SaaS Stories
SaaS Stories is my not-so-secret quest to learn what it truly takes to succeed in the world of SaaS—and I’m inviting you along for the ride! I have the pleasure of sitting down with brilliant minds and industry trailblazers to explore their journeys, uncovering the secrets behind their growth, the gaps they spotted in the market, and what really drives them.
It’s not all smooth sailing—there are challenges, unexpected turns, and moments of reflection where they share what they’d love to change about their journey. Think of it as a candid, insider’s look into the world of SaaS, with just the right amount of curiosity, empathy, and wit.
Join me as I dive deep, selfishly soak up all the insights, and hopefully share a little inspiration with you along the way—one SaaS story at a time.
SaaS Stories
From Silicon Valley to Southeast Asia: Patrick Gentry’s Journey to Revolutionising HR Tech with Sprout Solutions
In this episode of SaaS Stories, I’m excited to be joined by Patrick Gentry, the co-founder and CEO of Sprout Solutions. Sprout, an HR tech company based in the Philippines, has grown into a leading player in the industry, helping mid-market and enterprise clients automate their HR and payroll systems. Patrick shares his unique journey from starting Sprout as an "interesting project" to building a thriving B2B SaaS company.
Key takeaways from our conversation include:
- From Idea to Business: How a personal pain point led Patrick to create Sprout Solutions, and why approaching it as a project first helped it scale naturally.
- Sales and Strategy: Why sales-led growth was critical for Sprout’s success and the importance of aligning your go-to-market motion with your SaaS product.
- Scaling Challenges and Breakthroughs: The impact of securing Sprout’s first enterprise customer and how it pushed them to refine their product and operations quickly.
- Customer Success & Growth: The role of customer success in retaining clients and driving long-term growth, including key strategies from Patrick’s accelerator experience.
- Building in the Philippines: Patrick’s insights on tech adoption in Southeast Asia and advice for SaaS companies looking to break into new markets like the Philippines.
Learn how a personal struggle with HR and payroll led Patrick to create a groundbreaking B2B SaaS solution, revolutionising the way businesses approach these crucial processes. Patrick's unique perspective on entrepreneurship as a series of intriguing projects, rather than mere business ventures, provides invaluable insights into the world of scaling SaaS companies, highlighting the critical role of sales and marketing over product development.
Welcome everybody to another episode of SaaS Stories. Today I'm joined by Patrick Gentry of Sprout Solutions, ceo and co-founder. Welcome, patrick, how are you?
Patrick Gentry:Yeah, thanks. Thanks, rana, it's great to be here. Thanks for having me.
Joana Inch:Absolutely. Tell me about Sprout Solutions. What got you started into this creation and also into the world of SaaS?
Patrick Gentry:Sure. So yeah, it's an interesting question. It's been quite a ride. Sprout is nine years old, so we're old for a startup, and so kind of the story starts with me moving to the Philippines. So I am American, originally worked in Silicon Valley for a little while in tech and then moved to the Philippines for fun. No real agenda there, I was just kind of enjoying traveling and I landed in the Philippines and stuck around a bit. That was 2008. So yeah, 16 years ago and I got into.
Patrick Gentry:I ended up getting into business pretty quickly with some other people and we started a company in KMC and in the Philippines called KMC and we were we were growing this business and really struggling with HR and payroll.
Patrick Gentry:And there was another founder of KMC and I. Both of us kind of had a tech background and we said there's got to be a technological solution to this better than what we saw in the market at the time, and so we built a tool internally to help us automate HR and payroll and then we use that for a couple of years in that business. And then I talked to the other founders in that company and said, hey, I think this could be a B2B SaaS product, and so I want to take it to other companies in the Philippines and see if they also want to automate HR and payroll. So I did that as a project. So, like a lot of companies that I've been involved with that I'm a founder of, I kind of started it just as a project and explored whether people would pay me for it and, lo and behold, they did so.
Patrick Gentry:I incorporated Sprout in May of 2015. Did so, I incorporated sprout in may of 2015. Um, and then I've just been uh, selling that as a b2b sass tool in the philippines uh, ever since then.
Joana Inch:So, yeah, wow, I. I always love the stories and they always start with I found a gap that I was experiencing, so I just went and built the damn thing. I wasn't even looking for something else. Do you have coding background Like are you the actual builder of the software?
