Odoo in Numbers

Fabien Pinckaers: 0:00

We basically generate 200,000 leads a month. 50% is organic. So it's just people that go to the website, basically because of the word of mouth and which is still today the strongest marketing we can get. If the customers are happy, they will bring more customers out of these 200,000 leads per month, we convert 2.5% into clients. So we get 5000 new clients per month out of these leads. It's funny because it means we can lay off all our salespeople, no more new customer, only keep the existing customer and we would still do 25% growth. It's just a so good business model. We are trying to find ways in marketing that have very good return on investment and it's usually things that the others don't do and education is one of them. With the LabOdoo, we train 10,000 people per year on Odoo, and that was this year. Next year, with the second track, it's going to be 20,000 people. It's massive. We try to cut down on everything that does not generate values. It includes managers, purchase all the validation control process, and for these ones we try to make them minimalist by automating a maximum. I prefer the small numbers. I'm very proud of having a legal department of one person. So yeah, it's funny. Even though we are a large company doing massive things, educating a lot of people. My best accomplishments for me are that we succeeded to keep things simple and small.

Amy Caroline Downing: 1:19

Hi everyone, and welcome back to the show. Thank you for tuning in for today's episode. We wanted to give you clear insight on what Odoo is really made of. To do so, we challenged Fabian Pinkas, our CEO, to describe Odoo as a company itself, but with a cool twist using only numbers. Numbers are powerful indicators of a company's state of art, culture and growth, and we have a few of them up our sleeves that might surprise you. From the amount of marketing initiatives we have in place to our one person legal department, you will soon discover that despite its size, Odoo keeps things as simple as possible. So thank you, Fabian, for joining me today. We have already done an episode on your entrepreneurship journey to Odoo, so we wanted to take things just a little bit further and start digging into the companies story about growth and all of the crazy projects that we have going on. So what is Odoo made of today?

Fabien Pinckaers: 2:13

So in just a few numbers today, Odoo, it's a company of 2800 employees with a revenue of 300 millions of dollars last year in 2022. Wow. We grow at 63% per year. So you can imagine 300 + 60%, 60%, you get very quickly, very big. But if you want to understand Odoo, it's better to see it as an ecosystem. It's not just about us, the company, but it's also about everything that's around us. So for instance, we have 4500 partners all around the world. So partners are companies offering services on our software, and they have an average of 17 people working on Odoo per partner. Wow. So all in all, it's around 80,000 people working for partners on Odoo, whether it's sales consultant or development. But you can also add 40,000 people from the community who are not partners because we are an open source software, so people can use a lot of our services. So we do have a lot of freelancers and consultants on Odoo, whether that are not working for a partner or maybe 40,000 people extra. So all in all, it's an ecosystem of 120,000 people living on Odoo.

Amy Caroline Downing: 3:19

So this is huge. And just give us some perspective. Where did we start?

Fabien Pinckaers: 3:25

It started in 2002. I was alone, one person at the beginning. Then 2003, I was still alone. One person and then two. And then three. And then five people, I guess. So all in all, we did a gross of around 60, between 50 and 60% per year every year over the past 15 years. And that's what made what Odoo is today.

Amy Caroline Downing: 3:49

And what do you think are some of the key factors that contributed to that growth?

Fabien Pinckaers: 3:56

One of the things we did well is that we stayed focused. When companies start to grow, they defocus themselves, they wants to launch a lot of different departments, product activities and it gets bloated and bloated and complex if you look at Odoo in a different way. Yes, we do have a lot of people 2000 and some people, but we only have two products. We have Odoo online and Odoo SH. And that's something where we are very proud. We only have one way to deliver the service, the quick start offer, and that's part of our success. You I said it about the product, but I think you can apply it in every department is we keep things simple despite the fact that we manage very complex things. We worked hard to make it simple and refactor every year to be sure that we don't get more and more complex. So even though we are still 2800 people, we have the efficiency of a small company today. Yeah.

Amy Caroline Downing: 4:46

And that's something that is incredibly impressive and I imagine difficult to manage. So can you talk about some of the teams that have remained super efficient, even though they're quite small, considering how huge Odoo is overall.

