you the world ended last year and we're in
• 16:05
  SPEAKER_01: the worst downturn since the 14th century,
• 16:08
  SPEAKER_01: right?
• 16:09
  SPEAKER_01: Since the bubonic this or whatever.
• 16:12
  SPEAKER_01: Maybe, but maybe not if you sell to real normal businesses, right?
• 16:16
  SPEAKER_01: Because there is a little bit of impact here, right?
• 16:19
  SPEAKER_01: But overall, this is a pretty consistent, actually, that's the term, consistent, right?
• 16:26
  SPEAKER_01: So what did you learn through this macro last 24 months?
• 16:31
  SPEAKER_01: Summarize it for all of us.
• 16:32
  SPEAKER_01: What did you guys learn?
• 16:34
  SPEAKER_00: Yeah, so definitely I guess all of you have felt it, what happened in the last year and a half.
• 16:40
  SPEAKER_00: We also felt it, but you're right, to a lesser extent.
• 16:45
  SPEAKER_00: I think there's a few reasons for that.
• 16:47
  SPEAKER_00: There's things you can control and things you can't control.
• 16:51
  SPEAKER_00: As I mentioned,
• 16:52
  SPEAKER_00: the fact that we're not 100% tech-focused was a big thing because,
• 16:58
  SPEAKER_00: like I've said,
• 16:58
  SPEAKER_00: a lot of non-tech companies were not affected by the economy,
• 17:03
  SPEAKER_00: so that's a benefit.
• 17:04
  SPEAKER_00: If you can sell into non-tech companies, that's a great way to expand the company.
• 17:10
  SPEAKER_00: It was very...
• 17:12
  SPEAKER_00: You know,
• 17:13
  SPEAKER_00: it was great to sell to tech companies back in 21 because they were growing like crazy,
• 17:16
  SPEAKER_00: and it created great growth,
• 17:18
  SPEAKER_00: but I think that real businesses,
• 17:20
  SPEAKER_00: if they can,
• 17:21
  SPEAKER_00: should sell to multiple verticals.
• 17:23
  SPEAKER_00: So that's one.
• 17:25
  SPEAKER_00: Number two,
• 17:25
  SPEAKER_00: which I think we've done right,
• 17:27
  SPEAKER_00: and if you have a startup right now,
• 17:29
  SPEAKER_00: I think that's something you can do,
• 17:31
  SPEAKER_00: is performance marketing.
• 17:33
  SPEAKER_00: What I saw when the economy changed was that a lot of companies
• 17:38
  SPEAKER_00: Cut performance marketing entirely.
• 17:40
  SPEAKER_00: It's the easiest thing to reduce because let's say that you want to reduce the burn.
• 17:45
  SPEAKER_00: What's the first thing you're doing?
• 17:47
  SPEAKER_00: Not let people go or reduce expenses.
• 17:50
  SPEAKER_00: You stop doing performance marketing.
• 17:51
  SPEAKER_00: Yeah, just cut it all, right?
• 17:52
  SPEAKER_00: Cut it all.
• 17:52
  SPEAKER_00: The variable cost.
• 17:53
  SPEAKER_00: But in my opinion,
• 17:55
  SPEAKER_00: it's a big mistake because right now,
• 17:59
  SPEAKER_00: not only we kept doing it,
• 18:00
  SPEAKER_00: but we actually scaled it.
• 18:02
  SPEAKER_00: And right now we have like the lowest bids that we ever saw as a company because everybody pulled back,
• 18:10
  SPEAKER_00: A lot of companies reduce spend, and we're more aggressive than ever.
• 18:14
  SPEAKER_00: But I think, you know, in retrospect, why they've done it is that we had big brains.
• 18:19
  SPEAKER_00: So we had the confidence that every campaign we're spending on was bringing the results.
• 18:24
  SPEAKER_00: I think a lot of companies,
• 18:25
  SPEAKER_00: you know,
• 18:26
  SPEAKER_00: back in 21,
• 18:28
  SPEAKER_00: 22,
• 18:28
  SPEAKER_00: just spent money on performance marketing to saw the ARR grow.
• 18:31
  SPEAKER_00: So they said, okay, it makes sense.
• 18:33
  SPEAKER_00: You know, it's a good ratio.
• 18:34
  SPEAKER_00: But they didn't know how to attribute the campaign to the result.
• 18:39
  SPEAKER_00: And we knew.
• 18:40
  SPEAKER_00: So my tip to you is two things.
• 18:43
  SPEAKER_00: One, if you can, try and do performance marketing again because it's very cheap right now.
• 18:47
  SPEAKER_00: You should do it.
• 18:48
  SPEAKER_00: You should get new customers on board.
• 18:49
  SPEAKER_00: So that's one.
• 18:51
  SPEAKER_00: And number two, if you can, try to measure how each individual campaign affects ARR.
• 18:57
  SPEAKER_00: It's not that complicated to do it.
• 18:59
  SPEAKER_00: It's very easy to attribute that.
• 19:01
  SPEAKER_00: And it just gives you so much confidence and ability to scale.
• 19:05
  SPEAKER_01: Yeah,
• 19:05
  SPEAKER_01: I think when times were really good,
• 19:07
  SPEAKER_01: you know,
• 19:08
  SPEAKER_01: marketing budgets inflated and just certain amounts were just thrown at performance
• 19:11
  SPEAKER_01: marketing and too much was thrown and just cut to the bone,
• 19:16
  SPEAKER_01: right?
• 19:16
  SPEAKER_01: Just literally cut to the bone.
• 19:17
  SPEAKER_01: Okay, one more question on this, looking at this fresh, and then we'll move on.
• 19:19
  SPEAKER_01: But I have studied Monday a lot and I'm a super fan.
• 19:24
  SPEAKER_01: I think I understand why Monday has grown so quickly.
• 19:27
  SPEAKER_01: but it's really grown quickly.
• 19:29
  SPEAKER_01: And we can look at other companies that are top best of all time,
• 19:35
  SPEAKER_01: maybe a handful like Microsoft have grown faster.
• 19:37
  SPEAKER_01: But for B2B,
• 19:39
  SPEAKER_01: it's subscription revenue,
• 19:40
  SPEAKER_01: and you do need to do...
• 19:42
  SPEAKER_01: I'm missing a little bit of the story about why Monday grew quite as fast as it did.
• 19:47
  SPEAKER_01: Not why it's getting to a billion, but what was the thing that really blew Monday up?
• 19:53
  SPEAKER_00: So I think it's a combination of a few things.
