Ep # 170: Preventative AI: Replacing Approval Bottlenecks with Guardrails ft. Kyle Racki (Co-Founder & CEO, Proposify)

Kyle Racki 00:00 The promise of AI, I think, is a lot more powerful than the reality. People learn a little bit about something and go, wow, this is easy, but they don't realize how much more there is to actually know about it. It's easy to build crappy products, for sure. Building products is still hard. Adil Saleh 00:17 Welcome to Across the Funnel, where we dig into concrete Go-To-Market moves across sales, customer success, and account management so you can build revenue that lasts. Brought to you by Hyperengage and Dextrego. Hey, good morning, everybody. This is your Hyperengage podcast, and I know that this has been a long waiting in terms of the number of episodes. We cut it down to now not more than five. I know that it used to be like 15 or 20 a month. The reason being is we are pretty focused on what we are building, as well as some of the unique stories that we are trying to spend a lot more time locating. It's now equally important for us to make sure we don't just ride the wave of AI-powered, AI-native, GPT-first, and all these tools that are many in the matter, and it's a black box that I think that it's so hard to get so specific and granular into technology, into GTM, into growth, and all of that. This is what matters, and if we cannot unlock so much with so many of the platforms, there's no point in doing the podcast. So today, we've got this interesting product, interesting founder, being a longtime runner in the game, and being somebody that has done it at scale in a slightly generic segment. I know that when we talk about sales, we only talk about tools for SDRs and BDRs, tools that get them leads, get them product-qualified leads, help with outbound calls, and all of that. So I think today, we're going to be talking about how more than 45% mid-market to enterprise sales executives and account managers are trying to win their contracts, win their deals, close more deals. I would say that from first touchpoint to closing the deal, even writing an email, I think the whole journey has been slightly different than mostly SMB market and all the new gen SDRs, BDRs that we think of. But I think this has been something that we definitely want to talk about. Today, we're going to be talking about Proposify. We have Kyle Racki with us, the founder, CEO of Proposify. It's one of the platforms that is making a huge impact in the sales segment, especially in the mid-market to enterprise. Thank you very much, Kyle, for taking the time. Kyle Racki 02:57 Hey, thanks for having me. Happy to be here. Love it. Adil Saleh 03:01 So, Kyle, I know that sales journey has different components across different segments, and depending on what kind of market you're targeting as a sales or account executive, thinking about this entire spectrum changing. I know a lot of these sales teams in the enterprise segment, they're thinking about trying to standardize, trying to attach automated, data-driven, all of that. How do you see this proposal thing as a function in the sales? Whether it's growing, it's cutting down, people are more thinking about now, it's not going to run, but it needs all that literature and all. I know PandaDoc and all these conference-managing platforms are big enough for the same reason, but how do you see this entire category? Kyle Racki 03:54 Yeah, this proposal software space has been growing steadily now for the past 10, 15 years, and we've been grateful to be a part of that. We've now been in business 11 years at Proposify since launching. The space has evolved, but it's a lot of the same players. You mentioned PandaDoc, there's us, there's Qwilr, there's a handful of others. There's very specialized versions of it as well. I think I stumbled on roofing proposal software the other day. What I often say is, you listen to Jeff Bezos, the famous quote that he had said was, he looks 10 years in the future and doesn't say, where are things going? He says, what's not going to change in 10 years? That's the only thing you can really bet on. You don't know what technology is going to be like in 10 years, but you know what people are always still going to do in 10 years. For him, he said, faster delivery and lower prices, people are going to still want that in 10 years. And so he optimized Amazon for that. I view it a little similarly. Proposals have been around for, I don't know, since maybe the dawn of sales because at the end of the day, if you're talking to a prospect and they say, okay, I'm interested, send me the information so I can make an informed decision. And when I'm ready to sign, I will. It's our digital handshake. Other than the digital part, that handshake has been around for a very long time. Contracts, right? So any tool like us or our competitors that can speed up that process and make it faster and more efficient, and also allow the company to present a better image professionally, stand out from their competition. That's why people buy tools like Proposify. A lot of the businesses that come to us that are slightly larger, the mid-market enterprise type companies, it's not that they can't get a proposal out the door. It's the fact that as their team scale, it's become a lot more chaotic to manage. It takes too long for what it is. And often things are going out with errors or mistakes that make them look unprofessional. So they're usually buying us for one of three reasons: create a more professional presentation, reduce