Episode 119: Managing Growth in Lean Times with Robby Allen at AgentSync

Jun 5

Robby Allen, Chief Revenue Officer at AgentSync, grew up in San Francisco, so he was exposed to the tech sector in Silicon Valley his whole life. He began his career in sales, mostly at start-up B2B SaaS companies, starting with a company that had restaurants as their customers.

As his career grew, he was around a lot of companies that went on the high-growth trajectory that was so common at the time. He learned a lot by observing how things were done to make it possible to go from zero to over $100 million in revenue within just a few years.

He had more than one opportunity to come into a company with 20 or 30 employees and to watch it grow around him to 400 or 500 employees. It gave him a lot of insight into how you can scale that kind of revenue growth on a compressed and aggressive timeline. He saw what went well with that approach and what can go wrong with that approach.

There was a saying at the time at venture capital-backed companies, “triple, triple, double, double, double.” It refers to the annual revenue growth investors expected to see in the first several years of a company. This aggressive growth mindset could present some big challenges.

For example, at one company, Zenefits, Robby was in charge of sales, and they were growing so fast that there was a year-and-a-half span where he hired 250 salespeople. They were onboarding a new crop of salespeople every Monday during that time.

He saw that it gets to a point where that growth is unsustainable, and you start to get diminishing returns on every dollar that you spend. He learned a lot from that experience, and he sees many companies like his starting to buck that growth-at-all-costs trend.

Growth at AgentSync

One of the companies that are bucking that trend is AgentSync. As Chief Revenue Officer, he believes that growth is important, but controlling that growth and maximizing profits are also important.

While some VCs still believe that growth at all costs is the best way to get a return on their investment, the board at AgentSync doesn’t subscribe to that notion. In fact, a board member recently told him that doubling revenue this year is not the priority, and the focus needs to be on profitability.

That doesn’t mean growth isn’t important, and they have had tremendous growth over the three years Robby has been there. When he came on board with the company there were 12 employees. They now have 250 employees. They went from a bootstrapped company to one that was valued in 2021 at $1.2 billion.

The goal is to continue to grow but in a more measured way. They want to make sure they don’t continue to up the headcount recklessly by giving the people who are there enough time to get fully up to speed.

Growth is difficult to achieve if your idea of growing is throwing VC cash at the situation. AgentSync is a series B company in a growth stage, and the VC capital for those types of companies is currently dried up. Fortunately, AgentSync has plenty of cash and plenty of runway, so they aren’t having to go through a lot of layoffs like many similar companies are doing.

The AgentSync customer

The primary customers that AgentSync serves are insurance companies, mainly in the financial services sector. AgentSync provides core infrastructure software that all those companies need.

Many of those companies are enterprise-level, multi-generational companies that have been around for as long as 150 years. The recession isn’t affecting those companies, because they’re very durable. There is data that shows that the insurance industry actually does well in times of an uncertain economic climate.

The AgentSync SaaS platform helps insurance companies navigate the complex but required world of compliance. To add to the inherent complexity of compliance regulations, those regulations are different in every state.

Robby has seen the software procurement process at these types of enterprise accounts change over recent years. Decisions used to be made by department heads who had to stay within a certain budget. Much of the decision-making is now being centralized, and purchases are getting much more scrutiny by the CFO or CIO.

When you’re dealing with a CFO, much more of the focus is going to be on the ROI of your software and the value it adds to the company's operations. That means Robby and his team have to focus on being able to tell a story with metrics and data to show how they’re increasing revenue, how they are decreasing cost and how they are mitigating risk.

Focusing on value

As an enterprise SaaS company, they do have a pricing model and strategy that assures they’re consistent and fair with every customer, but because their customer base varies so much in their use cases and size, it’s impossible to have a standard list price for what they do.

What Robby and his team focus on when determining pricing is value. In the enterprise software world, pricing is directly related to value, and it’s important to be able to do a good job at articulating and quantifying the value of their solutions.

The focus is on compliance at AgentSync, and that is an area where software can really ease some labor-intensive pain points at insurance companies. Compliance is like IT, nobody talks about it unless and until it breaks.

This allows Robby and his team to demonstrate the value they bring to their customers with data that shows that using their software can unlock a certain amount of revenue for their business.

Because they provide so much value to these enterprise insurance companies, Robby says much of their new business comes from word-of-mouth and warm referrals. There are many associations and conferences that all of the major players attend, and they all talk to each other. And if they have a vendor that they have had a good experience with, they will recommend it.

It’s Robby’s job to make sure those good experiences continue.

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