Interview with Chili Piper Co-CEO, Nicolas Vandenberghe

please help me welcome to the stage Alina's co-founder at sherle Piper Nicholas Nicholas I'm call Nicholas with the give it up for Nicholas with the

pants good to see you man how are you I'm great I uh you've moved on from the the colorful French pants where did you get these ones from online you know I do I do a lot of research a lot of research you did it online seriously how much do they cost uh I don't want to say cuz my wife is here uh I'm get in TR she knows get in trouble you just don't know she knows okay well I wanted to make sure we could dive into something that Alina didn't already cover and so you provided me some really good data to do that well I did because

every time uh you interview me you dig into all these numbers I'm thinking I'm just going to send everything so that I know at least I don't have to I wish every CEO was like you then I wouldn't have to ask you know I just just send it it'll be good um I hope you don't think you know I don't do that at AG greed I just do it because I want to learn no you're doing the right thing I think you're the best interviewer well I appreciate you dig you probe you I appreciate that's a way to go all right well then I have full permission to ask anything now so let's move forward this is what your 2016 website looked like

wow right do you remember that no but but you truly weree a point solution you called yourself sort of a calendar round robin what were you and Alina thinking from a product perspective at this point in time so so something interesting uh uh when we started the company um this idea of product Market fit we had this founder market fit at least that's what we thought that's that's why we started the company we thought alen is very talented in building products I know the world of sales and marketing why don't we go get together and and

build and it's a dangerous way to start a company because we don't have a product we don't have an ID and usually you do something nobody needs so the way we started Is We I call the world bunch of companies and said you have a problem that I can solve and um that you're willing to prepay for and we found this company called five star and say it was an obscure problem five stars in San Francisco they still run they say my sgr takes seven minutes to book a meeting with the a account Executives because

they have to find who's next in the Ron Robin uh find the calendar and the invite and and that's way too much time they cheat they get lost and literally alen was SVP at Pearson at the time she was working on billion dollar uh bids and projects engineering at Pearson she was product engineering produ enging so I come back and say I've got it I've got an opportunity to tell me more we're going to build that and literally she said uh I didn't quit my job to build

that uh and I said the non-french translation I didn't quit my job to build this right and I said you did because we need to get started somewhere and so from there uh we said okay where do we go next and that's the reason why he say smart beautiful apps for sales leaders because in reality we never sold to sales leaders the next app we built uh came from this SDR telling us you know U my job is when people request a demo uh uh I called them and book the demo and say

how do they request the demo where they fill a form on the website I say okay and how's that going for you I said I'm going great I'm converting at 40% I say you mean to tell me that 60% of people asked for a demo and didn't get one so we build an Automation in in the form to automatically qualify route and book the meeting and we had a this company called um uh segment did an a test and they

went from 40% to 80% and they say we in we want to buy your product so now we had a product and we thought okay we're going to continue selling to sales leaders cuz that's what I know and told that sales leaders were not interested in replacing the SDR teams but marketers were because they were building all this traffic and sales was not converting so the marketers came to us so we started selling to marketers even though we had our s side selling we sell to sales leaders um so that that that's our journey that's why your journey is a bit unusual because we didn't start with the product at time and all that we we said okay how do we navigate and where do we

go uh but by then with this product I was very strong um come on Enzo get up here with Dad not me him yeah our product was strong yeah and so and so um let me let me let me pivot us really quick because there we have a lot to cover you guys chose 25 bucks a month any science there you just pick it and see what happens first price point it's a good question it was a tough one because we were bringing so much value and this question of value pricing right so if you imagine you have you have a

your pipeline inbound pipeline double so say you do uh $2 million in a month in Pipeline and now it's 4 million so we could have priced way high and what we thought was that uh candidly there was um canly in the space even though they didn't do what we did we thought they could come in and they have a very efficient business model so that's why we priced at that level we thought we don't want to go too high um and have the risk that they would just cut us up you know it's a very interesting question because uh some companies went

