649: 2023 Year in Review | Brendan King

What were some of the biggest milestones achieved by Vendasta in 2023?

On this special year-in-review episode of the Conquer Local Podcast, we are joined by Brendan King, the co-founder and CEO of Vendasta Technologies.

Brendan shares the milestones achieved by Vendasta in 2023, including the acquisition of Broadly and the release of new products in the customer engagement space. He also discusses the changing economic landscape and the importance of profitable growth in today’s market.

Tune in as Brendan highlights the exciting trends to watch in 2024, particularly the advancements in AI and its potential to revolutionize customer relationship management. Join us on the latest episode to gain valuable insights and get a sneak peek into Vendasta’s roadmap for the upcoming year!

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2023 Year in Review

Introduction

Jeff Tomlin: Welcome to the Conquer Local Podcast! Our show features successful sales leaders, marketers, thought leaders and entrepreneurs who will inspire you with their success stories. Each episode is packed with practical strategies, as our guests share their secrets to achieving their dreams. Listen in to learn the highlights of their remarkable accomplishments and get tips to revamp, rework, and reimagine your business. Whether you’re a small business owner, marketer, or aspiring entrepreneur, the Conquer Local Podcast is your ultimate guide to dominating your local market. Tune in now to take your business to the next level! 

I’m Jeff Tomlin, and on this special year-in-review episode, we’re pleased to invite Brendan King for an in-person interview in our studio!

Brendan King is the co-founder and CEO of Vendasta Technologies. He spearheads the company’s innovation and strategic vision. Known for his intense and imaginative approach, Brendan’s leadership focuses on both the grand vision and meticulous details, driving Vendasta’s success. 

With a history of successful ventures, including nationally franchised enterprises and real estate software, Brendan embodies Vendasta’s core values: drive, innovation, respect, and agility. 

Brendan’s passion lies in upholding these values, propelling Vendasta to emerge as a premier technology provider in the local small and medium-sized business space. 

Get ready Conquerors for Brendan King coming up next on this week’s episode of the Conquer Local Podcast! 

Vendasta CEO discusses 2023 milestones, including Broadly Acquisition and Product Releases.

Jeff Tomlin: Hey, Brendan. Well, it’s that time of year. December comes around and we look back and it always seems like the entire year just flies by us, but an incredible amount of stuff has gone on this past year. So maybe talk a little bit about some of the milestones we’ve had here at Vendasta this year in particular.

Brendan King: It’s interesting. I was thinking before I did this podcast, I was thinking last year I did the podcast, it was with George, and he wanted to ask about what are the coming trends in the next year. So I wrote, I used GPT chat when it wasn’t even really a thing to give me a list. And we went through the top 10 things. I said, “By the way, that was completely written by AI.” And as you know, I’ve been a big AI proponent. And so when you asked me to think about milestones, I mean there are many, I think about them in different categories. There are financial and business milestones, there’s product milestones, there’s people milestones. From a business perspective at the top level, we acquired a couple of companies, well, just one actually, and we just closed one at the very tail end of the year of last year in 2023, we closed Broadly.

Jeff Tomlin: A bit of a milestone.

Brendan King: So, that’s a big milestone to bring on a company that is in the customer engagement space. And it really prompted our entire product organization to rally around that and to release a bunch of products that are coming. I think you have one tomorrow, right? A big deal.

Jeff Tomlin: Yeah, big deal.

