How we acquired over 100 enterprise customers for our SaaS as a category creator.

Ryan Austin: 00:00:00

Yeah, so we really focus on education of learn ops as a driver. Um, so content marketing, whether it's webinars, blogs, eBooks, et cetera. Um, um, so call that tier two. And, uh, tier one would be the call to action, start a trial. Talk to sales. Um, so that's how we're, we're set up today. You know, different tiers have different s l a reply times by the s d R team and they'll qualify to the AEs. Um, so traditional kind of inbound model.

Upendra Varma: 00:00:38

Hello everyone. Welcome to the B2B SaaS podcast. I'm your host of Paint. Today we have Ryan Austin with us. Hey, Ryan, welcome to the show. Hey, thanks for having me. All right, Ryan. Let's get started and let's try to understand what your company does and why customers pay you money.

Ryan Austin: 00:00:53

Sure. So we're a, a b2b, we're an enterprise SaaS product. Um, really paving the way as the first learn ops platform, um, selling to corporate learning and development teams.

Upendra Varma: 00:01:07

All right. And can you talk a bit about these teams in particular, right? Who exactly are these teams? Are they, you know, like just talk about a couple of use cases, maybe?

Ryan Austin: 00:01:15

Sure. So, uh, we focus on organizations, thousand plus employees. Uh, a lot of the times the, these enterprises, they already have what's called a learning management system in place. Um, think of the learning management system as the delivery platform within the corporate learning and development function. And we're the operations platform to manage actual work. So, you know, in, in other business functions like DevOps or Rev op, think, think of the operating systems in those fields we're the operating system for corporate learning and development.

Upendra Varma: 00:01:55

Got it. And do, do your customers create content on your platform or is it you also providing, you know, some sort of basic content? Yeah.

Ryan Austin: 00:02:06

So w we don't really do anything with, uh, content creation or content delivery. We leave those to the authoring tools and to the learning management systems. Um, we're really a work hub for the learning and development

Upendra Varma: 00:02:21

function. Got it. Right. So let's move on to your customer base, right? I wanna understand, you know, how like Sure. How many, so just, just help me understand it. How many customers do you have on your platform as of today?

Ryan Austin: 00:02:31

Uh, I think we're, I think we're at 108 corporations, uh, to date. Mm-hmm.

Upendra Varma: 00:02:37

And all of these are big enterprises with thousand plus, you know, customers, thousand plus employees maybe.

Ryan Austin: 00:02:42

Yeah, and you know, it, it's really difficult in l and d. We, we l and d people pay us per seat and, uh, and different companies have different sized l and d teams often it's very decentralized. So the bigger the company, the more l and d teams they have, it's not even just one L and d team. Yeah. And

Upendra Varma: 00:03:02

then like approximately just how many seats do you have on your platform as a whole? Right. Is it like a hundred thousand or something, or is it.

Ryan Austin: 00:03:10

Oh, I'd, I'd, I'd have to check. I'm not even sure. Sure. Yeah. Alright, so, so we have about a hun hundred and eight, uh, enterprise customers,

Upendra Varma: 00:03:18

roughly. Got it. Got it. And, and just help me explain, right, how big these deals are. Right? So I'm assuming it's thousands of people using your platform per company. I know there's gonna be a big spread, right. But approximately how big of any CV deals have we talking about? Is it $10,000? Is it a hundred thousand dollars? Is it million bucks? That approximately, where do you sort of. Close your typical. Yeah, the,

Ryan Austin: 00:03:36

as we continuously like mature the product, the ACVs growth significantly. Um, you know, this time last year it was a really small, like sub 10 and, uh, last month or average contract value was over 50. Um, uh, So, you know, we're our, our whole model is land and expand. Yeah. Um,

Upendra Varma: 00:04:00

yeah, we'll come to that in a bit. Maybe if you can just let us know where it is. Is it $50,000 as of today? I know you're gonna grow and all of it. Right.