• 19:55
  SPEAKER_00: It's not like one thing that I can put my hands on,
• 19:59
  SPEAKER_00: but a combination of performance marketing,
• 20:02
  SPEAKER_00: which is very efficient.
• 20:03
  SPEAKER_00: You probably saw our ads on YouTube.
• 20:06
  SPEAKER_00: I think we all saw them.
• 20:06
  SPEAKER_00: Yeah, hopefully.
• 20:08
  SPEAKER_01: But they worked.
• 20:09
  SPEAKER_00: They work.
• 20:09
  SPEAKER_00: But they worked.
• 20:10
  SPEAKER_00: They work, and that's the point.
• 20:11
  SPEAKER_00: They work, and we know they work.
• 20:13
  SPEAKER_00: So that's one thing.
• 20:15
  SPEAKER_00: Second thing is, again, a lot of verticals.
• 20:18
  SPEAKER_00: So that really helps you because
• 20:20
  SPEAKER_00: One thing that helped us reduce the marketing span was let's say you focus just on one vertical.
• 20:25
  SPEAKER_00: Let's say project management.
• 20:26
  SPEAKER_00: At some point you exhaust the inventory.
• 20:28
  SPEAKER_00: And then the incremental dollar you put is not as efficient as the first one.
• 20:35
  SPEAKER_00: So the fact you can go multi-vertical is a hack in a way because you can bid in each industry
• 20:40
  SPEAKER_00: and be very efficient in that.
• 20:42
  SPEAKER_00: So that was one end that truly helped us.
• 20:44
  SPEAKER_00: Second one is the product, okay?
• 20:45
  SPEAKER_00: We allow our customers to use it, so they don't have a lot of feature requests.
• 20:48
  SPEAKER_00: We almost didn't get a lot of customer feedback or anything like that because we
• 20:53
  SPEAKER_00: gave them the ability to customize their own product.
• 20:55
  SPEAKER_00: So it's not like a million of feature requests that we had every day because we
• 20:58
  SPEAKER_00: gave them that freedom in a way.
• 21:00
  SPEAKER_00: So I think it's not just one thing,
• 21:02
  SPEAKER_00: but a combination of a few things that truly help us grow the company that quickly.
• 21:06
  SPEAKER_01: On this multi-vertical thing, that is, I think, a bigger insight than I realized or folks realized.
• 21:11
  SPEAKER_01: Do you staff it?
• 21:12
  SPEAKER_01: Do you have like a mini GM of different verticals?
• 21:15
  SPEAKER_01: Thinking about how many of these verticals have like a PM or a GM?
• 21:19
  SPEAKER_00: Yeah, so right now we really scale that.
• 21:21
  SPEAKER_00: So we have MondaySalesCRM and MondayDev, which is a complete organization within our company.
• 21:26
  SPEAKER_00: But back in the day, we had a team working on each one of those verticals.
• 21:30
  SPEAKER_00: And again, each one of those verticals was born because we saw our customers using them.
• 21:35
  SPEAKER_00: So Dave used it for a bunch of things, we learned from them, and then we packaged that into a product.
• 21:41
  SPEAKER_01: And I tend to think of,
• 21:42
  SPEAKER_01: when you're trying to look at the data,
• 21:44
  SPEAKER_01: I tend to typically think of 10% as material,
• 21:47
  SPEAKER_01: like if 10% of your customer is in an area,
• 21:49
  SPEAKER_01: lean in on it.
• 21:50
  SPEAKER_01: Because you're doing verticals, was it smaller if you saw 5% of your customers from churches or banking?
• 21:56
  SPEAKER_01: Was there a number that was material to lean in and invest in more in a vertical?
• 22:01
  SPEAKER_00: So the way we verticalize it wasn't the customer but the usage.
• 22:05
  SPEAKER_00: So you have churches doing fundraising and you have churches managing I don't know what.
• 22:11
  SPEAKER_00: But there's a lot of use cases each company uses.
• 22:14
  SPEAKER_00: And we actually saw what they're using it for.
• 22:16
  SPEAKER_00: And this is how we package the product for different use cases.
• 22:20
  SPEAKER_00: Got it.
• 22:20
  SPEAKER_00: Okay, super, super interesting.
• 22:23
  SPEAKER_01: Okay, let's slow this down.
• 22:24
  SPEAKER_01: I have written a lot of this on Sastr, and boy, this is the story of the year.
• 22:29
  SPEAKER_01: Monday's not the only one, but maybe one of the most visceral.
• 22:33
  SPEAKER_01: For folks that don't...
• 22:35
  SPEAKER_01: have to worry about things like operating margins or free cash flow because they're
• 22:39
  SPEAKER_01: just running their businesses.
• 22:40
  SPEAKER_01: This is like night and day.
• 22:41
  SPEAKER_01: So walk me through this, Ron.
• 22:44
  SPEAKER_01: In Q2 of 22, Monday was hyper-fast growing, right?
• 22:47
  SPEAKER_01: And so you were burning some cash.
• 22:48
  SPEAKER_01: It's okay, right?
• 22:50
  SPEAKER_01: That's what scale-ups and start-ups, how much would you raise in your IPO?
• 22:54
  SPEAKER_01: A couple hundred million?
• 22:55
  SPEAKER_01: You can spend a little bit of it, right?
• 22:57
  SPEAKER_01: And it was great, and the growth was incredible.
• 22:59
  SPEAKER_01: In four or five quarters, you go from not that unprofitable, but unprofitable, to wildly profitable.
• 23:06
  SPEAKER_01: I mean, I guess this is free cash flow, but plus 26%.
• 23:10
  SPEAKER_01: In five quarters, you were burning 16 cents for each dollar that came in.
• 23:16
  SPEAKER_01: That's not bad.
• 23:17
  SPEAKER_01: That's a pretty low burn multiple.
• 23:18
  SPEAKER_01: Now, 26 cents of every dollar is going to cash flow.
• 23:22
  SPEAKER_01: So we're going to talk about this a little bit, but this is night and day, isn't it?
• 23:27
  SPEAKER_00: Yeah, so a few interesting points about this.
• 23:31
  SPEAKER_00: One, like now the company has over one billion in cash.
• 23:34
  SPEAKER_00: Yeah.
• 23:34
  SPEAKER_00: And I think the important part is we actually celebrated a few months ago.
• 23:38
  SPEAKER_00: A billion in cash.
• 23:39
  SPEAKER_00: Well,
• 23:39
  SPEAKER_00: not just a billion in cash,
• 23:40
  SPEAKER_00: but something happened that we had more cash in the bank than we ever raised from
• 23:46
  SPEAKER_00: VCs and the public market.