Brendan King: We’re releasing these tools that primarily our partners used to use, and we’re now making them available for our partners to resell to those small and medium businesses. But why it’s a milestone if you just give me a little latitude and we go back, to when we started, we started by building these point solution products, listings, reputation management, social media management, listing’s really local SEO, right? And as we built those, we sold them through media companies and agencies to these small businesses to help those businesses go to digital. So there was some traditional advertising and they needed to bundle listings, rep and social. And as we did that, we started to … that was a milestone. We did a pretty nice growth back in 2009, ’10, ’11, ’12, and then we realized that our channel partners needed more than that. They needed this platform to scale. That was another milestone. We built out our platform and then we said we can’t build everything they need. And we built a marketplace so we could provide everything that a small business needs, and that’s our core mission, to give the small business everything they need to run their business with one login, and one password. So those are three sort of milestones along the way, but now we’re moving out of that AdTech and that MarTech stack. And it’s a tremendous milestone because when I think about a small business, what do they need? Look at AdTech and MarTech, those are things that are critical to the business, but not mission-critical. If the business isn’t going bad, it has problems, they can stop their advertising and they can stop their marketing. Also, those things are delivered primarily by the channel, and they’re managed by the channel. They don’t want to run their ad campaigns and they’re managed by and run by the channel. The SMB doesn’t use that software, for the most part, primarily. Now we move into this next sort of CRM productivity tools, inbox, customer engagement, billing and scheduling, media, booking, all of those things. Those are primarily sold by the channel and maintained by the channel, but they’re primarily used by the small business and they’re primarily recurring revenue. Advertising and marketing, some of it’s recurring, but some of it’s one-time or recurring. Versus these products are SaaS products that are recurring revenue for sure, primarily used by the SMB, and very sticky. And so our channel partners are the benefitors of this huge milestone. They’re going to be able to sell these products to these small businesses that they will use. So we’re already seeing that happen. And tomorrow’s release is going to be a massive milestone.

Adding Tools to Small Businesses Boosts Retention and AI Revolutionizes Customer Experience.

Jeff Tomlin: And our past research has shown the more things you can put in the toolbox of a small business, the stickier that customer is, they stay with you longer and they end up buying more things from you because you’re sort of the one-stop shop for them, aren’t they?

Brendan King: Yeah. And that effect happened in just ad and MarTech. So as we added on one, two, and three products, we saw, what was it, a 7% decline in churn for every product added. Well, what we’re seeing now with the benefit of some of the businesses we’ve purchased, we can see inside of some of that is that the churn rates are even lower. If you’re running someone’s CRM, if you’re connected to … our inbox is going to connect to their Google My Business page, right? It’s going to connect to Facebook, it’s going to connect to Instagram, it connects to your email, it allows you to send SMSs. Most importantly on your website, there’s an AI chatbot that can build your CRM while you’re not there. You’re underneath a sink fixing up a drain. This thing is getting the name and number of potential customers texting you so you can call them back and book that appointment. All of those tools are way more sticky in terms of retention.

Jeff Tomlin: And I’m so excited now that we’ve got the advertising and the marketing stack in place, with the CRM coming now, you’ll have all that customer intelligence now coming from the marketing and advertising, it’ll be at your fingertips. You won’t have all that crazy integration you have to do across all these different systems. It’s pretty exciting.

Brendan King: In fact, I would say that you’re touching on the biggest milestone, which is, and I am going to find a way to tie AI into this because I’m a huge AI proponent, I think it’s going to change the game. My thesis is  there’s the chip makers, and a couple of people are going to win there. There’s the model players. A couple of people are going to win there, mostly as hosting providers. And then there’s the people that have the data and the customer experience, and that’s where we fit in. So what you touched on was if you’re a small business and you’re using data, different programs, reputation over here, listings over here, CRM over here, booking and scheduling over here, what you won’t be able to do is tie all that data together and manage and have AI do the things that it can do across that set of data. Even more importantly, if you’re a multi-location group where you have restaurants here and hotels here and a ski resort over here, you can’t tell who’s done what with who if you have disparate data. And the things that AI can do right now are already amazing. But some of the demos that I’ve been seeing, the ability to index that information and communicate with potential customers in a way that’s unbelievable, that a human couldn’t even do, it’s crazy.

Major Enterprise Milestone: South African Telecom Replaces System with Vendasta Platform.

Jeff Tomlin: It’s really exciting. By the way, another milestone I want to touch on because it was a really big deal on the enterprise side of things. We had a really, really big client down in South Africa in telecom that replaced an entire system that they used to run their business basically with our platform. And that was a-

Brendan King: That’s a milestone.

Jeff Tomlin: … a really big milestone.

