Monetizing SaaS: Episode 30 with Dan Hellerman, Co-founder & CPO of Saleo

Dan, it is so fun to be here with you. Thank you so much for joining the podcast. You are a founder, you're an operator, you have a deep background in ABM and product amongst other things. Today you are the co-founder and CPO of Saleo, which recently raised its Series A from Emergence Capital and TechSquare Ventures. How did you get to now? Tell us the journey in your own words.

Yes, it's been a crazy journey. And it's like I've always been a producter. A lot of people and I appreciate you doing your research on the background. You're like always thinking like, oh, you're a marketer turned product guy, but it's actually not true. It's sort of the opposite way. So I got my start developing iPhone apps. So right out of early college, raised a round, like a pre-seed, $100 grand, developed a couple mobile apps, but a big one called Cinefy that caught the attention of, you know, even companies like Apple. I got to go present to their their iOS and their video team and their App Store teams. And so my life was always in mobile apps. And then was really heavily into product development, did a bunch of UI and pieces myself. Also had hired some agencies. And out of that, my degree was in network management. Like I thought the long-term, my long-term play was always going to be network design at scale, right? Doing things like long distance cellular communications and things like that. And so when I graduated college, I was just doing the mobile app stuff on the side. I took a job at a company called SevOne, which was a network monitoring, like infrastructure company. And they were— I got the job in marketing because my degree was in networking and they're like, oh man, you'll be able to design our ads and like actually know what they say. Right. And so during my time there, I spent a ton of time with our SEs. And helping people demo. We used to have like a weekly demo called Demo with Dave that was, you know, we had hundreds of thousands of views of these videos weekly where we were trying to like troubleshoot different network performance times. And it got me real interested in like how do companies demo and put their software together. And while I was at SEV1, I started looking at funding for a platform that I wanted to build around account-based marketing, right? This idea that, hey, I saw the biggest issue they were having was that they weren't hitting the right audiences with their ads and we were doing a ton of optimization and like, how do you identify people across the web? And while I was doing that, I was researching competitors. I came across Terminus, which was what brought me down here to Atlanta. Um, and sort of shelved the idea around demos and everything I was interested in the back of my head because I thought that account-based marketing would be like this new hotness. And so I trialed a couple of my competitors. I trialed Terminus and I thought that they had a really good software platform. They just weren't doing their ads right. And so at the end of like I tried their software for like 2 or 3 weeks. I emailed the CEO at the end of it and was like, hey, I don't think this is working the way it should be. Like, here's all my notes. And he called me that night and he was like, so you canceled your contract and you sent me like 3 pages of notes. Like, what's the deal? He was like, nobody's ever done that before. And I go like, truthfully, I was like debating building a competitor to you guys, but I think that you have a really good platform. Like, I'd love to join and like, here's what I'd do. And so then I spent the next like basically 7 years of my life at Terminus. And what I saw over my time there was that marketing and sales was moving to like a hyper-personalized placement, right? So it started with account-based advertising, but it moved on to more than that, right? So us being a personalized platform, one of the things that I always thought we suffered with at Terminus was that we weren't giving personalized demos, right? We could only show either ourselves using our platform, which we weren't always the best users of our own technology,. And so I kept thinking like, how can you give better personalized demos? I was researching different personalization tools constantly. And so it led to the idea for Saleo. So what we're doing at Saleo is we're helping companies give personalized demos, right? So actually showcasing their software environment in a way that replicates the needs of their prospects versus just, hey, this is our demo environment. So, you know, I'm sure you're used to this and all of us have seen this, especially if you're a product leader, you end up trialing 1,000 different softwares. And every time you log into a software, you either see, you know, the office space, you see memes from The Office, you might see Silicon Valley type names, or you see a bunch of example.com. And I had a really hard time as a product leader imagining that a platform could be built for me, right? Like you're always an imaginative if you're a product guy, but you don't always have a good idea of like, hey, if I'm in healthcare and the demo data that you're showing me is in manufacturing, bridging that gap and saying, well, do you have X and Y for my needs is really hard. And so founded Saleo out of this need to say, hey, when companies give demos, it needs to be built to their prospects because it'll cut down on, you know, the inevitable POVs. It'll cut down on these pricing discussions where people are, you know, sort of pushing you down because they're not sure your platform is going to work for you. And it'll increase trust, it'll increase multi-year contracts, all the things that sort of SaaS companies did. And so in a nutshell, like, you know, it's my whole journey has been leading me to this point where, you know, Saleo, we're hyper-focused on helping companies demo their software better.

One thing that I think is so unique about you is sort of the depth of your experience across ABM, product, but also ops, go-to-market, go-to-market ops. Is the thread that unites all these things that sort of long-term interest in personalization and personalization of the demo? Or is there another thread that you think unites a lot of these interests?

I think it's a long-term interest in user experience. Like I've always been obsessed with building products, but just like, you know, I always joke with my team about words of affirmation. Like I love when people say this is really cool, right? And the way that you get that in B2B, because B2B can be really boring sometimes, is with hyper-personalized experiences, right? It's this idea of how do I develop software and experiences and give people something that they're cheering for and that they're really excited to use. Versus software that is purely like, hey, this meets a need, it gives me this analytics. Because I always say SaaS is here to make complex data simple, right? And so what is the, you know, if you're not driving a direct benefit for your end user, they're not going to love using it every day. Like we always have those, we all have those softwares, especially SaaS companies that we log in every day just because it's an, you know, we have to or it's a choice. We don't get any excitement from it. Then we have that software that we interact with daily that's like super exciting, whether it's your customer revenue analytics or feature flags, you're turning on new things, right? There's a lot of different software, like that whole experience at the end is what drives it.

