Omer (00:09.760)
Welcome to another episode of the SaaS Podcast.
I'm your host Omer Khan and this is a show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch and grow your SaaS business.
In this episode I talk to Alex Gikulescu, the co founder of workforce.com, a leading provider of HR and workforce management software.
In 2012, Alex and his three co founders had just graduated from university in Australia.
While they were still students that built software to solve a pain that they were experiencing now, they decided to try and turn that into a business and gave themselves a year to generate sales.
By the end of the first year they were making around 5k in monthly recurring revenue.
Although it wasn't a lot of money, it was enough to give them a reason to keep going.
It took the team another three years to hit their first million in ARR.
During that time they underwent a lot of trial and error trying to find product market fit.
The team got a big break when they built one of the first integrations with the leading SaaS product which helped spread the word about their offering.
Plus they honed their inside sales skills and and started closing more inbound leads quickly.
Despite their initial success, the team still faced many challenges.
They operate in a highly competitive market with many big and well funded competitors such as adp, Workday and ukg.
When Covid hit, they faced a major problem because half of their customers were in the hard hit hospitality industry.
Despite all those challenges, they've been able to grow a SaaS business doing tens of millions of dollars in ARR with over 7,000 customers and a team of 150 people.
Most significantly, the business is totally bootstrapped.
In this episode you'll learn how they found product market fit after three years of trial and error.
The challenges they faced and still do in a highly competitive software market and how they've been able to compete with those much larger and well funded competitors.
How they've been able to drive growth through word of mouth, inside sales and smart product integrations and how they weather the impact of COVID 19 on their customer base and were able to come out stronger on the other side.
So I hope you enjoy it.
All right Alex, welcome to the show.
Alex Ghiculescu (02:33.880)
Thanks.
Great to be here.
Omer (02:35.800)
You have a favorite quote, something that inspires or motivates you that you can share with us?
Alex Ghiculescu (02:39.320)
Yeah, I mean like every entrepreneur ever, it's a Peter Thiel quote.
But.
But I recently reread Zero to One and there's a chapter called you are not a lottery ticket.
And it's about the idea that most successful people overestimate the impact of luck.
And while you probably will need luck at some point, maybe you should kind of assume the opposite of its case, which is that most things in life can be created or can be definitively decided by the work you do.
And so to sort of use luck as a escape hat is or is to think of your life as a lottery ticket as opposed to something you can control.
So I like that.
Omer (03:17.790)
Yeah.
Yeah, me too.
So tell us about workforce.
What does the product do, who's it for, and what's the main problem you're helping to solve?
Alex Ghiculescu (03:27.150)
So at workforce.com, we do workforce management software, which is scheduling, timesheeting, PTO management.
In outside of America, they just call it leave.
And we connect with a lot of payroll systems.
And so our general purpose is to help employers who employ frontline or hourly employees calculate or record when their employees should work, when they did work, and calculate how much they should get paid.
And in the salaried world, that sounds kind of trivial, but in the paid by the hour world, there's a lot of legislation and it differs all over the place.
I'm from Australia, so that's where it's hardest.
There's a lot of legislation that controls how people do get paid.
And so we have created an algorithm that kind of is able to interpret local law in almost any country and
Omer (04:13.940)
correctly pay people and give us a sense of the size of the business.
Where are you in terms of revenue, size of team, number of customers, that sort of stuff.
Alex Ghiculescu (04:24.100)
We've got about 150 people across three countries, so Australia, the US and the UK is our main markets and we have, we have some decent sized teams there.
We're not a remote first company, so obviously we're in those three countries, but each country kind of runs independently and works out of an office and everyone works together and we think that's really good.
We've got some number of thousands of customers.
Every time a salesperson makes a slide deck, the number changes, but I think it's probably around 7 to 8,000 would be my guess.
And the revenue is in the tens of millions, but I probably don't want to go into more than that.
Omer (04:59.760)
And we should clarify that the business is totally bootstrapped, correct?
Alex Ghiculescu (05:07.040)
Yeah.
So we started in college and we've just never gotten around to raising any money.
And now that things are going well, we probably never will need to.
Omer (05:14.880)
I love that.
Never got around to raising money, didn't
Alex Ghiculescu (05:18.920)
get around to it.
Omer (05:20.400)
All right, so let's talk about how you came up with the idea for this business, this product.
What were you doing at the time and where did the idea come from?
Alex Ghiculescu (05:31.770)
Yeah, so we had this four co founders, I'm one of them.
And we were all studying together in Brisbane, Australia, and we were at university together.
We were all living together as well.
And there's kind of this quirky thing with Australian universities that definitely isn't the case here in the US where all the.
There's a lot of businesses on the campus.
There's like restaurants and bars and lolly shops and whatever.
And most of them are operated.
Most of them are owned by a student union and they're operated by students.
So the bar where we used to hang out a lot was operated, was managed and fully operated by a bunch of students.
And so we decided it'd be funny to become those students.
So operating this bar.
And it's like quite a legitimate big on campus bar.
