Hey - Marc here.

Happy Saturday morning, Motivated B2B SaaS Founders.

Here's at least one tip to keep in mind as you grow your B2B SaaS company:

Today's issue takes about 5 minutes to read.

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In today's issue, I share some key takeaways from a recent interview between Nathan Latka, the host of Daily Interviews with SaaS Founders, and Will Robinson, the CEO of Encapture. They discussed why banks pay $1m+ for their software, resulting to $10m+ ARR today.

In 2019, Will joined as a CEO to be a part of Encapture’s big transformation when a private equity (Alturus Capital) came in and bought out the original founders and management team. They made a huge decision to pivot away from their legacy and focus purely on the product they had built.

How Encapture Started:

Encapture initially started in 1998 as a professional services company that worked and partnered with some legacy automation software companies in their industry. Over time, they started building their own product internally to fill some gaps in the market.

Now, Encapture is a high-growth SaaS platform that helps banks automatically extract important information from documents. They have captured financial companies such as Wells Fargo, Frost Bank, and Truist to use their machine learning to:

process and extract large amounts of data
make it easy to collect documents
read the documents automatically
verify that the data is consistent across different documents
do calculations

so they don’t have to spend and candidly waste a lot of time doing that.

Challenges

Transitioning the business was hard.

It was important for the company to bring in people who were excited about their vision and where they wanted to go with the product, so there have been a lot of changes from their organization’s top-to-bottom.

Signing up banks is not an easy process.

Banks are conservative organizations and oftentimes, they move slow. Typically, there are people in the back office that as you send those documents, they manually type in your data and manually review to make sure it's correct. That’s why Encapture innovated a system that can come in and automate that entire process.

People imagine a lot like what they see in commercials.

When people think of machine learning, they think a lot of what they see in commercials — unsupervised machine learning. At Encapture, they employ a supervised machine learning technique where humans can influence models that have been built with the use of this technology, either correcting errors or assumptions, made during the training process.

Advice to Other Founders

Make sure you have the right folks on the bus. Will had a really fortunate opportunity to step into a business with a lot of people who knew what they’re doing and what market they’re selling to. Will’s team size when he joined in 2019 was in mid 30s and now up to 75.

Spend a lot of time understanding your business process and opportunities you have for automation. It’s important to have benchmark data from your previous clients to know what type of action you should work on next.

Balance with existing customers while you get your go-to market figured out. You can go back and upsell to your legacy customers from your legacy partners while starting from scratch to get your new market.

Bonus

"No Ego" by Cy Wakeman is one of Will’s favorite business books. It teaches you how to build high performance teams. He also enjoyed reading Robert Greenleaf’s “Servant Leadership.”
Will’s favorite online tool for building Encapture is Slack – it keeps them more connected.
If Will was in his 20s, he wishes he knew that career paths are not linear. The most successful people in the world have very winding unusual paths and it’s okay to hold onto things loosely and just let it happen.

TL:DR

Encapture is a legacy player in the bank space, with services and software helping banking organizations process their documents more efficiently. Will Robinson took over his company back when an investment firm bought out its original investors. Since then, they've done $10M+ in revenue, with a total revenue growth of 270%. They’re looking to continue scaling by doing it efficiently — no outside funding since that private equity deal. 75 employees strong today alongside 25 heavy engineering positions focused on machine learning/AI work helping banks save time processing client claims faster than ever before.

P.S. Here is a link to the full interview if you are interested in listening to the full episode: Surprising reason banks pay $1m+ for this SaaS, $10m+ ARR today

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See you again next week.

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