Great to have you here. And before we dive into the question of the day, if you could please share with us a quick summary of what your company does and how long you've been running it for?
Yeah, sure. So I'm Betsy Harbison, located in St. Louis, Missouri, traditional searcher and closed on Soft Trip 13 months ago now. So definitely, you know, rounding the corner of year one. Soft Trip is essentially a mini ERP system for tour operators. So software platform, a tour operator being anyone that packages up flights, hotels, activities, restaurants, all of that good stuff and sells it to the end consumer. So we're sort of a B2B Mini ERP system for them.
Awesome, a software company close to my heart. So I am particularly interested in your answers to the question of the day, which is, as a CEO has been on the job for about a year now. Can you share with us some of the seemingly small changes that you've made that have had an outsized impact whether it's financial, operational, or even personally?
Yeah, absolutely. And I actually love this question, because I think the first year, you know, while you're getting your feet under you is really just a series of small changes. But the first one for us was really getting some sort of operating system in place, you know, this was actually a carve out software deal, which is a little bit unique in the search space, but really jumped into a business that had never had a lot of structure before. And by structure, I mean, clear vision, clear path, clear goals, clear priorities. And so we closed in October of 2021. And by December, we'd started the EOS implementation process. So Entrepreneurial Operating System, I think many people are quite familiar with it, it's sort of beautifully simple and intuitive. But it had an immediate impact on the business.
I think, first of all, in these small businesses, everyone sort of has their head down day to day, you know, fighting off what's coming towards them. But it's really important to pick your head up and start having some of these high level business conversations, and it allows that to happen. And also, for me, it was also an immediate team building opportunity, jumping into a business, and we're saying, hey, let's pick our heads up. And let's actually think about this business and where we need to go moving forward. So that was great. I mean, I think the two things that really stand out, first of all, is having a North Star goal, you know, an immediate sort of 10 year target of where do we need to be and get being fully aligned around that. And that comes up in many of our conversations. And then I think the second is, when you jump in, there are a ton of things that you really want to work on.
Everything's important, but when everything's important, nothing's important. And so how do you start to make a list? And how do you start to chip away at the problems that you want to solve within the business? That was extremely impactful? I think everyone was sort of running around, we need to do this, we need to fix this. Let's focus on this. But when you have, you know, very clear quarterly goals, it makes it so much easier to say, this quarter, we are focusing on X, Y, and Z, and everything else is sitting off to the side on an issues list. And we know we will get to it. But our priority in the next 90 days is figuring out these five or six issues. And everyone's aligned around that. So that, we started implementation in month two, but throughout the first 12 months, I mean, it's been incredibly impactful.
I have a few follow up questions. I also implemented EOS in my business and found it to be similarly impactful. There are other operating systems out there, Rockefeller Habits is one that comes to mind. Interestingly, I implemented EOS in roughly my second maybe even my third year, unfortunately, I just wasn't aware of the system at the time. I'd love to ask you, how did you think about when to implement the system? And were you worried about implementing it too early as a new CEO? If you could speak to that, that would be great.
I was, that definitely crossed my mind that this was happening too early. I think what sort of swayed me to let's get this figured out right now is we were sort of coming from nothing. It wasn't oh, we sort of know what our goals are for next year, or we sort of know what our priorities are over the next three months. There wasn't a lot there. And so I think it was important for me to start setting up the structures sort of immediately, I mean, and it's also a system I don't know what you're doing and your experience was with it. But it did take us a few quarters to really get in a rhythm as well, you set goals that are maybe too lofty or not enough. And it takes you a few quarters to really level set on what's the right amount of what to chop, essentially in a 90 day period. And so now coming into our fourth quarter with the system, I feel like we're sort of rocking and rolling, which is a nice feeling.
That's great. Now, in the spirit of focusing on the smallest changes possible, I'm going to ask you a difficult question that I've not prepared you for. So let's see where this goes. EOS is a wonderfully simple system, that might be its most attractive characteristic, but there's a lot to it, right? And in fact, they by definition, an operating system covers in many respects, substantially all of your business. So as you think about the entire system, if you were in a hypothetical world only allowed to implement one part of the system, you know, one change one new addition, just one component of it. Which one have you found to be the most impactful or the most powerful?
Oh, gosh, one? Okay. Let's see, I think for me, it's there sort of linked together. So I'm not trying to cheat here. But for me, I think it's the issues list, and then setting quarterly rocks. It just has brought a lot of focus internally to the team. So another issue might pop up, but we're able to say, you know, that's noise for now, we will get to it, when we get to it, our top priorities, are these five or six rocks that we have outlined. And that's that, and it even comes up in conversations, hey, what about this, and we go down a bit of a rabbit hole, and someone on our team might even say, it's on the issues list. It's not for today, it's not for this quarter, we'll get there eventually. And so I think it's brought a lot of focus. So that's sort of the issues, let's stay on the 90 day rocks, but probably the 90 day rocks most impactful.
