Competing with Huge Companies as a Bootstrapper

Michele Hansen  0:02  
So you remember a couple weeks ago how we were talking about competitors nipping at our heels?

Colleen Schnettler  0:07  
Yes.

Michele Hansen  0:09  
So, recently, we had a new competitor, enter the space. 

Colleen Schnettler
Ooh, interesting. 

Michele Hansen
Amazon.

Colleen Schnettler  0:18  
Oh, no. That's fair. 

Michele Hansen  0:22  
I mean, it's inevitable. Um, and we already compete with the likes of Google and Microsoft, and you know, all of these huge companies. So it's not, it's definitely not unexpected. Like, it's definitely been one of those. It's only a matter of time, things. But yeah, I, that that that happened, they launched their own location services. And, interestingly, they're just reselling to other providers, they're reselling s, ri, and here. And it's very focused on fleet management and asset tracking, which kind of makes sense based on what they're doing. Like, they're tracking packages and trucks and like, that's crucial to their operations. So it's almost kind of funny, because, you know, looking at that, and whenever people are asking about, you know, how do I bootstrap my own business? Like, where do I start? How do I get an idea? One of the most common pieces of advice and advice that I give is just start with something that you need yourself and go from there, which is what you have done. And it's also what Amazon has done here, too. So, so it's, like, I look at it, I'm like, Oh, this is clearly something they built for themselves, and now they're gonna have people paying for it definitely does, does a, you know, not a totally welcome surprise for us, right, because, um, fleet management and asset tracking is an important vertical for us, because it's expressly forbidden by some of the other major geocoder. So we do have an important amount of customers in those spaces, and overall, Amazon's pricing is much higher than us. But for asset tracking, it's, it's very favorable for that use case, because instead of paying per basically per ping from a GPS, imagine, like a truck might say, send back a GPS paying every 100 feet, for example, instead of paying every time for the new coordinates of that you only pay per asset. So you know, so I imagine we will lose some customers from this. But at the same time, what I think one of the great things about being in b2b SaaS, but especially the kind of space we're in, is that we're so diversified across industries, that we have tons of other verticals, in addition to fleet management and asset tracking. And it makes me really glad that I do that semi annual customer portfolio analysis, because I know exactly how much of our revenue is from that sector. And looking at this now and knowing Okay, there's this huge, well funded, competitor coming into the space. I can see pretty clearly like, how much revenue that directly puts at risk. But yes, certainly an interesting week.

Colleen Schnettler  3:33  
Yeah. So when you do your semi-annual customer portfolio, do you break up your customers by industry? Is that the purpose of that?

Michele Hansen  3:43  
Yeah. So basically, I look at our customers, as a portfolio, as an investor might look at, say, a mutual fund portfolio, for example. And I split it on a couple of different metrics. So I basically take the top 90% of revenue, and I look at the customers from it within that space. And I look at them by industry. So so there's like fleet management, but also say real estate or insurance, health care, things like that. By industry, I try to get a rough sense for company size. So that I can just kind of, you know, have a little bit more understanding there. And then just really trying to understand, okay, based on these different industries, like how much of our revenue is dependent on any one given industry, and should we think about diversifying whether we want a you know, a higher percentage of revenue in a particular category, we want new customers there, or do we want to purposefully pull back from a certain industry or simply just not emphasize it as much if we feel like there's too high of a concentration there, and also making sure that we don't have any high customer concentration and any one Given customer, so something an important metric for me is, you know, what are our largest customer, what percentage of overall revenue are there, they and basically making sure that that number is below 1%. And again, this also comes out of sort of investor style thinking where, you know, for example, if they're analyzing a company, and they see that a company has, say, 40% of its revenue coming from one particular customer, that's a huge red flag. Right? versus if it's highly diversified, then then let that's less of a risk. And yeah, that's, that's something I do about twice a year. And, and that's kind of one of those things are sort of had to create for ourselves, you know, I'm obviously not creating the concepts, but I think applying them in this way, is because, you know, as we've talked about a lot of the content out there on running a SAS is very much focused on growth and, you know, more well funded approaches to business that don't necessarily emphasize stability or profitability, or things like that. And so, rather than managing for growth, we manage for stability. And I find that this customer portfolio analysis is a really helpful tool for me. And, and matea stew in sort of like us communicating, okay, what are our priorities? And how do we create a more stable business and just kind of giving us a high level of that?

Colleen Schnettler  6:37  
So you do that as a manual process?

Michele Hansen  6:40  
Yes.

Colleen Schnettler  6:41  
So do you literally hand Google? 

Michele Hansen  6:44  
It's because I'm a I'm a glutton for punishment, apparently,

Colleen Schnettler  6:46  
I know. 

Michele Hansen  6:50  
You probably like the like the week, you know, the the week I spend on this every six months, I actually like genuinely is like

Colleen Schnettler  6:56  
your favorite. Yes.

Michele Hansen  6:58  
Making all my little pivot tables and everything and like, Oh, my gosh, I am. Yeah, it's actually really fun. Yeah, I basically just google them. And then, but a lot of them I've also had conversations with. So that's where I can fill out the rest of the picture to sort of so it's this combination of quantitative and qualitative information that we use for prioritizing. And, and this is really like kind of the first big moment I can think of where something happened. And my first thought was numbers from that analysis. And then it like made me feel better when when this happened.

Colleen Schnettler  7:39  
So when we talked about competitive analysis last week, the reason and this wasn't we were talking about Amazon, we were talking about some of your other competitors who had launched new features. And we talked about you guys competing on some very specific in some very specific areas. So with this Amazon launch, are you saying that now at least for the fleet management sector, you do not compete on price.

Michele Hansen  8:09  
So it's, it'll be it'll depend on the on the customer. So their price for pay as you go geocoding is much higher, they are $4 per 1000, versus we are 50 cents per 1000. If you want to store the data there, 50 cents per 1000, if you don't want to store the data, to anything, I read it more of a as a shot across the bow at Google than you know us. I mean, we're so small like that, you know, Amazon doesn't care about us, like, just kind of one of the nice things about being a bootstrap business. So of cour...