The drinking age In Australia is 18, so bars on campuses are a big deal.
And we employed, I'm gonna say about 30, 40 people, all students as well.
And we kind of found that no one came to work on time, like ever, which I guess wasn't that surprising.
But what was more surprising was that this bar on a university campus was losing, was not profitable, was losing a lot of money.
And so we tried to figure out why that was the case and we sort of dug in.
A lot of the issues were around people not being on time for work, people getting like getting paid a lot of overtime that they didn't need to incur, just incorrect calculations of pay, like really boring administrative stuff.
But two of the guys had finance degrees and they kind of really dug into this and fit figure this stuff out.
And so we thought, well, we should start by at least making people record the hours they work.
And we went to market to try to find a time clock for some sort of time clocking system.
And everyone seemed like the fingerprint scanner ones that are out there, but they seemed a bit lame and we would need to have like an IT department run them because they all ran in house back in the day.
Anyway, long story short, we decided that, I mean, we could go buy a system or we could just do it ourselves and try and make our own system and see what happens.
And so that's where I got involved.
I was studying computer science.
I wasn't as involved in the bar except as a customer.
And yeah, I sort of built this time clocking system and we had this idea because everyone was trying to sell us fingerprint scanners and they were like tens of thousands of dollars and you needed to host all the software yourself.
This was in 2012.
We thought, well, the cloud is a thing and it's not really that new anymore.
But what is new is like tablets that run Android are getting kind of cheap and you can buy them from any shop.
And these days everyone uses iPads.
But back then there was more competition and we figured out that we could get an Android tablet, write some software for it, and then for like $250, we had a device that did the same thing as it, $20,000 fingerprint scanner and all the other software to see timesheets and everything else and like actually do payroll could run in the cloud.
We wouldn't need to have an it, an IT budget for it.
So we went and built that.
And at the time it just, I mean, it seemed really obvious to us, like, all our software should run in a browser, you shouldn't need to have fingerprint scans, that sort of stuff.
But seemed like the market hadn't really figured that out yet.
So we felt like we were pretty far ahead of the curve, at least for companies the size that we were talking, that we were like, we were 100 odd employees.
So it was a decent sized operation.
We set it up in the bar, it worked fine, everyone got paid correctly, people came to work on time.
And we then were like, well, we're graduating now.
We could go apply for jobs or we could go do this.
And so we decided to spend a year trying to sell this product to other businesses, which was a very slow year.
But I think that hypothesis turned out to be totally true of the fact that we can get commodity hardware that does something that you used to need specialized hardware for, and we can run 95% of the software, 99% really, in the cloud.
And that, as silly as it sounds these days, that was like a really big and bold brash statement.
In small town Australia, smallish town Australia in 2012.
It was not something that people had been hearing from their vendors.
Omer (09:58.720)
Let me just kind of recap.
So you guys were at uni, you needed to solve this problem for yourself.
And it was painful enough that you decided, we're going to build a solution.
And at that time it was less about, let's build a business and go and sell it.
It was just, we've got this problem, we need to solve this.
And then once you guys graduated, it was like, let's give this a try for a year and figure out if we can turn this into a business.
So presumably at that point, you've got a product.
Well, at least you've got a tool.
Maybe it's not productized yet and you've proven that it works, at least for yourselves.
So what did you do in that first year to find customers?
Like, who did you decide to target?
And then how did you go and find those people or reach those people?
Alex Ghiculescu (10:50.450)
So I want to take issue with one thing you said about it was a tool and not a product.
And I mean, compared to the product today, it did like 1% of what it does today, but it did the most important 1%.
And I think it's easy when you're starting out to tell yours.
And I, I'm sorry, I'm nitpicking a lot, but it's easy to tell yourself that, oh, this is a tool.
We couldn't possibly sell this to anyone.
It doesn't do enough.
And our original version of the software, actually, it ran on a phone, which we put in a plastic box that some guy we knew who made plastic boxes made for us.
And we'd stick it to the wall for people, and the phone would overheat every three days and you'd need to take it out of the box and let it cool down and restart.
But it's.
Apart from when it was overheated, it still recorded the time that people worked and it still calculated when they should get what they should get paid, and that was enough.
So it was a product, but it was a very, very, very small product.
But I think that's important because I see a lot of, like, even today, people are like, oh, we couldn't possibly sell this.
It doesn't do anything.
And I don't.
I think that's not all.
That's rarely the case.
Omer (11:59.910)
It's a good clarification.
And I think when I was talking about a tool, it was less about it lacked features, but more about when you build something for yourself, you build it in a certain way that makes it hard to go and onboard customers, because you weren't really thinking about that.
And so that's what I was trying to get to was when you, when you went out and you said, okay, we're going to sell it to customers, was the product ready for that in terms of onboarding, usability, all that stuff, or did you guys have to say, no, no, no, we need to, we need to make changes to the product?
Alex Ghiculescu (12:37.120)
You're 100% right.
I mean, the core features were the same or Similar enough for us and for our first many customers.