Yeah. So when you go back to the kind of beginning of Saleo, what was the key insight here that like really made you feel confident? Because there were other companies that were providing demo software, like what was the key insight for you?

So for us, it was really crazy. So when I had the idea, we were only tracking like 2 or 3 competitors. And by the time that Saleo rolled out, I had an individual count of 63 platforms that were offering like quote unquote interactive live demos. And what I had seen through the market, and it's really funny, I've saved a lot of the texts Justin and my co-founder and I sent to each other during the ideation phase because we knew we wanted to do it differently. So like the thing that sort of set us apart and that made us want to enter and like, you know, compete against these other platforms is that we're seeing that a lot of people rush to market. There's one big company, Reprise, that raised like $88 million off like their first like $2 million in revenue, which is unheard of, but basically doing like interactive screenshots, DOM capture. Here we grab the HTML of your product, we're going to hop in. And from the very beginning, we knew we wanted to do something different that like, hey, if you're giving a demo and it's like you're calling it authentic and you're calling it a live demo, it needs to exist in your own product, right? Your own product needs to exist. It needs to function as described. And so we had come up with this completely different way of helping power your backend so that your native product actually works, helping inject data in there. So all your graphs and your tables, because people want an authentic buyer experience. And as you know, being a product leader, you always have to deal with the stump the chumps, which is like, you know, the people that are in your software, they're like, well, show me this or filter this by this, or is it really X, Y, and Z? And so we wanted to enter this sort of crowded market and fight it because A, it's a super— as having been a marketer, it's a super fun idea to like take on the big guys with a tiny idea and see how you could do. But B, it was very interesting to me because I didn't think anybody was taking the right angle and it was like sort of ripe for a change. And we've seen that play out really well for us.

I love the analogy when you walk into a marketplace that's selling fruit and a lot of vendors are selling apples, but then there's this new vendor that's selling oranges and like there's just a very distinct choice between an orange and an apple. What's the choice that Saleo offers? You know, if Saleo is the orange and competitors, other incumbents in the space are apples, what's the real choice here?

Yeah, so it's truly your live product. So a lot of product leaders don't like demoing a screenshot. They don't like crap demoing some HTML capture of their product and it's every feature working. And so when we sort of walked in the market, we start, you know, some of our initial race to $1 million in revenue. That we hit really, really quickly was purely peel-offs of competitor platforms. We actually thought, like, I have this running story that I always tell people when they join Saleo. We like, we thought we would grow into SMBs and grow upmarket, and the opposite happened, right? So we had enterprise companies throw themselves at Saleo, even pre-SOC 2, pre-everything, because they were so hell-bent on this live demo marketplace. And we're seeing it more and more, right? Whether you see You know, Marc Benioff and Salesforce or some of those other companies, everybody wants to demo the real product. Their mandates are, hey, we want to demo a real product. Like, the interactive demos are great to embed on a website and help train people on new software, but they're not the solution for truly live demos, right? People want to show their software, and a lot of software platforms are so huge. Like, I was counting the pages of one of our mid-market customers the other day, and they had 176 pages in their platform. It's like, how do you capture that individually and like link a lot of screenshots from that, especially in an iterative development cycle where every page is getting updated every so often with new features and pieces? It's just not a good solution. And so for us, that was the vision was like, how do we still do it? Like even if it's way harder, we sort of thought we'd iterate with AI, we'd iterate with machine learning, we'd find ways to do it. Even if it took us 5 years to like hit scale. And luckily it, it, you know, it didn't. We've sort of like blown up, but it's been— that's, that was the choice, was always it has to work here, has to truly be live. People have to have complete control over every ounce of every piece of data in real time, or it's not what we want to build.

Very good. Where, where are you spending your times these days? You, so you, you raised your Series A last fall. The company's grown really quickly. Where are you focused right now?

It's scale, right? It's all the things that the typical software SaaS startup has. It's, hey, what are the processes that we need to be doing now to ensure that, you know, we can onboard 100 and then, you know, 1,000 customers a month? And so we've been hell-bent on, you know, how do we lower implementation times? How do we increase, like, speed up time to value? How do we, you know, do crawl, walk, runs with our customers so that they can be up and using Saleo faster. And so we've just, we've been, you know, hell-bent on how do we improve this process. And so we've rolled out a number of, like, we've increased our implement or decreased our implementation time, I should say, by like 60 to 80% for majority customers. We went from like a, you know, 6-week implementation time to customers actively using Saleo, you know, some next day, some within the first couple days. We've been building products to help onboard these massive platforms, because what, like I said, like we had the enterprise rush to use us. And so us hooking up like just a set number of pages wasn't the solution anymore. And so recently we hooked up like 9,000 pages for a customer in a couple of days. And so it's, it's taking what used to take us 7, 8 months, throwing automation around them, or not 7, 8 months, sorry, 7, 8 weeks, throwing automation around it and then reducing it to, you know, 7, 8 days. And so it's been really, really fun. You know, like I said, I always joke that we grow with AI and every time we see a token increase or a speed increase or a new model comes out, Saleo tends to get exponentially faster.

So, so exciting. So there's been all this success in the first few years of having started this company. What's been the biggest surprise?