Patrick Gentry:Yeah, so it's interesting. My background is on the technical side, but not as a coder. So product management even like kind of early 2000s or before 2010,. I was in product. It wasn't really called product management back then, but that's really what I was doing, yeah, so that's, that's the side that they come from, for sure.
Joana Inch:Yeah, but you make it sound so easy. It sounds like you've scaled two companies, but I'm sure it has come with lots of challenges. What have you, what strategies have you found effective in acquiring and retaining customers?
Patrick Gentry:Sure, um, actually.
Patrick Gentry:So. So first is like founding and making it seem easy. It's certainly not.
Patrick Gentry:I have a laundry list of companies that I've started and failed, um, very quickly, uh, and in the early days, you know, I really love just looking at things as interesting projects and no more, no less. I think a lot of young people so like maybe people that are listening, that are thinking about wanting to be an entrepreneur or wanting to start a tech company. It's best not to force it and you know, I never called myself a CEO of anything. For quite a while it was always like, hey, this is an interesting project, I'm starting it. And then, after a while, when it started consuming a lot of my time, that's when I would start looking at, okay, maybe I'll incorporate a company to put this project in and, you know, claim the revenue and that kind of thing, and then then I would give my. Then I would start saying, okay, I'm the co-founder of this company and everything. But, yeah, certainly hard and there's there's ups and downs. Um, so your your question around growing b2b sass is I think growth is the number one thing with b2b sass. So, again, a lot of young founders I talked to are very product focused and it's one of those mentalities like, if, if I build it, they will come. Um, yeah, and man, that's just not the case with with b2b sass. It's.
Patrick Gentry:It's like the name of the game is sales and marketing really, and it's, it's brutal, it's really hard in our. In our it does depend a little bit on what kind of SaaS you're selling. So if you're selling something that, like, a couple of people within an organization can use, you can do like a product led growth motion and you know, you just kind of put your website up and you advertise a lot and people start picking it up and you close bigger deals later. But for us, like Sprout, we're a sales led growth company and so for a client to use us 100% of their employees will use Sprout. So it's a big decision which for the company, which means it's a friction, full sales process, which means we have to have this whole like sales led growth and yeah, it becomes a totally different engine versus the like product led growth that can be sold to anybody in a company yeah, yeah, there's definitely.
Joana Inch:There's definitely a lot of ways, ways to grow. There's, you know, customer led growth, sales led growth, product led growth and it's really, you know, I kind of have seen six people have success with either one. I guess it just depends on the industry how hard it is to use the software as well, how much of a paradigm shift it is for the organization, how much change management is required. So, yeah, it can definitely range from being like not so hard to extremely hard and, you know, very long life cycles as well it extremely hard and you know very long life cycles as well.
Patrick Gentry:Yeah, yeah, yeah, absolutely, um, a lot of learning there. So I think it's important for founders to to do some soul searching about an introspection and really, like, look at their business and they need to understand deeply, um, like what, what, what? Which one of these categories do you fall into and then, kind of, then you build your growth machine accordingly. Um, again, I've seen young founders that that that are, you know, using like plg strategies on a sales ed, growth business and and vice versa, and things like that and it, yeah, that'll, that'll really make it hard to grow yeah, for sure.
Joana Inch:Now you're based in the Philippines and you have been quite a while, but before that you mentioned Silicon Valley. Do you think is there any experience or learning there that really shaped, um, how you've tackled, you know, sprout solutions?
Patrick Gentry:sure? Yeah, excellent question, because you know a lot of people. I think before I went to the Philippines I would have said, oh, it's like such a different market. Everything's going to work differently there. That's just not true In this day and age. It's amazing how similar.
Patrick Gentry:You know all these markets are operating, whether it's a first world country or developing country. You know you kind markets are operating, whether it's a first world country or developing country. You know you kind of expect like your enterprise sales would work differently in the US versus Philippines, and it doesn't. It's like the same kind of things. You know you're fundamentally you're building a growth engine, you're trying to build repeatability and you're dealing with the same kind of like. If you want to close an enterprise customer, you need to have X number of contacts within the organization and it's this long sales cycle and you know you have to have your responses all lined up for all the roadblocks that come up and all this stuff. I mean it's amazing how similar it is and like. So.