But yeah, like, obviously it didn't do billing.
It didn't.
There wasn't a support system, it didn't have a way of signing up.
So all that sort of stuff.
Yeah, we had to go and build that.
I think some of those things are.
We put a lot more effort to it than others.
I think our onboarding for new accounts has been pretty bad until, I don't know, maybe a few months ago, it was just never the biggest priority for us.
But by contrast, as soon as we signed up some customers with credit cards, we built a billing system that could charge them.
And being bootstrapped, we had to prioritize.
We didn't really want to miss out on that for more than a minute.
Well, let me answer your actual other question.
So, yeah, we had this product.
We worked.
We happened to know a guy who ran some sort of.
They did something at the port in town.
I think they like scanned packages for customs or something like that.
I don't really remember.
We spent about three months.
Jake, one of the co founders, spent about three months basically calling him every second day, telling him about what features we'd built, which meant we had to build new features every day.
And then eventually he agreed to try it out.
And so we kind of, all four of us turned up there and we had our.
It wasn't in a box anymore because that was a bad idea.
But we had our Android tablet that was running our app that was really just like a keypad, like your phone where you could type in your passcode to clock into work.
And we stuck it to the wall and we're very proud of ourselves.
But amazingly, they're still a customer and obviously they've seen their product evolve a lot.
So once we had one customer that wasn't us, that kind of gave us a lot more confidence.
The next customer.
I remember the first few like it was yesterday.
Hey.
The next customer was a local supermarket and we just sent them.
We sent a letter in the mail to every supermarket in Brisbane and one supermarket called us back and so we went and installed that tablet on the wall and they were so happy.
And they're still a customer today as well.
Omer (14:46.450)
So two customers this, this business at the port, the supermarket, were they paying or were they just like willing to try out the product?
Alex Ghiculescu (14:56.450)
No, we pushed pretty hard to get payment from day one or to agree to a price from day one.
And I think we were just so naive to like.
We didn't really think about the fact that they might Then the product doesn't really do very much.
We just kind of picked a price and we like, well, we need some money or we're not going to be able to live.
So this is what it costs.
And it worked.
I mean, again, I don't know, I think we just got really lucky that we really nailed a very simple version of that core job they needed done and that was enough.
Omer (15:31.620)
And so by the end of the first year, where were you guys?
How many customers did you have?
And do you remember how much revenue you were generating by then?
Alex Ghiculescu (15:44.060)
I can tell you about 18 months.
I started writing the code while I was still studying, but by the end of the first full year, we kind of made a pledge with each other, which was that if we would get to 100,000 of annual recurring revenue in Australian dollars, we'd keep going.
And if we couldn't, we would apologize to the customers, turn everything off, figure out we didn't really think about the logistics of what would happen if we couldn't make it, which is probably a good thing.
We ended up getting to about 95 grand and that was close enough that we were like, cool, we'll keep going.
So yeah, 18ish months in, we were at about 100 grand.
Anna recurring.
Omer (16:29.780)
That's Australian dollars.
So that's roughly about US$60,000.
ARR.
Somewhere in that range, right?
Alex Ghiculescu (16:38.660)
Somewhere around there, yeah.
I forget what the exchange rate was, but keep in mind, we were giving people hardware.
So whenever someone signed up, I would go to the local electronics store and buy a tablet and then I would flash it and install our app on it and then lock it down and then mail it to them.
So this was mostly just covering our costs because our cash flow was kind of bad because we were buying all these tablets.
Omer (17:05.430)
What was the app like in terms of connectivity?
Was everything happening on the app or was it connecting to the Internet and uploading kind of some stuff into the cloud at the time or.
Alex Ghiculescu (17:19.110)
Actually, that's a good point.
We were also giving people a SIM card because a lot of these places didn't have good WI fi, if you can believe that.
So we had this.
At one point we had this outrageous contract with Optus, which is like the second biggest telco in Australia, where we probably had like a thousand SIM cards and they asked us where they all were.
This was a bit further down the track and we were like, we don't know where your SIM cards are, let's just like turn them off and see what happens.
And we had a big project around turning off all our SIM cards, but that was later on.
But yeah, all the app did was record the time that, like when someone got to work, they punch in a four digit code and it took a photo of them and it sent all that to the cloud.
Everything else was running remote, was online.
So as an admin, you go online and you'd see the times that people worked.
You'd see a photo of them so you know it's actually them.
And then at the end of the week, you'd approve it and you'd export it to your payroll system and pay them.
Omer (18:15.160)
So in that first year, how were you figuring out your target customer?
Did you narrow down your icp?
Did you have some verticals you were going to go after?
How are you figuring that out?
Who are you going to talk to?
Alex Ghiculescu (18:29.560)
I feel like I might be a bad influence on your audience here, but our target customer was whoever would talk to us.
Omer (18:34.680)
Keeping it real, man, that's important.
Alex Ghiculescu (18:36.680)
Yeah, all this SaaS terminology, all this, like ICP, we didn't learn what that meant for like five more years.