To me, the biggest surprise was that the market was the inverse of what I expected. And what I mean by that is when we first went to sell Saleo, like right at, so it was May of 2021. Quit my job full-time at Termus, went out to sell Salea. And one of the first companies we ever tried to sell to was like on its way, like they were smaller SMB. We thought they were a perfect fit. We did a huge hookup for them and they were like, hey, you know, how much, you know, like to buy the software? And I always joke that it was like, they were like, you know, I think we said like $20,000. We're just trying to get our first customer, right? And you're like, you're not making up pricing on the spot, but you sort of are, right? You probably hear that a lot, right? You're like, hey, here's how we price this. And so while they're, eh, we were like $12 grand, they're like, eh, and we were like $2 grand and they were like, eh. And I was like, you know, we're competing against some of those interactive demo vendors. They're doing like $50 a month. And I'm like, man, what am I missing here? Because we approached this on this idea of, you know, data at scale and like truly having control over this. They were thrilled. They were clapping in their POV. And I like, now I'm struggling to get like $2,000 out of them. And I was like, you know, I just quit my job. I've got a wife and two kids. What do I do? And then like 2 weeks later, we closed a, you know, a massive multi-year, you know, high, high 5 figures, close to low 6, which then expanded into over $300K of spend in the first year with a massive organization, literally 2 weeks after that. And so it was like, hey, where, you know, where are you finding success? Where are you targeting your market? And then it became quickly adapting like, okay, hey, we sort of built this. Not necessarily for SMB, but with the idea that we'd expand down the road. And now we're building all these tools to scale because the large mid-market enterprise companies have thrown themselves at Salelio in a way that we weren't expecting. And so, you know, initially, and so the nice thing is we got those clues within like 2 months of starting the company. And so our last 2 years of development has been not how do we support these small companies. It's, we've always been enterprise focused from like, I think we updated our website like 3 days later to being like, hey, we're built with an enterprise in mind. We started building all these super scalable features and features truly for like, you know, mid-market and enterprise companies. And that has changed the trajectory of Saleo, right? We went from trying to compete with the, you know, interactive demo market at like a $50 per user per month type of pricing to, you know, we have many, you know, 6-figure multi-year contracts.

I think it's really interesting because many startups are advised to go start with other startups, right? Like build for other startups, you'll grow with them. That's how you'll figure out product market fit and you'll earn your way up market incrementally. Your, your kind of biggest surprise was the reverse order of things. What must be true of a startup for it to, you know, for its ICP to be enterprise from the very beginning? What must be true? Or is it just very situational?

So I think there's a couple of things that have to be true. The first thing we figured out was that a lot of startups have an incredible demo environment. It's not hard for them to maintain it, right? At that point, they might have like 1 or 2 graphs and a handful of areas, you know, a handful of tables. And so for them to have like a live customer isn't super complex for them where like enterprise does. What's true and you know, what makes a company serve the enterprise well is something that we've learned over time, right? Because it doesn't matter how small you are, those companies that are signing the contracts with you are expecting that white glove service. And so for us, it's been like ferocious obsession with customers, right? Like 24/7, 365. Like I have Slack on me and my phone. And as we've expanded, right? Some other people have taken on some of those, but it's like, hey, if you have a, you know, we have some Fortune, a couple Fortune 500 companies, a couple Fortune 50s, like if they're slacking and it's 2 AM on, you know, it doesn't matter, right? Like the way you retain and keep those customers that you hyper-obsess and you hop on the calls with them. There's been a number of times where I've gotten like customer like, hey, what time is it for you? I'm like 2, 3, 4, 5 AM. But that's the way that you build it. And then you start building the resources around supporting those customers long scale. And so for us, we found that it was building that trust. And we didn't even have SOC 2 when we started. And you would think that interacting with these companies' platforms, that they care and we've bypassed it for years. We're still in the process of getting it solely on the need, right? So if you can identify a need from an enterprise company that is so important and so valid and helps their sales so much, people are willing to like overlook the size of your company. They're over willing to overlook, you know, oh, you guys don't have X and Y feature, you know, you don't have team management. We'll get into some of that in a bit. But the features and the pricing, the packaging that like a normal enterprise company, they will forgive pretty quickly as long as it's on your roadmap, right? With the anticipation that you're solving these big needs. And that's what we learned the most, is that if you treat the biggest wound first, right, it's the same way as triaging a patient. You know, people need you, right? They're not going to want to rip that out. We always joke some of our customers' demo environments now, a couple have multi-millions of records generated inside them. And I'm like, they couldn't swap to another competitor platform if somebody else could release things that copy of our product tomorrow. They wouldn't want to switch just because the amount of investment they've done to onboard it. And we have, you know, we have some massive companies. They're like, hey, you've done 5, 6, 7 of our 200 apps inside of our platform. Like, we're, you know, as we expand, like, it's only going to get stickier and stickier. And that's the beauty of a demo environment. It's almost like we've had customers tell us that they'd rather replace their CRM than replace Saleo because every area of your product gets touched. You know, you do these incredible cleanups. And, you know, great coats of paint. You don't, you don't want to move from that.

Solve the biggest wound first. Maybe that's the title of this episode. That's such a good line. Zoom out. So look, look at the next 10 years. I'm curious about the inflections that really attract a lot of your curiosity personally.