Patrick Gentry:Sprout in the early days of Sprout. I think one difference is in developing markets. As a founder you have access to to much fewer resources. So one of the things we did in the early days of Sprout, my co-founder and I applied to an accelerator program in the U? S and it was an accelerator program in the US and it was an accelerator designed for enterprise SaaS, and so we were learning from people like founders of, or members of the founding team of, Salesforce and other major SaaS companies in the US, and so that program was incredible because it taught us all of this, all these kind of best practices around b2b sass that we didn't have great exposure to in living in philippines. And then we took what we did, we took all that stuff back to philippines and it really helped us, you know, grow and scale our business, yeah, so yeah, that kind of makes sense.
Joana Inch:I mean, everywhere around the world. You know people are pretty tech savvy. The digital transformation has happened all around. You know you're kind of having the same issues in a company that you would in most locations. You know, especially the issues of HR, for example, and I guess you know with enterprise sales it's always going to be about relationships and how many people do you know in that organization? How many people can you influence? It doesn't matter where you are. I think asia and the apac region a lot more so as well. So it's interesting that you say that. I'm curious what was maybe some specific learnings from that accelerator?
Patrick Gentry:it sounds amazing oh, man, there's a lot. I mean, keep in mind, we did this accelerator in like 2015 or 2016, like we just founded sprout and like in those days, you know, customer success wasn't kind of a new thing. Um, you know, it was starting to be like we. We got to meet um nick meta, the, the he became ceo of gainsight, which was like a pioneer in the customer success field.
Patrick Gentry:So everything from like growth, like how do you growth hack marketing to you know how do you structure your customer success team with their commissions and how do they do you know the QBRs and the kind of regular cadences they do with customers, and then how do you does that lead into upsells and what's their, what's their net revenue retention target, and like, just like all these best practices in B2B sale and B2B SaaS, from acquisition to retention side, especially where, where, what we got to be exposed to and like man, that stuff, you know, yeah, it's put us at a huge advantage, I would say, versus a lot of our peers in Southeast Asia which maybe at that time weren't thinking about customer success yet, for example, or weren't thinking about, you know, lining up. Oh, what are my, what are all my major metrics that I need to be like watching like a hawk, like my sales efficiency and net revenue retention and and all these kinds of things. So yeah, a lot, a lot of learning.
Joana Inch:Yeah, absolutely. I've actually spoken to a few people on this podcast around customer success and I'm starting to think it's one of the most important things for a SaaS company. Now, Sprout now serves about 1000 clients. I have heard before that if the first 100 really matter and they're really going to dictate how fast you scale after that, have you found the same thing to be true? And in hindsight now, looking back, do you think you had the correct 100 for scaling? Would you do anything differently?
Patrick Gentry:great, great question. Um okay, we're actually about, we're actually about 1500 clients.
Patrick Gentry:Now I know our published published is a thousand, but it's a little outdated. Um, we're at about 1500 now and we serve about. We have about 250,000 active employees in the system and we kind of sit like mid-market to enterprise space in terms of customers that we cater to. And so early days of Sprout, so Sprout. Now, by the way, we also have about 460 employees in Sprout internally, so we've kind of grown bigger ourselves.
Patrick Gentry:But in the early days it was like me doing a lot of things and I think in the very, very early days, like first 50 clients, I was the one selling, I was the one implementing, I was the one doing customer success, most especially those three, and that was super, super critical. Um, if you're, if you're early stage sass, you need to be doing as much as you can yourself. Um, partly to save money, uh, because you're broke and you don't have money, and partly because you're taking all of these learnings back. Um, I was fortunate we had a couple developers very early that were really, really good and I would be always like bringing things back with them and working with them. But our strategy, so very early.
Patrick Gentry:So, first couple customers we had, they had a handful of employees, maybe 20 or 30. They had a handful of employees, maybe 20 or 30. And then we closed the client with like 200 employees and we recognized very fast that the sales cycle and support and things like that were very similar with these two groups. So in our minds we were like, well, one is paying us like $100 a month and the other is paying us $1,000 a month and they're pretty similar in everything else. I think we need to go go that way. So that was. You know, things like that. You grasp really quickly when you're doing everything yourself and you get to see like I was doing all this like sales and onboarding and support myself. So I was seeing all this firsthand like man, okay, this is the way we need to go. And so we set our sights on getting bigger and bigger and bigger customers as fast as we could and the software wasn't really ready.
Patrick Gentry:I mean like HR and payroll is incredibly complex. And so what happened is? It acted as a forcing function. So when we closed an account with a client with a thousand employees, it was like all this stuff broke in our not just our software, but in our implementation, in our support side. Like we weren't just ready to handle onboarding and supporting a client that big, but we had closed it, so we had to do it. And supporting a client that big, but we had closed it, so we had to do it.
