Claudio Erba, Founder Docebo

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The theme of this masterclass is: How to Build a Company from 0 to 1,000 employees and to cover this topic we have invited Claudio Erba, Founder of Docebo, the world's most powerful learning platform, built for the business of learning. Docebo helps organizations around the world deliver scalable, personalized learning to customers, partners, and employees, driving productivity, engagement, revenue, and growth.

Under his leadership, Claudio built an organization that went from 0 to 1,000 employees, $200M yearly revenue whilst being profitable and IPO’d on the Toronto stock exchange in 2019 and NASDAQ in 2020 with a market cap consistently over $1bn.

Timestamps 👇🏼

Passion for Growing a Startup (00:00:00) The interviewer asks why the interviewee is passionate about growing startups and discusses the challenges in scaling at an early stage.

Blueprint of Execution (00:01:00) The interviewee discusses the need for a blueprint of execution to scale a business and the challenges faced in scaling a startup.

Importance of Company Culture (00:03:01) The interviewee emphasizes the importance of company culture and the role of transformational people in shaping an organization.

Transition to Specialists (00:06:33) Discussion on the transition from hiring scrappy, multi-skilled employees to specialists as a startup grows.

Ideal Reporting Line (00:10:24) The interviewee discusses the ideal reporting line and the evolving role of the CEO from 0 to 1000 employees.

Evolution of Sales and Marketing Teams (00:12:38) The interviewee outlines the evolution of sales and marketing teams as a startup grows, with a breakdown from 0 to 1000 employees.

Challenges in Hiring and Building Sales Teams (00:18:25) The interviewee shares the challenges and lessons learned in hiring and building a sales team, emphasizing the need for quick reactions.

Evolution of HR and People Operations (00:22:02) The interviewee discusses the evolution of the HR department and the transition to a dedicated HR team as a company grows.

Retaining and Attracting Top Talent (00:25:28) Strategies employed by the company to retain and attract top talent, especially in the competitive tech industry, are discussed.

Money and Company Culture (00:25:53) Discussion on the impact of money on employee retention and the importance of company culture in retaining employees.

Diversity and Inclusion in Company Culture (00:27:40) Emphasis on the company's concept of fortress, diversity, and inclusion in the workplace, and the importance of embracing these values authentically.

Scaling Company Culture (00:30:25) Challenges and strategies in scaling company culture from a small startup to a larger company, especially in a remote work environment.

Advice for Founders (00:33:15) Advice for founders on maintaining a product culture, capital efficiency, and protecting employees while building and scaling their teams.

Journey to Product Market Fit (00:34:54) The interviewee's journey to product market fit, the shift to a cloud-based business model, and the impact of expanding to the United States.

Hiring and Growth Challenges (00:36:04) Discussion on hiring rockstar employees, market competition, and the challenges of attracting talent without significant funding.

Opportunities and Internationalization (00:39:18) The role of luck and seizing opportunities, the decision to expand to the US, and the advantages of being an Italian founder in internationalization.

Protecting Company Culture in Hypergrowth (00:43:07) Challenges in protecting company culture during hypergrowth and the need for preparation and rituals to maintain culture in extreme growth phases.

Founder's Attributes and Internationalization (00:45:26) The interviewee's personal attributes that attracted top talent and the advantages of being a disruptive innovator in internationalization.

Italian Influence and Unique Product Development (00:46:15) The influence of being Italian in internationalization and the unique product development approach that led to success in a competitive market.

Under-the-Radar Success (00:47:59) The interviewee's success in creating a unique product under the radar and the impact on a major competitor during the journey to IPO.

EPISODE TRANSCRIPTION

Automatically Transcribed With Podsqueeze

Inès Makula (00:00:00) - First question that I wanted to ask you is because when we first talked to you, this is a topic that obviously is very close to your heart and that you've been talking about. to I think universities or you had different, you know, you have a whole presentation and a whole deck about about this. So what is it? Why are you so passionate to visit? My question was about this topic, about growing and thinking, about growing such an early stage of the startup journey.

Claudio Erba (00:00:28) - Well, first of all, the evening was late afternoon. What time is it? I don't know. actually, I'm the former CEO of the table now, let's say retired. Not not very tired, but ambitious. I ambitious is to be retired. a lot of people in Europe. I mean, I don't know how many European companies went public to the Nasdaq. we learned something, and, a lot of people, in Europe, were continuously complaining that there is a, you know, a lack of ecosystem in Europe.