So I'm, I've been hyper-obsessed with AI and machine learning, which is probably the cop-out answer that you've heard on like every single podcast episode, but in a different way than I think a lot of companies are. I'm very interested in how it's going to transform the enterprise side of businesses, meaning CRMs, meaning, you know, like network security, infrastructure software, these massive data platforms. Just like I said earlier, right, SaaS has always been here to make complex data simple and people have been willing to pay, you know, millions of dollars and hundreds of thousands of dollars for software in some cases just to avoid having to peruse hundreds of thousands of records. Right. Like when you think about it, at the end of it, people buy Salesforce as a CRM because they don't want to have to go through 100,000 records of an account's history, right? They want a snapshot view of it. And one of the things that we're seeing AI be incredibly good at is summarization, right? And so it makes me wonder if some deep-seated platforms and probably not like a general CRM, like a Salesforce or HubSpot or things like that, because I think that they're so, you know, so needed as like the backbone of a company. But a lot of companies that rely on big data, as summarization gets better, I think there's a chance to offset these incredibly expensive platforms. Because if you can just ask a question to like, let's say it's a network monitoring software, right? And you normally there, you're paying them to monitor like where I worked at SevOne, we had appliances that could monitor a million, you know, a million devices at once. We had certain customers buying us for 40, 50, 100 million monitors to monitor just to like sort of get the graphs and figure out what's wrong with your network. If you can change that with a simple text query and just say, what's wrong with my network? It changes the entire paradigm and you might not need all of those historical analytics, right? It's just a matter of having a certain snapshot, being able to query on a threshold. And so to me, I think a lot of complex SaaS, especially stuff that's data heavy, are going to have to shift because I think that there's an opportunity for newcomers to come in that can run that kind of hyper-analysis on large datasets and summarize quickly. Like, as tokens get cheaper for like ingesting, those software prices will come down, which means that these hundreds of thousands of dollars you're paying these companies to plot, to, you know, monitor big datasets is just going to exponentially drop. And so the question is, how do they fare? You know, is it new features? Is it new, new SKUs that they roll out to try to keep their prices the same? Or are they going to get start cut away from the, you know, the more efficient vendors.

You're right. A lot of people mention AI, but you have an original spin on it. But it does remind me of something that someone said to me recently, which is I'm effectively curious about the speed at which token costs come down because that speed will determine margin compression.

Yep.

And in moments of margin compression, what companies do is they'll innovate. And often that means they'll innovate around like the number of entry points into a product. Which means they're innovating on pricing and packaging. The second thing he said is that because of how good these models are becoming at summarization, we may start to get to a place where we're better at actually understanding the real performance value of software for a business. And you might see more and more companies shift towards true performance-based pricing. Um, curious how you'd respond to both of those points.

I fully agree that we're going to see a shift towards performance-based pricing because people are going to get a good idea of like what this costs. I said this, you know, Justin, my co-founder, and I said this the other day.

We're—

we've been using Slack forever, right? It's been the basis of our company. It's another one of those softwares that I don't think is going away, right? I don't see anybody replacing Slack in the near future. I think it's as important as a CRM for a lot of companies' backend. But they rolled out Slack AI. If you haven't got to play with it, it's really cool and a really powerful feature. Like, I thought its channel summarizations and like those daily pieces. We have a lot of, we keep customers in Slack channels. And so we get like, you know, thousands of messages a week. And I love the summary feature as a, you know, as a product officer to be like, hey, has anybody asked about X and Y? Has anybody like, what are people caring about the product? What are their biggest issues? And it's really good, but it's $10 extra per user per month. And to give you an idea, like our Slack price, I think is somewhere around, we're on the public one, so nothing confidential there, but like it's like $7.50 per user a month.. And so I said, I'm like more than doubling my per user cost. And when I look at the tokens, I look at the amount of messages that our users send each month. I'm like, okay, like, you know, I think I sent like 5,000 Slack messages last week. I was like, the average one was like 20 or 30 words, right? Like it's not that much contextually. And I'm like, man, they're making, you know, giant margins on the tokens for summarization. And it's, you know, even though it's summarizing certain channels for me, it's sharing that across different people that want to summarize those same channels and it's sharing this sort of token library that's like, to me, at the end of the day, I'm like, it's not— the pricing doesn't manifest. And as tokens get cheaper and cheaper, I'm wondering how they're going to keep that up. Like, you know, sure, $10 is cheap comparatively, but to charge it per user with 40 users as a startup, to double your costs doesn't seem super sustainable. And I wonder about like how they're going to even handle large businesses and enterprises. A, a lot of them aren't going to want their content read for AI, but the second off being when you have, you know, 1,000 users, now you're up $10,000 a month, right? And so it just, just really goes up significantly. So I see a lot of that getting pulled off because there's plugins now that will do the same thing for me for $1 a user, $0.20 a user. And so it's going to force these enterprise companies to either shut down their app stores, their plugins that compete with them, or it's going to force them to drop some of that pricing.

Many companies struggle to build really good practice and intentionality around pricing and packaging until they get quite large, maybe Series B, C, D even. I'm curious in your experience if that feels true or if that feels false.