and priced really high um and everything goes great when the times are good because companies have money they're willing to pay but once the times are tough then they shrunk so you have company maybe I shouldn't mention them but high price companies that have had Revenue shrinking because they get so much competition and a chili paper because we priced very reasonably we never had a you can see our AR we never had a drop we kept growing so I want you guys to pay attention to a part of the screen that many of you may not have looked at already just pay attention to

the non-colored area the the gray area notice how there's no price point listed notice how says we're in private beta that's going to be sort of a theme as we move forward to the next slide so let's fast forward two years to 2018 your website now looks like this way back machine broken image on the left so I'm not quite sure what was there but still basically the same theme right any major product shift in those two years no it was the same product we built that new product in 2017 and and we went that product one thing that uh since you're

talking about pricing that's remarkable that uh was Alina's ID on day one to say we're going to do a no discount policy everybody same price and and that seemed a bit crazy but I went with it and uh we signed Facebook in 2017 and how big was that contract so it started with 300 licenses and then it moved to 1200 then 2,000 licenses so I had three rounds at procurement everybody would say what you talking about no discount I think we

have no discount I said but we Facebook and said well we chili Piper right and uh and hey Round Round of Applause for early on on the we did we did we just renewed actually the same thing we don't do discounts um so of course that means that we had to price very reasonably and and add a lot of value but but has worked really well for us you had enough of those early beta calls where you then said okay let's put a price point on the other side now there's 25 bucks a month there's also this $200 sort of add-on what is this add-on and what what did you why did you come up with this based

off all the beta calls you were doing the prior two years we wanted to raise our prices because we we could tell that um the value we're bringing we not align with how we were but it's difficult to raise people pay a lot of attention a price per user so thought maybe we add a platform fee um and that um seems less for some reason buyers P less attention to the platform fee and so we put the platform fee it went through and then we increase our platform fee and and that's

how we raise our prices without looking like we were raising our prices so guys they're growing Revenue in 2018 you can see how the product dropped down the black part of the screen you can see sort of how the talking about the business now each of these things listed in that drop down there wasn't I mean true or false it wasn't necessarily each individual separate software product you were just trying to figure out how do we name certain parts of our product to drive adoption would you say that's a fair statement yeah that's right yeah okay let's keep fast forwarding here so by 2020 you get in on this theme of everyone trying to create their own category so much so that you made it

your homepage website you know we're going to build I could even I could I felt like I was in the brainstorming room with you and alen in leadership team going we're going to we're going to invent the meaning automation space stick it website let's go am I am I wrong yeah exactly right okay exactly right because we do we do when we talk to VCS in the early days we say we have this product what is this product well when people submit the form we qualify in book in real time we double in non conversion rates okay so um okay so what category are you in I say I don't know we have a product that sells and we're

growing I say well no in the category so meeting automation that's right we say meeting Automation and then uh no we found a good one hopefully it will stick but but yes you're exactly right we we struggled around it well you keep you keep pivoting here and this is good this is where the story gets kind of fun so this was again going into 2020 2021 you guys can see the revenue here on the screen um I mean you guys tell me do you want to divert for a second and jump into the series B deck yes or no on the count of three one two three okay people want the deck so are all my numbers

right here first 35 million series B including a secondary out a 625 million post money that would be about a 34x multiple at the time on 18 of ARR yeah okay the 33 million is just a primary money 33 was was there another 33 million of secondary yeah yeah 30 of yeah another 30 of secondary at 625 that's right it was 63 and most of that went to you Elena on early employees and investors and Angels that's how it good depends those are I knew they were expensive I knew they were expensive okay so you guys have contacts on the

series B let's jump into the story that they were telling the market at the time you know a lot of Founders interview them and they say oh no we always knew it was going to be this it was per so let's let's see what deck actually looked like this is how you described yourself right this is how you described yourself this is how you saw your competitors at the time any any were you right or wrong looking back uh right okay this is how you saw Revenue I love seeing this because this is a screenshot I know that