or eliminate errors, speed up the process so it's a lot more efficient and more automated, and we require less human effort to do it, and ultimately to get the analytics and the metrics. Because that is one of the things that people miss when they're just sending a PDF over email, like, did my prospect even look at it? Did they open it? Sometimes prospects will lie and say, no, I haven't looked at it, but you know very well that they've been in there. So those are why people buy tools like Proposify. Adil Saleh 06:47 Interesting. You mentioned PandaDoc. I was thinking it as an adjacent market, but not direct into your category. So we are using PandaDoc for years only for the contract, like we think of it only for the contracts and anything to do with the customers, anything like signing it off, having sort of a digital mandate to make sure it's legally compliant too. So I know that it could be in the same market, but are they also thinking about jumping into proposals and all this presentation? Kyle Racki 07:24 We've gone directly head-to-head against PandaDoc for as long as we've been in existence. They used to be called Quote Roller back in the day, and then they rebuilt their platform, rebranded it PandaDoc, and they've been very successful in this space. They've raised a lot of VC money. They've grown. But yeah, in terms of what they do, I'm curious. I know I'm the one being interviewed right now, but I'm curious from your perspective, if you're using PandaDoc, why wouldn't you use it for proposals? Adil Saleh 07:53 A lot of these, I mean, it is more for the sales process that we have. I think at scale, thinking about proposing like 20 and 25 customers a week, prospects a week, the funds would have at least two like PandaDoc or thinking about PandaDoc or Proposify for proposing. I think this proposing is more going about relationship-based, like we're in New York City, we're in Florida, we're in NASA, we're doing some events, doing some networking, meeting some friends, people that know people, get referred. So it doesn't go like, proposal more meant for cold touch points and then proposing them different offers for product and services. And B2B says more, proposing and value sell them use cases and all. And it mostly is done after the demo. So it's demos mostly for people that don't know you or people that you reach out. So the sales process is not yet, but it's so powerful because I realized it is. The moment I saw it, I saw Proposify about seven, eight years back. This whole time I didn't know PandaDoc couldn't be used for that too. I thought like all these companies using PandaDoc only for contract management more than the posing and the sales process. Kyle Racki 09:14 Yeah. And granted PandaDoc's visual capabilities are not as strong as ours. So people tend to look at us more as the visual presentation tool than PandaDoc. But we're very similar tools. At the end of the day, you can use us for proposals, contracts, quotes, that kind of thing. Adil Saleh 09:32 Love it. So now Kyle was also thinking about this. I know that you started back in, I think 2014, 15-ish, and I know things were technologically different. Like you could have think about product and market competition all together different, even like four or five years back. How sweet you see it different. I know that you backed by the risk capital, whether it's enough for 10 years. Is it something that can help you elevate really, really fast, or you think that you need to settle down or you need to make sure that you capture the industry since this category is slightly evolving more and has less competition compared to many other, like in your JSON, a lot of these SDRs, they are using a ton of tool on average. In a funded startup from, I would say C to series A, a series organization on average uses like three to five tools on average. If you just go up market, like series A startups, I'd fund more than seven to 8 million. And the bank can, less more than 10. So they're using a lot of tooling. So how do you see, as a founder, fitting in and things changing and you adapt to it in terms of, from a commercial standpoint, as well as positioning the product? Kyle Racki 10:56 Things have changed in 10 years. I think we've experienced a pretty cyclical change that happens in all markets, which is there's the boom period where SaaS is eating the world and venture capital is very strong. Interest rates are low, which is essentially what makes VC money plentiful. And also because of that, people are buying more tools. So we've gone through the boom era, and that was the era that we raised money. And then in 2022, things started slowing down in SaaS. Obviously AI changed a lot where now we've still got some of the fastest growing SaaS companies, but they're AI first. And we're going through like a mini bubble where there is capital out there being deployed, but it's pretty heavily in the AI space, even though I think there's a lot of risks, and we can get into that if you want into the AI piece. But I guess, what's changed? We started off pretty bootstrapped. We raised a very small amount of capital and it was mostly government funded. It wasn't traditional VC by any means. Then we were growing and profitable for a number of years. Then around 2018, we decided to raise more traditional VC venture capital. And then we decided after COVID, we had closed, I think on our last round, but then as everything in SaaS got a little weird and money started drying up and deal cycles got a little slower, growth