• 23:48
  SPEAKER_00: So in the board meeting, we asked them... Freedom day.
• 23:51
  SPEAKER_00: If we can give them the money back and get the shares, but...
• 23:54
  SPEAKER_01: There's a moment in time when you really want to do that, right?
• 23:57
  SPEAKER_00: They didn't agree, they didn't agree.
• 24:00
  SPEAKER_00: Yeah, I think what happened was that...
• 24:04
  SPEAKER_00: Look, we focus on cash flow from day one.
• 24:07
  SPEAKER_00: Day one.
• 24:08
  SPEAKER_00: And I want to tell all of you something.
• 24:10
  SPEAKER_00: I think there's something a bit misleading in how we measure SaaS companies.
• 24:15
  SPEAKER_00: And if you take one thing from this session, this will be it, okay?
• 24:20
  SPEAKER_00: All the metrics that you're using,
• 24:21
  SPEAKER_00: you know,
• 24:22
  SPEAKER_00: LTV to CAC,
• 24:25
  SPEAKER_00: CAC return rate,
• 24:26
  SPEAKER_00: all of them don't take cash into account,
• 24:29
  SPEAKER_00: okay?
• 24:30
  SPEAKER_00: It's not cash.
• 24:31
  SPEAKER_00: It's not cash.
• 24:32
  SPEAKER_00: ARR is not cash.
• 24:34
  SPEAKER_00: CAC is not cash.
• 24:36
  SPEAKER_00: LTV, well, I don't know what it is, but yeah.
• 24:40
  SPEAKER_00: It's a bogus metric, but that's definitely not cash.
• 24:42
  SPEAKER_00: That's not anything.
• 24:45
  SPEAKER_00: So the point is, nobody measure cash.
• 24:48
  SPEAKER_00: What is measuring cash?
• 24:49
  SPEAKER_00: I want to explain.
• 24:50
  SPEAKER_00: When we started the company, what we were religious about was to see the cash return.
• 24:57
  SPEAKER_00: So we would spend money, as I mentioned, on Facebook and YouTube and Google.
• 25:02
  SPEAKER_00: So we would measure when the cash left the bank,
• 25:06
  SPEAKER_00: literally left the bank,
• 25:08
  SPEAKER_00: okay,
• 25:08
  SPEAKER_00: and that's when we marked it.
• 25:10
  SPEAKER_00: And then we measured when the cash came back into the bank, okay, from those customers.
• 25:16
  SPEAKER_00: So we would buy a cohort of customers and we see when the money goes back into the company.
• 25:21
  SPEAKER_00: Now imagine that you have five million in the bank, seven million in the bank.
• 25:26
  SPEAKER_00: One way to think about it is I can spend five million on performance marketing.
• 25:30
  SPEAKER_00: This is not what we've done.
• 25:32
  SPEAKER_00: When we had five million in a bank, we spent 25 million in performance marketing.
• 25:38
  SPEAKER_00: Now, how do you do that?
• 25:40
  SPEAKER_00: Because we recycle the money super quickly.
• 25:42
  SPEAKER_00: We would spend, let's say, 300K on performance marketing, and then after one month, we saw 50% back.
• 25:50
  SPEAKER_00: from that campaign, so 150 back, okay?
• 25:53
  SPEAKER_00: And then we saw 70% after three months and five months.
• 25:56
  SPEAKER_00: We tracked every penny,
• 25:58
  SPEAKER_00: how much,
• 25:58
  SPEAKER_00: when it goes out,
• 25:59
  SPEAKER_00: when it comes in,
• 26:00
  SPEAKER_00: and this is how we optimize the product,
• 26:02
  SPEAKER_00: the pricing,
• 26:03
  SPEAKER_00: everything,
• 26:03
  SPEAKER_00: okay?
• 26:04
  SPEAKER_00: So you can think about it like we raise money from our customer's usage, okay?
• 26:10
  SPEAKER_00: VCs are not the only resource.
• 26:12
  SPEAKER_00: If you don't think about it,
• 26:15
  SPEAKER_00: then you can say I'm gonna raise more money,
• 26:17
  SPEAKER_00: but if you focus on cash efficiency,
• 26:20
  SPEAKER_00: you can make your business super efficient and just scale much faster as a team.
• 26:26
  SPEAKER_01: Yeah,
• 26:26
  SPEAKER_01: and just to,
• 26:27
  SPEAKER_01: and we'll dig in a little bit on this in a second,
• 26:29
  SPEAKER_01: but just to take another pause on this,
• 26:31
  SPEAKER_01: I think,
• 26:33
  SPEAKER_01: you know,
• 26:36
  SPEAKER_01: Until fairly recently, we really weren't sure if B2B companies could be efficient, right?
• 26:43
  SPEAKER_01: We had kind of bought into this Amazon-like model when Salesforce went IPO that,
• 26:47
  SPEAKER_01: yeah,
• 26:48
  SPEAKER_01: we could spend a ton on sales and marketing,
• 26:50
  SPEAKER_01: but our customer lifetime value is 70 years.
• 26:53
  SPEAKER_01: So at Terminus, it all works out.
• 26:56
  SPEAKER_01: And we all,
• 26:58
  SPEAKER_01: and then I remember at the first SAST annual,
• 27:00
  SPEAKER_01: Aaron Levy came one week after Box IPO,
• 27:02
  SPEAKER_01: and I asked him,
• 27:03
  SPEAKER_01: how did Wall Street buy into this model?
• 27:05
  SPEAKER_01: He's like, well, not really.
• 27:07
  SPEAKER_01: I mean, it's tough.
• 27:08
  SPEAKER_01: And then everyone, and then SAST, the multiples got big, and people bought into this, right?
• 27:14
  SPEAKER_01: But what we've proven,
• 27:15
  SPEAKER_01: and Monday's a great case study,
• 27:16
  SPEAKER_01: is that,
• 27:17
  SPEAKER_01: look,
• 27:18
  SPEAKER_01: even if maybe you give up a little bit of growth,
• 27:20
  SPEAKER_01: and it's not clear that we do,
• 27:22
  SPEAKER_01: you can have it all.
• 27:24
  SPEAKER_01: It's not easy.
• 27:26
  SPEAKER_01: But you can actually have a very efficient model.
• 27:29
  SPEAKER_01: It's software, right?
• 27:30
  SPEAKER_01: Write once, ship a million times.
• 27:33
  SPEAKER_01: And you can do it, and you can do it spending a lot of marketing.