Claudio Erba (00:01:00) - And, many people say that ecosystem equal capital, which is not true. I mean, capital there is big enough capital out there. I mean, every company, you know, is raising capital. So there is liquidity. What's missing is a blueprint of execution. I mean, how to scale a business. So it's kinda easy to arrive to 1 million. And it took seven years for me to get to 1 million. So it was easy for you. But in 2005, I assure you, it's not that easy. we were like, after the dotcom bubble in 2001. Bla bla bla bla. But what's missing is a blueprint of execution that will help you and your company, your peers, your manager to scale or to get the ambitions to arrive at least to 1001 employees by 1001, because I have arrived to 1000, that they want to you to be better than me. so what? What I've done is like try to remember these 19 years journey where I survived and try to put together a set of topics that I liked how the company changes shape skin, processes.

Claudio Erba (00:02:16) - When you are from 0 to 10 employees 10 to 50, 50 to 101 hundred and whatever, up to 1000. Don't ask me what happened after because I stopped the journey before.

Inès Makula (00:02:27) - I think there was enough to talk about, to get to a thousand. and founders are often, you know, surprised because they might start their business to solve a problem. And, you know, they're very hands on in their, in their, in the product at the beginning. But then very early on, you start having to focus a lot on hiring, or fundraising. But talking about hiring, which is obviously the theme of the masterclass. How much time do you think a founder needs to be dedicating to to to H.R matters and and hiring and building a company culture from the get go.

Claudio Erba (00:03:01) - So first of all, welcome to the entrepreneurial life. I mean, this is this is life. I mean, it's not only product, unfortunately. first of all, my, my my thesis is that the business is not an engine.

Claudio Erba (00:03:17) - I mean, a company is not an engine with everything is well orchestrated. The company is made of humans. Humans are the center, the pillar, and always will be the pillar of the company. In the good and in the bad. So I believe that as an entrepreneur, and I'm not saying CEO, I'm saying interpreter. You have your company, and your company is made of people. there are different level of people, and you need to empathize with each one of them. I'm not sure that when you are in 2030, employee company, you need to have five of them that are sea level. I'm joking with Francesca that the crew that you are giving a C-level role and out to everyone. I mean, the guy at the bakery is the C bakery guy, and, you know, don't give it. I mean, wait, the people need to deserve this. but about the thing that I have learned the most and that really shaped my life, my career, my wealth is the role and the impact that transformational people can have in an organization.

Claudio Erba (00:04:29) - If you are lucky, you will have, let's say, three or 4 or 5 over 1000 people that entering the organization focus on a specific department. Maybe they are not C-level, they are someone else and the reshape completely for good. That specific department. This happened to me at least two times. one when, Alessio, the actual CEO of the chamber, enter and then the rest and the the the team, the the sales team, the revenue team. And the second is one young kids from pre IPO enter it in the organization and in one year literally reshaped the financial organization team to be ready to deliver result at the turn of the month. At the end of the quarter when we were really literally having the accounting done through an Italian to get the software and trying to know for books, whatever in the United States. And then we had to buy office, we never know, probably goes out to someone. And then he came in and they came literally from the waste industry that it didn't know nothing about software as a service.

Claudio Erba (00:05:37) - He entered three months to understand what are recurring recurring revenues, blah, blah, blah, blah. And in the organization, you need those people. You need those people in that space, in the organization. But realize that people that works when you are one, 50, 50 probably will not can happen, that they will not be a great fit for 501,000.

Inès Makula (00:05:58) - In fact, what actually leads to this follow up question about that? Because at the beginning, you need people who are putting their hands everywhere, right, that are like that don't necessarily have a lot of structure. There are higher for something what they're going to be doing other things as well, because obviously it's a startup and everybody does everything. But at some point you need specialists and people who are experts. How did you go, you know, from that phase, but also any recommendations for founders who are going through that? Which is a really hard time because sometimes you have to let go people because they're not the right people for the second journey or second phase of the startup.

Inès Makula (00:06:33) - So, yeah,

Claudio Erba (00:06:35) - I mean, the, the this is completely true. I mean, the scrappy people, we use the same word and I love it. are people that when you are very small, let's say 25, 30, 40 and are really hands on and that can do the job, can do that. Okay. those people are great. And they usually outperform the specialists in specific roles. Let me give you an example. We had when we opened our first office in the United States again, that was incredibly great. 24 year old guy, in sales and then 1.5 million quarter per year heat every year. And, I mean, you can imagine that with conditions, it can make probably a few hundred thousand bucks per year. And do you think that those people are very wise and they're going to repay back the debt of the university in the United States? No. He bought a Ford truck with like, wheels like this. Let's say that we discovered that over time, this person was not replicable.