got a little slower for everyone, I think. That was when we decided, I don't want to do this forever. I don't want to continue to have to raise every 18 months or every two years. So that was where we went back to our roots and just started to look at how do we get more efficient with cash? How do we get to profitability? And it might mean we're not the fastest growing company, but we're doing it on our terms. And yes, we do have investors and they want to see a return and maybe an eventual exit, but we're going to figure out how to do this more profitably and more efficiently. And that's what we've been doing now for the past three years. Adil Saleh 13:20 Absolutely. I absolutely love it because it's always good to give yourself a break. I know there are strategic VCs and all that can help you with a network, connection, resources, peers, or maybe some good logos. But at the end of the day, a lot of them, not all of them, they take all the freedom that you have as a founder and a lot of the decision making that you do to make sure everything aligns with the product vision, especially in the product side, because there's so much noise. Anybody can at least perceive anything and have a touch, like a prototype of anything that they think that's going to boom with AI. And there's so much money being spent on things that are flashy on AI and they're not as AI being not deterministic as its nature. So it becomes so hard for a founder to have a clear vision around the product, which people think like, how many co-founders you are altogether, like two or three? Kyle Racki 14:26 I had one co-founder who's not with the company anymore. He's retired. So I'm the CEO and co-founder. Adil Saleh 14:37 Okay. CEO and founder, founder. Love it. So now your industry, Kyle, also, a lot of these folks that we met, we met the PandaDoc team as well, their success leaders and all. So at that time they were not thinking, but now they are thinking like going about multi-product, building agents, having vertical specializing within the org and then testing it internally and then deploying it for the customers. So how are you thinking around that as a solo founder now? Kyle Racki 15:10 How am I thinking about AI specifically? Adil Saleh 15:12 Yeah, building vertical agents going forward. I know in your space, but that is going to be so hard for you at looking at the product without going multi-product. So what kind of things you're thinking along those lines? Because that's going to be really extended and adjacent market or adjacent segment for you. I'm not saying building something for customer support, but thinking about having adjacent use cases because with AI it's easier, number one. Number two, the customers on the other side, even in the mid-market enterprise, that's your sweet spot, they're also thinking about doing more with less, not because they don't have a lot of money, because a lot of these tools are doing a lot of adjacent use cases that are going multi-product, building maybe specialized vertical agents for different adjacent cases, because it's easy. I'm thinking a lot about, because I'm early, small, I'm just catching your thoughts, like how you're doing it. Kyle Racki 16:12 Yeah, I think going multi-product is an important part of growing the business. ChiliPiper added multiple products to their platform and it's really helped fuel their growth. I think they're 40 million or 50 million ARR now. So I think it is important because at the end of the day, the markets are big for SaaS, but they aren't infinite. So eventually you need to figure out how to sell more things to your customers. And a lot of them appreciate being able to use your tool for more things. So we talked about the difference between maybe proposals and contracts and where they sit at different stages of the sales cycle. But there's also, we didn't talk about digital sales rooms, for example, which is kind of, if you actually look at the functionality, it's very, very similar to what tools like Proposify does, but it tends to sit kind of earlier in the sales cycle, maybe after the first call or after the first demo where you want to put all the things in a room and have your access to contracts and be able to get analytics and collaborate with your buyer and all that kind of stuff. But really at the end of the day, it's just a proposal. It's a very fancy word for a proposal, but that's what it is. So yeah, I think what's happening in this space is, as is natural, there is consolidation, right? Like we saw it with HubSpot, like HubSpot started as an inbound marketing tool and now it's a CRM and it's a support platform and it's doing all these things. So I think that, I don't know about what our competitors are doing, but I know that for us, an important part of our vision is to expand into adjacent markets. And those typically look like CPQ, Configure Price Quote, CLM, Contract Lifecycle Management, I would say are the two biggest ones. There's a couple other ones we could talk about, but those are very similar use cases. It does expand our markets because maybe somebody who uses CPQ is not like a traditional marketing agency. There's somebody with more products, more SKUs, that kind of thing. But then the trick is, how do we sort of layer AI into all of these different use cases in a way that's really helpful? And so very soon after ChatGPT was released and we were all kind of, it was blowing our minds with how powerful it was, I realized that it was important to make AI an integral part of