Yeah, yeah. And in fact, at the risk of putting words in your mouth, the theme that I'm detecting there is prioritization. And prioritization is something else that you mentioned to me before we hit the record button in terms of, you know, seemingly small change that's had a big difference for you. But before we get there, change number two has to do with pricing. So I'd love to learn more about that one.
Yes. So I know pricing is sort of a hot topic this year, especially. So coming into the business, I was sort of under the impression candidly that the prior owner had been pulling the price lever, a fair amount, and that there really wasn't a lot of pricing room in this business moving forward. Now that I, this was six months ago, sort of halfway through my first year, you know, really started to dig into this, especially over the summer, inflation is increasing, what do we do? Really started to dig into our pricing strategy and where our customers were sort of priced, which candidly, was all over the map a bit. So we did a one time I would call this a level set, price increase back in June, that was pretty substantial to get everyone sort of level set in terms of number of users level of customization in the system, historically, we would customize things. Which as you can imagine, requires a lot of ongoing support that wasn't necessarily reflected on our monthly subscription payments. So just a one time level set for the business, depending on the customer sort of the 20 to 30% range. But it was just an opportunity to start to bring a method to the madness of it. And yeah, it was very impactful halfway through the year.
So this is a another topic that's near and dear to my heart. So I have a few follow up questions for you. First, you mentioned 20 to 30%, roughly as the magnitude. How did you decide by how much to increase prices? And the reason why I asked that question is because my experience as a rookie CEO was largely characterized by fear. I was worried that if I raised prices too much that we would lose a whole bunch of our customer bases, and I appear to not be alone in that. My experience is that first year CEOs tend to undershoot as it relates to price increases. So I'd love to learn more about how you decided by how much to increase those prices.
Yes. Oh, gosh, that is a great question. And to be honest, right in line with what you just mentioned, I think when I first started this exercise, I think I maybe sent out the notices in June, so maybe started this exercise in April or May. I was in sort of the five to 6% camp, candidly. And I think over time, which is I'll tell you how I started to get more comfortable around it but I sort of started in that camp as well and you know, first six months don't want to rock the boat. We can point to inflation, but you know, 20 to 30%, a lot higher. So I used a couple of things. I think, first of all, I've been very involved in all of our sales processes the first six months. And so I had a decent sense of where we were coming in, in terms of our competitors, a lot of our sales processes involve RFPs.
And we sort of know, based on our pricing menu, quotations there, where we were falling in the market. So part of it was just a level of comfort of we know what the options are out there. And we know how they're priced. And candidly, our product is much more feature rich and broad. I mean, obviously, I'm biased, but the best one out there. So I had a pretty good sense of competitive pricing, first of all. Second, I mean, it was looking at the size of customer and the number of users and how much value they're really deriving on a daily basis. I mean, I think our platform really helps our customers in two ways. First of all, it's just an efficiency. That efficiency play elimination of manual tasks, you've one source of truth.
If you have our system in place, there's not a ton of you know, you might not need those extra three heads to manually do some things and also driving revenue from a flexibility of the system perspective. So it's just also a sense of how much value we're actually driving for our customers on a daily basis. That was a piece of it. And then finally, I wouldn't say renewals, renewals happen sometimes historically. Maybe one year, they would happen one year, they didn't happen. And so really taking into account, how long has it been since the last price increase? How have they grown in users and complexity? So really try I mean, it is sort of an art, I love pricing to be a science, but it is sort of an art as well. So it was sort of competitive analysis, knowing where we stand in the market, understanding the value our customers are deriving from the platform. And then also, the customer specific details of users and specific complexity of their platform given we historically have customized to a good amount.
I'd also be curious to learn. I mean, if you're anything like me, I suspect you thought a lot about how to communicate when to communicate. I mean, I agonized over every period and comma and word in my outreach email that communicated that we were increasing prices, I would be curious to learn, what was the actual response from your customers in response to this price increase? And how did that actual response compared to what you thought it might be before you hit the send button?
Oh, great question. So I couldn't agree more. I mean, agonized over it. And also, I like to tinker with things. So I could tinker with pricing or in a model for weeks on end, but at some point, you know, it needs to go out. So I did expect some push back for sure. I would say on the whole, this price increase was broadly accepted. So I hope anyone listening if lesson learned there. And I think for a couple of reasons, I mean, obviously, the macro environment is at play here, of course, and especially over the summer, too. We have developers, we have technical talent, I think everyone if there any software people listening, it's hard to retain technical talent as well. So maybe not single digit inflation, let's think double, right. So I think that message resonates a lot people get it, they understand. And then just also, we are sort of on this quest to become more product roadmap driven. And also the messaging, look, we want to invest in the product for you here. This is really for you. It's so we're able to have the right resources and continue to deliver a great product. So I think those two messages really resonated. But yeah, not a ton of pushback, actually.