• 27:36
  SPEAKER_01: Right?
• 27:37
  SPEAKER_00: The only thing that happened here during those four quarters was that we slowed down hiring.
• 27:41
  SPEAKER_00: Yeah, we'll hit that one on the next slide.
• 27:43
  SPEAKER_00: Slow down hiring.
• 27:44
  SPEAKER_00: Only thing we've done.
• 27:45
  SPEAKER_00: But you have to be efficient from day one.
• 27:47
  SPEAKER_00: Because if you're not efficient from day one, you don't measure that.
• 27:51
  SPEAKER_00: Even if you stop hiring, that's not going to happen.
• 27:54
  SPEAKER_00: So we slowed down hiring.
• 27:55
  SPEAKER_00: Part of what drove the free cash flow, we became more efficient.
• 27:59
  SPEAKER_00: But a big part of it was that we were efficient from day one.
• 28:01
  SPEAKER_00: We measured everything and we stayed efficient.
• 28:03
  SPEAKER_00: It's part of the company DNA.
• 28:04
  SPEAKER_00: Now, you have to do it from day one.
• 28:06
  SPEAKER_00: Change it once you scale.
• 28:07
  SPEAKER_00: It's really hard to change.
• 28:09
  SPEAKER_00: Really hard, right?
• 28:10
  SPEAKER_00: Really hard, yeah.
• 28:11
  SPEAKER_01: Yeah.
• 28:12
  SPEAKER_01: So I think we'll touch on the head count on the next one because it's interesting.
• 28:14
  SPEAKER_01: But just,
• 28:15
  SPEAKER_01: I think the,
• 28:17
  SPEAKER_01: one thing just for founders,
• 28:18
  SPEAKER_01: I want to stay focused on Monday,
• 28:19
  SPEAKER_01: but a lot of folks have grabbed me here already on day one and said,
• 28:23
  SPEAKER_01: my investors,
• 28:23
  SPEAKER_01: my board,
• 28:24
  SPEAKER_01: told me I need to get profitable.
• 28:25
  SPEAKER_01: Right?
• 28:26
  SPEAKER_01: Okay, and that's, and Iran, feel free to editorialize this, that's the wrong lesson.
• 28:31
  SPEAKER_01: You do need to get efficient.
• 28:32
  SPEAKER_01: Getting profitable gets you nowhere, though, right?
• 28:35
  SPEAKER_01: Getting profitable and growing 0% or 3% does not build a Monday.
• 28:39
  SPEAKER_01: You've got to do what's even harder.
• 28:41
  SPEAKER_01: You've got to find a way to grow more efficiently but still grow, right?
• 28:44
  SPEAKER_01: And I think there's a lot of bad advice out there.
• 28:46
  SPEAKER_00: Yeah, overall VCs give a bit of advice.
• 28:48
  SPEAKER_01: A lot of a little whiplash.
• 28:52
  SPEAKER_01: Some of them, some of them, some of them, yeah.
• 28:53
  SPEAKER_01: A little bit of whiplash on this.
• 28:55
  SPEAKER_00: But I agree.
• 28:56
  SPEAKER_00: I think P&L, profitable, is not a way to optimize your company.
• 29:02
  SPEAKER_00: And free cash flow is much better because this is something that you can do things with it.
• 29:06
  SPEAKER_00: And I think a lot of investors,
• 29:08
  SPEAKER_00: and you talk a lot about this,
• 29:10
  SPEAKER_00: about being efficient,
• 29:11
  SPEAKER_00: meaning managing your cash and burn multiple that you mentioned a lot of time.
• 29:16
  SPEAKER_00: P&L-wise, I wouldn't focus too much about it, especially when you're a young company.
• 29:20
  SPEAKER_00: Yeah.
• 29:22
  SPEAKER_01: Okay, so this one, we might have the employees in the next one, I do want to hit it.
• 29:27
  SPEAKER_01: This one's super,
• 29:27
  SPEAKER_01: there's a lot of interesting going on here,
• 29:29
  SPEAKER_01: but I want to talk about this one,
• 29:32
  SPEAKER_01: high NRR from SMBs,
• 29:34
  SPEAKER_01: right?
• 29:34
  SPEAKER_01: And I almost know the secrets from Monday, but I actually don't know.
• 29:37
  SPEAKER_01: I think this is one of the most important things to talk about for anyone that's conquered SMBs.
• 29:42
  SPEAKER_01: And we can see on this first chart,
• 29:44
  SPEAKER_01: Actually, there has been some NR impact from macro, right?
• 29:47
  SPEAKER_01: No doubt about it.
• 29:47
  SPEAKER_01: If you look at 125 to 110, that's macro.
• 29:50
  SPEAKER_01: That's getting harder, folks hiring fewer people, scrutinizing more.
• 29:54
  SPEAKER_01: It's still epic, though, for SMB.
• 29:57
  SPEAKER_01: What's the secret?
• 29:59
  SPEAKER_01: How do you get over 100 for SMBs?
• 30:01
  SPEAKER_01: Because I think organic's like 90, like you talked about at 70, right?
• 30:04
  SPEAKER_01: If you don't do something, I don't think you crack 100.
• 30:07
  SPEAKER_00: Yeah,
• 30:09
  SPEAKER_00: so like Jason mentioned,
• 30:10
  SPEAKER_00: part of the macro we saw was that our pricing is based on seats,
• 30:14
  SPEAKER_00: meaning how many people you have in your organization.
• 30:16
  SPEAKER_00: So what happened was that some companies reduced hiring and that was the impact that we saw.
• 30:21
  SPEAKER_00: And I think a lot of SaaS companies saw that.
• 30:23
  SPEAKER_00: I think in some respect it shows the disadvantages of having a seats model.
• 30:29
  SPEAKER_00: Yeah, it has a downside too, right?
• 30:31
  SPEAKER_00: When everybody's hiring and growing,
• 30:33
  SPEAKER_00: that's a great thing,
• 30:34
  SPEAKER_00: but it has downside,
• 30:35
  SPEAKER_00: and we saw some companies which are more consumption-based that weren't as affected,
• 30:40
  SPEAKER_00: so one thing we think about is maybe we should have like a mixed model,
• 30:44
  SPEAKER_00: you know,
• 30:44
  SPEAKER_00: both seats and consumption to an extent,
• 30:47
  SPEAKER_00: so that's another thing that we're thinking about,
• 30:49
  SPEAKER_00: but
• 30:50
  SPEAKER_00: I think,
• 30:51
  SPEAKER_00: first of all,
• 30:51
  SPEAKER_00: for us,
• 30:52
  SPEAKER_00: we always try to optimize NRR and gross retention,
• 30:55
  SPEAKER_00: so both gross retention and net retention.