Like, this was the.
This was very old school.
I think there was nowhere to learn it from unless you like, already knew what to look for.
So.
But we knew that, like, we knew that we could sell a product for money and so we did that.
But yeah, our target customers, I mean, we knew it was people with employees that get paid by the hour because of what we had built so far and because of our experience.
But beyond that, we weren't very picky.
Omer (19:08.970)
So anybody who will talk to you, great answer.
I like that.
Alex Ghiculescu (19:13.850)
To be clear, we've improved on that since, but for a long time that was it.
Omer (19:17.890)
Yeah, yeah, we'll come to that.
So how long did it take you to get to that first million in ARR?
Alex Ghiculescu (19:24.890)
I think it was about three to three and a half years.
The first six months was just building the product, using it at the bar.
And then we spent about, I guess, two and a half years of actively trying to, like, be a real business and that.
And by the end of that, we were at about a million, which was a very exciting day, I bet.
Omer (19:45.510)
Yeah.
Now what did you do to go and get those customers?
Right?
Because getting up to a million, you got to try things.
Like I'm going to double down on content marketing or outbound sales or whatever.
So.
So what was the biggest growth driver for you guys that helped you to get to that milestone?
Alex Ghiculescu (20:06.400)
The biggest thing that didn't help was outbound sales.
And we've kind of had this conviction that we can do outbound sales really well for 11 years now and never quite actually done that as well as I think we would like to.
But from early days, so we were all, we had all our uni friends and we were like, let's get them to help us, like come sit in the office and call people.
And I guess this was to answer your other question, we did think about like, okay, rather than just calling anyone, let's at least find lists that make sense.
So I can't remember how, but I found a list of every childcare center in Australia and I screen scraped it from somewhere and so then we had someone come and call every childcare center in Australia and then send them an email afterwards.
And that didn't really do much in the short term.
But three years later we were still getting replies to those emails.
So it did have like a real long tail effect which was surprising.
Wow.
Not many replies but they were coming so we had to keep that inbox active.
In terms of what did work, the most effective thing was so I don't know if you know Xero, the accounting software, but they're from New Zealand and they're very big in Australia.
And they launched the Payroll product around 2012 and they launched an API for it, I'm going to say start of 2014.
And we knew that it would be good if you didn't have to type your timesheets back into Xero.
You could just use the API.
And we had this inkling that they'd probably try to, they loved Apple so we thought they'd probably try to have a real app store and promote their apps and stuff like that.
So we really tried to as quickly as possible get connected to the API, get it working, get a partner status, go to all their events.
And our guest was right in that they really, really made a corporate strategy for many years to push apps really hard.
I think they thought it would help with retention, which I don't know if it did, but it was really good for us because by being first or second onto that app store we were kind of, we always had the most installs or the second most installs with them, like highest rate in the categories we were in and that drove a lot of inbound traffic.
So we kind of rode off their coattails for a while and then I think as we got more mature, we didn't need that as much.
And then they decided they wanted to take a cut of apps, which made things messy.
But that's more recent history.
In the early days having someone who Basically effectively resold our product for us was pretty awesome.
Omer (22:37.830)
So once you get to a million dollars in ARR, you kind of are like, okay, this is turning into a more serious business now.
It's a very competitive market and you got some very big players in workforce management, adp, SAP, Workday, Kronos or ukg.
Now there's a lot of these companies, I mean, obviously most of them, I, I don't know them that well, but I think most of them are kind of going after bigger customers.
But I think some, there is some potential overlap, especially when you start to sign up some bigger customers.
So at what point did you guys sort of realize, look, we're playing in this space with all of these big boys and here's how we need to position ourselves.
So if we have a meeting with a potential customer, this is how we explain how we're different than those other products.
So when did that happen?
And then how did you figure out what that positioning was?
Alex Ghiculescu (23:44.600)
Something that's interesting about the workforce management market is that all the best products come from Australia and including us.
And the reason for that, I think is because Australia's industrial relationship legal framework is particularly complex in a way that most other Western countries don't have.
We would come across like the Kronos and so on of the world.
But the pitch there was kind of, you know, like, okay, try it out.
Like, we know it's not going to work in this legal environment and it's a small market as well, so that the incentive to make it work is not so big.
For when you're Kronos scale, when you're, we were called Tanda in Australia at the time when you're like Tandascale, the market's pretty big and pretty awesome and it's definitely worth making it work.
So we had, we were in this good position where we kind of no one took our market as seriously as we did.
And there was competitors that could have taken it over if they put in the effort, but it just didn't think it was worth it to them.
Omer (24:45.400)
And one thing I would add to that is like you told me earlier, before we started recording, in terms of like, hey, people say either go after the enterprise market or go after kind of smaller customers where it's, you know, totally product led kind of business.
Where did you fit in that?
Alex Ghiculescu (25:03.630)
So I should sort of caveat what I said before.
There are enterprise workforce management vendors in Australia and not all of them are Australian companies.
And some have signed some contracts up.