Both. And that's, you know, it's sort of a cop-out answer. So, you know, at Saleo, we have been hyper-focused on making sure that we get it right and trying to simplify it, right? I've worked for companies that have had way too many SKUs. In the past. And to me, it's about maximizing value. Like, that's what's going to get you the NRR and the retention and everything else. So like, there are certain features that I want to throw in, even if it wasn't an extra SKU, just because I know it's going to increase the chances and the likelihood of you renewing and your success with the platform. So for us, it's been really, really focused that way. I've worked for companies in the past, though, that seemed like every new feature we rolled out was behind a feature flag. You ever work for companies in the past where we had a dashboard of feature flags. We signed a new customer and I had to go filter through like 100 different feature flags to flag them just to figure out what a customer was. And it made contracts a nightmare because, you know, you send the customer this nice-to-read contract and says, hey, you have X, Y, and Z feature. And now I'm over here as a product leader looking at this, you know, I have a monitor one side with a giant contract, monitor the other side with every single feature flag, and I'm trying to match it. And inevitably you miss one and the customer's like, hey, where's this thing? And you're like, oh man, you're 4 months into your contract and you should be using that for value, right? And so like at Saleo, when we started building it, we were like, hey, how do we get down to the core of like what people are? And then we price based on that. And so like we have 2 tiers, right? We call it a demo creator or a sales seat. And that those nomenclatures will probably change. It'll probably be one of the things we evolve down the road is because I think we're going to move to a lot of like permissions-based pricing just because of the type of customers we've been signing. TBD. But what we basically said is there's people on your team that are solely responsible for the creation of your demo and there's people on your team that are solely responsible for just hitting play, right? And a lot of companies treat the AEs like, you know, I would say like a baby first learning to walk, right? That, you know, and they don't always deserve it. Like our goal is that AEs can demo as well as presales as a company, right? But I think there's steps to enable that.. And so it's silly, like demo creators can go in, they can edit all the demo data, they can make everything play, play sales seats can like, they can make one of those interactive demos that they leave behind on their, their website and stuff like that. Or they can come in and they can hit play on a demo and do a little bit of level of hyper-personalization, swap some text, do some, some other micro pieces. But really like the majority of their, like their job is to, to demo. I always joke it's like the Barbie movie, right? Ken's job is beach, right? Sales, like the sales job is demo, right? Like, like just hit play, right? It's a very simple one versus an SE. And so I see that that's my long-winded answer of saying, you know, it really depends. Like if you're a personalized company and you sell yourself in personalization, if you don't have personalized packages that are like, this is what meets our customers and we've spent a lot of time thinking about that, you sort of failed at your own mantra from day one.

I want to get your take on how monetization works generally in B2B SaaS. Start with definitions. What is monetization in B2B SaaS to you as a product leader, as a founder?

Yeah, so the way I always think about it is, you know, the same way VCs price, right? Like as an owner of a company, right? You're— I'm trying to think, hey, the thing that when I'm positioning my company to raise more capital or to build on, people care about what your per user pricing is, right? In your overall contract. And so as I'm designing features, as we're designing monetization around those features, it's always How do I increase our contracts each year? Right? Because the, those golden metrics of GRR and NRR, right? You want your net revenue retention to be above 100%, ideally at that like 140%, right? You want people expanding constantly. And so my thoughts around monetization are purely what are people going to pay more for substantially more, right? To increase their size of their contract each year, which, you know, To me, it's all hellbent on retention. What's going to keep them for years and what's going to make this platform so sticky that they never want to leave?

What are the systems that kind of interact with monetization within a B2B SaaS company or govern monetization? How do you think about the systems architecture?

Yeah, so for us, obviously it comes down to like entitlements, right? It's the, we, we've, you know, used a number of different, different platforms. We're using like LaunchDarkly right now. But for us, it's feature-based. So it's like, hey, do you have the live demos? You have the interactive demo part of Salelio. And then we have a few sort of subsidiary pages around, hey, do you have partners that want to sell out of your platform and some of those other pieces. But for the vast majority, we have, you know, we're sort of the get them hooked mantra. So it's like, hey, let's roll out some of these things. We're going to let people try them for a little bit. And then if they decide that they want to buy them, like at their 1-year renewal, we'll say, hey, now this is going paid. That's the way I like to play those hooks because it gets people interested. Like, I can't tell you how much software as a, you know, I bought a lot of software in my history between being a marketer and a product leader. And I always see these features. I'm like, oh, that looks really cool. I would love to try that. And they're like, cool, spend us, give us $50,000 more next year and you can try it. I'm like, no, no, no. Like, I'm not like, you know, I'm not a huge fan of like the cheapo free PLG because I think it gets a lot of people kicking tires, but if I'm a paid user of your software, like, give me a month, give me a week. Like, if your software— like, we should be building software that benefits people. If I decide not to buy it after that, you have a bigger problem with your software, right? Um, as long as the value prop and the pricing is good. And so for me, um, that's the way that I sort of see those, like, entitlements is like, hey, as I roll things out, you want to try something at any point, I will give you 20, 30, 40 days for it, you know, unless it's a feature that truly drives value over time, like an analytics hub that might take 90 days to generate data, we'll start, you know, for us, it's like super important that we, you know, we can build that software. And, you know, even with things like an analytics hub, I've always been like, even in my history with Terminus and everything else, like we've had companies that we priced and packaged things like those where like it would take 90 days. The fun fact behind the scenes is we're collecting that data anyway because we're so hellbent on the, hey, if somebody comes in and they activate this analytics hub, I want them to have value from day one. I don't want to have to start collecting and have this conversation in 90 days as to whether it met their expectation. Like, I want to blow them away from day one. And so that's the way I see those entitlements is like, it's always, it's always worth a positive experience day one.

And just for listeners, entitlements, a good way to think about that would be what a customer has access to based on what they purchased. So how does, how does, so it sounds like you manage entitlements in LaunchDarkly. How are entitlements interacting with maybe kind of customer information in the CRM or your billing tool? Like, paint a picture of the architecture that governs the customer's experience around monetization?

Yeah, so for us, it's one of the things that we need to do better. We don't have a direct link between like a contract and the entitlements right now. What I'm doing is because we don't have a ton of entitlements, right, as a startup, we have like 7 or 8 feature switch flags. And of those, like 3 to 4 are true product-specific switches. And the other ones are like, hey, if they have this tech, we need to flip this switch because it makes their lives easier. So, you know, I'll go down to 4 of them. It's like, it's contract review. Like, I know without an expansion on the table or a renewal, like, people most of the time aren't going to get access to those new features or entitlements unless they're like in one of our, you know, our beta lines or pieces like that. And so that's the way we see it. I definitely think that like well-rounded companies like yourself, right? Like with, you know, the whole purpose of schematic, right? Things like that. Like it should be tightly tied. Right? We need to start creating these fields and syncing them back to HubSpot because a lot of times you'll end up with, hey, does X company have Y? You have to go back and find an old contract. You have to review it. There might have been new talks. There might have been maybe they added this feature at an expansion or a time like that. You know, my long-term dream is that customers will be able to like, you know, single serve, hey, I want this feature now. It can get added. It can start, you know, You know, with the right signature, it can, you know, get prorated and you can start this, you know, now. Um, we're just sort of working out what are the levers to get there.