UI that is the git Latka Revenue graph UI screenshot apprciate we did close to that I think I love that you guys use it that was awesome yeah but you were bootstrapping growth hits here this is how you described your strategy so this is where we get back into the product strategy walk us through what you were selling here in the series B round so actually the series B uh I didn't remember that deck but it's very close to what we actually did both in terms of revenues and what we're we're doing we call it inbound conversion we've

renaming demand conversion so meeting automation didn't work pivot to in me work no inbounds taken so inbound conversion yeah yeah uh well yes that's right because because in the end what we found that our main customers are marketers and offs and they don't identify with meeting automation but of course they do identify with inbound conversion and even better with demand conversion because I demand gen people and demand conversion so we we call it the demand conversion and what we see

here is exactly what we've built and what's working now if you see our AR now is taking off and it's taking off because we we I don't want to some arant but yeah we we we anticipate the Market properly and build properly what we did is that we expanded we added a lead distribution chat so hand off and and form scheduling and the reason why it works is because all these things rely on the same underlying assets your rules your teams your territories so you do it

once in our product and all works and that's a key thing that we discover because we tried you don't see here but we tried other products along the way we tried an inbox automation we tried I don't a whole bunch of other things and uh it didn't take off because it's very hard to go with a new product where you're not known and and you're known for something else people don't give you credit but when we went with something that is actually makes sense so the rules are all in one place now we say you're going to consolidate how do you consolidate everybody's talking about

consolidation these days right all all the SAS companies every company said we need to consolidate I say okay how do you consolidate what what vendor do you select to go with and it has to make sense so it has to be that there's a logic um I say just to put up numbers to back up your statement one way to measure is the product logic working is to look at this number right so the number you see on the screen uh you can tell that it's working right 141% net revenue retention uh is not easy so what would you credit

this incredible stickiness to was it the multiproduct approach it's because we had priced very reason Enzo disagrees we had pressed very reasonably and we bring a lot of value is what I said so when the times got tough we were not the first on the Block because there was you know people say no no we can't cut chili paper and and look it's not that much money so that that that's what happened no we stting getting more competition because we we were a bit delayed in building the

platform but overall it was a in enough value that we're providing that people stick with us so want to fast forward again this is series B you can see customer lifetime value clv was that the annual contract value or c for customer lifetime value of 4K no no uh bottom left yeah that's 4,000 deal value okay okay got it yeah but anyway this is a core part of the story as we continue moving forward so let's now go to the website in 2022 right the website headline now is results driven you're not trying to Brand meeting automation

or say you know we sell to the CMO you're just saying here's the thing we deliver uh was this working from a conversion perspective yeah I think we we said to stop that of string a category and go with the benefit you know yeah and this is what the product drop down look like so form concierge drro handoff Booker that's right so so drro is a lead distribution product we launched it uh it was the early days the product was not but it was the idea to ship fast and learn and we did that so it didn't make

much of a dent but but it got us in the market and and from there we iterated yeah and this is where we got about four minutes left this is where we are today in terms of the business and the product strategy and not only is this working they are getting customers cheaper here's how CAC has decreased uh over the past six months so you're spending a high back in ail about 12,500 where was most of that spend maybe this is a Lena question but where was most of that spend going on the CMO marketing side uh paid

ads events ads influencers influencers PID okay and then we have an outbound team uh and is team still and so what would you credit that now are you are you just spending less or are you getting more from the spend which is why CAC is decreased yeah so the first like everybody we decide to do a more efficient so we we stop hiring and Rec kep growing our revenues and so you you need to find more automation alen has a a weekly meeting with a whole

bunch of people in the company that we call automate everything and we we keep looking for ways and with AI and St so that really works we that lower our cost um then when we rebuild the platform because uh we rebuilt it from scratch we decided to make it self server so now we uh can um allow people to try the product and so we're moving towards more self- service and that's what's opposite of what most people would do is let's go up Market I imagine tiger your investor going please go up Market but you're

saying we got to go plg bottoms up uh there's nobody answering the door when you knock on tiger so that's not been an issue so tiger let our series B and and disappear so we don't have pressure from VC we we do what we think is right so going up Market uh we we have beautiful Enterprise customers but we think that is very important we be we're learning a lot from HubSpot you know HubSpot um everybody says go up Market but instead they went