our vision, but there was a strong part of me that knew that eventually all tools are going to have these types of things, right? Text generators, and then agents came out, and it's really hard to implement AI in a way, A, that's unique because everybody's kind of doing the same thing, and useful because there's a lot of AI in all the tools we're using today that I would venture to say many of us don't actually use. Summaries, text generation, things like that are kind of just a given and a lot of times we don't even really make use of it. So I think the interesting part is, how could we use AI in a way that really solves problems that we couldn't solve in any other way? And that's how I'm looking at AI. So, I mean, that can be in the form of generating documents asynchronously via agents, but also, Kyle Racki 19:43 Yeah, those are kind of the more obvious use cases that I think us and PandaDoc and everybody's going to have. I also think that there's some really interesting use cases around why do people buy Proposify and tools like us? There's a lot of cases to eliminate errors. They want to implement things like approval workflows. They want to make sure that documents are going out with the right pricing, and that's where actually I think AI can be maybe the most useful, is how can, instead of having a human be the bottleneck in approving a document or a proposal, how could we train the AI to know what to look for? So we're kind of calling it preventative AI, but that's not a real term, but that's kind of things that we're looking at. We're also looking at predictive analytics because tools like ours generate a lot of data and a lot of view metrics, and being able to use that data and run a predictive model at it to be able to say, here's things that you can or should be doing to increase your close rate. Adil Saleh 20:47 Absolutely. Yeah, and here are the things that I actually wrote for other people, based on analytics and all, or maybe wrote for you, based on your past contracts and all. And on the tech scenario, on the knowledge base that you mentioned, how you're thinking around, let's say we have like three customer segments, and we are proposing in one customer segment and we have standardized paybooks for sales, like, these are the crates of companies, B2B contacts, and these are the parameters. So all of that, if we feed to Proposify, based on some of the case studies that we have or the knowledge base that will help us drive that sale or value into that proposal, can that automatically be understood, analyzed, or like an expert section taken and added, like how I can tailor my proposal for one segment in less time and make it as impactful? Yeah, so how are you guys driving towards that? I know that you touched a little bit. Is that along those lines? Kyle Racki 21:55 Yeah, those are definitely things that we're thinking about. It's, I think in a lot of ways we need to walk before we can run. And so where we've started this year is at very simple AI use cases, generating a template, being able to customize or improve text in the proposal. So we're kind of starting there to get our feet wet with it, because I think this is still new for a lot of people. And I also think that AI is still quite limited in what it's able to do. The promise of AI, I think, is a lot more powerful than the reality of it at the moment. We're seeing that with, for example, like app generators, like Replit and Lovable, one of those like that, where, when they first came out, people were like, oh, my God, we don't need developers anymore. Developers are the way of the dinosaur. And then people actually realize how hard programming is and how things break and you have to actually... Adil Saleh 22:55 Now they're building a customer success or now just recently they are the customer success, head of customer success. Now they're taking a lot of reaching those customers and helping them adapt to the platform. Again, it's not easy at scale. Kyle Racki 23:09 Exactly. Well, it's the Dunning-Kruger effect in practice, right? Which is people learn a little bit about something and go, wow, this is easy, but they don't realize how much more there is to actually know about it. And so I don't buy into the idea that building products is easy. You see that all over LinkedIn. It's easy to build products nowadays. It's easy to build crappy products, for sure. It's easy to build generic CRUD lists, for sure. But building products is still hard. It still takes expertise and talent and people who know what they're doing, whether it's engineering, design, product management. It is still a real craft and a real art form to do it well. And I feel like we're still in a lot of ways just trying to nail the basics. And that's actually what customers tend to care about. Yeah, we get customers or prospects who ask about certain AI capabilities that we don't have yet. But more often than not, the things that people want and the things that people complain about when it's not working well are the basics of like a smooth editing experience, powerful integrations that automate things and sync properly. That piece of it is a lot harder than people realize to get right. Adil Saleh 24:26 Absolutely. When you're 10 years down, you think more about how we can serve them better with experiences and deliver more value than adding more features. Because that is more of us to your team that you mentioned earlier. It's always easy to knock, build a lot of things and scatter a lot of things and experiment and expose