Transcript
Harrison Rose:
The same day that I picked up my A-level results, I drove straight to Paddle’s first office for our very first day at Paddle. The reason why a SaaS company should either win or lose shouldn’t be how well they’ve invested in some of their billing infrastructure … or whether they’ve done that right or not. It should be on the quality of their products, and the value of that delivery.
Stephen Cummins:
Welcome to 14 Minutes of SaaS! The show where you can listen to the stories and opinions of founders of the world’s most remarkable SaaS scale-ups!
Still at SaaStock in Dublin, where we meet Harrison Rose, co-Founder and Chief Customer Officer of Paddle, a company that has tripled its revenue every year since its founding in 2012. And in this episode, we learn all about how he united with Christian Owens, fellow co-founder and CEO to build this amazing start-up right out of school.
[00:01:06] This is 14 Minutes of SaaS coming to you from SaaStock in Dublin, in front of a live audience. We’ve got Harrison Rose, who’s the Co-founder and Chief Customer Officer of Paddle, a subscription and commerce platform for SaaS, and other software businesses. Hopefully I’ve described it correctly. We’re delighted to have you.
Harrison Rose:
Thanks for having me. Yeah, great to be here.
Stephen Cummins:
How has SaaStock been for you so far?
Harrison Rose:
Fantastic! We’re right at the end of the conference. I’ve spent the last 15 minutes G-ing my team up … and I’m dosed up on cold and flu medicine … so it could not be better! [laughter]
Stephen Cummins:
So the first thing I’ve got to ask you … and I know in your case it’s not rude … What age are you?
Harrison Rose:
25! Although the grey hairs I’m slowly getting might tell you otherwise. I blame pattern exclusively for those.
Stephen Cummins:
So quickly calculating in my head that tells me that you came straight from doing your A-levels in Cheltenham College
Harrison Rose:
Not Cheltenham … A-levels at Bedford Modern School. But the same day that I picked up my A-level results, I drove straight to Pardo’s first office for our very first day at Paddle. Christian Owens, the CEO and other founder, and I had worked together before, but our very first official day at Paddle was that same day I picked up those results, which is pretty mad.
Stephen Cummins:
Wow. Well, take us back a little bit before that … and tell me a little bit about who you are. Two minutes, maybe. Your childhood growing up, your influences. Give us a little bit of a flavour of who you are before we jump in.
Harrison Rose:
[00:02:28] Sure … Yep. So I was born and raised in Hertfordshire. Most of my life is Paddle like, to be honest with you. We’ve been doing this for nearly eight years, seven years. They all blur. And I went to school in Hartfordshire … I went to many different schools, about five, in fact. Don’t worry, I didn’t do anything wrong. We’re not gonna get any spoilers or anything to worry about here. Stuck around in Bedford Modern … did my A-levels there. Interested in all the very generic and boring things I think someone of my age is probably interested in. Yeah.
Stephen Cummins:
And yeah. So the ex-assistant head of one of the places you went … said you set up a successful graphics delivery company as a kid. So you were an entrepreneur even before Paddle, am I right?
Harrison Rose:
[00:03:13] Yeah. So Christian, who I now work with at Paddle, who’s our CEO and founder, was actually due to hire my best friend whilst we were at school … at the time he was running some fledgling, failing affiliate marketing company, I was trying my hand at graphic design. I dread to think what those things look like now. I’d hate to draw those back up again … and I ended up joining Christian at the time as someone who is entrepreneurial and wanted to get involved in business and have an impact. Never looked back really.
Stephen Cummins:
[00:03:40] So how did you … and/or Christian Owens, your co-founder, come across the initial problem that Paddle was to address.
Harrison Rose:
Yeah. I’m glad you say problem there … because we certainly got the solution wrong initially. So Christian was building software himself … and he certainly much more enjoyed, and was much better at, building it than he was actually selling it. And he brought me in to assist in that effectively … both helping him sell software more effectively … and others too. And we realised quite quickly that this is really hard for a lot of people … and actually quite a big problem. And it was our initial hypothesis that marketplaces actually help people sell software. They drive customers for you, they handle payment for you, they allow you to sell globally, handle tax free fraud … all these things that maybe you take for granted. So we tried our hand at launching a marketplace in order to help people sell, what was at the time all sorts of digital content, games, e-books, et cetera.