Fabien Pinckaers: 4:59

The most efficient teams are the smallest ones. Let's start with the, I don't know, the purchase department. We have zero people in the purchase department, so it's super efficient. Everyone can buy whatever they want. They just get an expense or they ask the credit card. We don't have a purchase process with no validation. We just trust our people. So that's basically the most efficient. But you can check that over a lot of different teams, like the legal department, one person, one person to manage. We have 70,000 contracts. We have a lot of negotiation, partnership, contract commissions, contract, customer contract, but still it's only 1 person. So we made everything so that we are sure that we have less effort, less cost of acquisition per customer and legal is one of them. You always have a lot of discussion with legal department where we work with mid-size and large companies, so we standardize the contract. We made them very fair so that the customer doesn't negotiate too much. And so we applied that to every department to make them extremely simple, like for system administration to run all the it we have the 2800 laptops and screens and printers and everything. It's only three people. So we basically installed Linux on everything. So that's less maintenance and we do that on everything in order to scale and grow. That's the way I see is that I want to focus on activities that generate values like R&D, the developers, they create a product that generate values sales, they acquire revenues and they build long term relationships with customers. That creates values for the company. Service, They help customers, they help deploy and move people in production. That generates a lot of value. But we try to cut down on everything that does not generate values. It includes managers, purchase all the validation control process, and for these ones we try to make them minimalist by automating a maximum.

Amy Caroline Downing: 6:50

And what are some of the things that we're automating specifically?

Fabien Pinckaers: 6:53

Pretty much everything.

Amy Caroline Downing: 6:55

So the HR team, for example, we process a ton of applications every year, but the team still remains small. How do we manage that? How do we keep the quality at top level?

Fabien Pinckaers: 7:06

That's a good example. In HR we recruit 75 people per recruiter. So basically in Belgium there were six recruiters. They recruited 400 people last year. The industry is around 30 recruitment per recruiter, so it's more than double the efficiency of the industry, I would say. And how did we do that? We first, we have very good tools Odoo, we use Odoo, but then we automated all the process. So an applicant or before I say that, I should say that we are also very selective. It's not easy to recruit at Odoo because we recruit 1.5% of the applicants that apply. So we have to we need a lot of sourcing and get a lot of candidates in order to to recruit a few people. So basically everything is automated. It starts from the website. The job offer is super clear so that people easily choose the offer they want and then they have a salary configurator. They don't have to call us to know they can configure the salary even before applying, so that reduces the negotiation afterwards. And then when they apply, everything is automated. We have a Kanban, we drag and drop, we drag and drop the HR drag and drop a card. A mail is sent to the applicant where he can do the qualification on a test online. And then we continue. And then if we we meet him, he can schedule his appointment with the interviewers. Right. Right away online, no back and forth with HR to know who is available, when and all the things up to the negotiation of the contract. They have a salary configurator where the candidate can do everything like big car, small car, more time off, less time off, and then they get more gross, less gross up to the signature of all the documents and the the fleet management with the car they get. So all the things are automated. That's why today a recruiter has to do is able to recruit 75 people per year.

Amy Caroline Downing: 8:52

Wow, That's amazing. And part of the reason why we are able to get so much interest for people who want to work for Odoo and why we keep growing so much is because of our community as well and all of the new potential customers we have or the community, the users that we have in Odoo. So how do we manage these users? How do we get leads? How are we processing that flow?

Fabien Pinckaers: 9:15

Yeah, we don't have numbers about the community because the community is online, on forums, on GitHub everywhere contributing. But we do have number of the community of customers and partners and the business. So let's talk about these ones. The way it works is that I see do as a big manufacturing line. We have one step and then another and everything is industrialized. So it all starts with the lead generation and we basically generate 200,000 leads a month. A lead is someone that goes on our website, fill a form and say, I'm interested to use odoo. So these leads are sent to different sales team. If it's a large one, it's going to be for the partner. So we send that to indirect sales team. If it's a small one, it's for customers and then the sales still work on these leads. In order to generate, And then close the deal and then the lead is assigned to a service team who will follow up the client to be sure everything goes well. To generate these 200,000 leads which are the source of what's needed to have these 1000 salespeople selling the software. 50% is organic. So it just people that goes to the website basically because of the word of mouth and which is still today the strongest marketing we can get. It doesn't mean it comes from no effort. I mean, in order to get to that level of 100,000 organic leads per month, you need a very strong product and quality of service. So it's the result of having a very good focus on the product and on service team and support. But still, the word of mouth is very efficient because we have focused for the past years a lot on making our customers happy, fostering the community. Be sure that our best customers become fan of Odoo because they get so much value from what they use. And we also have 100,000 leads that are the results of marketing efforts, could be online ads, billboards and so on.

Amy Caroline Downing: 11:07

And can you tell us a little bit more about those marketing campaigns that we're focusing on?