Claudio Erba (00:07:49) - Because when you go up and you need to scale, and you cannot have only a rock star in the organization, and you have to hire a specialist. And when you sell software to enterprise, you need an account executive, the sales engineering and the sales consultant. Three people to do this guy job. the real problem is not if they are specialists or not. Well, what I've seen is that people to grow in the organization, and they need to be manager of people, manager of humans, which is a very hard job because you're dealing you need to empathize, to empathize with a lot of different attitudes. So sometimes happen that the people that are with you from day one, you can do two things. Try to find him, him or her or someone and not the role and the you know that this is not optimal, not for the company and not for the person, because the person feeling that is there in a corner Just because you want to be grateful for what this person has done in the organization, or you let them go and, it's happened.

Claudio Erba (00:09:03) - It's life of the interpreter. And some of them spontaneously say, I love this startup environment. You are becoming a dinosaur, so please let me go. or on the other side, you need to have a very frank conversation. For me, what works is having frank conversation say, we made this journey together. It's time to, you know, find the other things. But you need to need to do it very ethically and need to be very generous. If you are generous and ethical and you speak, I mean, when you speak about that, it usually they take the decision on their own. It's not like you are fired. So what? We are where we are now. What do we see each other in two years? And you comfortable what you are doing? Are you happy? Are you enjoying life? Two years ago. Three years ago?

Inès Makula (00:09:53) - Yeah. Those are great, tips and keeping the human aspect. Right? Right. Because sometimes in companies you can lose a little bit touch.

Inès Makula (00:10:02) - And there's ways of doing things, even the hard conversations and getting a little bit more specific into structuring the company reporting. What do you see as the ideal reporting line, and should all executives, for example, report to the CEO? how does the CEO role change over time from going to 0 to 1000? So.

Claudio Erba (00:10:24) - So, first of all, I, I think that there is not a golden rule. that the reporting I mean, first of all, when I say that we need the blueprint, it doesn't mean that the one finger, one ring will rule them all. I mean, there are different blueprint for different different industries, different geographies, different markets. First of all, I speak B2B and I speak enterprise B2B. If you are in the tourism, software in the tourism space or restaurant, don't speak with me. You will go bankrupt in two days. but let's, The second thing is, the organization is driven. The organization framework is driven by the industry you are in. And the people I mean, there are different founders with different skills.

Claudio Erba (00:11:21) - If you have a CEO that is a product designer but really hate sales, you need to have kind of a CEO that oversees everything else but product. Okay. So in this case, the CEO overall makes sense. But if you have the smart CEO, which is a chief revenue officer and a smart product person, and the CEO is, you know, solid enough to handle. You don't need a CEO. Or on the opposite, if you have a CEO that is only on sales and don't give a shit about product which which happened. I mean, you need a very solid product person that handled product professional services and stuff like that. So the organization framework is, really fluid and need to be flexible and, wait a lot before hiring a C level and the pointing C level when you are ten people, you don't need that.

Inès Makula (00:12:19) - Let's not talk about like specific ways to structure a team, because as we mentioned earlier here you have a blueprint. So in your experience obviously it doesn't apply to you can't apply to every single business, but starting with the marketing and sales team, which most companies, most startups here that are tech based have.

Inès Makula (00:12:38) - How should a team evolve? as a, as a, as a startup grows and scales through the different phases from 0 to 1000 with the breakdowns that you had mentioned. So zero to was it 0 to 50, 50 to 100. Yeah.

Claudio Erba (00:12:52) - Okay. So first of all, let's let's take the example of the enterprise B2B. It's a ticket 60,000 bucks in the mall, the customer among the 500 employees, which require a specific structure. And then after you have to remember, because I'm an old guy, I don't remember anything. Let's touch a little bit the company they sell to small business, which had different dynamics. both of them probably when you are ten employees. This the sales are made by the account executive and the CEO. You don't need anyone else. You just need to validate the market. You need to speak with the customer. You need to sell. And probably the CEO will also do the demo and probably answer that the phone to the desk. That's fine. then when you are, let's say ten, 100.

Claudio Erba (00:13:40) - in this case, we can start thinking to add at least a border layer. I mean that there is an and also, inbound VR. So when when you have those people, they qualify the lead and then they pass the baton to the account executive to close the deal. what I am seeing is that they may delay the later you hire me. The art, the battery is because if you give to account executive the duty to build their own pipeline, they will build internal methodology and best practices. Then when you decide to trigger, if needed, the BDA to to to open the team. They are the people that train the PDR people. They know how this happened. So you don't have to reinvent the wheel every time because you you have an account executive that knows the process and can train and teach and grow the media. And by the way, the media are the starting point to become an account executive. So there are career opportunities and they have a lot of different ways to be motivated, like commission promotion.