Patrick Gentry:And my co-founder and I were in meetings with our first proper enterprise customer every single week, just trying to make things work. We got so much learning from that. All of a sudden, these like 100, 200, 400 person companies were pretty easy for us. So it acted as like this forcing function to get us, you know, better and better and better at serving what would become our core market, which is like 100 to 2000 employees. Like that's kind of our ideal customer range. We go all the way up to like 20,000 employees for some of our much bigger clients, but a lot of our like our bread and butter is this kind of mid-market. So yeah, I mean it's, it's your, those customers, those first few customers you have kind of help, you dictate the kind of direction that you want to take the company and then you're driving that that really really hard after that.
Joana Inch:Yeah, no, it's a good learning and nothing it speeds up productivity like gaining your first enterprise client and having to build it for them having to build for them. Yeah, absolutely yeah um, you mentioned two words that I was really interested in strategy and also sales. I think so, uh, again coming back to that accelerator that you went to, did you learn anything about strategy and the importance of having one, and maybe, if you want to talk me through the sales processes that have really helped as well?
Patrick Gentry:sure, wow, there's a lot I mean a lot of strategies is quite broad and there's a lot to unpack there. I would say, like, just at a very basic level, because I still see a lot of people getting it wrong and I and I know I referenced this earlier but, like, you need to look at the kind of product you're selling and the kind of sales that you have to do to sell it. So what I mean is if, if one customer is paying you ten dollars a month, you cannot afford to spend any time selling to that customer. It needs to be like them just signing up and doing everything themselves. Like, if you find that, like one customer is worth $500 a month to you, all of a sudden you can afford to spend time talking to them before they start paying you. You know plugging in after they're paying you to like make sure they're doing okay. You can maybe have an implementation team handling them.
Patrick Gentry:So, like, just knowing like these basics is a very important place to start because strategically has this massive effect on your go to market. We call it like go to market, your go to market motion Now in terms of like, so for us it's a very friction, full process. So a lot of companies um, the companies want to talk to you, they want to explore the solution. It takes like a month or two months or five months to sell the product to them, but then they're willing to pay you like 500 or a thousand or a hundred thousand dollars a month, right At the very high end. So for Sprout, when you're thinking about this, you're kind of allocating resources accordingly Now in our context. So if you're looking at selling a B2B SaaS product where you can't afford to charge a decent amount to customers, then it's like a sales process and then the way that we look at it and not all companies do this, but we have a marketing engine that we put a lot of resource into. We spend a lot here.
Patrick Gentry:We do thought leadership articles, we have marketing agencies. Today we use like eight different marketing agencies to help us. We do events, we do thought leadership pieces, we do PR all these different kind of pillars of marketing which leads to a lot of interest and that leads to inbound leads that we then pass to sales reps and they work on those reps, they work on those leads. Now we've kind of segmented the whole. Like again, a lot of companies will say, oh, the sales rep especially in enterprise, traditional enterprise the sales rep closes the deal and then they support the client after that. Um, and they're kind of farming the client after they've closed it. Um, but a hunter and a farmer are different people.
Patrick Gentry:And that was again one of the learnings that we got in. The accelerator was like, hey, there's kind of a different model. You have a sales team that are just closers, they're doing the whole sales cycle. They close it, then they hand off the account to an implementation team which is very specialized on implementation. They guide the client through implementing and then they hand it off to the customer success management team who are responsible for managing and upselling from there. It's amazing, but like very differently. Even today, most enterprise companies don't work that way. If you go to SAP or Oracle or Workday, the sales reps in those companies. A lot of times, at least in Asia, they'll sell and then support their clients or sell and then upsell the same crop of clients. So yeah, different, different setup. Um, there's there's pros and cons to different ways of organizing your kind of go-to-market and support and upsell motions, but we found this is super effective. Uh, we really like it.
Joana Inch:Yeah I love, I love the metaphor that you use, like there's hunting and there's farming. You're right, I think. If you're a hunter, you're kind of not really wanting to do the farming or the nurturing, and as vice versa, some people are just not cut out, but to be hunters as well, um, it makes sense yeah like, yeah, but I I do know a lot of companies that do it that way as well, where they, you know they do the sale and then.
Joana Inch:But then what happens? Is they a lot of their time gets consumed by managing the client and then they spend less and less and less time actually selling so it can impact the company's growth yeah, for sure, I, we, and then the reps.