• 30:58
  SPEAKER_00: Again, we measure it from day one.
• 31:01
  SPEAKER_00: We have gross retention around mid-80s,
• 31:04
  SPEAKER_00: something like that,
• 31:05
  SPEAKER_00: on all customers,
• 31:06
  SPEAKER_00: but obviously it's much greater on enterprise.
• 31:09
  SPEAKER_00: Something that really drove NRR was definitely going upmarket.
• 31:13
  SPEAKER_00: That's something we've done late in the game, only around 2018.
• 31:16
  SPEAKER_00: So going back to me telling that I'm an engineer,
• 31:19
  SPEAKER_00: my partner is an engineer,
• 31:20
  SPEAKER_00: I think at some point we said we're never going to have a sales team.
• 31:25
  SPEAKER_00: Well, we were wrong.
• 31:27
  SPEAKER_00: We have a huge sales team right now.
• 31:30
  SPEAKER_00: But that was a good lesson because what I found, I always said I want to build the most amazing product.
• 31:35
  SPEAKER_00: What I found is that the most amazing product for enterprise companies is to have a
• 31:38
  SPEAKER_00: person talking with them.
• 31:40
  SPEAKER_00: It's like they want to talk with somebody.
• 31:42
  SPEAKER_00: They have security issues, they have governance, they need help, and this is just a better product.
• 31:46
  SPEAKER_00: So that's how I think about it.
• 31:50
  SPEAKER_00: So building a sales team was a great growth driver in terms of NRR and bringing more accounts.
• 31:57
  SPEAKER_00: So the more customers you have, the more NRR is important.
• 32:00
  SPEAKER_00: That's one of the things.
• 32:03
  SPEAKER_00: What happens, like when you're a young company, you focus a lot on acquisition.
• 32:07
  SPEAKER_00: That kind of drives the AR.
• 32:09
  SPEAKER_00: You always acquire more companies than you have.
• 32:12
  SPEAKER_00: But think about Monday right now.
• 32:15
  SPEAKER_00: 90%, 85, 90% of the revenue is from existing customers.
• 32:19
  SPEAKER_00: That customer that... I didn't know it was that high, 85 to 90%.
• 32:21
  SPEAKER_00: Yeah, that's customers that have been with the company for more than a year.
• 32:25
  SPEAKER_00: Now, think about it.
• 32:26
  SPEAKER_00: You have that many customers,
• 32:28
  SPEAKER_00: and as you scale,
• 32:30
  SPEAKER_00: even though you do performance marketing,
• 32:31
  SPEAKER_00: you do the Super Bowl,
• 32:32
  SPEAKER_00: you do whatever you want,
• 32:34
  SPEAKER_00: That increment is going to be insignificant compared to the subscription revenue you already have.
• 32:39
  SPEAKER_00: So let's say you want to grow 30%, 40%.
• 32:40
  SPEAKER_00: How do you do it?
• 32:42
  SPEAKER_00: Only with NRR.
• 32:44
  SPEAKER_00: Eventually,
• 32:46
  SPEAKER_00: the company growth will become its NRR because that's the majority of the customers
• 32:50
  SPEAKER_00: that you carry with you.
• 32:51
  SPEAKER_00: That's the majority of the revenue.
• 32:52
  SPEAKER_00: So that's why it's so important to focus on that.
• 32:55
  SPEAKER_00: My tips for increasing NRR was, first, measure it.
• 32:58
  SPEAKER_00: Maybe it sounds intuitive, but a lot of companies don't do it.
• 33:01
  SPEAKER_00: We build a customer success team.
• 33:02
  SPEAKER_00: We measure everything.
• 33:03
  SPEAKER_00: We have people in charge of making this number grow.
• 33:07
  SPEAKER_00: So that's tip number one.
• 33:09
  SPEAKER_00: And tip number two is...
• 33:12
  SPEAKER_00: You know, instead of, my intuition was always, oh, we need a higher NRR, we need to improve the product.
• 33:18
  SPEAKER_00: Now, nobody knew what to do with this information.
• 33:20
  SPEAKER_00: Okay, we're improving the product all the time.
• 33:22
  SPEAKER_00: Like, what specifically do we need to do?
• 33:24
  SPEAKER_00: So over time, we added more things we can sell.
• 33:27
  SPEAKER_00: You know,
• 33:28
  SPEAKER_00: because eventually,
• 33:29
  SPEAKER_00: if you create more value,
• 33:30
  SPEAKER_00: and you create more sales opportunities,
• 33:33
  SPEAKER_00: that helps drive the NRR go up.
• 33:34
  SPEAKER_00: So multi-product, add-ons, enterprise features.
• 33:38
  SPEAKER_00: There's anything that can give customers more value while giving you more revenue.
• 33:42
  SPEAKER_00: As a company, it's a great way to increase the NDR.
• 33:45
  SPEAKER_01: And I should know this,
• 33:46
  SPEAKER_01: but today,
• 33:48
  SPEAKER_01: do you know what percent of your revenue is sales-driven or sales-assisted,
• 33:51
  SPEAKER_01: sort of sales-led,
• 33:52
  SPEAKER_01: versus pure-prote freemium?
• 33:54
  SPEAKER_00: We have the 50K segment.
• 33:56
  SPEAKER_00: Yeah.
• 33:57
  SPEAKER_00: So that was almost nothing like three, four years ago.
• 34:01
  SPEAKER_00: Now it's almost 30%.
• 34:02
  30%.
• 34:02
  SPEAKER_00: Yeah.
• 34:04
  SPEAKER_01: All right.
• 34:04
  SPEAKER_01: So the majority is still mostly self-service, but from nothing to 30 in the last couple years.
• 34:10
  SPEAKER_01: That's the main growth engine for us as a company.
• 34:11
  SPEAKER_01: And so I think...
• 34:14
  SPEAKER_01: it doesn't seem like you went upmarket too late because the growth was pretty linear,
• 34:19
  SPEAKER_01: but should you have done it a little bit earlier?
• 34:22
  SPEAKER_01: Did you sequence it right?
• 34:22
  SPEAKER_01: What's the learning looking back on it?
• 34:25
  SPEAKER_00: Yeah, definitely, you know, always great to start earlier, you know, like 2017, 2016.
• 34:30
  SPEAKER_00: Like I said, our investors were right.
