Podcasts Business SaaS Interviews with CEOs, Startups, Founders 809: How This $12m Accounting Biz Moves from On-Prem to SaaS Model

809: How This $12m Accounting Biz Moves from On-Prem to SaaS Model

Published: Oct. 11, 2017, 9 a.m.

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Barry Clapp. He brings over 30 years of experience in sales and management to Centage. Beginning with IBM, he held successional positions with increasing responsibility on software and internet businesses. At DigitalGlobe, a satellite imagery company, he served as VP of international sales opening distribution in over 20 different countries.

Famous Five:

  • Favorite Book? \\u2013 Biography of Richard Branson
  • What CEO do you follow? \\u2013 Marcus Lemonis
  • Favorite online tool? \\u2014 Salesforce
  • How many hours of sleep do you get?\\u2014 6
  • If you could let your 20-year old self, know one thing, what would it be? \\u2013 Be bolder, take more risks and get more equity from businesses with potential

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Time Stamped Show Notes:

  • 01:43 \\u2013 Nathan introduces Barry to the show
  • 02:12 \\u2013 Centage makes a budgeting and planning tool simple
    • 02:20 \\u2013 Every company budgets and most use Excel, which can be very difficult
    • 02:49 \\u2013 Centage automates budgeting to replace Excel
  • 03:10 \\u2013 Centage is a SaaS business
  • 03:18 \\u2013 Centage was launched in 2002
  • 03:37 \\u2013 Centage\\u2019s current business model is a changing from their previous licensing model
  • 04:27 \\u2013 Centage is in the SMB space and they have less competitors
  • 04:55 \\u2013 One of their competitors, Adaptive Insights, has just raised $175M
  • 05:13 \\u2013 Centage has raised a total of $13.5 M
  • 05:50 \\u2013 Barry shares what he did prior to Centage
  • 06:24 \\u2013 The top three PE firms for Barry, in Boston
  • 07:16 \\u2013 Centage\\u2019s customer pays an average of $35K to $40K a year
  • 07:26 \\u2013 Centage has also sold services in their first years
  • 07:48 \\u2013 Pricing is per seat
  • 08:18 \\u2013 Centage currently has a thousand customers or 10K users
    • 08:46 \\u2013 Most customers have 3 or more subsidiaries
  • 09:06 \\u2013 Barry is hoping to break the $30M ARR number
  • 09:20 \\u2013 Centage just launched their new product that is currently on beta
  • 09:57 \\u2013 30% of Centage\\u2019s customers are on subscription and the 70% are installed on premises
  • 11:07 \\u2013 2016 ARR was $12M
  • 12:43 \\u2013 Team size is around a hundred with some remote
  • 13:13 \\u2013 Average CAC
    • 13:36 \\u2013 Centage has an inside sales model
  • 14:29 \\u2013 Annual logo is quite higher than the previous model
  • 14:41 \\u2013 Centage has 80% retention rate
  • 15:43 \\u2013 Centage\\u2019s product has been continuously improving over the years
  • 16:32 \\u2013 Centage has always made 10-12% of their revenue from upselling
    • 16:52 \\u2013 Centage sells additional training
  • 17:11 \\u2013 Barry shares the weirdest thing they did to acquire new customers
  • 18:50 \\u2013 Gross margin
  • 19:10 \\u2013 Centage runs webinars, goes to tradeshows, spends at least $10K a month on Google AdWords and total marketing spend is around $100K a month
  • 21:06 \\u2013 The Famous Five

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3 Key Points:

  1. Be BOLD and take risks now!
  2. Shifting from a previous model does NOT mean that you should force your current customers to shift as well.
  3. If people see value and how you can make life easier for them, they\\u2019ll stay loyal to your product.

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Resources Mentioned:

  • Simplero \\u2013 The easiest way to launch your own membership course like the big influencers do but at 1/10th the cost.
  • The Top Inbox \\u2013 The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
  • GetLatka - Database of all B2B SaaS companies who have been on my show including their revenue, CAC, churn, ARPU and more
  • Klipfolio \\u2013 Track your business performance across all departments for FREE
  • Hotjar \\u2013 Nathan uses Hotjar to track what you\\u2019re doing on this site. He gets a video of each user visit like where they clicked and scrolled to make the site a better experience
  • Acuity Scheduling \\u2013 Nathan uses Acuity to schedule his podcast interviews and appointments
  • Host Gator\\u2013 The site Nathan uses to buy his domain names and hosting for the cheapest price possible
  • Audible\\u2013 Nathan uses Audible when he\\u2019s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
  • Show Notes provided by Mallard Creatives
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