Patrick Gentry:Like you know, your incentive is a huge thing for sales and again, that's part of your strategy, like it's it's. So pricing and commissions are massive areas that you're always studying um in b and b sass because they're super critical to your, to your company, and pricing is just. You know how do I best maximize the value I'm delivering to clients and you're constantly looking at that Um. And then on the commission side, your commission incentivizes behavior and so you you're. You have to be very cognizant of what kind of behavior incentivizing um. Just as an example for us, sales reps get commissioned on the first year only um, which is pretty standard in the industry because it keeps them hungry Like a sales rep. Their commission is expiring every 12 months.
Patrick Gentry:So, they're constantly looking to keep that commission stream coming. So, yeah, these kind of things are super important for sales head growth.
Joana Inch:How would you approach commission for customer success teams? Is it about keeping the client or is it just about cross-selling and upselling?
Patrick Gentry:So both Good question. So customer success, so sales, is earning commission on first year. Conversely, customer success doesn't earn anything on first year, but they start earning commission on the renewal. So first time the customer renews, like like in year two, now the customer success rep is earning commission, and then they're earning commission just on the renewals and then additional commission for anything that they upsell, cross sell, all that stuff yeah, yeah, I love that.
Joana Inch:It sounds like a really amazing process. That, uh, yeah, it absolutely sounds like it's going to work.
Patrick Gentry:Yeah it's been working.
Joana Inch:It's funny. I went to an event last night and it was all about strategy and the debate was really around how big does the strategy need to be and how, what does it need to entail? And in the end I think some of the key experts were like one or two pages, that's it. It just needs to make sense to everyone in the organization that they're just kind of a common goal, common aspiration and that's it.
Patrick Gentry:yeah yeah, absolutely so. So, at the highest level. It's so funny because, um, that's, you're right, you know, and people can develop like these elaborate strategies and like these elaborate like business plans and they're like this is how it's going to work, and then they get to the first customer and it's like totally destroyed.
Patrick Gentry:You know, I always I think most especially for early stage your bias to action is incredibly critical and I've never dug too much on the kind of uh, big, like big thinking and things like that. It's more like, hey, we need to execute, we need to get to the next level, and then what is our next level? So, um, a good example of this is sprout was always 100 focused on the philippine market and you know that helped us. It really helped us stay focused and win in, you know, in our business and, I think, if we'd expanded. But you have to understand, in Southeast Asia, to explain context here, in Southeast Asia there's a ton of pressure to leave your home market Because investor, like each market, is only so big and investors are looking for large outcomes and so they're just doing the math Like well, your TAM, your target addressable market, is only so big.
Joana Inch:If you go to a new market.
Patrick Gentry:Then you've expanded TAM. It's great. There's a lot of pressure and premature scaling just destroys startups in Southeast Asia all the time, because a lot of people do it, lot of people do it, and so it was always this like probably the most long-running critical question and sprout from a strategic level has been do we stay single market or go multi-market? Um, yeah, it's been huge, and so our software specifically addresses nuances of the philippine market, which makes us like we, we do a better job of payroll and timekeeping than SAP Oracle Workday, because they're made for global companies. They can't afford to do like government compliance for payroll for every market in the world, so they don't do it, at least not nothing like the way that we do it.
Patrick Gentry:So so yeah it made us very strong in the Philippines. But you go to a new market and it's going to make you really weak, so strategically that was a trade-off. Okay, we have a smaller adjustable market but a much better value proposition and competitive position. So, yeah, we stuck in the Philippines for a long long time.
Joana Inch:Yeah, no, it sounds like you did absolutely the right thing. I was just smiling, because it's something they said at the event last night was um, you gotta pick a market that you want to win at and you can't just go generic, you have to go. It sounds like you picked it, like we're going to stay in the philippines and we're going to be the experts in the philippines, so hold on for sure it's.
Patrick Gentry:It's in a I forget which book, maybe built to last or good to great, one of those they talk about. Do something that you can be the best at. Um, now I would be very cautious, kind of saying that to entrepreneurs who are thinking about starting something, because I don't think when you're first starting something you have as much as clear a picture that like, yeah, I can be the best in the world at this. Like I was very, always very insecure at the start of sprout. Like can we really be the best in the world at this? Like I was very, always very insecure at the start of sprout. Like can we really be the best in the world?
Joana Inch:at this.
Patrick Gentry:But but we kind of we got there and so you know we we got to be the best in the world at philippine hr and payroll right. So yeah.
