Scaling a SaaS Business to 11,000 Customers: Booker.com CEO Josh McCarter (Part 6)

Sramana Mitra: What are some of the inflection points in the business when things started clicking in gear? We’ve talked about one of the key issues which is really turning into this metrics-driven organization. What other inflection points have you experienced in building this business?

Josh McCarter: I think there are a few. The early stage was just pulling the company out of the original parent company because that gave us the opportunity to go out and create our own business, our own P&L, and the ability to raise capital by ourselves. Being able to go out and start generating our early sales was very important.

Sramana Mitra: I’m asking a very specific question. It’s about an inflection point about customer adoption. As you trace the graph of >>>

Scaling a SaaS Business to 11,000 Customers: Booker.com CEO Josh McCarter (Part 5)

Sramana Mitra: What is your conclusion about where you wanted to pin your customer acquisition cost? How does that correlate to your lifetime value for your SaaS business?

Josh McCarter: All of the benchmark studies say that you need to be north of three times LTV. That seems to be the number where people feel like you’ve got your acquisition cost in line. Obviously, when you’re in enterprise sales, your months-to-payback are sub-12 months. When you’re in SMB SaaS, they’re usually sub-20 months. One of the things that we’ve really focused on is how to change some of our go-to market strategies so that we are less reliant on direct sales and more reliant on channel partners. >>>

Thought Leaders in Financial Technology: Mike Ward, Chief Revenue Officer at World First (Part 4)

Mike Ward: The ability to land one client at a time is not necessarily as scalable. You have so many people trying to do it. It doesn’t create a unique acquisition channel out there. That one to many is a unique opportunity. There are people out there with API’s who are landing one to many and partnering with someone who already has a group of clients or potential clients. I don’t think as many people are thinking about that as a true game changer.

The other thing, especially in financial services, is all of us have gone with this mono-line focus and pick apart a single product or service from large financial institutions. We have the belief that no consumer corporations out there will say, “I want multiple relationships. I want eight apps to manage.” The power of us integrating this into one is where the industry is going to go. >>>

Scaling a SaaS Business to 11,000 Customers: Booker.com CEO Josh McCarter (Part 4)

Sramana Mitra: What happened after you raised the $15 million? How did the business move? What were the strategic moves that you made to get to the next level?

Josh McCarter: The major move that we made was, we started investing in sales and marketing. We started building out our team. We took on some larger contracts that, in hindsight, were not the best things for us to do over the long-term for the company. They were big contracts. They were big name companies that helped us gain credibility with our investors and with other people in different segments. They were all multi-million dollar, multi-year contracts.

Sramana Mitra: What was wrong with those contracts? Typically, multi-million multi-year contracts are good news. Why was it bad news? >>>

Thought Leaders in Financial Technology: Mike Ward, Chief Revenue Officer at World First (Part 3)

Sramana Mitra: You have a third segment that you wanted to talk about?

Mike Ward: Those are all the three: corporate, and I believe I touched on consumer and e-commerce.

Sramana Mitra: You touched on consumer and e-commerce. I don’t think you elaborated on the corporate.

Mike Ward: From a corporate perspective, it covers many different industries that we can work in. We have some success in certain industries and that might be because of acquisition channels. We can really come in and facilitate in any industry. What we tell the clients is, we’re almost a free hire in their treasury team under the CFO. We can come in and help, not just manage post-sale delivery of these funds, but we can also come in when it comes to budgeting. When you start to put in a forecast, collecting invoices, and paying those invoices in multiple currencies, >>>

Scaling a SaaS Business to 11,000 Customers: Booker.com CEO Josh McCarter (Part 3)

Sramana Mitra: What did you have in place when you went to raise capital?

Josh McCarter: We had a functioning framework of the software. We had about 700 customers and a team of about 30 people. It was, at least, beyond a prototype and proof of concept. The business was doing under $1 million in revenue. We had a good reputation and had some big marquee contracts with Hilton and some other hospitality brands.

We leveraged that saying, “This is real. There are transactions happening through the system. We want to extend it to other feature sets to help these businesses run.” Salons started signing up. We thought we could make a dedicated product for salons so we started pushing out in that direction. We ended up building out the business from there. >>>

Thought Leaders in Financial Technology: Mike Ward, Chief Revenue Officer at World First (Part 2)

Sramana Mitra: What are some of the use cases?

Mike Ward: Private clients today might be an expat living abroad for a few years. You might have a consumer who is studying abroad. We pay part of that tuition for them. They could be buying a vacation home. From a corporate perspective, they might have their own website. They might buy or sell products and services. That might be done on a cross-border basis. We would come in and facilitate that.

Sramana Mitra: Why do they use your service versus banks? What are the drivers? >>>

Scaling a SaaS Business to 11,000 Customers: Booker.com CEO Josh McCarter (Part 2)

Sramana Mitra: What year does this bring us up to?

Josh McCarter: Around 2001.

Sramana Mitra: What happened then?

Josh McCarter: The company’s IPO was successful. After six years, I was looking to do something new. I went and joined a company called Spafinder. It was a travel-based magazine and was call center-oriented. We were trying to turn it into an online travel content company. We ended up joining with that team and worked on that business for a couple of years.

I ended up on the Board and decided to look up a few other business models. I connected with some friends in business school at USC. One of them had >>>