What about at Terminus? Can you share any stories from Terminus? I mean, the company was— I don't know exactly the scale when you were there, but I would guess this is a growth stage software company. So we're talking between $10, $15, $20, $30 million in ARR. It saw a lot of evolution, I imagine, around the way it went to market, the way it billed, the degree to which it tried to make functionality available to, you know, kind of, you know, specific customers. Can you talk about what you learned from that experience?

Yeah, I did. So I learned a ton. So that was, you know, one of the most interesting ones. They had a sheet of like 100 entitlements depending on who signed up, what CRM they're using. We had also acquired, like through my time, like they were a big company that grew by acquisition. So we had, you know, acquired like 5 companies during my time there. And each of those companies, we inherited their entitlements right into one massive entitlement system. And so for us, we were a lot more tightly aligned. We had features individually in our CRM that said, hey, do they have access to X, Y, and Z? What we found is time, one of the things we struggle with is that like, you know, at one point there's a lot of turnover with employees there. We, you know, end up with like a ton of entitlements. We're always trying to figure out, hey, what is this entitlement? It's named this, but what features and stuff? And like going back and redefining what people should have access to was a a process that we, we took over at one point. For them, it was also very heavily around analytics and metrics. So we had a whole— we rolled out a measurement studio. It had a significant amount of metrics. And so how that connects, what kind of data you're— we are collecting from an end user would have totally different entitlement things. We had some companies that didn't want us to connect to their CRM at all. And so we had to show value a different way versus, hey, if they have this field for revenue on, if they have this field for influenced by an ABM campaign, it would totally impact their experience. And what I like to do a lot was sort of run our own reports on what entitlements customers had. And we almost had a, like a 1-to-1 direct correlation with the features that a customer had enabled for them and like their probability of renewal, right? The biggest one being tied specifically around like their measurement and analytics hub, right? Like it's like, oh great, if they have ABM for for ads, like they would not see the same level of success as if they had the full Measurement Studio to a point where it sort of impacted what we gave customers. Like even if they were like, oh, I don't want to buy Measurement Studio in the contract, like I'm going to do X, Y, and Z, like we would throw it in and we'd be like, hey, you know, we're going to throw this in if you sign this deal by X, Y, and Z, because we knew that having access to that feature increased renewal rates. And that's what sort of modified my opinion for how we run Salelio when, as we're rolling out features, like I always want people to get their hands on it because I think more often than not, they're going to find it indispensable, right? Versus, hey, I might not keep you if I don't give you X, Y, and Z, right? Or we don't really run into that problem, but it's more of a, how do we increase your experience with the platform and increase what you're like when you go back to your bosses and say, I want to renew Salelo for another 6-figure deal next year. How do I prove my ROI? How do I show all these things? And you earn a lot of goodwill. Which tends to lead to like more expansion seats-wise for us, like, you know, running it back. Like a lot of our customers are like only at a 10th of the expansion that they theoretically could be as they roll it out to more products, more feature lines, things like that. To me, entitlements leads to expansion one-to-one almost.

How do you align your product roadmap with your pricing and packaging roadmap or your monetization roadmap? And maybe they're not aligned. Just curious about how you think about the alignment of those two things.

They, they should be. And so I want to say that they are. For us, we're constantly building on what our customers want, right? We're polling them, we're looking at it, we're trying to figure out, hey, what do you struggle with the most? Like, what's that next big, like, you know, gap that Saleo could help fill? So like, there's gaps obviously on, hey, how do we all help automate and speed up your demo data creation? How do we help you personalize better, right? Like, what are your biggest struggles using Saleo? And then there's like, there's what are your biggest struggles outside of using Saleo?. And that's the one that I see as the biggest use for like new pricing and packaging levers. It's like, hey, if I'm making a big improvement to how like Saleo Live or our capture product works, I feel, I personally feel like I've already sold you that. You should get that. You should reap that benefit as a user of that software. Even if it costs me a little bit more money at the end of the day, it'll keep you happier and I'll keep our net retention up. If I'm solving a net new problem for you, or I've rolled out something that's significantly changing from the features and pricing that I've sold you, like that's the thing that I'm going to trigger on for that sort of upsell, resell things. And so a lot of that is driven on, hey, Customer X, what are you looking for new? And so we've aligned our roadmap a lot towards that. But there's also ways that we haven't, right? We've recently had talks with customers who like— we had one customer buy a— well, actually a couple of customers buy banks of seats and they're like, hey, cool, I want to start using these for my partners.. And I'm like, well, awesome. These are like sales seats. We'll give them access. They're like, well, I want all these people to have all these new like features. And I'm like, well, that's not a sales seat for us anymore, right? Like that's like, yeah, I'm buying them for my partners. And so we're in this process of like, hey, how do we redefine these in the future? Like if you bought these for them, I'm absolutely going to honor what I've given you, right? Like that's not the point, but like we have a, they have a need for this seat that doesn't exist yet. Right. And so very similar to like how CRM is, right? Like a lot of our customers are asking us not necessarily for like those democrator, the sales seats, like we talked about building that like super simple pricing. They're asking us for permissions-based pricing, just like you and I were talking about. I want a user that can— I want 100 users that can edit demos. I don't care what they're called in your system. I want to be able to dole those out very similar to like the Zoom idea of like this guy is a webinar host and this guy is a licensed video platform. And so I could see— excuse me— I could see some of our pricing adjusting as we roll into some of that permissions-based policy. And a lot of that comes from our biggest customers, right? Like we have, you know, a couple of CRMs, things like that as our major companies. The bigger the company is, the more you're used to like that role-based access permissions or not even role-based, right? It's individual user. This user can do X, Y, and Z. And so that's one of the things that I'll see affecting our roadmap on some of that pricing. And then we have other customers that are like, hey, we really want these, you know, this, you know, we're rolling out Analytics Hub right now, but we have like these plans for, hey, what's the future of presales? What does their login look like? And we always say we want to make presales like the— like what Salesloft did for SDRs, we want to do for presales, right? Really sort of elevate them. And so as we roll out some of those new features, I see a lot of that. Having additional features, right? Where there's a base level of analytics that are free because I'm always in that mind of how do we hook people on this? And then, oh, you want like the whole team reporting? Oh, you want, you know, pricing management? Oh, you want to add like sync this back to a CRM? These are the— those are the features that I think really benefit people because then, hey, they can still come to the platform and get some of those ROI metrics. But if you want to expand it to the rest of those, you can start pulling off some of those metrics and then you're you can start pulling off some of those levels— levers for pricing. And those pricing, like that pricing is more aligned towards enterprise and like the bigger contracts where it's like, hey, if you want this to infect your CRM, then they're more likely to have a CRM and they're more likely to have all these users and database and numbers. Like, how do I get the most users into my software? Because that's how I'm getting paid on seats. And then I'll start charging you back for, you know, on that per-seat cost for the data you want to pass back. That's the, the end goal. It's always, it's always get 100% of their users under our platform and then sort of start raising the prices on the features that they find the most valuable.