They just don't deliver A very good product.
But we knew that when we were very small, we weren't really like we couldn't be legitimate enterprise software salespeople because we didn't really know how to do that.
At the other end of the spectrum, like when you go into SaaS, everyone talks about having a good customer, onboarding, doing product led growth, letting people just sign up and buy the product.
And that's the key to scale.
And of the four founders, I was the only one who could code and I'm a terrible designer.
And we just kind of therefore decided that there was never going to be the case that I could design a good onboarding flow and a good self purchasing flow.
So we just never tried.
What we did get really good at is inbound sales.
And many SaaS people will tell you, or at the time told us that you can never make any money selling to businesses with 50 employees because it's.
The sales process is too expensive.
I don't know if they still say that these days, but that's garbage.
Like we definitely proved that wrong.
We got really efficient in man sales.
We got really good at teaching unique college graduates how to close deals, not just to be SDRs, but to actually do the full sales process.
We got really good at implementing these accounts and making the customers really happy.
And that was extremely scalable.
It was very, very effective for us.
Omer (26:31.130)
Where did those inbound leads come from?
Alex Ghiculescu (26:33.930)
A lot of inbound leads came from being a Xero partner.
We tried to copy that.
So we went and partnered with every payroll system that would partner with us.
And a lot came, but most came from Xero for a long time.
Then gradually over time, word of mouth really started to kick in.
So we found this niche where we were the only vendor in the country that could actually calculate in almost any circumstance what you should get paid.
And the, I guess the lack of quality of other vendors meant that we had really good word of mouth where people would just be like, well there's only one way to do it, you should use tander.
Then things just happened in our favor.
That kind of having this good product meant we could ride the coattails of.
So there was a big drama in Australia around 2015 I think, where a bunch of 711 like the convenience store operators all got busted for paying people, not, not paying overtime to any of their employees or something like something super illegal.
And the brand damage to 711 was huge.
The fines were enormous.
Like it was amazing.
It was in the front page of every newspaper for weeks.
Weeks.
It was like a really big national Scandal in the way that only Australian can have national scandals.
But what happened is every franchiser in the country kind of realized that they needed to prevent this from happening to them.
And far and away the best way of doing that was our product.
And like we just sort of, we rode that wave pretty well and really lent into building out more filter features around compliance and being a better product in that space.
And we just kept going.
And then again, the more customers we had, the more word of mouth we had.
Omer (28:10.090)
So most of the customers that you were signing up were relatively small, but you have started to sign up bigger customers now.
When did you sign up the first big customer?
Alex Ghiculescu (28:25.370)
We had about a million dollars in ARR, somewhere around a little over that.
And we signed a contract with Domino's Pizza in Australia and the size of the contract was about a million dollars ARR, maybe a little bit more.
So it basically doubled our business overnight.
And that was, that was hard.
And the reason it was hard, lots of reasons it was hard.
We had to learn how to do project management.
We'd never project management before had been like the person who onboards your account, of which there's two people just calls you every now and then and tells you and checks in to see how you're going.
Obviously that didn't really.
That wouldn't fly here.
We had to build, we had to learn how to like do scalable support because they wanted to bring on 10,000 ish people on the same day.
And we also had to expand the product a lot.
So we kind of, when we were selling to them, we sold them on what we wanted the product to be one day.
And I mean, the way these things go is like the person you talk, the people you talk to when you start the sales process versus the end users, it's obviously never the same people at this size.
So the message got passed down that the product was that today.
And so we had to do a lot of development very quickly to make that a bit less embarrassing and make them a bit less annoyed at us.
Omer (29:46.740)
Give me an example of the kind of pains that caused for you.
Alex Ghiculescu (29:50.510)
I think me and one other guy, Dave, if you're watching, we basically just spent a year working backwards from their requirements.
We had no API.
And then for some reason we told them that we'd have an API and they could connect to integrate with us.
So then Dave just kind of disappeared for three months and came back with an API, which was pretty helpful.
The whole product team sort of chipped in.
We built a lot of features that we wanted to do, but thought we would spend the next three years building and did them all in six months.
And then I think I kind of something I didn't do very well is once we'd gotten over the hump and we deployed it and we had most of the stuff they wanted, there's always suggestions and feature requests and stuff, but we had most of it.
I just kind of kept being that point of contact for them for other year and a half.
And so I would get phone calls every day with feature requests and bug reports and every, every day until I realized that that was not how you should run.
And like we could never do another big account If I'm spending 3/4 of my working time looking after the first one.
So eventually I stopped doing that.
Eventually we like put people who actually were good at account management into account management roles, which made life a bit easier.
But for a long time it was just, I was basically just on call for an entire pizza organization.
Omer (31:11.930)
What happened at the end of the first year?
Did they renew?
Alex Ghiculescu (31:15.050)
So something we did that was smart was we signed a five year contract.
We did a five year contract and there was no option at all to cancel before five years and five years gave us enough time to really fix all the problems.
To the extent like five years later, everyone had forgotten about all this except the people who lived through it.