Ryan Austin: 00:04:07

But, well, as of last month, 50 K. Yeah. 50 K. Got

Upendra Varma: 00:04:10

it. Alright, so, uh, are you comfortable sharing your revenue or. Let's move on. Yeah, no, uh, we can. Alright, alright. Yeah. So let's move on. Right. So I'm, I'm, I wanna specifically focus on your, you know, sales motion and your retention and expansion strategy. Sure. But before that, I also wanna touch upon your top of funnel lead generation, right? So, where exactly are you sort of finding all of these enterprises, you know, strictly from a top of funnel, lead generation perspective, what is that first, first touch point for every new customer who's getting onboarded? Let's talk about that marketing strategy of your strategy of

Ryan Austin: 00:04:39

yours. Yeah, so we really focus on education of learn ops as a driver. Um, so content marketing, whether it's webinars, blogs, eBooks, et cetera. Um, um, so call that tier two. And, uh, tier one would be the call to action, start a trial. Talk to sales. Um, so that's how we're, we're set up today. You know, different tiers have different s l a reply times by the s d R team and they'll qualify to the AEs. Um, so traditional kind of inbound model. However, um, this year we're launching a freemium product in the first community for on learn ops.com. Um, so those will be really nice, top-down, uh, optimizers to for, for market capture,

Upendra Varma: 00:05:33

right? And, but as of today, it's primarily these content marketing that you have, right? So you've got a bunch of flocks and all of it, and it's just driving all of that count content. Yeah. 80% inbound. Alright, and what about rest? 20%. Uh, outbound. And are these emails like where, what,

Ryan Austin: 00:05:49

how do you sort of Yeah, you know, com combination. Like, we use outreach as a platform, so co combination of, uh, of email, social, and telephone calls.

Upendra Varma: 00:06:00

Got it. So now let's move on to your, you know, sales cycle and bottom of funnel, right? So once somebody discovers you, once they realize that, okay, this is an interesting platform, what happens after that? Just talk through those, through that entire sales cycle. Maybe you could just pick a customer also to help. Help us really understand what happens during those, you know, discussions and negotiations as well.

Ryan Austin: 00:06:18

Yeah, so it really depends who the job title is and if they're hitting tier one or tier two. Um, if it's tier one often, we'll we'll just use a calend, like a calendar scheduler, uh, and go right to the ae, especially if they're within the ideal customer profile. We rank, it gets a high score. Um, so sometimes we'll, we'll just assume that it's qualified. Skip the SDRs, go right to the account executives. Um, uh, and other times it just depends. Are they hitting tier one or tier two? Tier two being just content leads. You know, these aren't people who have asked to speak to sales. They're, they're just getting educated. So we, we usually leave them alone. But if they hit a piece of content three, four times, then somebody will reach out. With more of the understanding of asking why, like why ha have you been looking up that content? What are you trying to look for? How can we help you? Um, we often try and have a 24 hour response time sla to those leads because, you know, again, they're, they're not hand razrs saying, I'm ready, talk to me, uh, tier one leads being, um, free trials or talk to sales. Mm-hmm. Um, we'll take a sales assisted approach to those, uh, to help guide them through the TR trial, if that's the path they took, or to help qualify to put them in touch with the right account executives depending on their needs as well.

Upendra Varma: 00:07:50

Right, and like what's the typical sales cycle once it goes to an account executor, what happens? So like how much time does take

Ryan Austin: 00:07:55

to close that? 50, 90 to a hundred days. And it, you know, we we're very focused at constantly driving down those timelines. Mm-hmm. Got it.

Upendra Varma: 00:08:05

And, and what, what really happens during those 9,200 days? Is it just convincing them maybe, do you have any POVs because they've already signed up for a trial or something?

Ryan Austin: 00:08:13

No, no, no, no. POVs they, uh, the trial is, is that, uh, you know, it, it's really about, uh, Navigating evaluation, building up the ROI business case. We have a nice ROI calculator at Cognoa. Um, and, uh, just helping them on their journey, navigating not only to build the business case internally and where to, to get budget, but also, um, Just info security and legal, right? You selling the big companies, you have to have a trust center. You have to have your, your info security and auditing process. Like down path. Yeah.

Upendra Varma: 00:08:59

Yeah. So, so I, I missed a question, asking you a question, right? So like exactly 12 months before, right? How many customers did you have on your platform approximately?