Joana Inch:What advice do you have for other tech and sas founders that are maybe looking to break into the philippines market? Maybe they're dominating you know, australia the Philippines market. Maybe they're dominating you know, australia and New Zealand and they're looking towards the Philippines and maybe other Asian markets as well. What advice would you give them?
Patrick Gentry:So you know easiest thing if you're thinking about it book a flight.
Joana Inch:Yeah.
Patrick Gentry:Book a flight and go there. That's it. It's just as simple as that, you know once you have a plane ticket. Now you're incentivized to set up meetings and you'll reach out to whatever network you can even like, if it's like Facebook groups in the industry that you're going to Like. For example, let's say you want to get into HR in the Philippines, book your flight, and then you go to the HR Philippine HR groups on Facebook and say, hey, I'm coming to the hr philippine hr groups on facebook. Um, and say hey I'm coming to philippines.
Patrick Gentry:I want to meet people in hr, whatever, in accounting or whatever vertical you're in um, like I don't know it's like I know how silly or kind of basic that is, but like just do it.
Joana Inch:Yeah, it's a really good. It's a really good tip. I think a lot of people are too scared to do that. I mean, I remember one interview I had. The founder was saying one of the key kind of things that have helped him scale was the ability to talk to strangers. And I said a lot of people can't do that. I mean we spend all this time teaching our kids to not talk to strangers. And then suddenly you're an adult, Go talk to strangers? Yeah for sure.
Patrick Gentry:I hate talking to strangers. And then suddenly you're an adult, go talk to strangers. Yeah, yeah, for sure. I hate talking to strangers.
Joana Inch:I'm an introvert, I mean super.
Patrick Gentry:But but the thing that saved me is I just formed friendships with people who are very entrepreneurial and that kind of got me into into it and then I it took off from there. But, yeah, you find, you know, find a way to find a way to make it happen. Um, that's what I would say, because I think when you're in australia or the us like I was, you know, you think about southeast asia. The picture in your mind is like something probably radically different from how it is. Um, like my lifestyle in in philippines is it's better than it would be in the us. You know, I have a beautiful house and a nice office to go to and things like that. That would be very hard in the us.
Joana Inch:Um, so it's definitely not how I would have pictured philippines, you know, uh, 20 years ago yeah yeah I love that like just book a flight and go and experience the culture, because you could do so much reading and, you know, listening to podcasts, but you have to be in it to really understand it super.
Patrick Gentry:The second you're on the ground. The second you're talking to people. All the planning that you've done most of the time goes out the window anyway um so you book a flight, you go there.
Patrick Gentry:You probably either be very pleasantly surprised or very unpleasantly surprised, and then your decision is done like then you know okay, yeah, um, so that's what I found I've like started and failed a bunch of stuff, um, and it was just because I just tried to do it, um, and then got to a decision very quickly and that's what you. That just makes everything faster.
Joana Inch:Yeah, and you're either successful or not. And learn from it.
Patrick Gentry:Yeah, that's right.
Joana Inch:Yeah, tell me a little bit about the world of HR. How has that industry come along in recent years? How is technology transforming it? Is it something that's kind of embracing technology and AI and the future, or is it lagging behind?
Patrick Gentry:Yeah, good question. So, and I'll kind of relate it to to broader SAS or, yeah, b2b SAS, cause I think that'll that'll apply even more, even more. But just, I think in general in our field, like HR is back office, it's a cost center. For most companies they consider it like a cost center. You would think budgets are going to be super, super tight, that people won't invest in technology, maybe, or it's a lagging kind of tech adoption, but it's really not the case. Like even in Southeast Asia, which are like predominantly developing countries, hr folks are very keen to automate, they're very keen to adopt tech, very keen on cloud-based SaaS, and many of these companies are going from Excel straight to cloud-based, postmodern, beautiful SaaS products like Sprout. So, yeah, yeah, it's that digitization wave is hitting Southeast Asia, just like it hit the rest of the world maybe 10 years ago.
Joana Inch:Like definitely.
Patrick Gentry:US is ahead. You know US and other countries like Australia are further along this curve. But yeah, it's amazing how fast tech moves into these markets and now AI is kind of transforming the whole thing again. So we have a lot of customers starting to ask about AI and actually Sprout acquired an AI company last year. We have a Sprout AI labs, this division, just developing kind of AI angles of addressing these pain points. So yeah, I mean SAS, the whole SAS industry is going to be kind of transformed software as a service. I think the best description I've seen around where it's going is like software as a service becoming service as a software. So AI kind of will make this shift, shift of it's not no longer a tool that you have to use to do stuff, it's now a tool that does stuff for you and you're just, you know, subscribing to this service as a software yeah it's interesting yeah, for sure.