Brendan King: 100%. I mean, we have lots of enterprise customers that use our software in certain functions, and we have lots of agencies that use that as an operating system to run their entire business. But this is a huge customer that uses our platform to basically run their business. And it’s a huge milestone, believe me. And I wouldn’t say it comes without the trials and tribulations. If you ask the folks that … we have people here that work around the clock on their time a-nd-

Jeff Tomlin: A very long time

Brendan King: You know how persistent we are at Vendasta. We just kept pursuing that goal until we could do everything they needed. So I’m super proud of the team for pulling that off, but the milestone is huge and we’ve got other ones falling right along.

Companies now Valued on Profitable Growth, not just Growth and Vendasta Successfully Raises $20M.

Jeff Tomlin: So I mean, you touched on it a little bit, but let’s talk about the trends that you’re paying the most attention to in the CEO seat from this past year and looking into 2024. What are the most important trends that you’re thinking about?

Brendan King: Well, I mean look, there’s the market writ large. The obvious economy has changed. So it started in 2022 even. But in 2023, it became super obvious that the market is rewarding. The value of companies now is based on profitable growth. And so in the past, it had been, grow at all costs and we, like any other company, raised quite a lot of money and we want to grow as fast as possible to get the best value. But that’s changed. So the market’s saying, hey, you don’t want to have to go to market again. You need to be valued at your profitable growth. And that’s what we’ve done. So we’ve brought our company in line to be able to be sustainable, and I’m really proud of that. We still have a good amount of money. We had a small raise this year, a small $20 million raise this year. And-

Jeff Tomlin: Another milestone.

Brendan King: … a huge milestone. And I’ll tell you, we brought in the Foundry Group, and without sounding like a gushing fanboy, I am so pleased with the folks at Foundry. They’re fantastic people. They have a lot of resources and they put their full weight behind us. And Brad Feld in particular is an amazing individual. And when you ask for some resources or some help, you get more than you’re going to get it. So that is a really big milestone. But coming to a place where you don’t have to rely on others and you can run your business profitably is a pretty good feeling. It’s a constant struggle always too, because you want to grow, we still have to grow.

Jeff Tomlin: I mean, more and more companies now, they’re forced to actually operate like a real company. So people can lament the doom and gloom of how it’s been in the tech sector over the last year, year and a half or so. But coming out of it, there’s a lot of companies that are operating really, a lot of … most companies should be operating. 

Brendan King: Well, I guess I don’t want to take umbrage with the fact of that. I mean, if you raise money, you raise it to spend. And if growth is the thing that gives you value, that’s what you’ve got to do. And so I’m not looking back and saying that companies shouldn’t have run that way.

I’m just saying the environment changed and you have to change with it. And so what people are valuing now is profitability and profitable growth. So we’ve still got to grow, but we have to be profitable. And that’s the value metrics we’re after now. And it is fun to do too. It can be fun. It’s painful a bit, but it can be fun.

Acquiring Companies: Lessons on Culture, Aligning Expectations, and Scaling Operations.

Jeff Tomlin: So following on in that, this year wasn’t without its challenges for a lot of people in the tech space, a lot of opportunities as well, maybe some of the challenges that we had faced throughout the year. What do you think that some of your takeaways are or any lessons that you learned from in 2023?

Brendan King: Well, I mean obviously we learned a lot. So we’ve acquired four companies and as we acquire companies, we learn a lot about how to make that work. And so a big part of that’s culture, a big part of that is aligning expectations. So I’ve learned that as we acquire companies, it’s really important that we have a plan that’s shared that’s fairly solid. I mean, as solid as any plan can be, but also it’s important that the expectations are clearly set. And so I think you can do that and you can apply that to any part of your life or your business, setting clear expectations with others is just super important.

Jeff Tomlin: And with adding other companies into the portfolio, we’ve talked about that on the podcast. I have a couple of different of the guests that we’ve had on. And it’s a really great way to grow because in a lot of cases you can find opportunities where when you put two companies together, one plus one can equal three. But in order to do that right, it’s a different muscle. You’ve got to learn how to develop and work into your operation.

Brendan King: Yeah. And as you get to scale, so as you get to a hundred million dollars or above in run rate, US or Canadian, you have the ability to do things that smaller companies can’t. And so it’s a different way of … So there’s a lot of things we learned about how to run companies at scale that are completely different than running a smaller company.