to AI a lot when you're early on. You don't have a bunch of folks and customers that you have to look after every month. So that is easier. And I would call it they're fortunate, but it's still hard, 100% agree. It's still hard to build a product, right? A product for scale, engineering for scale. It's not easy even today. You might be able to do it slightly faster. But I think that when it comes to expertise, you need the same amount of expertise to understand the outcomes coming out of AI and understand what's the right outcome and what's the right engineering. If you don't know it, no way I know, no amount of AI would ever be able to do it at scale. Kyle Racki 25:35 And I want to share this because I think depending on your listeners, they might find this interesting if they're kind of in the startup world or tech world is we're still paying off tech debt that we created 10 years ago. And exactly what you talked about with people getting up and running fast with AI, that in a lot of ways existed, but on a different scale 10 years ago because tools like coding frameworks, for example, made building apps a lot faster and easier. And when we got off the ground, of course we did what every startup does, which is just kind of build everything in a monolith, use the most available technology, PHP, jQuery, things like that, to just build really quickly and build what customers want. And then we built something that customers wanted. But the critical mistake that I made was I didn't invest in getting a more experienced engineering leader in place until much, much later in our company's history. And I realized that once we started to raise money and hire engineers and start to move fast, we started to get a lot slower at being able to ship. And you think, well, wow, with more engineers, instead of like we started with two, three engineers, and now we have 30, we should be able to actually do 30 times the amount. We actually did much less. And that came with cultural debt, but also technical debt and legacy and building within a monolith. The whole reason why we launched Proposify 3 earlier this year, because most of our customers are still on the old version on 2, is the fact there really was no way for us to build quickly with modern tech without replatforming and without being able to break things out into separate services and use more kind of modern front end and be able to use API endpoints. And I don't know how technical your audience is, but the broad strokes is you've got to pay for the tech debt one day. It might come sooner or later, but eventually you've got to pay for it. And we've been paying for it for years. And it was only when I was able to get the right CTO in place who was able to say like, okay, we can deliver value iteratively, but we also need to pay back our tech debt iteratively. Adil Saleh 27:53 We need to do the chain management. We need to make sure that we need to change the engineering infrastructure. Not because it's badly built, because it was built maybe five years ago. Things have changed drastically. Even that CTO earlier, the co-founder didn't know that. And this happened a lot with a lot of founders. And I've built a couple of products in the past six, seven years. Some of my passion projects too. And I call them obsolete. And we have some customers around, like one-off lifetime customers that they use that product for digital cards and all. And just six months back, I have my CTO is building Hyperengage as well, to change everything inside out. So we got two engineers to work for a good three weeks and change the entire backend, push it to the next. And this comes back to the thing that we discussed with the CTO of Trustpilot, like ex CTO of Trustpilot, he is now building GreenData. Great guy. These European guys, they're so good at infrastructure engineering, to be very honest, analytics and all. So he said that if you're building and you're taking up doing the right engineering for scale from day one, people, your co-founder, your team members, your customers, they're not gonna clap for you today. And that's one job that nobody claps for you that moment, but you know that you're doing for the future. So it's just about that. Kyle Racki 29:15 And it's very important to not build for scale before you know you have a real business, right? And so that's the problem sometimes with technical co-founders, is they want to really focus on the backend and the infrastructure and how they're managing server resources and things like that. And that's absolutely the wrong thing to be doing at that stage, right? You've got to build rapidly. And that's where AI tooling really makes sense because you can spin up ideas quickly that work, that have a database in the backend. But the point is you've got to pay for the tech debt one day. And I think what a lot of founders who are not technical, who are using AI, maybe don't realize because of that Dunning-Kruger effect is, it's great if you can get a couple hundred or maybe a couple thousand users using your product that's built with AI, that's great. But eventually it's going to break and you don't know how to fix it. So you've got to invest in the tech talent and you probably eventually just have to move away from an AI generated app and actually just build it properly. Adil Saleh 30:19 Absolutely. You can have an AI augmented with the human in the loop, but in your case, it's mission critical things. All of these, you're passing, these are all customer-facing roles and doing all the engagements