But on the domino's side, they didn't care.
So in five years time they really liked it, Everyone was really happy.
It was a great, it was as happy as an enterprise customer can be.
And we renewed it for five more and it was much easier than the first time around.
Omer (31:52.070)
I think there's one thing we should add here.
People might be listening and saying, five year contract.
How the hell do you get a customer to sign a five year contract?
And maybe you guys were just really good at selling.
But I think it's also worth explaining that the workforce management space, like once you get up and running with the solution, you're not kind of chopping and changing every 612 months, right.
This is, this has such far reaching kind of implications for the way you run your business, pay people all that stuff, that once it's up and running, you're going to stick with it for a while, right?
Alex Ghiculescu (32:32.730)
Yeah.
So one of the hard things about selling our product is that it touches the entire organization.
So if, for example, if you were selling HR software or even payroll software, you would sell it to the HR team or the payroll team.
But we need HR payroll operations, which is a very big department inside these businesses.
We finance, all of them need to agree to it and usually legal as well, because there's legal ramifications if they pay people wrong.
So we kind of need to get.
And of course it's always the worst.
So we need to get all these people on board for any big contract.
But the flip side is also true.
Once they're on board, it's much harder to switch off.
Now that said, I don't think we've done another five year contract since.
So I think there was like just the naivety to think that you could do a five.
I mean, I didn't personally negotiate it, but somehow we just decided that five years was an acceptable contract length and for some reason Domino's agreed to it, which I'm grateful for.
If all our deals today were five year deals, I'd be pretty happy.
Omer (33:37.080)
So we've talked about kind of moving up market a little bit or quite significantly bringing on a customer like Domino's.
Tell me a little bit more about the inside sales.
So you're getting these inbound leads, a lot of them coming through the Xero integration or increasingly through word of mouth.
What did that sales process look like?
So you get the lead come in, you had to do what, you know, a demo, how many follow up calls and then how do you get to closing?
How long did that take?
Alex Ghiculescu (34:07.850)
So all those things have changed amazingly over time.
But there's one rule that we've had that we've tried to push so hard, it's never changed, which is that when someone signs up, we would call them within five minutes.
And I think that's been pretty helpful because I mean, I sign up for products today that I want to buy and they call me three days later, if ever.
And by then I feel like I've lost interest.
So we would call people within five minutes in the early days, we would try to make them do a demo there and then.
Or we would be like, you know, you're already using the product because we called you like a minute after you signed up.
So we'll help you set it up right now.
That worked for some people.
Some people kind of found it a bit aggressive, like didn't work in every case, but you can always call back.
These days it's a bit more sophisticated in the sense that we will, in most of our regions will have someone who does the initial call, like the five minute call and is then setting up demos for someone who does the close.
But we're always trying to do like, I mean, to be honest, I've been Away from the details of this for a few years now, but back when I was closer to it, our goal was to go from sign up to credit card within two weeks.
And we had a two week free trial and we usually did it much quicker.
And I just, I think like once you see the product once and once we help you set it up, you know it works.
That was kind of enough for most people, like because we got that first job to be done, done so well, that was usually enough to get people over the line.
Omer (35:42.350)
What about a bigger customer, like a Domino's kind of size customer?
You're not going to get a credit card after two weeks.
So how did that play out?
Alex Ghiculescu (35:51.630)
I would say that we have only gotten a good enterprise sales process in the last few years.
For a long time it was just like we're just going to keep talking to them until something happens.
I wouldn't say we had any sort of sophistication to it, but for Domino's, for example, it was all the founders working on the deal.
And when you're doing founder led sales, you can throw some of the, and we didn't have a playbook because we didn't know, but you can throw the playbook out the window a little bit and try to just keep sort of pushing and you're going to push hard, you're going to keep pushing much harder than the median salesperson will.
So we did that for a long time, but that was pretty tiring.
I think in every case we just eventually had one salesperson who really wanted to become a master of their craft in that particular market or segment of the market.
And they, they kind of taught us how it's meant to be done.
So I mean in Australia and enterprise there's that one person who kind of led the way in mid market.
It's the same.
And now everyone just does what that person originally did.
Everyone just copies them.
Omer (36:54.610)
Why do you think outbound sales, you know, is still isn't working well for you guys today?
Alex Ghiculescu (37:02.340)
So it's not working well in America.
And I think I'll come back, it's working really well in Australia and I'll come back to why I think that is.
But something that happened over the course of years with inbound sales is because our process, our sales process was so like we tried to shrink it as much as we could.
All the salespeople are forced to learn a lot about the product.
And when I go and get sold things these days, if I compare the salespeople that I'm trying to sell Me stuff to the ones we have.
The product knowledge our salespeople have is like exponentially higher and that's because they weren't just reading from a script, they were like setting up the account, they were configuring everything.
When they were handing it over to implementation, it was mostly implemented in a lot of cases.
So the level of product expertise we developed in the sales, in inbound sales was like insanely high.
The challenge we've had with outbound sales is you can't just call someone and start geeking out about the product because they don't care.