Yeah.

Well, not existing features, but new features, right?

When you look at your experience at Terminus or with Saleo or blend the two, what are one or two or three sort of tactical things that you all did that you look back and you say, that was really a good thing we did that from the context of like building pricing and packaging in a really intentional way.

Yeah. So the first thing was monitoring, like at Termos, one of the things that I was really interested in from the beginning was, hey, what companies are people actually targeting? So like we had, we were sort of blind to this fact that we had companies constantly getting loaded up and we'd see them getting added to the campaigns every day, but we wouldn't know what companies people truly wanted to go after with ABM. And when we started sussing that out and saying, oh my gosh, they, you know, 90% of our campaigns have a top 50 in enterprise, right? Like these companies were shared over and over again. It helped us start understanding the types of audiences our customers wanted to go to. And then it started informing new features. So we started saying, Hey, as you're rolling out, you know, one of the first things that we did was like, hey, as you're rolling out new campaigns, you should really have an enterprise campaign, a mid-market SMB, because if you have Microsoft and Bob's Burger Shack in the same campaign, right, Microsoft is inevitably going to eat up 90% of that spend. And so it became optimization for that. But then we could start predicting companies. And so this is what got really interesting that affected the pricing is that we always did something called a match test determinist and it was Hey, you give us your list of target accounts. We'll tell you how many of those we have in our database, right? Every ABM company does it. In my opinion, it's sort of a dying practice because everybody eventually just fought each other to 100%, which, you know, wasn't always true for the end customer. You know, Terminus did a really good job of being honest about it, but I still wonder about some other platforms. I'll put it that way. But what we started doing is we would take those match tests and we'd run it against their their customer base. And it would give us an idea with their like spend rate, how those companies would be, you know, broken down on. And then we could say, hey, you really need X, Y, and Z packages, or a majority of these companies are international, you need to add on our international targeting, right? Or hey, we've seen the best, best way of targeting these companies in the past being LinkedIn, right? You need to add our LinkedIn features on, or hey, you should really pass these metrics back and do your own secondary warm-up campaign. And so it became really, really valuable to say, or like, you know, enterprise companies, especially as you're doing like deals into them, they can take tens of thousands, hundreds of thousands of impressions to be as effective as a small company, right? Because if I target, you know, a schematic that you guys probably have 10 or 20 employees, right? There's like, I'm much more likely to get 100% coverage of your company with like a few thousand impressions than a Microsoft, right? Hitting my end users. And so we could not only like inform people on what their average spend should be, which helped us like inform the profit we make off their contracts and the packages that we should have them on. But it also enabled us to figure out they probably need a measurement studio added onto their contract, just like we were talking about earlier, because measuring the success of 100,000 impressions across a Microsoft is way harder than a schematic. And it really informed the features that they should have. And then the campaign strategy to keep them longer, right? Like, hey, if you have a lot of these, you should be retargeting the traffic coming to your site. Versus if you have a lot of like net new inbound, they might be better served with these like single lane messaging target directly to their ICP, right? And so it all came down to personalization at the end.

What about mistakes? Are there any mistakes you've witnessed or been a part of that you'd say, especially to product and engineering leaders, avoid these mistakes at all costs as it relates to pricing, packaging, or monetization?