Fabien Pinckaers: 11:12

So the way we see marketing, it's more about delivering content. So the product is delivering real value to the customer. The marketing objective is to expose the value of the software. So we try to focus not on push logo marketing, so we don't do sponsoring, we don't do events or logo on a football team or whatever. We invest where we can really help or give value to our users. The main one is the e-learning, so they build an e-learning platform where you can learn the product better, use it so that you get more value from the product. But we also have direct marketing to generate leads for the salespeople. The main ones are online marketing, Google AdWords. To give you some idea, we pay €10 per lead. Sorry, in Google AdWords, it's close to €1 per click. And then we have billboards. We like billboards because it's different marketing where the offer and demand is. There is not a lot of B2B on billboards. And so a billboard, we pay around one and €2 per CPM. So the cost per thousand views or thousand cars that pass through the billboard, it's 1 or €2 depending on the location and the country.

Amy Caroline Downing: 12:18

And I have to say I love the billboards because I've been to the US, India and even in Belgium. Just next to my house we have an Odoo billboard. So I feel like wherever I go, I see them and I point out to whoever I am in the car with, Hey, that's where I work. It's always fun. And then you.

Fabien Pinckaers: 12:33

See the same and they tell you about it. It's really efficient. Way more than what people think. And I also think it's good to have like a multi-channel marketing. If we would only do online marketing, we would miss something. But billboards is because it's physical out of home. I believe it's it contributes a lot. Yeah, absolutely. We invest millions in Billboard per year. I don't have the exact number, but I think it's close to 10 million per year in billboards.

Amy Caroline Downing: 12:58

Wow. And so we're also doing other things as well. We're working with influencers. And I think one of our really interesting campaigns is the roadshows. Can you talk a little bit about the roadshows and how those work?

Fabien Pinckaers: 13:12

So the difficulty when you have a community which is online all around the world is that it's not the same thing working online, on GitHub and forum and meeting people physically and sometimes you could have frustration. And when you meet people physically, everything gets easier when you get to know each others. So that's why we launched the roadshows in order to meet or prospect clients and partners. And so we organize events in different countries, 300 events per year. So 1.5 per open day, we would say, and we have an average of 600 registration per event. So you can imagine the scale of the activity. Some day we have five events the same day because most of the events are on Tuesday and Thursday. So it's huge in a lot of different countries. It's also very, very efficient. It's basically we go to a hotel, we replicate. It's often the same demonstration, so we are used to it. It's really fine tune, it's great. And we have a team of seven people working in the event department just to do that. So seven people organized 300 events and each event has 600 registration per event. So you see how efficient it is. And it also gets to that level because we use Odoo everything is automated from the mass mailing, the promotion, the registration to the event.

Amy Caroline Downing: 14:28

Another example of keeping things as simple as possible.

Fabien Pinckaers: 14:31

And it's also in terms of return on investment. It's incredibly efficient and even cost us €5,000 on average, which is basically nothing when you have hundreds of people looking at the software for a few hours.

Amy Caroline Downing: 14:45

Wow, that's really amazing. And something else we're doing to reach out to the community as well is the lab Odoo. We've been hearing about this in the press and we actually did an entire episode where we discussed labodoo in detail. Can you also. So talk a little bit about that here.

Fabien Pinckaers: 15:01

Yes. So we are trying to find ways in marketing that have very good return on investment. And it's usually things that the others don't do and education is one of them. Schools and universities are a large pool of future prospects or students, and we wanted to reach them. And in the other hand, they had an issue. When you go to an accounting course, you learn about debit and credit and so on, but you miss the real life. Most of them didn't have worked on real invoice and do matching with the bank statements and things like that. So that's what we wanted to provide to the people with the labodoo. So it is a real workshop where you discover all the departments of the company. So we built this big truck that goes from school to school every day. It's a different school from an average of 80 students per day. So basically the truck is training 10,000 people per year. Wow. And it's so efficient that we are just launching our second truck now. And I hope in a few years we will have a fleet of trucks.

Amy Caroline Downing: 15:56

A fleet of trucks like our fleet of Odoo cars as well, at least in Belgium.

Fabien Pinckaers: 16:01

Yeah, because all different countries are now asking to get a truck for to promote and educate the kids.

Amy Caroline Downing: 16:06

So we'll really be everywhere. And what age groups are we targeting.

Fabien Pinckaers: 16:10

For the lab? Ado It starts at 17. We also did earlier ages, but I think 17 to 23 is good.