• 34:33
  SPEAKER_00: Like they always said, like, at some point you didn't have a sales team, but they were patient with us.
• 34:38
  SPEAKER_00: Well, you did just fine.
• 34:39
  SPEAKER_00: Yeah.
• 34:42
  SPEAKER_00: But definitely it was a game changer.
• 34:44
  SPEAKER_00: We actually, the first sale that we ever done was a guy from our customer success team.
• 34:50
  SPEAKER_00: He said, trust me, let me sell to a customer.
• 34:52
  SPEAKER_00: I can do it.
• 34:53
  SPEAKER_00: So he just did it.
• 34:55
  SPEAKER_00: We got like the first 50K deal.
• 34:57
  SPEAKER_00: And I was like, whoa, like you've done it in a few days.
• 34:59
  SPEAKER_00: That's amazing.
• 35:00
  SPEAKER_00: We need to build a team.
• 35:01
  SPEAKER_00: So a lot of credit to him.
• 35:03
  SPEAKER_01: There's more of those on the self-serve folks.
• 35:05
  SPEAKER_01: There's more of those stories where someone said, let me just go sell it.
• 35:08
  SPEAKER_01: It's a pretty common story.
• 35:11
  SPEAKER_01: Actually.
• 35:13
  SPEAKER_01: Okay, I think we hit this one.
• 35:14
  SPEAKER_01: You're right, we did hit this one.
• 35:15
  SPEAKER_01: Whoa, finished Q2 with 63% year-over-year increase.
• 35:18
  SPEAKER_01: So it's good you went up market.
• 35:20
  SPEAKER_00: Yeah, yeah.
• 35:22
  SPEAKER_00: Look, it's amazing to see the growth of that segment and the enterprise customers.
• 35:26
  SPEAKER_01: Oh, sorry, we did hit this one.
• 35:30
  29%.
• 35:30
  SPEAKER_01: Let me talk about... Oh, maybe we didn't have the headcount one.
• 35:32
  SPEAKER_01: I thought we had it.
• 35:33
  SPEAKER_01: There is a slide that maybe isn't in here,
• 35:35
  SPEAKER_01: but let me imagine it for the audience so I don't skip too many.
• 35:39
  SPEAKER_01: I think for about four quarters, roughly, you kept headcount about flat, right?
• 35:44
  SPEAKER_01: So that's how you went from negative cash flow to epic in four quarters.
• 35:49
  SPEAKER_01: And then I think it grew a little bit last quarter, right?
• 35:52
  SPEAKER_01: I think you're hiring again.
• 35:53
  SPEAKER_01: So...
• 35:56
  SPEAKER_01: Did we get too efficient?
• 35:59
  SPEAKER_01: So this is the meta question for 2024, 2025.
• 36:02
  SPEAKER_01: Can we stay as efficient as we are today?
• 36:04
  SPEAKER_01: Are we too efficient?
• 36:06
  SPEAKER_01: Are we mortgaging a little bit of our futures because our sales teams are too lean or everything?
• 36:10
  SPEAKER_01: Or can we sustain this level of efficiency?
• 36:13
  SPEAKER_00: Yeah.
• 36:15
  SPEAKER_00: So it depends.
• 36:16
  SPEAKER_00: First of all, we're back to hiring.
• 36:17
  SPEAKER_00: We're going to add another 500 people next year, so that's the plan.
• 36:21
  SPEAKER_00: So how many employees today?
• 36:23
  SPEAKER_00: Now we have about 1,800, so we're going to be 2,300 next year.
• 36:26
  SPEAKER_01: Okay, so hold on.
• 36:28
  SPEAKER_01: I wish I had that slide, but you're 1,800.
• 36:29
  SPEAKER_01: Yeah.
• 36:30
  SPEAKER_01: So basically you kept it roughly 1,800 for five quarters, okay?
• 36:34
  SPEAKER_00: It was, I think, 1,600 in the beginning of the year, so we increased like 200.
• 36:37
  SPEAKER_01: But now, sometimes my math gets worse in the afternoon.
• 36:40
  SPEAKER_01: Help me, because you're the real engineer.
• 36:42
  SPEAKER_01: I know the numbers.
• 36:43
  SPEAKER_01: You're going to add 25% to the headcount next year.
• 36:46
  SPEAKER_01: So that's re-accelerating, right?
• 36:48
  SPEAKER_01: But less than revenue, right?
• 36:49
  SPEAKER_00: Yeah, but the free cash flow is going to remain the same percentage.
• 36:53
  SPEAKER_01: Okay,
• 36:54
  SPEAKER_01: so if they're roughly equal,
• 36:56
  SPEAKER_01: you'll maintain the free cash flow and you'll stay stable by putting that money
• 37:00
  SPEAKER_00: back into hiring.
• 37:01
  SPEAKER_00: Yeah,
• 37:02
  SPEAKER_00: so basically what happened was that we reduced hiring because the demand was not
• 37:07
  SPEAKER_00: growing as we expected.
• 37:10
  SPEAKER_00: Even though I mentioned that we kept performance marketing,
• 37:12
  SPEAKER_00: but the demand went a little bit lower than what it was,
• 37:14
  SPEAKER_00: so we just adjusted the sales team.
• 37:16
  SPEAKER_00: We measure everything in the sales team as well.
• 37:18
  SPEAKER_00: So now we see a trend where we see more demand,
• 37:20
  SPEAKER_00: more customers,
• 37:21
  SPEAKER_00: so we have the confidence that we can continue and hire more salespeople,
• 37:25
  SPEAKER_00: more R&D people.
• 37:27
  SPEAKER_00: So we accelerate hiring.
• 37:28
  SPEAKER_00: We've already been doing that.
• 37:30
  SPEAKER_00: But I think what happened was very healthy for the companies.
• 37:33
  SPEAKER_00: We got rid of a lot of fat that we had.
• 37:35
  SPEAKER_00: Not a lot, because we were very efficient, but every company has fat.
• 37:39
  SPEAKER_00: So we took the fat out and also improved a lot of things.
• 37:43
  SPEAKER_00: So we're committed to stay free cash flow positive,
• 37:47
  SPEAKER_00: roughly the same percentage,
• 37:49
  SPEAKER_00: while continuing to grow the headcount next year.
• 37:52
  SPEAKER_01: Yeah, I think we all had some fat, right, if you did well.
• 37:56
  SPEAKER_01: What are the...
• 37:58
  SPEAKER_01: What are the things, are there some things you're not going back to?
• 38:01
  SPEAKER_01: Are there some practices that change so you can stay fitter or less fat or more efficient?