self-service uh premium and you see it's working really well I think it's a company that's going to keep doing well so we went the same way we said let's do self-service that we lower our cost of acquisition we cover the low end and and we go from there key part about making plg work is you got to see these numbers go up uh you see that orange bar going up which is great organic traffic I Won't Grow you too hard on these because I think this is probably under the CMO role so talk to alinaa at lunch or in the hallway if you want to learn more about how they're growing some of the the SEO and plg motion it is interesting though I always like looking at this at

what keywords you guys are bringing in the most organic traffic from and it's actually funny you guys have like dominated this keyword uh persu like persuasion techniques which obviously all sales reps are like sort of looking for but that's bringing in multiple thousands of clicks uh per month but good SEO strategy there I want to talk though with on the last two minutes on current pricing page cuz you guys remember the first slide of the deck two things 25 bucks a month simple many people listen this looks complicated there's so many things going on how do I know what to choose there was a lot of

intentionality that went into this setup right so take us from the left to the right what's going on here how do you get people to pay more uh I'm going see for little I'm going to tell you how we came up with that so we launched all these products and people are used to saying I'm buying chat I'm buing lead distribution so they are used to buying them separately so we thought we can't just sell the platform it won't work we have to be able to sell them separately but how do how do we do it MH and um I have a friend uh from college who is now the chief Revenue officer at

Verizon he managed $80 billion and he's done all his career managing pricing because in the Telecom space so I flew to Miami I said this is my problem and he came up with that so I'll tell you what it is yes he said Telecom pricing manager inspiration from their for this is what you get exactly he said see how you do it you want to keep things simple otherwise it's impossible so same price for each product and I know some products are more valuable than others but keep things simple so 30 30 30 and then what you do is that if you buy two

instead of 30 is 25 for each product so if you buy for 30 and you buy another one your price goes down this bottom part you guys see here and if you buy three is $20 if you buy four it's $18 and that way there's a huge incentive in buying more than one product um from our customers is exactly what we want because they get more value from our platform and they'll be uh less likely to turn yeah so that is working incredibly well I uh you know we go go we go say say buy more than one product

say yes of course I'll buy more than one product and then they add more and the price goes down it's it's amazing see everyone everyone on fiver right now looking up Telecom pricing strategists Miami come now update our pric it doesn't consult but for sure uh it comes up with very good Solutions what a wild but but there I guess the the lesson I was hoping the audience would take from this is there is a way to keep pricing simple but still preserve your ability to drive more revenue and upsell exactly and I think you guys I mean it's incredible how this look instead of raising our prices we we expand it

online and make it very compelling for people to buy more from us and that's working beautifully and the numbers back it up this is how ACV has expanded just over the past six months so it's gone about 6K up to almost doubled over the past six months yeah we launched in uh in uh the first BS in made Rel launch June 4th and now we we get the uhv going up and that's just new logo right because we also have our uh retention going up because we're selling on base we have people uh you know ditch

ditching drift ditching Linda moving to chili paper fanil fanila uh um for good reasons yeah when you see CAC going customer AC cost going down you see ACV going up you see Revenue Perlo also increasing from a low back in February of 2020 two of call it 75k uh this is a recipe for Success again start off as a point solution quickly move to the multiproduct approach now a pricing page that value

Simplicity but also ACV expansion and extreme effic efficiency having fun while doing it Enzo is now how many years old three years old so yeah I guess I'd too after I want to comment on this chart because I don't think our numbers are good enough right now we still at 200,000 ahead uh we're going you can see the jump is uh unfortunately reduction in force we we think but now we can see we're on the right Trends we feel very confident that we're bringing value our pricing is

Affordable and so we uh we uh We've launched our plg so we can see how that's going to keep trending the in the right direction hub spot in our inspiration secondary so you took some off the table which is always great as Founders building a great family husband wife team not easy to do you guys are making it work having a ball doing it guys give it up for Nicholas and Alina add shile five you guys Enzo what' you think look at this he's going to do it