2024 Outlook: Higher interest rates, AI advancements, especially in Natural Interaction.

Jeff Tomlin: So you look out into 2024, so predictions are always really important. People look to see what other people are thinking, especially the leaders in the space. How do you think people should be thinking heading into 2024? Or what do you think should be top of their mind?

Brendan King: Well, I’m not going to guess at whether some people are saying things are going to get worse before they get better. I do think that interest rates are going to stay higher for longer than people anticipate, which is probably neither … it’s not the best thing for business. I don’t think, and here I am making predictions I don’t like to do, but I don’t think that small businesses are going to particularly be affected going into a recession. So I think in the case, from my point of view, if you’re a SaaS company selling to other SaaS companies, you’ve got some headaches coming and maybe they’ll abate next year too. But if are selling to Main Street versus Wall Street in the small business, I think you’re going to be okay. That’s one thing. The other thing is AI. I kind of almost got sick of it. I was talking about it before it was a thing, and then all this year when it went to some conferences and all it was was like AI, AI, AI. But I don’t think we’ve seen anything yet. I think that people have not figured out how to use it. It’s like your parents talking to Google, have you ever seen someone try to talk to Alexa or to a Google Home device and they’re talking funny? And I don’t think we need to do that. And I think that’s indicative of the way we used AI. The way AI is in our products too is not, some of them are really good, like responding to reviews, boom, it’s unbelievable, but some things are a little disjointed. And I think as AI it’ll come more natural and it’ll be more objective. So you’ll say, here’s what I want, and it’ll do that. Right now it’s more like, here’s the steps I need to get what I want. Let me use AI to make each step better, versus just telling AI, here’s what I want. And so it’s going to get more natural, it’s going to get easier. And I don’t think we’ve seen anything yet.

Exciting 2024 Roadmap includes Versatile Billing and Practical AI Applications.

Jeff Tomlin: All right, so one of the favourite things that I know that you like to do is to talk about the future and what’s coming next in terms of product development and roadmap because we’ve got a lot of exciting things coming along. And our product teams and our marketers in particular don’t necessarily like to talk about things until they’re ready. What are the things in the roadmap that you’re really excited about coming up in 2024?

Brendan King: Well, look, and let  me just address that until they’re ready. I think nobody would ever release anything if they waited until they’re ready. Nobody’s ever quite ready. And as we do get bigger, and as people rely on us to run their business, we’ve got to get more ready. So when it’s billing, that’s not probably the most important or exciting aspect for anybody.

Jeff Tomlin: It’s got to work.

Brendan King: But it’s got to work. And so we have, one of the things I’m really excited about is our platform over time. It can handle now lots of different billing models and use cases and make it easy for both our channel partners to sell to their small businesses and those small businesses to sell to SMBs. And the billing infrastructure that we’re providing, it’s not super exciting from an outside point of view, but the ease of use and the way that it works and the cost savings for those SMBs and the ability to send an invoice by SMS to their customers is, I’m super excited about that. 

I’m really stoked. The second thing I’m really stoked about is AI again, but in a practical way that it can be used to make things work. So there’s been years and years, and there’s a lot of companies that this is existential to them because they’ve invested years in software development to build things like a chatbot, and we’re in a position where I think you’ll see it tomorrow where we can essentially leapfrog them. And so you’ve seen these chatbots where you’ve got to go in and you go like, what do you want to do today? Do you want to do this or this or this? And you’re like, you don’t have to do that. You can just talk to this chatbot and it will give you what you want because it knows, and this is why we’re in a good spot, and why I’m so excited is we have all the data. We’ve got their website, we’ve got their support materials, we’ve got all of their reviews, good and bad. We’ve got all of their business information clearly, the tagline and where they are and their cross streets and what credit cards they have, all of that. We have all of that. We’re syndicating that today to these listing sites. And we’ve been writing all their social content. We have this huge amount of content that we can reference with AI and give answers that AI couldn’t even do … that a human couldn’t even do. And I’ll give you another example. So some of the things that are incredibly hard in the world of digital marketing are the right content on behalf of small businesses. So imagine your content writer, I don’t care where you are in the world, you’re writing content for a business. What do you have to do? You have to know everything about that business.

Jeff Tomlin: Hard to do.

AI Empowers Content Creation, Elevates Humans, and Transforms CRM Capabilities.