Christian and I have since made the joke that having launched that marketplace and having AA game titles like Fifa, a 100K e-books, and all sorts of things on this marketplace … that we’d have literally sold more content going door to door. We launched in like December many years ago, made no sales for like a month. And were like ‘surely this is not what’s going to happen, right?’ And at some point we realised that people didn’t want another marketplace. And competing with Amazon or the outsourcing centre wasn’t a smart idea. But there was a need for the infrastructure we built out it to help software companies.
Stephen Cummins:
Ok. And you market Paddle as an all-in-one platform and partner solution. Can you explain what you’re encapsulating there when you describe it that way?
Harrison Rose:
[00:05:22] Absolutely. We refer to ourselves as the SaaS commerce platform. So it’s our focus really to help software businesses both run and grow. And both of those things are really important. And by run we mean removing all the operational burden out of selling software. So we handle things like checkout payments, recurring billing, tax and fraud to name but a few. And then on the grow piece, it’s utilising all the data that we collect on your SaaS business, and on the SaaS businesses on the platform in total to help inform things like pricing strategy and your go-to-market … and really helping them to grow revenues and grow their businesses.
Stephen Cummins:
Okay. So yeah, you seem to cover two or three different bases there. Who would your immediate competition be?
Harrison Rose:
So. The most common way in which SaaS businesses are running today isn’t in using a direct competitor of ours. And as you’re saying, it’s normally cobbling together a number of different tools and services in addition to a number of internal jobs, actually. And typically we are centralising what it is that we’re doing. We’re trying to be a full SaaS commerce platform … rather than having to integrate, pay for, and manage this disparate set of services … and not enjoy doing so … and hate doing so … usually we’re trying to just be the one platform they can use to actually run their business.
Stephen Cummins:
Can you give me an idea of what sort of growth trajectory you’ve had over the last year or two?
Harrison Rose:
[00:06:41] We’ve been growing very fast. I think we’ve named the fastest growing software company twice recently by Deloitte. We like hired 100 people in 2018. It’s been a pretty mad journey … hence those grey hairs. I try to look forward as best I can. Rather than back.
Stephen Cummins:
I can’t even see them. I don’t even look at hair anymore.
Harrison Rose:
This giant headset. I mean, this is great for me. [laughter] But yeah. Looking forward to the next stage of growth. I’m heading out to New York to open our first US office just next month. So, yeah, I try and keep myself looking forward as best I can.
Stephen Cummins:
[00:07:13] And in your U.K. office, the team is co-located. They work together in the same office? …
Harrison Rose:
Yeah, we have a handful of people, but there’s about 130 people in the office in London. And then 20-ish kinda spread around.
Stephen Cummins:
[00:07:22] Now. Your title change from running sales and customer success to Chief Customer Officer. Did anything actually change?
Harrison Rose:
[00:07:33] Yeah. Yeah. I promise! So I ran the sales and success team at Paddle for six years. And I probably, on reflection, should have hired in much more senior and more intelligent people than me to help with that a little bit earlier in the process. And we certainly did that on product and in engineering earlier. And around a year ago, we hired a VP of Success, and a VP of Sales … who I was able to give some of that responsibility to … and allowed him to run the functions. And then they reported up into me. And it was at that time that we kind of had the time to change. In reality, and truthfully, my title has been something we’ve kind of half made up over many, many years … all over the place. And just helping go to market and the commercial teams run. At one point on a business card, I just had the title ‘Big Hair’. But yeah, hopefully that makes some sense.
Stephen Cummins:
And your sweet-spot customer … I mean do you have more SMBs … or do you sell into the enterprise as well? How’s that working?
Harrison Rose:
[00:08:33] Yeah, it’s quite an interesting question. When we first set out with Paddle, having never done this … for the first time, and speaking to a lot of software companies, we focused first and foremost on relatively small businesses …. trying to give them the infrastructure which they needed in order to get off the ground and go to market however they wanted. And assuming that at some scale, and at some stage, you have the internal resource to do this stuff yourselves. And it turns out we were wrong. And these days we’re working with businesses in the tens of millions of dollars in annual revenues. And funnily enough, they don’t want to spend time building out billing management or tax infrastructure or preventing fraud, because it’s not probably what they started that business to do. It’s just a necessary thing they have today in order to monetise, which is also pretty important to most businesses. Let’s not go there. [laughing]. But … so the sweet spot these days … a customer is probably doing somewhere between 3 million dollars in annual revenue, up to about 30 million dollars in annual revenue. And we work with all different types of software companies. But really focused on doubling down on those in B2B SaaS right now.