Ryan Austin: 00:09:07

Uh, about, uh,

Upendra Varma: 00:09:09

40 40. So you've, you've grown by around 60 customers or so in the last 12 months, something like that. Yeah. Like

Ryan Austin: 00:09:15

about 155% annualized growth rate. Mm-hmm. Um, and, uh, should be better this year. Got it. We're not, so

Upendra Varma: 00:09:23

my question is, right. So to, to be able to close this 16 year deals, right? So how much of your top of funnel sort of leads did you actually needed? Right? How many, how many sort of. Came to your tie when, you know, whatever that, that you call, and how many came to your tie and what, what's the conversion rate like? Because like 60 days, I'm assuming given the 10%, you should have pulled at least 600 thousands of leads in that funnel. Right? So yeah. How does that number look like?

Ryan Austin: 00:09:47

Yeah, we're, we're, we're pushing to get like our, our win rate towards 25, 30% this year.

Upendra Varma: 00:09:54

And this is from the first touchpoint. The moment you classify them as a tire, when from, from,

Ryan Austin: 00:09:59

from, from a qualified sales accepted lead perspective. We don't really measure outside of that because again, a lot of them are just like content viewers and whatnot. And. Part of being a category creator for Learn Ops is that you're gonna get a lot of people just learning about the category, learning about, um, what Learn Ops is, and we don't wanna bug those people. We just want them to know that we're available to help them along their journey if they need help.

Upendra Varma: 00:10:29

Got it. Right. We'll come to that category creation part in a while. Right. So just wanna understand your retention and expansion strategy as well. Right. So the moment you close a deal, you, you mentioned it's, it's primarily land and expand for you and you, you talked about how your A A V grew from like 20 K to 50 K over the past one year. Just talk about what happens the moment you sort of close that, you know, first deal with the customer, right? Maybe with a smaller team. How do you sort of manage to expand that account?

Ryan Austin: 00:10:52

Yeah, it's, uh, we have an, a dedicated account management team that's just focused on, uh, working in partnership with customer success. And anytime people need new seats or upsells or, or additional products, account management comes in and they focus specifically on expansion. Um, uh, they don't get involved in anything else, and, you know, they, they, they carry targets and whatnot annually as well, so we. We, we often will land with one L and D team and through customer success and account management, we'll try and find other use cases with other learning and development teams that are in the business or part of affiliate businesses cross-sell as well. Right.

Upendra Varma: 00:11:36

So, and like, how does your expansion rate look like as of today? So what's your N R R for example?

Ryan Austin: 00:11:42

Uh, about 145%.

Upendra Varma: 00:11:46

45%. And like, like, how, how big of a churn do you have? I'm, I'm not expecting it's, it's going to be a big number given the scale

Ryan Austin: 00:11:52

of 10, 10%. We're, we're sitting at like, uh, I think a 91 or 92% logo retention right now. And that's per year, right?

Upendra Varma: 00:12:01

Yeah. Yeah. Got it. So, yeah. So le let's go back to your category creation part in a while, right? So, so why do you say you're a category creator? Like were you the, were you literally the first one into this space with this positioning? Is that how it was? Yeah,

Ryan Austin: 00:12:13

for first, for Learn ops, we a, we actually own the trademark as well, and we license it to channel partners who become trusted partners to build the category together because in learning and development, Um, there's a red ocean in the learning management system space, and it's crazy. You'll see people. Just trying to close their next deal and they'll, they'll just throw out marketing content without, you know, just to try and win the deal and almost lie to customers to say, oh, we're a learn ops platform, and they're not. Right. So, so we, we, we've. We've built strong IP moats in order to, uh, deter this from becoming a buzzword. It's too mission driven. Mm-hmm. And we want to responsibly build the category for the industry with other vendors and experts who want to shape this with us. And so we license it to them for free under partnership, um, and we build it together.

Upendra Varma: 00:13:18

Correct. And, and put this on a timeline for me. Right. When did you start the company and when did you actually sort of decided to become a category creator? When was it? Yeah,

Ryan Austin: 00:13:26

it's, it's, it's interesting cause uh, um, it's not a clear path of, with this company for sure. So mm-hmm. I, I actually, um, S had a consulting service business in l and d helping l and D teams where I stumbled across this problem. Mm-hmm. And in 2017, we started thinking about software not knowing. That this was gonna become an operating system. We started with one feature, and from 2017 to 2019, you know, we sold that one feature to a bunch of people. Small ACVs, cuz it was a single feature to one, one person on the l and d team. One user profile. But in doing that, we started seeing this bigger problem to solve about becoming an operating system. So from 2019 to the end of 2021, we really focused on building out the end-to-end learn ops platform. And when we got there, we realized, you know, it wasn't really. Enterprise ready. There was challenges because of how you have to sell into learning and development. And so we rebuilt the platform, launched it last year, and it's been like crazy since then.