Brendan King: Do you know how hard that is for a human? Do you know how easy that is for AI? AI can know more about that business, and what humans get to do is elevate themselves now. So instead of reading all that content and trying to write the business, they can look at the output and they can give it some tweaks on the input. And they can say, oh, by the way, this business, this happened new. This is new, this is new. Oh, we are doing all this social, we know this. And boom, it can make that content better than any person ever could have. And that’s the point, right? It’s delivering value to their customers.

Jeff Tomlin: Make themselves better and get more of their time back.

Brendan King: 100%.

Jeff Tomlin: And doing the important things.

Brendan King: And elevate themselves and get paid more. How much can you pay someone who writes dribble? And I shouldn’t say dribble, but I mean it is good content, but how much can you pay someone to read all about a company and write a few lines of text that they’re going to post on behalf of that? How can that work? Whereas if you can empower the humans to actually do real thinking and make really real content, you can do better.

Jeff Tomlin: By the way, and you started out talking about the billing system and then all of the data that we have at our fingertips. On top of the reporting system, clearly, I’m a data guy, as you can tell by my mug …

Brendan King: You love spreadsheets.

Jeff Tomlin: I do. I do. But what I love more is when numbers don’t have to be in spreadsheets and they can be in a reporting infrastructure. And now all that data that we have and billing information now with the reporting infrastructure that we have, the partners have a lot of intelligence at their fingertips now.

Brendan King: They do.

Jeff Tomlin: And that’s-

Brendan King: And by the way, I was going to say I was excited about our CRM, but really what is a CRM? It’s an ability for you to manage a relationship w ith a customer. That’s why it’s called customer relationship management. And what is a relationship with a customer? It’s a bunch of data points. It’s a bunch of data points about what you’ve sold. It’s a bunch of data points about what they need. It’s a bunch of data points about where their business is, what their business is, what it needs. And this is a revolution. So our CRM to me is not an evolution even, it’s a revolution because it’s AI-based. And what it can do is incredible.

CRM Transforms, Making Data Entry Unnecessary for Customer Insights and Efficiency.

Jeff Tomlin: I like that. And nobody uses a CRM because they love putting notes into it.

Brendan King: Nobody loves it. No. But you love your customers and you want to know everything about them, and why should you have to enter all that stuff?

Jeff Tomlin: And you want to be able to have the information to make your company more efficient.

Brendan King: 100%.

Jeff Tomlin: And that’s there. So a lot of exciting things. Brendan, I’m going to give you the last word. What’s the last word?

Brendan King: Oh, I don’t know. It’s, 2024 is going to be fantastic and I hope it’s fantastic for you and your family and everybody, your   company, business. I hope it’s a great year.

Jeff Tomlin: Couldn’t think of a better note to end on. That’s it for a wrap on what’s new, I look back on 2023 and what’s coming new in 2024. Happy holidays to everyone out there and hope everyone comes out of the gates just cranking in 2024. Best of luck to everyone.

Brendan King: Thanks, Jeff.

Conclusion

Jeff Tomlin: There you have it, our traditional year-in-review episode with Brendan King. The first takeaway is around Diversifying Offerings for SMB Growth. Vendasta, expanding beyond ad tech and martech, is now also focusing on other adjacent categories of operational tools critical to small businesses. The move to AI-driven solutions, including chatbots and CRM integration, has inched Vendasta closer to its grand vision of providing everything a business needs to operate in one place.

The second takeaway is Adapting to Economic Changes: Brendan discussed the changing economic landscape and how Vendasta adjusted its fundraising and operational strategies accordingly. Heading into 2024, he anticipates sustained higher interest rates and emphasizes the importance of aligning expectations and setting clear plans, especially as the company reaches for impressive growth rates. The focus on growth and profitability as key value metrics reflects a nuanced approach in navigating economic uncertainties. 

If you’ve enjoyed my chat with Brendan, revisit some of the previous episodes from the archives. Check out Episode 552: 2022 Year in Review with Brendan King or Episode 625: Building a Strong C-Suite Community with Jeffrey Hayzlett 

Happy New Year Conquerors and until next time, I’m Jeff Tomlin. Get out there and be awesome!