Claudio Erba (00:14:48) - You can become a team leader in the media and then account executive, etc. and then the problems start because when you go to 100 500, the first thing that you will notice is that you will lose productivity because the layer of people I mean, when you have a bigger problem, you need the leader of the media. When you have an account executive, you need a team leader of county executive. So the first thing that happen is increase of cost of customer acquisition, because we have people that are not caring, but they need to stay in the organization. And then the second problem is scalability, because when when you are not only the Rockstar 1.5 million, but let's say a 700,000 bucks, $700,000, people, you lose productivity and, when and not all of them are rock star. And then you need the two high specialized functions. So together with the account executive that have only the duty to close the deal, you have to hire sales engineering that answer the technical question. And then you have to hire the sales consultant that are the people with the beautiful lights on zoom and everything, that they prepare the demo and they run the demo, and they are a kind of influencer of the software as a service that they want.

Claudio Erba (00:16:16) - and then you are losing productivity because commission needs to be to split with three people. So your gross margin, I mean, you start getting a lot of compounding, which is good. But on the flip side, everything on the gross margin is start getting compression because the cost of sales is quite high. And then you start the I mean, I forgot marketing, I hate marketing. because marketing in my opinion, should not be a department, but it's a job function. But this is another topic. so marketing is a there are different way of marketing, but one 100 to 500 probably. You need to have at least the demand generation. You need to have events, which is very important in branding. But in my opinion, branding does not belong to sales, so it's another marketing that doesn't have the job. what worked very well. I hate marketing, but I love account based marketing. I mean marketing, they target specific customers with, like, gifts, events, formula one, VIP seats and whatever, which, really change your ideal customer profile, your buyer persona and specific company.

Claudio Erba (00:17:32) - It works. It doesn't work if you sell small businesses, you have $2,000 yearly revenues. But for big cheques is important. at the end of the journey, you have, what's called the sales operations. That means a group of people that manage the operation of sales and supervise the sales department. Don't ask me what they do. I struggle understanding, but I've been told that they are useful. I was making a mistake. Thank you. I'm sorry. I'm told they're useful.

Inès Makula (00:18:11) - And in terms of, like, the some of the biggest mistakes that you made while hiring and building out your, your sales and marketing team, that's seeing more sales team mistakes and lessons learned. Something that, you know, and here you could. So.

Claudio Erba (00:18:25) - usually that means you are aware of the mistakes in your perspective and that not why you are doing it, but. First of all, Sales Machine is a beast because of the mistake you are doing now will have impact on the pipeline in six months and to fix the pipeline takes a little earlier.

Claudio Erba (00:18:45) - Even if you have a sales cycle of nine months, this is mathematics. It's not a numbers that are thrown like I don't know. So the first thing is to react super quickly when there is something wrong and they can make to example, when the pipeline is start going flat or shrink or not growing and the speed, you don't have to start analyzing. And let's speak with the board in the next quarter. Now jump on it, go hands on, fix it or try to fix it. Because sometimes you don't know because you know, there is this marketing sales attribution thing. So say it's marketing, marketing side sales and maybe it's both and maybe the wrong people. And on the on the fixing side, you need to hire fast fire faster, especially in sales. If they don't deliver higher, faster, faster. The real problem of faster is you don't know if a people is delivering until he says the sales person is fully ramped, and if he's an account executive, it takes nine months to run.

Claudio Erba (00:19:49) - And so you don't know if it's if he or she will hit the quota until nine months. So quick reaction are incredibly important. The last thing is hiring the wrong leaders. and the especially if you have, let's say a week, let's, let's, let's imagine a 1000 people company. You have the sea level, the CEO, the sea level, you have the VP. So you have directors and you have manager, and then you have the contributors. If you hire chief sales officer that have a weak VP level line and, this person is not end zone is not doing skip level meeting does not own the numbers in here. It rely on the rosy prediction that never happened of the SVP. That is average. So you have this person that does not own the business, neither the reporting line on the business. So you need to get rid of this person and get someone that knows the numbers and also can question what the reporting line says otherwise. I mean that if you and this happened, usually when you are people wanting a bigger company of yours that relies on strong processes with strong reporting line, they are blind.

Claudio Erba (00:21:19) - They are political animals. Use it to speak with the board and with the sea level, playing politics and not going and doing their own job.

Inès Makula (00:21:29) - And talking about the attorney department, which obviously a startup doesn't have any track department, its the CEO or, you know, the founders doing most of the hiring. At what point and what stage of how many employees or how big do you think there should be a proper Itar? At least one person dedicated to ATAR. And then at what point does a chief people officer need to come in? and of course, you know, just kind of the structure of that team, which is what you start with, you don't really think about. But it's good to have in mind as you start growing. Yeah.

Claudio Erba (00:22:02) - First of all, I want to question your wording of coming in a chief people officer, because there is also the option to grow someone, to become a chief people officer. But and it's a topic that need to be touched because giving people the possibility to grow inside your inside the organization create a good culture because, wow, I'm staying in the organization because someone is giving me opportunities.

