scaling operations in the subscription economy (brandwatch)
TRANSCRIPT
Scaling Operations in the Subscription Economy
A COO’s Perspective
Bryan Tookey
Chief Operations Officer
Brandwatch Agenda
1. Brandwatch Introduction
2. Operations at Brandwatch
3. Measuring success
4. Operational challenges in the Subscription Economy
KPIs
Support
Billing
Process
Services Right gents, AOB?
Operations covers a lot of topics
Finance
HR and Legal
Set up
Sales
22% of Brandwatch Staff are Ops
HR, Legal, Office (4)
F I N A N C E A N D M I I S S I G N I F I C A N T , B U T M I N O R I T Y
Support (5)
Set-up (7)
MI (1)
Finance (5)
Consulting services (7)
Total 29 (out of 130, 22%)
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All staff Index) Operations staff (index) Monthly revenue
How operations has grown R E V E N U E , H E A D C O U N T A N D O P S G R O W T H
Under invest as limited resources
Over-invest to fix processes
Enjoy benefits of scale
Increased enterprise customers
Zuora has improved Billing E R R O R S C A U S E D B Y C O M P L E X I T Y / F L E X I B I L I T Y
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Invoice date
Also: fewer invoices per customer + faster invoicing + lots more flexible options
Post-Zuora: on average we issued corrections to 5% of invoices
Pre-Zuora: on average we issued corrections to 9% of invoices
KPIs
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Revenue Index
Staff Index
Ops staff Index
KPIs: we use Bessemer’s SaaS metrics
KPIs
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All Staff Index
Opera,ons
MRR Are we selling enough?
KPIs
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All Staff Index
Opera,ons
MRR Pipe Will we grow
KPIs
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All Staff Index
Opera,ons
Cash flow Will we run out of cash?
KPIs
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All Staff Index
Opera,ons
Churn Do my
customer hate me?
KPIs
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All Staff Index
Opera,ons
CAC (Customer Acquisition Cost)
Are my sales team too
expensive?
KPIs
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All Staff Index
Opera,ons
CLTV (Customer Lifetime Value)
Is it all worth it?
Support: hard to scale 2 4 H R A N D M O R E L A N G U A G E S I S E X P E N S I V E
750 customers c. 40 requests (tickets) per day 14 hours support, 5 days a week 2 languages (EN and DE) except Portal (EN
only) 2.5 1st line Full Time Equivalent employees 1 second line FTE 1 FTE for support materials 1.25 FTEs for training (EN, DE)
2013 1300 customers c. 70 requests (tickets) per day 24 hours support, 5 days a week 5 languages (EN/DE/CN/ES/FR) including
Portal 10 1st line Full Time Equivalent employees 2 second line FTE 1 FTE for support materials + 4 freelancers 3 FTEs for training (EN/DE/CN/ES/FR)
2014 2x revenue
1.7x customers
Up to 4x costs
Clients demand Services G R O W T H O F B R A N D W A T C H S E R V I C E S O F T I M E
23% 20%
31% 32% 31% 34%
37% 35%
38%
8% 9%
14% 13%
19% 21% 21%
9%
22%
0%
5%
10%
15%
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25%
30%
35%
40%
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13
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Revenue from Brands Revenue from Services
• We get asked for Services (set up and summary social media reports) from our direct brand clients
• Services are very lumpy
Reasons why…
Acquire: Complex product
Bill: One offs
Collect: Enterprise Customers
Nurture: Complex Product
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What it all means R U N N I N G O P E R A T I O N S I N A S U B S C R I B E D B U S I N E S S
• A subscription company can grow v fast • Existing customers retained at low(ish) cost • Allow majority of company focus on product and new sales
• Flexibility, a complex product and larger enterprise clients can make it hard to get all benefits of subscription economy
• For Brandwatch, Operations has been a slow building process
Photo AGribu,on Slide 6 Gargoyle 1: by Julian Fong Slide 7: (sales and product) by chuck624 Slide 8: Rob Faulkner with thoughUul frieze Slide 21: Alexandre Dulaunoy with the graffiY gargoyles Slide 23: Akbar Sim with RoGweiler Slide 24: Jennifer with thank you gargoyle
Extra 10% price Amazing increase in func,onality + not really loose on price 1 day to implement