That's great. That's great. That's actually pretty representative of the typical experience, at least from from my view. Okay, let's get on to change number three.
Yes, and so I'm calling this change incorporating the word know, into your company's vocabulary. This is sort of my favorite one, actually. And I can tell you what it meant for us as a software business. But then I also had a real world example actually, that I think sort of beautifully fits into this. But so as a sort of a mini ERP software platform, we've been around about 20 years, I would say historically, customization was thought of as sort of a great source of revenue for the business. Now I'm sure if there any software People listening, they are cringing currently. But that that was how it was for the last 20 years. And some customizations can make sense, but a lot do not. And it's sort of bad in three ways is sort of how I would think about it.
I mean, it's not great for our customers, if we sort of take on customizations with not a lot of discipline, it does lead to bugs, which impacts their experience down the road. Sometimes we'll do customizations that are, candidly outside of our wheelhouse, and it doesn't serve our customers to do something for them if we cannot do it, well. I think we'd be much better served to say, hey, this actually is not something that's in our wheelhouse. Here's the API, we highly recommend you take off and run with it. So you can build something that works for you. And then I think there's a level of discomfort too, if we build something and one customers using it, I think that makes that customer uncomfortable, right? So that's sort of what's not great about this customization.
And it's bad for us, of course, because we're a software business, we've got to focus on maintaining custom code versus actually building things into the product that benefit the entire customer base. So anyway, we started incorporating the word no into our vocabulary, we set up sort of this new committee system, where on Tuesdays, we review all requests coming in, we have a very disciplined approach to how we review it, we truly think about is this good for our customer? Will this actually benefit them? Are we able to execute on this well? And that's been unbelievably helpful for our business, I believe. And I was sort of thinking, I know, not everyone is a software person, but I had a sort of a real world experience happen to me also in the last 12 months, when I was attempting to find the right third party accounting firm.
The first one I worked with, everything I asked for, I needed opening balance sheet, I need sales tax help. I need X, Y Z help. It was yes, yes, yes. And, in fact, that was actually quite outside of their wheelhouse, right. But in their effort to appease me, they actually, I think it really deteriorated the trust between us because they told me yes, on these things they weren't able to complete or do well. Now I'm with a great third party accounting firm, it's also search. It's a search fund business, but they're great. And I remember that first day and onboarding, it's okay, here are your needs. Here's what we can do. This is right in our wheelhouse, here are the things that we are not able to do. And we recommend that you go find outside help for these three items.
And I said, perfect, I can work with no, I can't work with Yes. And then my expectations aren't met. So I just think it's really important to draw lines. And I know a lot of small businesses want to say yes to everything to all of their customers. But at the end of the day, sometimes it's not good for your customers, nor is it good for you.
Yeah, it's such an important point. I mean, this is a particularly acute issue in software. But I think in substantially all lower middle market or micro cap businesses. In my experience, it's entirely reasonable. Maybe it's even expected for a company to say yes to everything, when they're just starting out, let's say when they're growing from zero to 5 million in revenue, or something to that effect. But to get from five to 20 million in revenue, that approach just doesn't scale. But in my experience, introducing note the vernacular of a company. While it's entirely the right thing to do, it is really hard. And in fact, it in my experience, required like a big cultural change. I mean, we had people who had been working there for 20 years, who had been conditioned over the course of 20 years, just to when a customer said jumped their first response was how high. Can you talk to like some of the maybe the unanticipated cultural difficulties that may or may not have popped up as you've implemented this change?
Oh, gosh, great question. I mean, we definitely had a bit of the same situation, right. 20 years of just saying, yes. I will say, it's not something that happens overnight. I think it's a message that you have to continue to discuss, continue to hammer home. For example, in our committee meetings that we've set up, that's something we're talking about every week, is this good for us? Can we do this well? Is it good for our customers? So it's not something that happens overnight, but when you start to repeat that, I do think the culture starts to shift a bit. So it's been difficult. It just takes time. I would say more than anything, strangely with our customers, I think that's never a fun message to deliver, especially in your first three month, as CEO, that's a very hard message to deliver.
I know you're used to sort of thing I need this and I need it next week, go do it. But here's how that's actually not good for you in the long run. And here's how it's not good for us. I have obviously a very hard message to deliver. But I think in a strange way, they've sort of appreciated it. Because they know that we're being thoughtful and taking a line and saying no to things that we're not able to do. Well, I think that's also how you build trust to with your customers. So in a strange way, it's not the most fun message to deliver. But I think over time, they've started to appreciate it a bit and understand why the word no is sometimes important.
Yeah. Such an important lesson whether one is running a software company or not. Betsy, thank you so much for your time. Congratulations on your one year anniversary and best of luck in the years to come.