You have to have like a reason to be calling them and something to say initially.
And I think we've struggled to get that messaging right.
In Australia it's been more successful.
We've had people, like people know who we are, we understand the market better.
Maybe people, people get sold things a lot less in Australia.
I think there's, there's lots of speculative reasons why I wouldn't, I'm not close enough to know exactly what the dip, what's making it work better there.
But the numbers don't lie.
But I do think that our inbound sales methodology where a prospect could ask any of our salespeople anything about the product and get an extremely well reasoned and useful answer about the product or about the market.
I think that's rare and I think that's served us really well.
Omer (38:50.590)
Let's talk a little bit about COVID A lot of SaaS startups saw some really healthy growth during the times of the pandemic and it's only now that they're starting to come to terms with the reality that isn't the reality of basically where, where the business is going to go.
For you guys, you had almost like the opposite situation or a challenge that you had to tackle because of your customers and the space they were in.
So just tell us about that.
Like what situation were you in?
Alex Ghiculescu (39:31.290)
Yeah, so half our customers globally are in hospitality.
And then obviously when the governments of the world decided to shut hospitality down, that was a bit scary for us.
And then there's lots of other industries that had a pretty unclear future as well in whatever in early 2020.
So yeah, Covid was pretty, we weren't really, we didn't really know what was going to, I mean no one knew what was going to happen.
But we were in a particularly odd, precarious situation where we had just done a major acquisition, we are bootstrapped, we really depend on cash flow being consistent month in, month out and then suddenly it's like, for all we know, three quarters of our customers might not pay a bill again for who knows how long.
So what did we do?
Well, I think the main thing that we did, which Jake, the CEO was really good at, was just trying to sort of keep everyone focused on the things we could control, which was we can still keep improving the product, we can still call every lead within five minutes.
Restaurants were still signing up for a free trial in mid April, when all the lockdowns had just started.
I don't know why, but they were.
So we could still try to sell to them.
We didn't, like, we didn't discount or anything like that because for new accounts, because they're reaching out.
And then we also had to make some, like, we had to do some stuff that was kind of hard, like, so we had a reasonably sized team in the Philippines that we had to.
Which was doing a lot of support and marketing, which we had to.
We shrunk a lot of that and shut that office down.
And some people stayed remote, but a lot didn't, which.
Which really sucked.
But we just couldn't afford to keep.
We didn't think we'd be able to afford to keep all our people in the uk.
The UK government had a weird scheme where they were just kind of paying everyone's wages, so we had to, like, stand everyone down such that the government could pay their wages and people weren't meant to work and all sorts of stuff.
We kind of did everything we could to keep as many people employed as we could, but the focus was always like, how can we just keep doing the things that we can control?
And I honestly hope for the best.
Right.
And then I think we got lucky in the sense that, like, specifically in our realm, it didn't go as badly as we thought.
Like, some customers couldn't pay for a few months, but most kept going or bounced back pretty quickly.
And so we were able to keep going.
Omer (42:02.030)
I also wanted to talk about SEO.
You tried a bunch of SEO with varying levels of success.
You ended up rebranding the business workforce.com, it's still called Tanda in Australia.
You couldn't buy the domain, so you bought the company.
Is that what happened?
Alex Ghiculescu (42:22.990)
Yeah.
So not long before COVID we had been in America for about a year and in the UK as well as Tanda.
And one of the things we've learned about America is Americans are very good at marketing in a way the Australians are not.
And we kind of had this idea that if we had a much better brand, things would be much easier.
And through somehow, Tasman, one of the co founders, found out that this company called workforce.com, which was a magazine called Workforce, but it's like a HR magazine.
Tasman found out that this company was for sale, and so we kind of.
Omer (42:59.500)
We bought it.
Alex Ghiculescu (43:00.660)
The idea was not just that we'd call ourselves workforce.com, but that we'd also publish a magazine and sort of do all the content marketing stuff and keep this, Keep everything running.
But as well as being a general HR magazine, we'd also become a workforce management thing and have our own ads and that sort of stuff.
But then six months later, like, Covid happened and everyone shut down their advertising budgets, which is what was funding this magazine, really.
And so we had.
We shut the magazine down as well, but we kept the brand.
That's what brought us to Chicago as well, which is where our US headquarters is now.
And, yeah, and now we.
And now we have workforce.com.
but it was a pretty weird way.
It was a weird way of getting there.
And it's been.
I mean, the brand is incredible for recruitment, it's incredible for word of mouth.
Our theory that you can win it, you could sign a customer up just because you had the best brand hasn't quite been proven true, but it was a pretty optimistic theory, I guess.
But it is.
I mean, it's the best brand.
It's the best brand in our space.
So that's nice.
Omer (44:02.520)
It is.
And that's the one thing I said to you was like, hey, that's a cool domain, man.
It's like.
And you were like, yeah, but it hasn't made things much easier.
It's just, you know, it's a nicer brand to have, but we have to work still just as hard to try and get customers.
