Sramana Mitra: When you were selling to a customer, what kind of average deal size were you seeing?
Rafael Sweary: In the hundreds of dollars per year at that time. Once we got into the pricing, we started selling over the Internet. We got our first customers through dialing. After we got some four or five customers, we put it on our website. We started doing marketing. We started generating media attention. We started driving traffic onto our website. Some bought online. For some, we would call them after they sign up and ask them if we can give them a demo. That encourages them to buy.
Sramana Mitra: What were you learning about the companies who were buying?
Rafael Sweary: We learned about their problems.
Sramana Mitra: My question is what kinds of companies were buying?
Rafael Sweary: It was websites and SaaS vendors.
Sramana Mitra: That was one learning. At this point, people could just do a web self-service. They could just look at your software and decide whether or not to buy.
Rafael Sweary: Yes, they bought. We gave them a free trial. It was free for a short period with limited capabilities and then they could upgrade for a better package.
Sramana Mitra: This started in 2008?
Rafael Sweary: No, we just started the company in 2011.
Sramana Mitra: You started in 2011 and you started selling online in 2012?
Rafael Sweary: Correct.
Sramana Mitra: What kinds of numbers were you seeing in terms of how many SaaS companies were coming through the site, how many were starting to download, and how many were converting? What did you learn about the metrics?
Rafael Sweary: Frankly, I don’t remember. When we were looking at the metrics, all I cared about was finding a profitable model on the unit economics. I don’t measure leads. I don’t measure exposure. I don’t measure anything. I measure only two things. What is the average cost of acquisition versus the average selling price. If the average selling price (ASP) is higher than the customer acquisition cost, then let’s bring more customers. If it’s lower, then let’s stop bringing in customers. This is how we found the type of customers that are going to acquire from us.
Sramana Mitra: What was the ASP at that point? Were you still doing that $100 per year average selling point or did you move to a larger ASP?
Rafael Sweary: Only in July 2013, did we move to a higher ASP.
Sramana Mitra: For about a year, you were selling at that $100 ASP price point.
Rafael Sweary: We also had customers who were paying $500 per month. We had those customers as well, but they weren’t the majority. The majority were buying very small packages and were using WalkMe very lightly.
Sramana Mitra: With that information, what was your strategic move?
Rafael Sweary: The strategic move was to move into the more advanced customers where there is financing and where the value that WalkMe brings is greater. Think about it. Basically, WalkMe eliminates the need for training employees. If you have three employees, we’re going to eliminate the need for training three employees. Imagine the value of training 30,000 employees. At 30,000 employees, the value is amplified not just by the number of employees but also by the complexity.
Different employees have different roles, different languages, and different technical capabilities. We started focusing there. WalkMe reduces the volume of incoming support request by encouraging self-service. A typical customer of WalkMe would see a drop of two digits immediately after implementing WalkMe.
If you have 10 support calls per day, instead of 10, you’re going to have six. You’re still going to need a support person. When you have two million support requests per month and you’re able to shave that from 30%, that’s 600,000 calls. That is very significant and worth a lot of money.