Stephen Cummins:
Okay, very good. So SaaStock is a perfect place for you guys to be. What would your vision be for the next two to three years? Looking forward with Paddle … where do you see yourselves going?
Harrison Rose:
[00:09:47] Yeah, I think we’re doing a really good job at the moment of removing some of those burdens of selling software for people. We strongly believe that we make that a lot easier, and we level the playing field I actually think for a lot of different SaaS companies. The reason why a SaaS company should either win or lose shouldn’t be how well they’ve invested in some of their billing infrastructure … or whether they’ve done that right or not. It should be on the quality of their products, and the value of that delivery. And I think we’re doing a good job of levelling that playing field through our infrastructure. I think the real focus for me personally … will be for us in the next couple of years [to understand] how do we continue doing that …. Also, much to invest in how we’re growing the revenues of these businesses as well.
In providing them with this infrastructure from day one, the speed at which they can enter new markets or move upmarket and internationalize should be much faster and they should be able to do so much more effectively. And I’m really interested and excited to see what impact that has for many, many software businesses over the next couple of years … having worked with quite a number already. And also utilising the ever increasing dataset we have on SaaS Commerce businesses – both successful and unsuccessful – and using that data to inform how it is they’re going to market and growing their business. Really thinking about that.
Stephen Cummins:
[00:11:01] Okay. So big data play. And you know … I assume some of your payment is through transactions, and some of it is recurring revenues. Is that correct?
Harrison Rose:
At the moment is just a transaction fee.
Stephen Cummins:
Do you see yourselves moving towards a more recurring revenue type of play … or having something in that domain?
Harrison Rose:
[00:11:20] Not for the foreseeable. I think we’re in a really exciting position whereby at the moment we make money when you as a seller make money. And which is helpful for them, because they’re not paying for something that they’re not getting value from. But more importantly, when it comes to actually growing the revenues of these sellers, when I make a suggestion to a seller that they should change their pricing in a region … or actually I think that they should change their value metric and per seat billing makes a lot of sense within because of the potential they have in B2B. Because we only make money when they make money … they take the suggestions with real credibility. And we’re not trying to flog an extra couple of seats to increase our LTV on that customer. We genuinely are making suggestions this business because we think it’s going to impact on revenue positively. And if it was a bad suggestion, that’s going to negatively impact us too. So I really like that alignment right now with the customer. And so for the foreseeable, I don’t see that changing.
Stephen Cummins:
[00:12:12] Okay. Any reasons we acquired iconic customers? On your books.
Harrison Rose:
[00:12:17] Many …. gladly. And the customer I personally have worked really closely with and I really enjoy working with … and really fit into how we see software companies run in the future … is a company called Framer, based out of Amsterdam. And it’s been an amazing journey with those folks … moving them from a perpetually licensed desktop product to a cloud based subscription product that was sold to individual designers initially. It’s a proto-typing tool based out of Amsterdam. And then having really successfully sold to a huge number of individual designers in this product led growth track … We then help them move over to this kind of per-seat billing model, which is much more applicable when selling to businesses. They’ve been able to continue to scale that self-serve model that is true – and that all of us recognize …. whilst now also really effectively being out to start selling into these bigger businesses, into doing six figure deals and names that we all know. And allowing them to go on that journey without them ever having to invest in tooling or internal jobs to do this … They’ve got a single person in buyer support. So we handle so much of that work for them …. and never had to have hired anyone in tax in their financing …. being able to remove all this operational burden for them to actually accelerate the speed at which they can go on that journey. Selling to those different types of customers is really exciting for me. And I look forward to being a part of that story from many other. SaaS businesses. More than happy to stay in the background … let those guys go and build amazing things which change our lives for the better. And just ensure they have the tools on which they can go and do that.
—
Stephen Cummins:
In the next episode, the concluding one of a 2 episode conversation with Harrison Rose, he’ll tell us how Paddle is going to market and how it plans to scale into the future.
You’ve been listening to 14 minutes of SaaS. Thanks to Mike Quill for his creativity and problem solving skills, and to Ketsu for the music. This episode was brought to you by me, Stephen Cummins. If you enjoyed the podcast, please don’t forget to share it with your network. Subscribe to the series, and give the show a rating.
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Thank you for the artwork to the talented Michael Quill, AppSelekt CTO & CoFounder