that are mission critical. And it needs to be not super intelligent, more super efficient. So love it. So now thinking about a little bit about your customer segment, I know that it's 10 years down, it's always good to settle down. Hey, this is my spot, I need to expand, I need to go up market within the segment. What you're thinking about Go-To-Market wise, what kind of more segment that has opened up for you in the last three years? I know when there's noise, there's opportunity. So how do you see it as a founder from the Go-To-Market standpoint? Kyle Racki 31:14 Yeah, I think this is really interesting because in a lot of ways it parallels the whole thing we were talking about with technology where you start with scrappy and fast and deliver iteratively and then figure out how to scale up the backend. I think it's actually similar in Go-To-Market because you want to start a new business with a very, very narrow specific segment of the market that you sell to. And we did that actually in the early days with marketing agencies. Our primary target audience was small digital marketing agencies, founder-led, with maybe 10 to 20 employees. And the reason we kind of picked that was just because it was the market I knew because that was my prior business. So I kind of was solving my own problem and able to speak to what it's like running an agency and dealing with clients and trying to send proposals. But we actually expanded quite a bit over the last decade because naturally proposals are a very broad thing. Most markets send proposals and most of them want to do it more efficiently. So what we kind of found was that there were certain markets that were naturally attracted to us that we weren't specifically going out and trying to market to. Probably the most notable one was kind of what I lump as the general blue collar market. So this would be things like janitorial services, landscaping, roofing, the construction space. It was not a market that I really knew well or really intentionally went out and tried to build content and advertising around. It was just one of the ones that kind of naturally came to us and now it makes up a pretty significant part of our customer base. But it sort of breaks down into that blue collar market, but then also the white collar market, which is not just marketing agencies but IT, consulting, events, law firms, accounting firms, that kind of thing. And so we have dozens and dozens of industries that use us and some that we have more of than others. But in a lot of ways, this has been a real help to us because regardless of what the markets are like and the economy is like, you pretty much always have a segment that's doing okay, even in a bad economy. Whereas I feel bad for SaaS founders and SaaS companies that specifically sold to other SaaS companies. My buddy of mine, Ryan O'Hara calls it the fake economy, right? It's like all the SaaS companies are just buying each other's products but then when SaaS goes through recession and you can't get funding, it's like, where are we losing? Adil Saleh 33:52 It's like 200 people sharing a meal. Kyle Racki 33:54 Yes, exactly. Exactly. Adil Saleh 33:57 Your industry, I closely look at because we go through it as executives and in our everyday lives. So this looked like I was trying to, just last month, I was hiring a space in San Francisco, a financial distributor doing an event on October 28. And just folks getting together, having some main panels, startup panels, having some networking, sharing a meal at the end of the day, 5 to 8 p.m. So I was just looking through a platform named PeerSpace. So they're like different event spaces and then you can rent it for an hourly basis. I wanted it for three hours. And also, I just called this guy up and the host was with the name Jose and he said, hey, we went and we negotiated and all of that. And he said, okay, I'm gonna send you the contract approvals. I think they were using PandaDoc or something. So he sent me a lay down and it was just 800 bucks an hour, something like 2,000, 2,500 bucks. But he made it short. It's absolutely formal. Everything will be discussed on call. I'm good about just picking the phone, calling people up. But he was more about right after that call, he just laid down everything, PandaDoc, the documents so I can review it. And then I said, hey, this is something that I need to change. And it was kind of an iterative process. It's a part of everyday life, your category. And it is going to be even more expanded in other segment, as you mentioned, like this roofing, pest control, a lot of these. Like I met yesterday, I was at a Delray Beach vendor meet a friend at the event. And there I met a guy that is doing roofing and all of this, he has this company for commissioner of Miami that was running election. So he's got like seven or eight different businesses. All of them, they're doing documentation and they're documentation heavy. And they're slightly more formal, or anything with government. So I love the way you're approaching because it's not only about SaaS, especially the times we're in. Kyle Racki 36:14 Yeah, I think software makes people think that everything, every idea has to be original and has never been done before. My idea has to be a solely unique thing. And the thing is nothing is really that original. And when you look at people in say your area, your neighborhoods, who are the wealthiest people that you know, what do most of them do? They're in finance. Somebody in my city who kind of people know