Business Breakdowns
· Matt Reustle
[00:00:00] S0: Yeah. I have to say I'm embarrassed to note I did not appreciate that it came out of Wix. I noticed that the Wix founder is a very large shareholder and it would be obvious to connect the dots there on that point. Was that a major opportunity for cross-selling? Was there an ability, because Wix is obviously this outward-facing customer platform essentially, build a storefront out of a box with a website, which I think was very innovative in a lot of ways. I think it helped a lot of small and medium-sized businesses. Was Monday.com able to tap into, whether it was the customer base or anything with cross-selling in those very early days to get that start off the ground with customers?
· Ben Hensman
[00:00:00] S1: Yeah, in the very early days it was really a single use case, single product platform. And we met them very early on in 2015. The business was growing very fast. I mentioned that at the end of 2014 they had about $400,000 of ARR and that grew to six and a half million by the end of 2016. During that period, when they were a single use case, a single product company, the usage patterns were extraordinary, both in terms of depth of usage, but also retention. By 2017, they had three-year-old cohorts with 100% net retention. And while we see software companies today with 115, 120% net retention, 100% net retention at an early stage, when you don't necessarily have product market fit with every customer, you've got plenty of customers churning who don't have product market fit. To maintain that 100% over three years for your first annual cohort is extraordinary. And the reason for that is that the product was so incredibly flexible. So you had customers coming in and using it, and we can talk about some broader use cases. You had companies coming in and using it for a single project and that was starting to evolve into using it for multiple projects that would often need more teams. And so you'd move into expanding and pulling in data from other teams, pulling in approvals from other teams. Sometimes you'd be pulling in approvals from external companies. And so you saw this incredible pattern of usage across many, many use cases, but without separate products for each of those, it was very much a flexible and open platform. And so the way that Monday solved that problem early on is effectively a discovery problem for customers is that you need to know what you want to use it for. And so in solving that discovery problem, they turned to solution-based selling or product marketing. So in the early days, their use of YouTube and other areas of content aligned with their performance. Marketing really went to customers with solutions. Instead of "we are a task management platform," it was "we are a CRM" or "you can build workflows within your business in any way that you want," or a very specific problem that a customer could solve and that very quickly allowed customers to start using them for core workflows early on.
· Ben Hensman, Matt Reustle
And that pattern has continued all the way through, if you look at Monday today, built across its platform, with individual products on top of the platform, the usage statistics are really interesting, but they've actually been quite similar for a number of years. 60% of customers manage two or more core customer workflows. And what that really means is, things like CRM service, that could be IT service or external service, HR functions, recruiting functions, 12% of the customer base today use it for HR, 47% use it to manage their clients, 14% for finance management, and 21% are using it as a ticketing system. And so it's an incredibly broad system. And you saw that in the early days, but really on an open platform in a way that today is much more organized across different building blocks. [00:00:00] S0: Yeah, it's interesting to hear, as much as you can, talk about your flexibility as a platform. And I've heard the LEGO analogy, it's one that I like. You need to spell it out sometimes just to give the end customer a sense of what they can use it for. You've hinted on some of the use cases, maybe you can bring it to life with examples of how customers might have used them early on and how that's evolved? And anything you can spell out with a clear example I think is particularly helpful.
· Ben Hensman
[00:00:00] S1: Yeah, absolutely. The rough framework to think about is that often companies will start or an individual team or an individual person will start with a one-off project. So managing a specific need within a business and that will typically evolve into daily, ongoing core work that will often then evolve into different departments and then together those teams start to invest in core workflows and standardize across the organization. And some really interesting examples. If you look at Monday's customer base, they serve businesses across 200 different verticals. About 70% of the customer base is non-technical or blue collar in industries like manufacturing, other industrial categories, managing really interesting and difficult processes inside Monday. So one example at the technical end is Canva. They've been a very vocal proponent of the platform for some time. Their marketing operations team was the starting point for that account. This was a set of teams who were pushing requests into the marketing team from all over the business. They were doing that in very different ways, through email, through different tools, some task management tools as well. You had some people managing in Jira, some in Atlassian. You had one or two using Monday and then a lot of emails and communications flowing in. They standardized on Monday and they did that with the Monday WorkForms product to bring data from those teams in a standardized way into a core platform. Then they built a set of automations across all the activities that they need to conduct inside the pipeline and integrated those with all the other tools that they work with and then execute in. If you look at Monday more broadly, there's about 80,000 integrations that are active every single week. So they act as a bit of a hub and allow teams to really orchestrate their workflows. If you look at Canva's ROI, and this is the most important thing for a customer, is ultimately what changes they were able to make. They improved marketing production time by 40%. They were able to increase their creative output for the business by 3x. And this is before the era of generative AI, so it'll definitely be moving faster now and more effectively manage concurrent projects as they rapidly scale into a whole lot of new markets. McDonald's is another really good example.
· Ben Hensman
The business process team, they were spending 20 hours a week tracking approvals and processes and different projects across emails, Excel, other documents. They created a series of interconnected boards on Monday.com across all of their work areas and projects within each work area. And that all funneled up to a mother dashboard at the top. They built 150 different automations to limit duplication and repeated processes and steps. And they measured all of this. They're having such a significant impact on the business and speeding processes up allowed them to really smoothly orchestrate important partnerships with external parties and give them access to boards with the required permissions and security and enterprise-grade protections. And the measurement was really interesting. They reduced internal emails by 20,000 per month. They calculated that they saved 1200 hours per month in productivity, which they measured about 7 FTE and the overall ROI in dollar terms was about 6 times. So really, really compelling. Another interesting use case, which I'll share and we can dig into a few more if you'd like, is Bloomberg. Large organization and an organization that's been around for a long time with lots of different ways of working, but sophisticated systems that it provides to its own customers and significant internal proprietary systems. Monday has a really flexible API that allows external customers to connect their own environments to Monday and orchestrate them from Monday, pull data into that environment and run different workflows. And Bloomberg is one such customer who's made that investment and gone really deep using the API. And we've seen that a lot.
· Matt Reustle
[00:00:00] S0: Yeah, it's very interesting to hear. I can think of our own internal use case where we implemented a software. It wasn't Monday.com, but just the unlock at the time where it was emails and messages to just have one single system that was pulling from Google Drives and our email and our Excel files and our RSS feeds and external and internal. It was just unbelievable in terms of the unlock that that created. But we did run into issues where the ability to connect into other systems started to break down and there's all types of issues. So you need to keep evolving it to meet our needs, let alone the needs of a McDonald's or a Bloomberg. And that's one of the points I did want to get to. It seems like Canva is by all means an incredibly successful business at this point in particular, but I'm sure when they started working with Monday.com they were probably smaller and still compared to a McDonald's or a Bloomberg. There's a big gap there. My impression was that it was very much small and medium sized businesses and the larger enterprise or larger organizations have started to come more recently. Can you talk about that evolution and how that played out? Whether it was just organic, natural evolution to go up market or if there were particular things that really drove that?