Joana Inch:I think the pandemic definitely helped speed things along with digital transformation and adoption of technology. Um, sometimes I don't know if australia is ahead, to be honest, a lot of the clients I speak to and people I speak to, you know their biggest competitor is excel, so it's a whole paradigm shift. Trying to sometimes sell the technology and, you know, convince people that there's a better way to do this, but they're so tied to their old ways. Yeah.
Patrick Gentry:Well, and you?
Patrick Gentry:know it's so funny and that's that's a good point and it's amazing Like we're we're in tech and so are we kind of I get we get so in this like echo chamber of like oh, this is this is like, this is modern and this is good and this is old. Like in my mind, going from Excel to our software was like proper transformation, like wow, that's a big step. And like if you're on Excel, you're not digital. And then I talked to a customer and they were like Patrick, you need to understand, before we talked to Sprout in our minds we had already undergone digital transformation because we went from the Bundy clock, so you know the old punch cards.
Patrick Gentry:Like you bring your card and you punch it in the thing and then put it in like. A lot of companies in Southeast Asia still operate that way. And they were like we went from Bundy cards to Excel.
Patrick Gentry:So in our minds we had undergone digital transformation, like everything was wonderful, we were so advanced. And then you came along and sold Sprout to us and when we first saw your product, we were like it was hard for our user, our payroll and HR folks to really understand what kind of step change this was in our processes and everything. It totally overhauled our processes and we had been thinking already we're so advanced. Like it totally overhauled our processes and we had been thinking already we're so advanced and so it really reinforced the idea, that of perspective. Right, and you know our perspective it's you need to get out of your own head and you need to talk to customers and you need to get out there because you'll find, like your idea of technological improvement is totally different than than the market yeah, I mean, I've had this experience so many times.
Joana Inch:I'm just laughing because it's um, it's a very relatable story and you're right, they're like well, excel is a software, right?
Joana Inch:um, yeah, yeah yeah, I I mean, I think, to a lot of those tech and SaaS companies. I just say look, you just need to put in a lot of work when it comes to educating the customers. They're not looking for a solution because they think what they're doing is fine, so they don't understand yet that they have a problem. What have you found has worked to change people's minds when they're very much accustomed to doing it that way?
Patrick Gentry:So I think that's a very, very good question. Around like your, go to market motion because you're so in the early days. This will be typical of a lot of marketing and like. Just like, put your website up, do like, let's say, facebook advertising, linkedin advertising and SEO, and have a great website, and people that have a need will search for you, search for the problem, find your website or your ad or whatever, and then inquire with you. And those inquiries are from companies who know that they have a problem and they're looking for a solution, and so your position to sell to them is very different than what you just described, where you're convincing somebody, they have a problem.
Patrick Gentry:So it's a very big change in your go-to-market In the early days you'll probably be doing like SEO and some advertising and you'll get all these leads of people that know they have a problem and looking for a solution. You go to sell to them and you'll have a decent close rate. That's very different motion from the outbound callers who are generating lead lists, you know, and then calling on those leads and then convincing them hey, come and talk to us.
Patrick Gentry:And then the salesperson then taking it and being like yeah, you have a problem so yeah again an area that you have to be super aware of, um, and know that it's way harder. The second one is way harder, like convincing a company that like, hey, the way you're, our solution is 10x better. So you're always looking for that 10x value prop. What I'm telling you is 10x better than what you're doing today. And making that pitch to a company that doesn't know they have a problem is way harder and it takes more work. You have to build your scripts. You have to refine your ICP much better, your ideal customer profile. You have to have all your look lookalikes ready, like, hey, we serve x, y and z in your industry and they, they've cut this process by this much and like, you know totally, totally different and you know very, um, very hard it takes more work involved absolutely.
Joana Inch:It does take some time and some convincing. And I mean, if you're playing in enterprise as well, it's like so many people to convince and influence and um, and then it's like and then you know, over to the customer success team. It's quite a challenge as well because you have to really educate them on how to use it. The new way they keep coming, shifting back to their old ways and you know, if you're measuring that they're not using the software correctly, they're just going to end up not renewing at the end of the year.