has like big mansion. What does he do? He sells used cars, he owns dealerships. There's business owners that sell bread that have restaurants. I'm not saying those are necessarily great businesses to run and they have their own challenges, but every business has its challenges. It might be low margins. SaaS has plenty of challenges, but it also has a lot of upside. But the thing is at the end of the day, your business doesn't need to be unique. It just needs to solve a specific problem for a market who cares and do it really well. Rinse and repeat over and over and over again. That's what I love about people like Jason Fried and at Basecamp. Adil Saleh 37:20 Yeah, I love David and Jason. I love their business model. Absolutely, bootstrap, all of that bootstrap. That's the best business model that you could have. You can still be profitable and you don't make the headlines, that's okay. You don't get buzz like all of these VC backed companies does. You can build a really good product. Kyle Racki 37:40 And look at a lot of the SaaS companies that have raised tons of money and have gotten tons of headlines and press. In a lot of cases, they don't exist anymore. They've been bought up by PE and sort of ripped and replaced and merged with another company and they just don't exist anymore. Adil Saleh 38:02 That's the new term that came with AI, acqui-hire. These folks, like my ballistic tool, I've done so many episodes, done it for so long. There's so many product that came and shut down and doing altogether different things than the promise right here on the other side of the table. So I know that's a part of the game, but it's always good to not marry to one idea and one segment and anything, and always have your independent kind of a thinking model, a mindset as a standard. To have like, see the opportunity that's AI, see the opportunity in roofing and pest control. Boom, let's do something for them, while that aligns everything with our product and all. So I mean, I know it's hard. I know it's not easy to make sure that you adopt, like a lot of these industries, they're not well adopted technology. But do you have to build technology differently as well? User experience, UI, you're building somebody that is a realtor, a real estate brokerage versus a guy who's in a sales executive or account executive in a tech company. Experience might be different, their adoptability might be different. So many things. And there are challenges I was mentioning, like there are challenges if you go to significantly different segments, and that are more profitable, that's fine. But as a product, as a Go-To-Market might be not that heavily disturbed, but when it comes to product experience and all of those, that also comes with it. Kyle Racki 39:41 Yeah, yeah, a hundred percent. Adil Saleh 39:44 Okay, so just last few minutes, we're gonna talk a little bit about, I know that a lot of these companies talk about like, we make like four million a year, a recurring revenue of five, 10, 15, well around 150 items, like, okay, that's fine. Whatever revenue that you make, that's good. How much you're putting it back for success with your customers? So what are you doing towards making sure they're well onboarded in the first few weeks, they are doing all the checklists to well adopt to the platform, they're seeing value the fastest into the product. So what kind of investment initiatives are you doing in terms of giving it back and making sure to work towards success? And at the end of the day, they're able to use your product for the longer period of time, you're able to use the platform value, help them see more value over time and increase and expand. What kind of workflow you guys have? What kind of initiatives have you guys taken recently? How much of it is data driven? All of that. Kyle Racki 40:49 Yeah, since we're in a kind of an interesting transition period now, because as I mentioned, a lot of our existing customers are using our older V2 product. And we've rolled out our V3 product, which is not 100% there in terms of it doesn't have all the features yet that the old one has, but it's an overall kind of smoother editing and user experience. So we're kind of straddled right now between those two worlds. So they kind of look very differently. We've been trying to really nail our user onboarding and our trial to pay conversion. And we haven't always been successful at doing that. For example, my big idea earlier this year, I guess it was late last year, but we rolled it out in March was, oh, this is a perfect use case for AI. So a lot of people who want to use a tool like Proposify, where they get stuck is they've got to learn this editing software. They've got to take a template and they have to customize it and replace their brand and their colors and add their content and images and all that kind of stuff to it. So there's a little bit of a time to value delay because ultimately people want to be sending out proposals and winning at the end of the day. But in order to get there, you've got to invest time and energy into setting up your first document or your template. So I said, well, perfect use case for AI. Give us your website or upload a PDF and we'll turn it into this ready-made template that's already got your brand colors and all this stuff. Well, it failed miserably. It actually hurt our conversion to add that to the onboarding. Adil Saleh 42:34 Oh my gosh. Could you also please add more like what were the reasons it failed? Because it seemed like kind of anything