Upendra Varma: 00:14:50

And when did you actually coin this? You know, Term Learn ops platform. When was it? Uh, we did

Ryan Austin: 00:14:56

it for a while, but mm-hmm. But we, we, we rebranded the company from Synapse to Cognoa, uh, in 2022, and that's when we formally kind of made the announcement, uh, uh, at the beginning of. The second half of the year. So H two we formally announced the new positioning and the new brand with the, the V2 product all at once. But you still carried

Upendra Varma: 00:15:22

over all of your older customers to the new product, right? Yeah. Yeah. Got it. Alright, so, so, uh, yeah. So I'm assuming creating a new, new category, it must require a lot of external funding, right? So, so what's your funding status as of today?

Ryan Austin: 00:15:36

Yeah, we, we've raised, uh, I think around 7 million. Um, just signed a term sheet for Series A. Uh, so we'll announce that soon. And, uh, uh, yeah, just really pushing on community and freemium this year as well as optimizing everything that's going. Why

Upendra Varma: 00:15:55

would you go from enterprise, you know, sales motion tool, let's say freemium, or, you know, why would you go down market? Like, what's the plan there, or what's the thought process there?

Ryan Austin: 00:16:03

Yeah, so we, we get hit up by a lot of the smaller l and d teams, and it's not that we can't help them, we can, it's just, it's not good for our, our business model from a unit economics perspective. Yeah. But they're also good evangelizers. They're gonna talk about us and, and because we're mission driven, we, we don't like to say we can't help you, so we're gonna automate that part to help them it, that way it doesn't distract. Sales people, and it helps us, you know, build the category more at scale. Sometimes you'll see. A manager of l and d or a director of learning and development working at a customer that we don't, or a company that we don't consider our ideal customer profile today. Mm-hmm. And then they leave that company and then you track them and two months later they're. You know, the director of learning and development at Disney, for example, right? Which is in our I C P. So there's a lot of that that happens in our industry. And so it's just a really nice way to help the industry, but also, you know, continue with category leadership

Upendra Varma: 00:17:10

and where you wanna put, put this new raise funds into, is it into marketing? Is it into sales?

Ryan Austin: 00:17:17

This year they're still building to do. So, you know, building out. Community freemium. Couple features that we're really excited about around learning strategy and measurement. Um, and next year it's really to just pour, you know, pour fuel on the sales fire. Alright.

Upendra Varma: 00:17:38

Got it. Alright, Ryan, so one last question here, right. So what's the vision here? Where, where do you see your company going in, let's say five years down the line?

Ryan Austin: 00:17:45

Yeah, I mean, I, I mean, we really look at a tenure vision. Um, this isn't a business that we're trying to flip and exit right away. Like, I would prefer to take this company public one day. And why,

Upendra Varma: 00:18:00

why not just flip it? Is it, do you have any personal reason for that? I've sold company is

Ryan Austin: 00:18:05

before, and so you're a second time founder. Yeah, I mean, you know, you get back to work, right? Mm-hmm. I'm still young. I'm not gonna retire, and I think it's. Pretty incredible that we came across something that just literally did not exist in the world. Yeah. At all. And we're first in the emails and, uh, the comments that we see from our industry, it it, it just shows you how impactful or mission driven what we're doing is for this industry, which is still very immature compared to other business functions. So if, if, if we hang tight and help them to. Mature and help them on that journey. I mean the, you know, the really, the world's our oyster. Like we, there's so much we can do in this business and, and we wanna play that out. Got it. Alright.

Upendra Varma: 00:18:57

Uh, alright Ryan, thanks for taking the time to talk to me. Hope you scale Cota to much, much greater heights.

Ryan Austin: 00:19:02

Thank you. Thank you. This was a lot of fun. I appreciate your time. Yeah.