The Bootstrap Founder's Bet on Agentic Support

Alex Theuma (0:03)

Every decade or so, the rules of software change completely. This is one of those moments. The AI Revolution Show is the intelligence podcast for B2B software founders navigating the platform Shift, the founders building through it, and the founders already on the other side.

Alex, good to see you. Welcome to the AI Revolution Show. Speaking to you ahead of you coming to Shift AI Europe in Barcelona on the 13th and 14th of October.

Alex Turnbull (0:32)

Yeah, super excited. I know you have been putting a lot of work into it, so I know we're going to have a great attendance. And yeah, just super excited to be a part of it.

Alex Theuma (0:41)

I guess some of this will come out at your talk at Shift AI Europe, but today we're going to speak about, like you ran, you were the CEO of Groove, which I think a lot of people would have seen, would have heard, would have been following your newsletters, maybe would be customers, ran that for 15 years. It's still running, was at 5 million ARR at its peak. But now you're the CEO of Helply, which is I guess an agentic version or agentic support platform. And what I have seen in some cases with like a thin, I mean, actually maybe your case is similar to what Intercom did with Thin, because actually they said, and Owen McCabe said, burn it down and they built the new thing with Thin. They actually did carry on running Intercom, the old product at the same time. But I've seen some other SaaS companies where they said, we've burnt down our 10 million ARR business and we're starting afresh with an agentic.

You've kind of done an Intercom, I guess, is it fair to say?

Alex Turnbull (1:42)

I think fair to say, I think it was creative destruction. I think there's definitely some creative destruction in our story.

We've had a legacy helpdesk solution called Groove, our prior company Groove, now rebranded to Helply for 15 years in the marketplace. Has done pretty well as a bootstrap company, gotten to 5 billion ARR in 2024 at our peak, bootstrapped again. But a lot has happened since then. And what I'd love to do is kind of get into the reasons why we made that decision to do some creative destructions ourselves. But we basically killed our legacy SaaS. And we started over completely for the agentic error. Now, kind of fair warning here, we had no clue what we were doing, right? Like everyone else, like when Chachi PT came onto the scene in 2022, I think we were all kind of scrambling, especially as it relates to customer service software. It was probably one of the number one use cases for large language models. We kind of just jumped into it, knowing that we had to do something with AI.

So we started bolting things on, we made an acquisition of another company, shut things down and essentially started over. So yeah, anyone who's kind of watching this, fair warning there, don't take this as gospel. It's a bit of a crazy story.

Alex Theuma (3:04)

So was it in 2022, release of Chat GPT, that was the moment where you realize, I need to do something and started to do, figure out, start to do some of these things. You didn't wait until 2024 to decide to build Helply.

Alex Turnbull (3:21)

Yeah, so we did wait. So the story of Groove is a little bit more complex than just Chat GPT coming onto the scene. As it relates to our growth, in 2024, as we're hitting 5 million ARR, throughout that year, we're seeing signs of Groove becoming what Jason Lemkin referred to as a net revenue retention zombie.

So what that means is our customer base was pretty solid. They liked our product, but no new customers were coming by and signing up.

Some stats from Jason Lemkin that may be helpful for anyone that's watching is for an NRR zombie, the size can be anywhere between 2 million and 20 million ARR, sometimes even more. Your net revenue retention, anywhere between 90 to 100 percent. Your customer logo retention, anywhere between 80 and 90 percent. But here's the catch, you're unable to acquire new customers. So that's the biggest catch for us.

In mid 2023, mid 2024, we started to see these signs at 5 million ARR. Like I said, on a typical month, we're looking at percent net revenue retention. So in that definition, also not terrible too, at the same time. Customer logo retention at 90 percent in that metric spec there. But again, the catch for us was we were averaging only 25 new customers a month for our SaaS. And so you can see, like with churn, if you've got 30 to 40 customers churning a month, and you're only bringing in 25, then you're starting to see an issue. At the same time, like I said, we've got this chachi BT that's come on the scene in 2020 Everyone's kind of in the back of their minds, kind of seeing what we're going to do. Intercom, ships finned, Zendesk AI launches, and it's on, right? 2023, that's when all this kind of starts, this innovation starts, or at least people are trying to innovate in the AI space.