• 38:05
  SPEAKER_01: Have things changed?
• 38:06
  SPEAKER_00: Look,
• 38:07
  SPEAKER_00: I think what happened in 2021 and 2022 was very deceiving because if the economy is
• 38:12
  SPEAKER_00: growing like crazy,
• 38:13
  SPEAKER_00: you don't know what is it that you're doing that makes you successful.
• 38:18
  SPEAKER_00: It's like, everything works, everything we've done works, but it wasn't really the case.
• 38:26
  SPEAKER_00: When everything is growing,
• 38:27
  SPEAKER_00: up and to the right,
• 38:28
  SPEAKER_00: everything looks good,
• 38:29
  SPEAKER_00: you feel like everything you're doing is like,
• 38:31
  SPEAKER_00: wow,
• 38:31
  SPEAKER_00: amazing,
• 38:33
  SPEAKER_00: such an amazing idea.
• 38:34
  SPEAKER_00: But when the economy changed, suddenly not everything looks as shiny.
• 38:39
  SPEAKER_00: You know, we had so many initiatives, so many things we wanted to build like five, six years from now.
• 38:43
  SPEAKER_00: And at some point when the economy changed, we said, okay, we need to focus.
• 38:46
  SPEAKER_00: We need to do what's working.
• 38:48
  SPEAKER_00: We need to reduce what's not working.
• 38:49
  SPEAKER_00: And I feel that's very healthy for our company.
• 38:51
  SPEAKER_00: I think we got confused that we attributed the success to ourselves as opposed to
• 38:55
  SPEAKER_00: understand that there are macro trends for better and worse,
• 38:59
  SPEAKER_00: right,
• 39:00
  SPEAKER_00: that we ride it on in order to be successful.
• 39:02
  SPEAKER_01: Yeah, the more you go through hyper growth, actually, sometimes the less you're sure why, right?
• 39:06
  SPEAKER_01: Yeah, that's the problem.
• 39:08
  SPEAKER_01: And did you...
• 39:09
  SPEAKER_01: One thing that I know a lot of people are thinking about and struggling with about
• 39:14
  SPEAKER_01: when you got Fitter,
• 39:16
  SPEAKER_01: how did you help the sales team adjust,
• 39:20
  SPEAKER_01: right?
• 39:20
  SPEAKER_01: Because a lot of fat gets into the sales team too, right?
• 39:24
  SPEAKER_01: And how did you...
• 39:25
  SPEAKER_01: Did you think about metrics differently, attainment differently?
• 39:29
  SPEAKER_01: Did it change the type of rep you were looking for?
• 39:32
  SPEAKER_01: Because that's something a lot of folks are struggling with.
• 39:34
  SPEAKER_00: Yeah, we kind of re-optimized the quota for salespeople.
• 39:38
  SPEAKER_00: Lower, higher, or just different?
• 39:40
  SPEAKER_00: Higher, yeah.
• 39:41
  SPEAKER_00: Again, you set a quota, you have expectations from salespeople.
• 39:45
  SPEAKER_00: You can control how many leads they're getting, what's your expectations for them.
• 39:50
  SPEAKER_00: So we increase the quota,
• 39:51
  SPEAKER_00: make them more efficient,
• 39:52
  SPEAKER_00: reduce some of the helping teams that help them sell,
• 39:55
  SPEAKER_00: but wasn't as efficient.
• 39:57
  SPEAKER_00: SDRs, optimize some of those teams, CSMs, account managers.
• 40:02
  SPEAKER_00: It's just when you grow and everything up to the right,
• 40:04
  SPEAKER_00: like you keep hiring and you say,
• 40:06
  SPEAKER_00: oh,
• 40:06
  SPEAKER_00: I'm not sure it's working,
• 40:07
  SPEAKER_00: but let's hire more people and scale that.
• 40:09
  SPEAKER_00: And we went back to the drawing board and optimized some teams and started to
• 40:13
  SPEAKER_00: measure things we haven't done before.
• 40:15
  SPEAKER_00: And,
• 40:16
  SPEAKER_00: you know,
• 40:16
  SPEAKER_00: once you've been proactive about it,
• 40:18
  SPEAKER_00: it's really,
• 40:19
  SPEAKER_00: you can optimize a lot of things in the company.
• 40:21
  SPEAKER_00: I think,
• 40:22
  SPEAKER_00: you know,
• 40:22
  SPEAKER_00: with the sole economy change,
• 40:23
  SPEAKER_00: instead of thinking,
• 40:25
  SPEAKER_00: okay,
• 40:25
  SPEAKER_00: we're stuck in this situation,
• 40:27
  SPEAKER_00: we're going to have a shitty quarter,
• 40:28
  SPEAKER_00: we're going to have a shitty year,
• 40:30
  SPEAKER_00: Just like COVID, in a way.
• 40:32
  SPEAKER_00: We said, let's do something about it.
• 40:34
  SPEAKER_00: Let's change.
• 40:35
  SPEAKER_00: Let's try to be proactive.
• 40:36
  SPEAKER_00: Let's take control.
• 40:38
  SPEAKER_00: Something I heard from one of the founders, which I admire, was that in downturn,
• 40:46
  SPEAKER_00: The greatest companies are forged.
• 40:48
  SPEAKER_00: And I understand it now because if you're resilient through a downturn and are able
• 40:53
  SPEAKER_00: to change your company and pivot quickly instead of,
• 40:55
  SPEAKER_00: you know,
• 40:56
  SPEAKER_00: just stepping yourself on the back and saying,
• 40:57
  SPEAKER_00: oh,
• 40:58
  SPEAKER_00: we're going to pass through that.
• 40:59
  SPEAKER_00: I think it shows resilience and it kind of gives birth to the best companies going forward.
• 41:04
  SPEAKER_01: All right, one last one on this efficiency one.
• 41:05
  SPEAKER_01: I know I've got a lot, but it's just, it's so good to have you on.
• 41:08
  SPEAKER_01: Because I do think this is the theme of the next couple years, right?
• 41:12
  SPEAKER_01: Samsara just, in their last quarter, they had a great quarter.
• 41:14
  SPEAKER_01: And they said, we didn't have enough sales capacity.
• 41:18
  SPEAKER_01: Samsara actually had some big macro impacts, but it was earlier than others.
• 41:21
  SPEAKER_01: I think it was three or four quarters ago they had a hit one, and then boom.
• 41:24
  SPEAKER_01: And they were just like, well, we literally don't have enough.
• 41:27
  SPEAKER_01: We're hiring like mad, right?