that you've, I'm not sure about that, those traditional localized businesses, but more for like IT companies and tech, like executives in the enterprise market, they would have loved it. Kyle Racki 42:39 Yeah, some of it's technical and some of it's UX related, but it's like AI is, and if you look at any of the AI proposal generating tools out there, if you Google search that, our name will come up in a couple of others. They actually take a long time to load, like more than people are used to. It could be 30 seconds. It could be a minute, but that is a long time for a user to sit and wait and sort of watch like a spinning loading tool before they get something. And then the problem is whatever it generates is just okay. It's not that great. And I've used others. I've used our competitors. Everybody's are kind of about the same is that it gives you like a sort of kind of crappy document that may use your old logo and use your wrong colors because it's just scraping the web and finding what it can find. And so it's one of those ideas that sounds so great on paper, but then when you actually see like rubber hit the road, you're like, this isn't actually that great. And users don't actually like the output. They're better off choosing a template and just putting their own stuff in. Adil Saleh 43:54 Okay. I mean, now you're thinking about making sure that you read for it and make sure that you focus more on the user experience side of things and less about features and enabling them, but more giving them the ability to craft through these templates and enable them to your templates. Kyle Racki 44:15 Yeah. And our professional services have been an important part of onboarding for a very long time. And we were even making tweaks to how we do that. What we always did historically was for larger accounts, we would sell them a service that would basically be, we have professional designers in-house who know the product well, and you just give them your requirements and they build a custom template for you. And it actually looks stunning. Customers love it. What we're playing with is how to repackage that service into instead of just being a design service, it's more what we're calling a launch kit. So it's like, the idea is that people don't care about a template. They care about getting the value. They care about sending a great looking proposal and winning deals. So we're basically packaging that together and like, how do we get you to value faster? It might be, we take a template, we brand it to your name, we deliver it much faster than like a more custom service would be. We send you a video walkthrough of how to use it. We give you priority support for the first 30 days. We give you a money back guarantee. Like how can we create, like stack this offer so that it's a no brainer and make it more affordable because we're able to deliver it a lot faster? That's where we're trying to go with it because that ultimately, we have a professional services team, right? Adil Saleh 45:34 Yeah, love it. And of course, this is by no mean, like of course you're trying to prioritize it, but thinking about traditional success, how you're analyzing how they're interacting with the platform, success metrics around the actions that they take for a lot of our space, like B2B SaaS, mid-market, and the rest. Are you doing any of that? Because a lot of success lies within how customers are adopting to your platform and then consuming it over time. Kyle Racki 45:58 Yeah, a portion of our sales come in from an actual sales team, right? So we have a sales team that runs demos and closes deals. And they obviously can't talk to everyone because we get a lot of trial signups, we get a lot of demo requests. It's actually the current problem we're trying to solve right now is how do we get more conversion happening from free to paid. But also even demo to paid. Our problem right now is not demand. We've been averaging in the last quarter like between 700 and 900 trial signups a week. And that's not counting demo requests. The real trick is how do we harness that demand and convert it? Adil Saleh 46:54 And because demo is going to be hard to kill with, of course, with a product like this, you're going to have regular demo. There are a lot of people who want to explore and all. It's not that bigger size companies, you'd only think about building demo. There's like freelancers, agency owners and all. It's so hard to serve that amount of demo. So it's a better bet for you guys to make the freemium model more self-serve, more have kind of a digital touch, and then setting some triggers or kind of a metrics around the high growth accounts. And you only cherry pick those based on some triggers, some rules and all of that. So I think we can talk more about it for another day, but it was really, really nice having you guys on. And my team, we already know about Proposify and we love the way that you have had this level up and you didn't like just try to ride the wave during the last two, three years, like many, many companies tried to do that for good reasons. Now that I know more, I appreciate your time, Kyle. Kyle Racki 47:59 Yeah, thanks for having me on, Adil. Adil Saleh 48:02 Yeah, loved it. Have a good rest of your day. Kyle Racki 48:04 Yeah, you too. Outro 48:05 Thank you very much for listening to Across the Funnel. If you got one useful Go-To-Market idea out of this show today, please share this with a teammate and hit follow. Explore Hyperengage at hyperengage.io and Dextego at dextego.com.