Alex Ghiculescu (44:19.680)
You do, but, I mean, I'm the pessimistic one of the four of us.
So if you ask the other guys, they'd be like, yeah, I mean, it is a great domain.
There's no silver bullets.
Omer (44:28.240)
Right.
Alex Ghiculescu (44:28.480)
Like, we've learned that so many times.
This is just another example of that.
Omer (44:32.800)
So the bigger that you get as a business, you're kind of potentially overlapping more with some of these other workforce management systems.
We mentioned earlier, all these companies are very well funded.
They are often raising money.
And you guys have continued to bootstrap your way for the last 10, 11 years.
Have you ever thought about raising money?
Alex Ghiculescu (45:02.870)
Oh, yeah, all the time.
We're pretty aware of.
We sort of follow what the market's doing and are aware of it.
But in the early days we probably spend more time letting people give us an offer.
And a lot of the time the offers were like, oh, we could, we could take this money or we could just wait two months and we'd have the same amount of growth sort of thing.
The Australian VC scene wasn't very good and then now I think we're just so adept at operating in a bootstrap sort of way that it just sort of like crumbs away naturally to us.
And it would be a really, really big change bringing in more parties and I mean between the four of us founders, there's enough disagreement as it is.
I think adding more people on the cap table I don't think would make that any easier.
So yeah, it just never kind of happened.
After the COVID scare, we decided that we would be profitable from that day forward.
We would never.
Before that we were kind of in.
According to most financial statements we were losing money.
So we were really just surviving because we were selling annual contracts upfront a lot.
We sort of shifted a bit in how we think about our financing after that to the point where we would try to spend less than our revenue regardless of whether it's annual deals or not.
So we've matured a bit in that sense.
Now we have much more buffer and don't need to fully worry about scares like that anymore.
But I mean I just think that like we're growing at what, 50% year on year generally differs a bit by market without, without raising money and I think those are pretty good numbers for mature SaaS product.
I'm not convinced it would be better.
I don't know.
I don't know what we would do differently to make it better.
If we had more dry powder.
Omer (46:47.080)
It's pretty impressive you've been able to get this type of growth as a bootstrapped business.
We could talk for another hour, but I think we should wrap up.
So we're going to get onto the lightning round.
So I've got seven quick fire questions for you.
Just try to answer them as quickly as you can.
What's the best piece of business advice you've ever received?
Alex Ghiculescu (47:06.190)
Go into business with your friends.
Everyone says you shouldn't, but you should.
Omer (47:10.430)
What book would you recommend to our audience and why?
Alex Ghiculescu (47:12.830)
A book called in the Company of Giants.
These Stanford researchers interviewed like the top 10 tech CEOs in the 90s.
And these interviews are really, really good.
The first ones were Steve Jobs, but they get much better after that.
Omer (47:25.390)
What's one attribute or characteristic in your mind of a successful founder.
Alex Ghiculescu (47:29.630)
Discipline.
Omer (47:30.830)
What's your favorite personal productivity tool or habit?
Alex Ghiculescu (47:34.430)
I'm like the most unorganized person, but I email my any idea ever.
Omer (47:39.930)
So I guess that what's a new or crazy business idea you'd love to pursue if you had the extra time?
Alex Ghiculescu (47:44.810)
So I just moved to rural Colorado and I want to start a tennis club in the town I moved to.
Omer (47:49.850)
Well, what's an interesting or fun fact about you that most people don't know?
Alex Ghiculescu (47:53.450)
Apparently I look a lot like Tony Hawk and we tried to sell to a company that makes skateboard ones skateboards once and we put a side by side comparison photo in our slide deck and it didn't work.
Omer (48:06.380)
It didn't work and you didn't close the deal?
No.
Alex Ghiculescu (48:09.260)
So not good.
Omer (48:12.220)
Love it.
And finally, what's one of your most important passions outside of your work?
Alex Ghiculescu (48:16.140)
I'm sorry, it's just moved to Colorado so I ski a lot and I would like to play more tennis I guess.
But that's what the summits are for.
Omer (48:23.420)
Thanks for joining me, Alex.
It's been really helpful to kind of unravel this story.
I know it's never easy to, you know, concisely tell a story of 11 years in 45, 50 minutes.
So I appreciate you doing a great job with that.
As I said, I'm very impressed with what you guys have been able to do and the growth that you've achieved as a bootstrap company.
And I wish you guys all the best of success for the future.
If people want to learn more about workforce.com they can go to workforce.com and if folks want to get in touch with you, what's the best way for them to do that?
Alex Ghiculescu (49:03.120)
You can email me alexorkforce.com I recently started blogging, so I don't know if you can add a link to that in the show notes, but they can always go subscribe there and I'm trying to write more about the stuff we've learned recently.
Omer (49:14.480)
We'll put a link in the show notes for that so we don't have to spell.
Well, thanks man.
I wish you and the team all the best of success and thanks for taking the time to chat.
Alex Ghiculescu (49:22.480)
Thanks.
It was fun.