Patrick Gentry:Yep, absolutely Absolutely. And, like under again, strategically, understanding where you're at in a customer's tech stack is super important. So what I mean by that is are you a mission critical software or are you a software module or something an add-on to another software like, um, people have built great businesses, for example, off of salesforce. So like they built something that plugs into salesforce and then they go and sell to all salesforce customers and that's great.
Patrick Gentry:But they're not the core they're, they're an add-on um and it changes all the dynamics of selling and supporting and upselling your customers versus sprout, where we sit in a core vertical of a client's tech stack. So we are like employee system of record, like timekeeping, benefits management, payroll, government compliance.
Patrick Gentry:These are like mission critical, core functions that a company is automating and so it changes like yeah, yeah, we're a lot stickier, but if our software breaks it's like disaster for a client, so we have to be super big on availability, security, redundancy, all that stuff um, yeah just the dynamics, you know, totally change yeah, there's a lot to think about, I think cyber security, privacy, how you handle data, all this stuff becomes really big if you're mission critical and then the trade-off is that you're mission critical, so they can't turn you off very easily yeah, they don't want to drop you.
Patrick Gentry:They get a lot of value from you all that stuff. So it's, it's trade-offs, like if you're, if you're a young founder you're thinking about, you know starting company. So many people will complain about a problem and be like god, I wouldn't want to be trying to like. So many people told me, oh my god, hr and payroll in the philippines.
Joana Inch:Like what a headache.
Patrick Gentry:That's a nightmare I would not want to be in your shoes and I was like, yeah, for sure that's. It's exactly that painful, but that's how big of an opportunity it is yeah bigger the pain and the harder it is, the the more stressful your life in the early days of your company, then probably the the better off you are the more rewarding later yeah, for sure it's not meant to be easy yeah, it's not meant to be easy, no way.
Patrick Gentry:Being a tech founder is not like a cool, like I'm so cool kind of thing. It's like hard, hard work it is yeah, yeah, I always laugh.
Joana Inch:It's like the people that open a restaurant with the vision that they're just going to be eating dinner there every night. But no, it's hard work.
Patrick Gentry:No way, oh my gosh, yeah super.
Joana Inch:My last question for you. Uh, what's been the most rewarding part?
Patrick Gentry:of building sprout the journey. So it's funny there's like there's so much here. We, you know, I've grown the company from from nothing to to post series b, so we've raised seed round series A, series B. We have incredible investors behind us which are really fun to work with. I founded the business with my wife and she and I have had incredibly rewarding experiences building the company together, really really love working with her and kind of building this with her, so I've been like really fortunate with sprout. Um, I think I'm I'm so grateful for so much stuff along that journey. Um, I think maybe one of the things that's that sticks out are the employee stories, so like seeing young people come into sprout and grow their careers like then seeing seeing some of these careers just rocket ship and like blast off is incredible.
Patrick Gentry:I love it. I love like being able to give these opportunities and then really great people come in and they seize the opportunities and they you can see them changing their stars, like they maybe came in from a, from a humble background and and now they're on their family line is on a totally different track. Um, they got to be part of this. That's incredible. I, I love it. Um, that's I. I'm very close to that. So I see clients all the time and I see what we're doing for them.
Patrick Gentry:I'm really happy that we're impacting them and their employees and all that, but but the people I'm working with every day, that's like that's something else.
Joana Inch:Definitely gives you purpose, right? I mean, it sounds like you've got some amazing customer success stories, but then also you're surrounded with a lot of amazing people, like your wife, like the investors, and I think that's really important. At the end of the day, the people that you surround yourself with that help you. I always find that businesses that have a co-founder actually work better, because you need that other person to just bounce ideas off and depend on and, just, you know, make sure you're not going insane at the end of the day.
Patrick Gentry:Yeah, for sure that's actually a best practice that that I was taught and we were taught in the accelerator to have a have a co-founder. Yeah, yeah, yeah, for sure all those listening.
Joana Inch:If you don't have one, maybe go and find a friend that you can trust and depend. Yep, that's right, um patrick.
Patrick Gentry:Thank you so much I've certainly learned a lot.
Joana Inch:I've really enjoyed our conversation and I'm sure the listeners have as well. Thank you so much. I've certainly learned a lot. I've really enjoyed our conversation and I'm sure the listeners have as well. Thank you so much for your time.
Patrick Gentry:Sure Thanks as well. It's great being here.
