Repositioning Proposify for larger customers
Kyle explains why moving into the midmarket required security features, integrations, and messaging centered on control over sales proposals.
Summary ·Watch at 04:52
Founder conversationGuru $10m+
How We Fixed Our Growth After Getting Stuck At $7m ARR
Moving upmarket with security features and new positioning, then cutting burn from $400K a month to profit
Kyle Racki · Proposify
Published September 6, 2024About this resource
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What you’ll learn
Kyle explains why moving into the midmarket required security features, integrations, and messaging centered on control over sales proposals. Kyle describes the cash warning from his COO and CFO, the subsequent headcount reduction, and the shift toward cash-flow break-even.
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Reducing burn to keep the company alive
Kyle describes the cash warning from his COO and CFO, the subsequent headcount reduction, and the shift toward cash-flow break-even.
Summary ·Watch at 09:37
Addressing cultural debt and hard conversations
Kyle discusses replacing an overly comfortable culture with candid conversations, more experiments, and a focus on delivering customer value.
Summary ·Watch at 13:26
Finding the engineering leader who could change delivery
Kyle describes how a new engineering leader combined a practical technical vision with a focus on the shortest path to solving customer problems.
Summary ·Watch at 15:21
Moving upmarket
“ProductClosed some gaps (Salesforce, SSO, SOC-2) Positioning around control + visibility (hired April Dunford) Pricing Moved to per-seat, CSM, professional services How We Moved Upmarket 3 things allow us to have mid-five and six figure customers TAKEAWAY 1 TAKEAWAY 2 TAKEAWAY 3”
Growth by segment
“Growth by Segment Small segment began declining rapidly in 2022 Large segment grew steadily and now same in ARR as small Our initial growth was driven by small self-serve customers”
The profitability reset
“Yearly Net Income Loss From Burning $400,000/month to profitable in 2 years Headcount over time by department”
Building a performance culture
“Fixing Our Culture Debt Building a performance-driven culture Getting scrappy again Making tough conversations the norm”
Solve the biggest constraint
“Solve for your biggest constraint Leaders are your leverage SaaS is a marathon, not a sprint Takeaways Momentum is hard to rebuild once you lose it. TAKEAWAY 1 TAKEAWAY 2 TAKEAWAY 3”
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How We Fixed Our Growth After Getting Stuck At $7m ARR - Slide Deck
Co-founder & CEO of Proposify, a software that helps companies streamline their proposal creation and management process.
- Company revenue
- $10M
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Each slide with a short explanation of what it shows. Open the slide text for its exact wording.
14 passages
Proposify’s stalled-growth context
Slide text
SaaSOpen, September 2024 How We’re Fixing Growth Our After Getting Stuck At $8m ARR Kyle Racki CEO & Co-Founder, Proposify
The good old days of high growth
The talk starts from a high point: Proposify once had high growth and high NPS. A team photo on a boat and an entrepreneur award photo set up the contrast with the stall that follows.
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The good old days High growth, high NPS
Moving upmarket
Three changes that moved Proposify upmarket
Selling to mid-five and six figure customers took product, positioning and pricing changes together. Product closed gaps such as Salesforce, SSO and SOC-2. Positioning centered on control and visibility, with help from April Dunford. Pricing moved to per-seat, CSM and professional services.
Slide text
ProductClosed some gaps (Salesforce, SSO, SOC-2) Positioning around control + visibility (hired April Dunford) Pricing Moved to per-seat, CSM, professional services How We Moved Upmarket 3 things allow us to have mid-five and six figure customers TAKEAWAY 1 TAKEAWAY 2 TAKEAWAY 3
Segment growth and stagnation
Small self-serve customers faded as large grew
Early growth came from small self-serve customers, but that segment began declining rapidly in 2022. The large segment with dedicated CSMs grew steadily and now matches the small segment in ARR. The chart splits annual run rate into small, medium and large customer lines.
Slide text
Growth by Segment Small segment began declining rapidly in 2022 Large segment grew steadily and now same in ARR as small Our initial growth was driven by small self-serve customers
ARR climbed to about $8m, then flattened
Total ARR rose from near zero in 2013 to roughly $8m, then plateaued and turned slightly down. Hand-written notes mark product stagnation starting well before the peak, and growth slowing during 2021.
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How We Got Here Product stagnation started around here Growth slowed during 2021
Restoring profitability
From burning $400,000 a month to profitable
Proposify moved from heavy yearly net losses to profit in two years. The bar chart shows losses peaking in 2021, shrinking in 2022, turning positive in 2023 and slipping to a small loss in 2024. The headcount chart shows staff growing to a peak, then falling sharply.
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Yearly Net Income Loss From Burning $400,000/month to profitable in 2 years Headcount over time by department
A layoff that reset the company
Cutting the team was among the hardest and best decisions: it helped reach profitability, reset the culture and returned the company to startup mode. The LinkedIn post shown explains the layoff of 25 employees and says hiring had been ramped ahead of revenue in 2021.
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One of the Toughest Days of My Life Helped us get to profitability Reset the culture Got us back to startup mode But also one of the best things we did
Profitability in 2023 bought time to innovate
Becoming profitable gave the company room to rebuild its product. An internal finance update shown says December was profitable and the fiscal year ended with an overall profit of $58k, with expenses under budget. Behind it sit budget tables and a net burn chart.
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2023 Financials We became profitable in 2023 Buying us time to innovate our product 2023
Culture and technical-debt repair
Fixing culture debt with six values
After the layoff, the culture work aimed at performance, scrappiness and normalizing tough conversations. Six values spell SORBET: honour the sales profession, choose optimism, be radically candid, build the plane while flying it, experiment constantly, and start with a full trust battery.
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Fixing Our Culture Debt Building a performance-driven culture Getting scrappy again Making tough conversations the norm
One engineering hire changed the product trajectory
Hiring a new VP of Engineering in 2023 is credited with changing everything, with a shout-out to Mathieu. The screenshots show the first outreach email and an early Okta sign-in demo for Proposify.
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Meeting My New VP Engineering One developer changed everything Shout out to Mathieu 2023
Rebuilding the architecture to pay down technical debt
Fixing technical debt meant redesigning the system. The diagram shows separate front-end services, an event bus connecting independent back-end services each with its own database, and a data pipeline feeding metrics and analytics reporting. A chat message from the VP of Engineering is overlaid.
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Fixing Our Technical Debt
Recovery lessons
Recovery is under way but not finished
The decline is flattening, but it takes time to fix things when you are stuck. Most new product features have not launched yet and market conditions remain tough. The MRR table shows current MRR of $649.0k, slightly below the readings from 30 to 180 days earlier.
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We’re Not Out of the Woods Decline flattening out Most new product features haven’t launched yet External market conditions still tough It takes time to fix things when you’re stuck
Three lessons from getting stuck
Momentum is hard to rebuild once you lose it. The takeaways are to solve for your biggest constraint, to treat leaders as your leverage, and to remember that SaaS is a marathon, not a sprint.
Slide text
Solve for your biggest constraint Leaders are your leverage SaaS is a marathon, not a sprint Takeaways Momentum is hard to rebuild once you lose it. TAKEAWAY 1 TAKEAWAY 2 TAKEAWAY 3
Thank you from Kyle Racki
The talk closes with thanks from Kyle Racki of Proposify and an invitation for the audience to reach him by email, shown on the slide.
Slide text
SaaSOpen, September 2024 Thank you! [redacted email] Kyle Racki CEO & Co-Founder, Proposify