Claudio Erba (00:22:28) - And that's saying that what happened today. How the department evolves. First of all, yes, they want. When you are small, you need them to be the recruiters. You need to hire people. Then the second part is training. I mean, you have hired people, but you need to train people to let them grow and let let them enable to do the job. And then there is the third part, which still probably is we start requiring some kind of, you know, skills related to specific jobs, which is compensation and career planning. Having a super solid framework of compensation that says, you are here, you are compensated. We have a range for your role, which is here and here based on the seniority, your performance will be evaluated. In this way. Your bonus will be non-cash or VIP. Long term incentive. That means equity. bla bla bla bla. These require a kind of solid structure. And then after you needed to start with the I say funny and interesting range of jobs, which are HRP, which is the HR business partner, and H.R. person.

Claudio Erba (00:23:41) - That is specifically a partner of the sea level of a specific department. Let's say HDPE for product air, maybe for sales and stuff like that, which is helping the C-level or the SVP or whatever to manage people. And then there is corporate branding, employers or employer branding, which is what makes your company attractive. So let's let's imagine that we hire, a VP of H.R. For the compensation and, career planning. When you are a person, the first thing you want to you want to understand this week as possible is if that person is stretched as VP or VP or have the potential to become an SVP or a C-level. In this case, when you have realized this. You can decide that if you if if to hire a chief legal officer from outside, or to try to grow this person and give career opportunities inside the organization.

Inès Makula (00:24:43) - But at what point do you think there needs to be a dedicated like at one point of the world to how many, how many people in the company does the founder needs to step a little bit out of this and, and have the The founder.

Claudio Erba (00:24:57) - The founder. Partner with the VP of in charge. Let's say I mean sorry. These are these are questions that require a disclaimer. It depends on how fast you are going. If you are 50 people company growing five employees per year, it's different than having a passport First company hiring 50 people per year in a fast growing organization. I think that you are going to lose control with 50 people.

Inès Makula (00:25:28) - Okay. It's interesting just to give a little bit of an idea of size. And as the chaebol scaled. what were some of the strategies that you employed as a, as a, as a company to retain and attract top talent? Because obviously it's a big question, especially in tech. There's a lot of competition. Salespeople can go get more money elsewhere. Like what was some of the the good things that you've done a good share.

Claudio Erba (00:25:53) - So money money is a big factor. and there's some time, especially in moments when there is too much liquidity. you cannot retain people with only with money. I mean, I think if you have a company that is probably more than 100 employees, you have seen this kind of, KPI going up and down during the after Covid.

Claudio Erba (00:26:21) - The people attrition by that means people that are spontaneously resigning during Covid skyrocket because there was so much liquidity out there that really I've seen junior people 25 years old, zero experience getting over $300,000 plus equity to go to work somewhere else. But then when it goes down, the economic cycle goes down. You have the employees that are going, coming back, what we call boomerang employees. Sometimes you accept them because they are smart. They are, you know. Thanks, but no thanks. so these this question is very broad, and I think that one big pillars for his company culture and company value. I think that the to have a company that cannot should not. It cannot rely only on the money and compensation. And when I say compensation, I mean cash bonus equity, everything I mean, all the package is there to create the company that feel people welcome. That people have an impact. I mean, whatever you do, the icon of the software will have an impact because it's deployed on many thousand customers.

Claudio Erba (00:27:40) - And those should be accepted and protected for what they are. So we have created this concept of fortress, the chamber where fortress means if you are an employee, you and your family are inside the fortress and we will do whatever possible to protect you. Unexpectedly on 15th March 2013. 15th January 2020. All our offices and boxes of face masks for all the employees 15th January, not 15th February. So we were already paranoid to protect our people. another element is that the chamber. If I'm not wrong, about 10% of the higher coming from referrals, that means employees that, you know, put their reputation in front of the company saying, this guy is smart, this lady is smart. Please hire them. and also, well, but I want to be extremely careful on that. diversity and inclusion in terms of being open to anything politically from geographically orientation of whatever in the chamber I've have always been. A normal thing to do. And frankly speaking, I'm I'm I'm not looking at very, in a very positive manner when these ideology become ideology and become just a tool to attract people.

Claudio Erba (00:29:12) - I mean, if you are open to gender diversity or whatever it is, because you do it for the greater good because it's the right thing to do, it's It's obvious, and not because there is now something that popped up politically. And then you need to embrace an ideology. And, you know, the chamber was in Milano, probably the first company and the first company established in Italy to sponsor the pride week. And that was the party was crazy and, was everything was beautiful. And now we have a meaningful amount of people coming from the LGBTQ plus community.