Amy Caroline Downing: 16:20

And are there specific courses that we target or that we go to with the labodoo.

Fabien Pinckaers: 16:26

So Basically there are nine workshop. One of them is the and they are all based on entrepreneurship. So it's very large. Like one is the point of sale how to run a small shop. You do the opening the closing of the of the cash register and then sales and then barcode scanner for the inventory. We have manufacturing, HR, accounting, we have scanning voice, you do the bank matching and so on. Project management building a website. So it's very large. It could be used for accounting courses as an introduction to how the real business work or management courses or inventory, logistic course or entrepreneurship, or there are some courses about creating a company. It's used for all these everything around management, I would say, and this.

Amy Caroline Downing: 17:10

Is really nice as well, because then students can see how useful this all inclusive, integrated software can be in their different subjects as well. Even if we're targeting one of their courses, maybe they can apply it to other courses as well. And how does what we do actually impact their learning after the labodoo leaves the campus? So we show up for a day, maybe more. And then what happens after?

Fabien Pinckaers: 17:33

After we do you mean with the with the schools and the after? We have the scale of business game where the kids can play with a role playing games and deeply two hours per scenario, all the management areas like buy/sell and managing inventories, creating websites, manufacturing products. But that's in the form of role playing games.

Amy Caroline Downing: 17:56

Okay. And what is our main reasoning behind this project? Is it for recruitment art or brand awareness? Maybe both.

Fabien Pinckaers: 18:04

One thing we did well to do is to always think for the long term, and I think this one is a very good example because when you train 17 years old kids, they will be probably a customer in eight years. So it takes time. But we didn't do it only for marketing purposes. We did it because we think it's good. We need entrepreneurs in Belgium. So that was the main driver and it turns out that it was extremely good in marketing too, because think about it, 10,000 people per year, we train 10,000 people per year on Odoo and that was this year. Next year, with the second track, it's going to be 20,000 people. It's massive. So the impact is extremely efficient. Even though it's long term. The efficiency we are sure is very good. Wow. Okay.

Amy Caroline Downing: 18:48

That's a really amazing project. So you explained how we generate all these leads with all of the different activities that we just talked about. So could you tell us how these leads are processed?

Fabien Pinckaers: 18:58

Yes! So out of these 200,000 leads per month, we convert 2.5% into clients. So we get 5000 new clients per month out of these leads. And in order to do that, we need the sales people. So basically our sales people are it's more like consultants that guide new customers or prospects through the process of understanding the system, see how it can transform the company into being more digital. And so we have two teams of salespeople. 60% goes to the indirect. So partners, it's companies that will deliver the service and will sell the software. So it's managed with our account manager, but it's the partner who actually do the service of implementing the software. And we have 40% of our leads that are assigned to the direct team where we sell for the smaller clients. We sell directly ourselves to the clients, and the revenue per salesperson is very different. When you work in direct each direct sales we have, they generate €900 monthly recurring revenue, so they generate €900 of Customer who pays these every month. Even though it could be early, we transform that into MRR to be sure that we consume apples and pears. So €900 generated for each salesperson and for the indirect, the ones working with the partners, because the partners do most of the things, they generate 2500 MRR on average per month. So it's like close to three times more sales per person when we work with a partner.

Amy Caroline Downing: 20:27

Okay. I see. And from the Odoo perspective, once we have the clients, what do they generate when we consider revenue after we've already signed that initial contract?

Fabien Pinckaers: 20:37

Yes. So in addition to the MRR they generate, they also sell some non-recurring revenues for the direct team. Because we do the project ourself. We have an average of €8,500 per per salesperson per month. And for the indirect it's much less because the partners do everything. It's just 3000. So we also have a sale of service, but the majority of our revenue come from the subscription. So basically 83% of our revenues come from the subscription and 17% of the revenue only are services that are one shot. Wow. Okay. And the good thing with the do is that once we get these clients, most of them, they stay with odoo. It's like a drug. When you start to do, you can not stop. I mean, it has so much value. It impacts all your departments and it's so good and people are happy that they usually stay with the product. So they renew every month or every year or every two years. And one of the measures we use for that is what we call the net retention. So net retention is like imagine you have €100 of value to renew next year or much of these €100 will stay next year. So you exclude the new customers, but you have to include the ones who leave, the ones who don't create, the ones who upgrade. And the net retention we have is 125%. Wow. That basically means that when we have, I don't know, a 100 million of contracts to renew out of these customers, they will generate 125 millions of euros. It's amazing. It's funny because it means we can lay off all our salespeople, no more new customer, only keep the existing customer. And we would still do 25% growth. It's just so good business model.

