The Top- 547: Handshake CEO Glen Coates — Handshake Raises $24M, Helping 1000+ Customers

In Episode #547, I interview Glen Coates. He’s the co-founder and CEO of Handshake. It focuses on putting the right product on every shelf in every store. He goes between Sydney, San Diego and New York City. Famous Five: Favorite Book? – The Five Dysfunctions of a Team What CEO do you follow? – Dave Yarnold Favorite online tool? — Boomerang for Gmail Do you get 8 hours of sleep?— Yes If you could let your 20-year old self, know one thing, what would it be? – Glen wished he knew how intense running this company was going to be and to spend a lot more time making music and going surfing. Time Stamped Show Notes: 01:37 – I introduce Glen to the show 02:15 – Handshake is about getting the right product on every shelf, in the world 03:30 – Handshake brings the Amazon-like buying and selling platform to businesses 03:55 – Handshake Rep is the mobile app used by sales reps who work for the brand 04:21 – Handshake Direct is the mobile and web-based ecommerce for B2B 05:00 – Handshake is a SaaS business and they sell to manufacturers and distributors 05:10 – Handshake’s customers are the manufacturers, distributors, and their customers who log into Handshake 05:22 – Handshake has a similar model to Salesforce 05:40 – Glen started working with Handshake in 2010 and got their first customer in 2011 05:51 – First year revenue 06:16 – Average number of customers at the moment 06:51 – The pricing model is per seat per year for Handshake Rep, Handshake Direct is made-to-order 07:37 – Average customer pay per month 08:24 – December 2016: total average revenue range 09:35 – Handshake used to have monthly contracts 09:59 – Most of the contracts now are annual contracts 10:07 – Total capital raised is around $24M inclusive of Series B 10:29 – Series B closed in February 2016 10:40 – Handshake isn’t in any acquisition talk 12:03 – What Glen and his team is building is grand in scale and requires a lot of hard work 12:44 – Team size and location 13:05 – Glen shares the number of people per team 14:10 – LTV 14:15 – “I don’t think much about lifetime value” 16:51 – “I care about delivering 100% growth with a better payback period than I care about delivering 200% growth with like a terrible payback period” 17:05 – Handshake growth is 100% annual 17:30 – Glen shares the flagged payback period in VC communities 18:48 – Glen is currently burning close to $500K a month 18:56 – Glen thinks that it should take at least 6 months before having to raise again 19:50 – Glen usually raises for a couple of years and each time he raises gives them 2 years of runway 20:15 – Gross annual customer churn 20:30 – Churn has come down when they shifted their market 21:25 – Glen shares what they did to combat high monthly churn 22:38 – Handshake always has a negative revenue churn 23:30 – Glen wouldn’t sell Handshake for Nathan’s sample offer 25:10 – The Famous Five 3 Key Points: It’s difficult to create a SaaS that is web-based and mobile-based – it takes hard work. Delivering 100% growth with a better payback period is better than delivering 200% growth with a terrible payback period. Raising usually takes 6 months and it is the CEO’s responsibility to decide how he can leverage each raise.