Inès Makula (00:29:50) - Yeah, as we mentioned, people can feel when it's authentically done rather than like a checkbox, because now you have to have the gender or.

Claudio Erba (00:29:58) - Because it's because it's political, because you are on this side or that side.

Inès Makula (00:30:03) - And in terms of company culture, we we spoke a little bit about it with Joseph and he was saying about how, you know, the culture that Airbnb scaled from startup to, to a huge company. What about at the table? Like how did you where are you very intentional in scaling the culture, going from a startup to obviously like a big company now on the IPO?

Claudio Erba (00:30:25) - Yeah, I mean, the culture topic ever became a problematic and became a big topic, especially after Covid, because you have to imagine that the chamber for seven years was a company of 20 people, where CEO and others were roaming around the desk all together in the same office.

Claudio Erba (00:30:48) - And I knew not the name, not only of the wife and son, but of the dog. And and then we started opening the offices and the first thing we had to learn is that there were, you know, different, cultural patterns. I mean, what's Juneteenth? Why Juneteenth is, is a holiday in the United States. But we had to learn a lot of things that were not Europe, a European thing. And then Covid happened. At that time, the table was 300 employees, 2020 2023. We close to 1000 employees. And the shift was for, let's say, four offices, eight offices, all the timezone in the world. You can imagine with most of the people who work from home. So we we we are, we they are. And I was before leaving the company tried to reinvent rituals and the new way to, you know, try to build and keep the the culture. The Dutch farm like, call it, bind together despite the forces that were playing differently.

Claudio Erba (00:31:59) - And the biggest forces is the anti-gravity forces. It is not like doing like this, but it's doing like this because it's expanding and, and it's, it's a problem. And the, the first thing we do is continuously monitor the culture of the company. there is this culture and software that highlight what are the problems and what what what we need to do to address it. There is another company that does the same job is training. company culture is, a big, big topic. And also they need didn't want to address. I mean, you can have a townhall, you can have podcast, you can have ask me anything, but it should. It's a job.

Inès Makula (00:32:42) - No, absolutely. And it's also a way to retain people and and not attract talent. Just talk the time. Check. One more question for me before we open to everybody. If you had to give an advice to to people, you know, there's a lot of founders here who are probably more towards like 0 to 50.

Inès Makula (00:33:02) - what what are some of the, the, you know, the advice that you'd like to share to everybody kind of starting out and thinking about building their team, how, you know, how long term do they need to think about and strategize?

Claudio Erba (00:33:15) - so first of all, you need to keep this product culture where you have two different forces playing against each other. What is the disruptive innovator, the people that says, I don't give a shit about the cost, what the customer want. This is what they want because I decided what they want. And on the other side, there should be an incremental innovation team. They say, yes, but we need also this, this and that. If you keep a balance of them, you will not lose. Not the innovation and not the customer needs. So capital efficiency. Try always to have a kind of revenue system that allows you to shift from a negative to a positive and maximum three quarters. If you have these, know that and the good cash cushion, you will sleep well and that you will protect your employees.

Inès Makula (00:34:11) - Thank you. Thank you. opening up the the the floor for questions and. Perfect. Done. Thank you.

Speaker 3 (00:34:26) - Thank you. Claudia. And the congrats on the Jordan is an inspiration to many Italian founders room. And the question was on a product market fit is that you have around seven years to get to 1 million. So my question was, as an Italian founder, how was the road to product market fit and was something that you find in Italy or in another geographical market? And the follow up question, did you lose market fit along the way to 1000 employees and find it again?

Claudio Erba (00:34:54) - No. First of all, the market fit was the day one. Because, you know, I got, when when we released the 0.1 version of the chamber, we got a phone call from a big Italian television group saying, I want to be learning and I need this software. So the product marketing was there. What was the strange but strange for you? Not strange for in 2005, for a company founded in 2005 is that it took me one sorry, seven years to get to 1 million and then coincidentally, after 1 million.

Claudio Erba (00:35:29) - The software as a service cloud logic started the SAS. SAS was not a thing in 2011. So we changed the business model. But the most important thing we opened in the United States, United States was the game changer for us. Hello.

Speaker 4 (00:35:51) - My question is, you said you stayed seven years before reaching the 1 million. So how could you stay sexy to hire Rockstar's employees in after seven years of being in market?

Claudio Erba (00:36:04) - Okay, so 2005 was not 2020. I mean, there were not 2000 stepped up raising money without a market fit and without experience out there competing. There were companies that was doing software. It was a job. Like another job was like this we need to do bills. We need to pay bills. We need to have a bigger office. We need to serve the Italian customer at our best because it needs a business like it should be. It's not. It means it's not sexy. Business is a business. Business is a is a company that is such a role. The first role is protect employees.