Amy Caroline Downing: 22:15

Yeah, that is amazing. And it's so nice how businesses can really scale up with odoo. And that's just the proof. Yes.

Fabien Pinckaers: 22:22

And then you have this like virtuous cycle. You know, we have this customer because they are happy, they use more the software. So that's why we have 125% retention rate. And because these customers are happy, they will talk to others prospects and customers and friends. And then we have new leads. And so we come back to more leads, more salespeople, more product deployed that will generate more leads. And that's kind of the power of being viral and the power of having very, very happy customers.

Amy Caroline Downing: 22:51

Amazing. And one thing so to shift gears a little bit that we haven't talked about that much here is the annual release. Can you tell us a little bit about the growth, the immediate growth that we see just after our annual release every year?

Fabien Pinckaers: 23:04

Yes. So I told you that the main marketing channel of is word of mouth. If the customers are happy, they will bring more customers. And so we could talk a lot about marketing and CPM and cost per acquisition and leads and so on. But at the end the main marketing channel is if we turn our customer very happy, then they will bring more customers. And the new release is about that. The new release every year brings so much value for the end users that customers get super happy and then they invite even more customers to use the software. And it's funny because even though it's a R&D effort, so it's a massive R&D effort, it has a direct payoff in marketing. When we release the new version, it's always in October every year. This year is going to be the beginning of November, but right away we have 30-35% increase in terms of number of leads and we think about 30, 35. It's massive because we are today 200,000 leads per month at 35% to that, it's an extra 70,000 leads. So the impact of releasing a new version of the product is huge. And it's a super good impact because it's not just like we paid ads, it's because people are happy because they like the product, because they like the software, because they see value in it, that they invite even more people. So these leads have a very high conversion rate compared to the traditional 4%. We have 2% sorry, we have in the Google AdWords.

Amy Caroline Downing: 24:29

And how do we prepare for this release? We know that we're going to have a huge increase. And so what do we do to be sure that that transition is as smooth as possible?

Fabien Pinckaers: 24:38

Yeah, the difficulty when you release thousands of new features that you have to be sure that the community gets the message, is trained on the product. So it starts with a new experience, which is a massive event. It costs one millions of euros to organize.

Amy Caroline Downing: 24:50

Wow.

Fabien Pinckaers: 24:51

It's in Belgium and it's organized for three days plus two days of training when we release the software. And we. Have this year 350 conferences during this event to explain all the new features of the product. The event basically is free, so it's always the same. Our goal in marketing is not to generate revenue but to educate the market. So that's why the event is free. You can pay if you want to stay for the party and eat and so on, but.

Amy Caroline Downing: 25:15

Which is a great time. Highly suggested.

Fabien Pinckaers: 25:18

It's super fun. But yeah, the main event if you just want to attend and learn from it is basically free because you want it to be accessible to everyone, like students who don't have a lot of money and so on. Great.

Amy Caroline Downing: 25:29

Amazing. So I have one final question for you. What is in numbers your favorite accomplishment at Odoo?

Fabien Pinckaers: 25:39

I prefer the small numbers. I'm very proud of having a legal department of one person or having zero person working on the purchase department. That means we trust people they can buy and we have no validation process and it's super fast. If they want to do things for the company, they can do it on their own without depending of purchase department. But obviously what I really like is the product. So that's why we only have two products because I want my attention to be split on only two things. So Odoo and Odoo SH, the hosting platform. So yeah, it's funny, even though we are a large company doing massive things, educating a lot of people, my best accomplishments for me are that we succeeded to keep things simple and small.

Amy Caroline Downing: 26:18

And that is part of why Odoo is so successful.

Speaker3: 26:21

Now.

Fabien Pinckaers: 26:22

Yeah, it's one of them for sure.

Amy Caroline Downing: 26:24

Well, thank you so much for your time. This has been a really great conversation and I wish you a great rest of your day.

Fabien Pinckaers: 26:30

Thank you.

Amy Caroline Downing: 26:31

Well, everyone, that was a lot of numbers. I hope you appreciated discovering the behind-the-scenes of the company in such a quantitative, yet unique way as much as I did. If you would like to know more about what is behind the numbers you heard today, I would recommend you check out our episodes about education and our recruitment process. Thank you again for listening and keep it cool.