• 41:29
  SPEAKER_01: Did you learn anything about sales capacity is complicated.
• 41:32
  SPEAKER_01: Did you learn about anything from going from fat to skinny to higher quotas?
• 41:36
  SPEAKER_01: Do you have enough capacity now or any evolution of that learning?
• 41:42
  SPEAKER_00: First of all, things happen just organically.
• 41:45
  SPEAKER_00: It's not always the salesperson that closes the deal.
• 41:48
  SPEAKER_00: Some things happen just because they happen.
• 41:51
  SPEAKER_00: Customers want to upgrade.
• 41:52
  SPEAKER_00: They want more seats.
• 41:53
  SPEAKER_00: They want more use cases.
• 41:55
  SPEAKER_00: So you discover throughout the process that you can do more with less people.
• 41:59
  SPEAKER_00: So I think that's one discovery we had.
• 42:01
  SPEAKER_00: And we started to measure that more and to make sure that we never go back.
• 42:05
  SPEAKER_00: Never go back.
• 42:06
  SPEAKER_00: Never go back.
• 42:07
  SPEAKER_00: Always try to optimize more.
• 42:09
  SPEAKER_00: Because the less people you have...
• 42:10
  SPEAKER_00: the more quickly you can move and react and change as a company.
• 42:14
  SPEAKER_00: I think having a lot of people has a huge downside to it, especially when you're a young company.
• 42:20
  SPEAKER_00: So I think that was a good learning for us, and we're committed to continue with that going forward.
• 42:23
  SPEAKER_00: Okay, that's good.
• 42:24
  SPEAKER_01: All right, last one.
• 42:25
  SPEAKER_01: We'll be out of time, but can we put this slide back up?
• 42:27
  SPEAKER_01: I think we lost him.
• 42:28
  SPEAKER_01: Just for fun, I know we hit this already, but if we can.
• 42:32
  SPEAKER_01: Okay, I know we already hit this, and you already answered this question, but just for fun.
• 42:35
  SPEAKER_01: So the Super Bowl...
• 42:38
  SPEAKER_01: I don't even know if that's performance marketing.
• 42:42
  SPEAKER_01: Maybe that's brand marketing.
• 42:43
  SPEAKER_01: And literally, it seemed like Monday everywhere on YouTube.
• 42:48
  SPEAKER_01: But I think you're going to tell me the learnings on the left is it all worked, right?
• 42:50
  SPEAKER_01: These endless YouTube ads worked.
• 42:53
  SPEAKER_01: Any quick summary there, and then tell us about the Super Bowl, and then we'll break.
• 42:56
  SPEAKER_00: Yeah, so we had our first, maybe last, I'm not sure.
• 43:00
  SPEAKER_00: Subaru will add.
• 43:01
  SPEAKER_00: Maybe last, is that what he said?
• 43:03
  SPEAKER_00: I don't know.
• 43:04
  SPEAKER_00: We'll see.
• 43:06
  SPEAKER_00: Look, it was great.
• 43:07
  SPEAKER_00: It was a great experiment, and we've done it at the peak of the bubble, I would say.
• 43:12
  SPEAKER_00: Yeah, beginning of 2021.
• 43:14
  SPEAKER_00: And
• 43:17
  SPEAKER_00: I think for me, it was an experience.
• 43:19
  SPEAKER_00: Look,
• 43:19
  SPEAKER_00: we had billboards before,
• 43:21
  SPEAKER_00: even here on the 101,
• 43:22
  SPEAKER_00: and we had subway ads,
• 43:25
  SPEAKER_00: but we could always measure them to some extent because we saw the uplift in traffic.
• 43:29
  SPEAKER_00: Again, we try to measure everything.
• 43:31
  SPEAKER_00: With Super Bowl, it was more tricky because it's like one day, one event, one commercial.
• 43:37
  SPEAKER_00: The uplift wasn't worth it.
• 43:40
  SPEAKER_00: I'll tell you what did happen.
• 43:41
  SPEAKER_00: Something that in almost every sales call,
• 43:45
  SPEAKER_00: one of the customers mentioned that they saw us doing a Super Bowl ad.
• 43:49
  SPEAKER_00: Now, how do you measure that?
• 43:50
  SPEAKER_00: What's the value of that?
• 43:52
  SPEAKER_00: I'm not sure.
• 43:53
  SPEAKER_00: You sure it didn't work then?
• 43:54
  SPEAKER_00: Well, I don't know.
• 43:56
  SPEAKER_01: I mean,
• 43:56
  SPEAKER_01: I don't know how multi-touch you go,
• 43:58
  SPEAKER_01: given your efficiency,
• 43:59
  SPEAKER_01: but it doesn't sound like it hurt the deal.
• 44:01
  SPEAKER_00: Yeah, it didn't hurt the deal.
• 44:02
  SPEAKER_00: Was it worth $8 million?
• 44:03
  SPEAKER_00: I'm not sure.
• 44:06
  SPEAKER_01: It's an interesting one, right?
• 44:08
  SPEAKER_01: Okay, so you think it was ROI negative, but it came up in a lot of deals, so hard to say, right?
• 44:14
  SPEAKER_01: But YouTube's ROI positive from day one, right?
• 44:19
  SPEAKER_01: Anyone that thinks it didn't work doesn't know performance marketing, right?
• 44:23
  SPEAKER_00: Yeah,
• 44:24
  SPEAKER_00: we measure not just clicks,
• 44:26
  SPEAKER_00: but actual views,
• 44:27
  SPEAKER_00: that people view the ad,
• 44:28
  SPEAKER_00: and we can see a funnel where people saw an ad and then go on Google and search for money.com,
• 44:33
  SPEAKER_00: and we see the whole journey of a customer through BigBrain,
• 44:36
  SPEAKER_00: and we know how much you attribute to each channel.
• 44:38
  SPEAKER_00: So, again, make it very efficient.
• 44:40
  SPEAKER_01: And it's very targetable.
• 44:42
  SPEAKER_01: So if you saw it, it's not like every single person in the United States saw that ad.
• 44:45
  SPEAKER_01: You are being targeted.
• 44:46
  SPEAKER_00: Definitely everybody here.
• 44:47
  SPEAKER_01: Everybody here for a while.
• 44:48
  SPEAKER_01: All right.
• 44:49
  SPEAKER_01: Ron, this was great.
• 44:50
  SPEAKER_01: Thank you so much for the time.
• 44:51
  SPEAKER_01: Thank you.
• 44:51
  SPEAKER_01: Thank you.