Claudio Erba (00:36:43) - If you have capital or not, you still have to protect your employees. Sorry, philosophical.

Inès Makula (00:36:50) - But I think the pace of the growth, you know, just to get to 1,000,000 in 7 years nowadays is not seen as something. It's seen as like there's a problem, right? Oh, yeah.

Claudio Erba (00:37:01) - But I did it without capital. Of course, if you have investors that give you three millions and it takes to use seven years to go to one, you have a problem.

Speaker 4 (00:37:12) - Okay. But the. So sorry. Go ahead. the problem I, I've got similar problems. So I took quite a long time to get to 1 million and I had no funding. So it's, it's similar in a certain way. but the problem is that the market, the to hire a rock star, now it's a market. So, I have to convince that person to come to to my place and not to another one. We protect employees. We are EBITDA positive and and all this stuff. But still they have more money.

Speaker 4 (00:37:48) - They make more. you say, they spend more on marketing. They have a brand, the bigger brand, a stronger one. So it's also a question of trust. No. And after seven years without this kind of expenses in, in in our journey, it's quite tough to explain.

Claudio Erba (00:38:06) - That.

Speaker 4 (00:38:06) - We have this kind of growth compared to others that are just.

Claudio Erba (00:38:11) - But, you know, for us was we were 20 people company. I was doing sales, cleaning the roof and doing a desk. And there were software engineers and sometimes we were experimenting, marketing. But in the meantime, we started the air also was like a family. I mean, we didn't feel the need of, of hiring a rock star. What was the feeling that we had was. We need to transform each other. We need to go abroad. And then I found the rock star that was here. But the transformational thing was not. I need to find the rock star to go abroad. But they need to go abroad.

Claudio Erba (00:38:49) - And then they need to find the rock star. And then they need to find the capital to pay the roster. Okay.

Inès Makula (00:38:57) - Pass the microphone.

Speaker 5 (00:39:00) - Thank you so much for for your narration. Thank you. I appreciate it. How do you decided to go to the US? I mean, why you felt the need to change. And of course, then all the rest. But, after seven years. Let's go there.

Speaker 4 (00:39:15) - No, no, it's not. You're not.

Claudio Erba (00:39:18) - First of all, I don't know if some of you is a big fan like me of Nassim Nicholas Taleb, the guy that brought the Black Swan. He said that you catch opportunities. I mean, that lucky plays a big role in the creation of wealth or company. But lucky comes only if you have your antenna open to look for opportunities. Okay, so what happened? First of all, the ambition, the mission to go abroad started being one. the second year we we developed this framework was we were already localized in 45 languages.

Claudio Erba (00:39:53) - So the ambitious goals we want to become like this. But that was not the opportunity. So what happened that, the actual the chamber's CEO, that was my dolphin. I mean, the guy that I try to help to to make his own career, and he was successful. Alessio was working in Atlanta for another e-learning company. In that moment, the other learning company was not doing well, and it texted me on LinkedIn. We could catch it up together. He spent one year with me, and, it's a club. There is a big opportunity. United States. I gave him a $65,000 check. He opened the office in Atlanta And that you never asked that additional capital. So was like and we tried before we tried to go to buy with the mechanical because there were opportunities there. That was not the right timing, but I mean, that was sliding doors, but I was ready to catch the opportunity.

Speaker UU (00:40:56) - There's two. Yeah.

Speaker 6 (00:41:01) - assuming they get. You have to do everything from scratch nowadays.

Speaker 6 (00:41:05) - Of course, but. 2005 was way different in 2024 right now. So how long do you think will it take you with no investment to reach what you've reached in seven years? So, like, what's the procedure?

Claudio Erba (00:41:23) - Probably six and a half. No, I think I will try. I mean, first of all, there is a big chance that I will go bankrupt because, I mean, no, no kidding, I mean, lucky and, you know, timing plays a big role also for me. So it's not given for granted that I will be successful again, Let's say that there are some best practices that I will put in place. you know, for example, in this company, Friday, those guys are smart. And, I'm saying this is not the guys that will kill the chaebol or something similar. They want to bootstrap the company. They build a product which is small, nice, in a very boring vertical. That is compliance. No one will set to compliance because there is zero budget.

Claudio Erba (00:42:14) - But this started sending two very big companies to the compliance office with this strategy to expand in other departments. I think that this is something that will bring me into one, will bring the company that I will never found again to like 1,000,000 in 1 year, because it's a smart strategy. But now I'm smart. I mean, I'm retired, but one before I was not retarded.

Inès Makula (00:42:44) - I mean, there were some questions back there.

Speaker UU (00:42:51) - Thank you so much.

Inès Makula (00:42:52) - Thank you so.