Yeah, honestly, the biggest one that I've seen repeatedly has been getting all these new features and not getting them in the hands of your customers, right? I think, you know, as much as I like really loved my time at Terminus there, like when we bought these, like we bought 4 or 5 different companies and started with BrightFunnel, we acquired Growflare and RambleChat and oh my gosh, I'm going to miss the other 2 for a second. But, you know, we would announce it, our customers would get so excited. They're like, oh, this is so cool. You're, done, you acquired this company that has all this intent data. We'd love to use it. Like, cool, here it is. It's going to be like $10 grand, $20 grand, $30 grand. It's the same idea of like not getting their hands on it. It didn't create the value, right? And the adoption it would have if we had just rolled it out as part of our package and then figured out ways to iterate our pricing on top of it. Or even just like, hey, this, we'll give it to you for the first year. You've got to get it because a lot of the companies that we acquired were already had quasi deep-seated competitors. And so somebody would acquire it and we're like, hey, you like require BrightFunnel. They're like, oh, well, we already use this competitor. Like, do you really want to? Like, and we would struggle to like make the sale. Whereas if we had made it effective and part of our day one packaging, it would have changed the trajectory of the company. Cause I think we would have seen greater adoption and expansion over time, or at least higher net renewal upfront. And so that's the thing that sticks in the back of my head over and over again. Like, as product leaders, we love to develop features, but if people aren't using them, what's the point? I always joke with my team. I'm like, listen, let me know if I'm off base here because I'm not building this stuff for my ego, right? Like, it's like, you know, as much as I love sales demos, right? We're all here at the end of the day to like create immense value in the companies that we have ownership of. And so I would much rather spend 10 years building a feature that mentally to me is boring and draining, but to our audience and our customers is super exciting than I would like, oh, I'm building for Dan's ego. This is an amazing like I think it's the coolest product on earth, but nobody wants to use it, right? There's nothing that like that fuels me more than like opening up adoption metrics and seeing people use a feature like the first day that comes out. We just had a couple of those that were super exciting and like, again, I don't need my Celsius in my coffee in the morning when I see it. But when you like roll something out and you do the announcements and you do the guides and your product and people, there's like no adoption on it. You're just like, man, like that's, that's never a thing that I want. And so whether it's through acquisition in the future with sale of new companies or whether it's rolling out new products, they always want to find a way that some part of it remains there for the customer to adopt and expand.

Dan, one of the closing questions I always like to ask is what was the specific moment in your career that you think has been most formative?

Ooh, that's a great question. Man, for me, I think it was, oh man. It was probably the moment that we stepped out for Saleo and did it. Like I had a really comfortable job. So I had been at Termus for a long period of time. A large publicly traded company made an offer for me. Couple, about 6 to 8 months before I stepped out to do Saleo, they were like, hey, we want you to come run our ad unit. They were launching a really big ads product. I got calls direct from the CEO. Like, it was very ego-building for me, right? And the offer was ridiculous— multi-millions for 2 to 3 years of my time. And I was like, man, do I love building products and doing this? Because like at Saleo, I was going to go cut my salary by a third, right? I was like, I'm— I love toys. I buy myself a million and one like little fun things all the time. Like, it was like, do I want to go back to like sort of budgeting and spreadsheets and like, hey guys, we're going to have like hot dogs tonight for dinner type of thing versus going out to the restaurant for a couple of years? Or do I want to go take this job offer that would have been like more than life-changing money, right? You know, Wellit, and they're like the high 6, low 7 figures for it, like per year. It was massive. And I called my buddy Justin, we were working, because we spent a year building and bootstrapping Saleo before it. And said like, look, I've got this offer. He's like, what are you going to do? I'm not taking it. He started laughing. He's like, wait, really? And I was like, he was like, not even like, I was like, no, like I just, I want to focus on this. And like, I think like long-term, like, you know, Salelo could be life-changing money, which like I do, you know, I have a firm belief on that. But like to me, I love building product that I love. And I was like, I wasn't tapped out on terminus and account-based marketing, but like I didn't want to answer to another person, right? Like I wanted to really like control my destiny.. And to me, like going down to basically not earning anything and building like really cool product with cool engineers was way more worth it. And that's when I sort of figured out like, you know, my future, I was, you know, like my future wasn't there. Like as cool as it would've been and it would've been a blast to like build that product. Like I, I really like getting in the weeds. To me it's understanding everything, right? Like I proved my value to Terminus by learning all about cookies. It was tech. Technology nobody had any idea how it worked on behind the scenes for ads across platforms. And you know, here it's like the backends of every company and APIs and AI. And it's like, hey, I can, like, I love, love, love to learn about stuff. And so for me, that was the moment it was like, hey, you know, you have a $900,000 delta between these two jobs, which you're going to take. Like 90%, probably 99% of people would have picked the other one because it's like a sure thing, right? Because we hadn't even started yet. We haven't raised our first million. Million dollars. We were just two guys with a random idea, both working for Terminus. But, you know, at the end of the day, like, I think mentally, like, I'm much more happier as a builder and developer. And so to me, that's like, that was the key moment. It was like, hey, your life could split here. You have the choice of like taking a cushy job and having some fun for a couple of years and being one of those like quasi-names that people have where you have a chance of like really going out and trying something and I don't know, I like the entrepreneurship.

When I ask that question, there are a lot of different answers to it, but a theme that's emerging is a moment where someone took a risk.

Yeah.

And you're describing one where you absolutely took a massive risk. So thank you so much for this time. It's been incredibly useful to, I hope, many product and engineering leaders. Where can people learn more about Saleo?

Yeah, absolutely. So they can go to Saleo. It's saleo.io. Check out our website. They can follow us on LinkedIn. We're pretty active over there. So always happy to answer any questions. My email is dan@salia.io. I always leave that open. One day it's not going to be— it's going to pay me back. But for now, I love answering questions whether people are customers or not. Like I'm just as I'm learning, right? I'm hyper-obsessed with demo environments and what people are doing. Like it's more fun for me. Like I don't even care if you pay us at this point, which I do like you paying us, but hey, at the end of the day, like, to me it's just fun. Like, it's— I would rather know and be informed and learn more about how people are solving problems than not. It's been a really cool ride.

Dan, thank you again.

Absolutely. Thank you.