Speaker 7 (00:42:53) - Much. That was really inspiring. I had a question, if you could maybe elaborate also on how you continuously protect your culture in this extreme growth, because you also mentioned, you know, the remote setup also played into this. So super curious to learn a little bit more.

Claudio Erba (00:43:07) - Yeah. But I mean I probably you will be disappointed because I don't feel that I have done a good job on keeping the culture. I mean, the fact is that hypergrowth undermine the culture by definition. And if you are not prepared to tackle those problems, preparing the ritual ahead.

Claudio Erba (00:43:30) - You will try to fix brakes on the formula one car while running a Grand Prix. And so I think that now I'll be a little bit more prepared. And that's why I've built this curricula to say you have to invent. And we have now what will be the opportunities and problem and to 50, 500 to 1000 employees. And that's why you need the blueprint of execution. Because you don't have to be like me. You need to be prepared and better than me.

Speaker 4 (00:44:06) - Thanks for.

Speaker 8 (00:44:07) - Defining.

Speaker 4 (00:44:08) - That.

Speaker 8 (00:44:08) - And I had a quick question about. I used to live on the right and if so, will you do it again or will you.

Claudio Erba (00:44:17) - Get a bit sorry.

Speaker 8 (00:44:18) - Are you a solo founder? Did you find the step alone or. Or. No. And it's all bullshit. Would you do it again or would you look for a co-founder?

Claudio Erba (00:44:28) - So, No, I, I find that Fabio, the actual chief product officer. I consider him a co-founder, but I consider also a lesser co-founder because when Francesca Schroeder joined it in 2008, because she joined in 2012.

Claudio Erba (00:44:46) - But we were 1 million. So I mean, we were start tapping and the have been a very great partner. So I've been I mean I've been lucky in all my life to be surrounded by great ethical people that are great, that were great partners. And I think that, I mean, the notable success belongs 20% to me and 80% to the others.

Inès Makula (00:45:14) - And to to that what so obviously luck, you know. But luck aside, what was it about you that you think attracted top talent, or at least people that clearly helped grow the channel?

Claudio Erba (00:45:26) - Not playing games? Be honest. Be transparent. Sometimes ruthless, sometimes grumpy. doesn't think. But, you know, people are always, saying that, you know, you are a pain in the ass, but you will never kill me behind my soul.

Inès Makula (00:45:43) - So being, like, true to yourself and completely Was there any other questions? Well, if there's if there's no other question, I think of. Oh, sorry.

Speaker 3 (00:46:00) - What? I think there is one.

Speaker 9 (00:46:03) - Important question we should make. Claudio. Which is what? You're being Italian. Help you out in making the table with this table?

Claudio Erba (00:46:15) - This is a good question. to find, you know, I was, two weeks ago, I was in Paris helping the capital venture capital fund doing, you know, a session to their portfolio company. And they were saying, we are French gas, Italian are better than you on doing internationalization. And let me tell you why. Because you are lucky. You have Paris and nothing else. Everything is there. There are the local Louis Vuitton, all those companies that are opened by. So you have a big captive market, and then you can arrive easily to five millions without feeling the need to go international. On the other side, Italy that continuously celebrate this stupid concept of small business is nice. I don't like this capital market, so if you want to grow, faster, don't do like me. Take seven years to to arrive to that. But you need to go international.

Claudio Erba (00:47:20) - This is the topic number one. The topic number two is I you remember that. I say that there are the disruptive innovators, that they don't give a shit about what customer wants. And, the incremental innovators. I'm on the disruptive innovator side. I came to the to the industry of learning without now knowing.

Speaker 10 (00:47:41) - Nothing.

Claudio Erba (00:47:42) - About e-learning. So when we have to build the product, we build it as we imagine, not as the competitor have done, try to mimic and replicate. So we were like the obvious kind of drone in the.

Speaker 9 (00:47:57) - English.

Claudio Erba (00:47:59) - Department that will never fly, but it flies. And so we this allows us to build a product that was completely different from other products because we are we we were living on the, you know, border of the empire in Italy without being exposed to competitors in us. And good story, not two story. We were so under the radar that one were conquering us, our biggest competitor, and didn't realize in the chamber that we were not in their competitive intelligence radar up to the IPO.

Claudio Erba (00:48:32) - So one of they saying? What's the learning company in the Nasdaq world?

Speaker 10 (00:48:39) - One of them.

Claudio Erba (00:48:40) - And then, I mean, I cannot say anything because otherwise we get a lawsuit. But things went well for the team.

Inès Makula (00:48:48) - Thank you so much, Claudio. Thank you for sharing your blueprint. And you know, your experience with everyone here. Really appreciate it.

Speaker 9 (00:48:54) - Thank you. Thanks.