Dax Dasilva: $900M ARR at $2.6BN Market Cap?! Lightspeed, The Most Undervalued Public Company |E1188

1. 0:00 – 1:04

   Intro

   1. DDDax Dasilva0:00

      The first two years, I coded literally till 4:00 in the morning every day. When I wasn't coding, I was with those early four customers and watched them use the software and then iterate quickly so that if something didn't fit with their workflow or- or it didn't consider something that they needed to do with their inventory, there would be another iteration of the software that was out, you know, within a week or so. But when I've mentored companies that are building these- these SaaS solutions, in order to have attractive metrics that are gonna be interesting to VCs, they're shortcutting a lot of the product development and like be at the basics of building a business like we did.

   2. HSHarry Stebbings0:35

      Ready to go? Dax, listen. I am like a vertical SaaS nerd to the extreme, which is-

   3. DDDax Dasilva0:52

      (laughs) A vertical SaaS nerd? Wow.

   4. HSHarry Stebbings0:54

      H- honestly, dude. There are so many reasons why I-

   5. DDDax Dasilva0:56

      (laughs)

   6. HSHarry Stebbings0:56

      ... had very few friends at school, but that means I love your-

   7. DDDax Dasilva0:59

      (laughs)

   8. HSHarry Stebbings0:59

      It means I love your business. So first off, thank you so much for joining me today.

   9. DDDax Dasilva1:03

      It's great to be here.

2. 1:04 – 3:55

   Childhood Challenges That Shaped Dax

   1. DDDax Dasilva1:04

      Thank you.

   2. HSHarry Stebbings1:05

      Now, I always think we're always kind of shaped by something in our childhood that maybe wasn't actually that easy. You know, for me it was actually my mother having MS and looking after her. When you think back to your childhood, was there something that shaped you or really impacted how you think and who you are today that stands out?

   3. DDDax Dasilva1:20

      I had a really beautiful childhood, but I think the context of where my parents had just immigrated from, uh, they, you know, there was a dictator in Uganda, they grew up in Uganda, and my- my family family's from, uh, originally from- from India, from a Portuguese colony called Goa, but they all moved to Uganda for jobs in the British Civil Service, and then they were expel- expelled by a dictator in '72. And, uh, you know, my- my mom was 18, my dad was like 22, 23. And so in that context, I was born, my sister was born in this new country where they were just super young and- and- and had to carve out a, unexpectedly carve out a whole new life. And so the fact that we had an- like these incredible childhoods that- that like we spent a lot of time in nature, doing these low cost things like camping, which is why I'm such a big- big proponent of the environment today, um, it's- it- it came from a bit of a chaotic background. And I sort of had the immigrant experience, but I'm, you know, born in Canada, so it's, um, yeah, I think it shaped me. You know, I was a little bit of a dreamer, a little bit of a person that would bike around in circles in their front yard and just dream up fantasy, kind of like cartoons and sort of... You know, I was just sort of like a- a definitely an introvert.

   4. HSHarry Stebbings2:33

      Did you have entrepreneurial pursuits when you were young?

   5. DDDax Dasilva2:35

      I did, yeah. My dad brought home a- a Mac, you know, when I was eight or nine. You know, he- the Mac had just come out. He was a graphic designer. Actually, he was a welder and- and, uh, they discovered that back in Africa, he was a journalist and that he was a communications guy, and so they gave him this opportunity and I went- I nerded out. You know, you're into vertical SaaS, I- I nerded out on UI design and, um, a tool called HyperCard on the early Mac, and that's how I became a programmer. I mean, by 12, um, I had my own Mac, and by 13 I was working for a Mac developer, uh, that was- that was building early networking software on the Mac. So yeah (laughs) , that's the other part of my childhood where it like confirmed nerd, right?

   6. HSHarry Stebbings3:15

      No- no, I'm so happy 'cause I- I obviously invest today for a living and I have a thesis that the best founders always and consistently start entrepreneurial activities very, very young. I- I never meet them when they're 25 and it's their first thing ever. And so I'm pleased that you fit the thesis that I have.

   7. DDDax Dasilva3:31

      So- so I was like, I worked for that startup, uh, and got to see like a startup from ages 13 to 15, the insides of one. Uh, it was like a husband, wife, and maybe a contractor that worked elsewhere. And then quickly after that, I started building software on my own. So by 14, so by 15, I was building software as an independent contractor. So yeah, on- you know, one, team of one, but you know, entrepreneur to the core.

3. 3:55 – 5:36

   The Inspiration Behind Starting Lightspeed

   1. DDDax Dasilva3:55

   2. HSHarry Stebbings3:55

      Why did you start Lightspeed? Like, did you, you know, the family there, no background in restaurants, no like, "Oh, I saw my grandmother cooking-"

   3. DDDax Dasilva4:02

      Mm-hmm.

   4. HSHarry Stebbings4:02

      "... over a stove and I fell in love with restaurants." Why did you start Lightspeed and what was that aha moment?

   5. DDDax Dasilva4:07

      The environment that I grew up, so obviously there's a big background in the early Mac and- and, uh, being a part of that Mac ecosystem, whether it was the- the early developers or the dealerships. You know, before there was Apple Stores, there was dealerships. Uh, and I grew up in those dealerships, I was doing tech support, I was, uh, working in them as, you know, major, major little nerd- nerdy Dax. Uh, but I started building software for those dealerships. You know, they were building a lot of their own software. Each dealership was building their own software, um, u- usually in this tool called FileMaker. And it was usually the business owner building their own custom FileMaker. It was like a, you know, an Acc- Microsoft Access database, homegrown. They were terrible. So over time, I was trying to build more and more software for these dealerships. And if you think about what an Apple dealership would look like, it is, it really is our ICP, our ideal customer profile at Lightspeed, it's a complex inventory-centric retailer with high value inventory, with serial numbers, multiple locations, purchasing across multiple stores and multiple currencies. It's everything we do as a- as- as a, uh, it's everything we offer in the Lightspeed software today to retail. So I was cutting my teeth building software, you know, contracted software for these dealerships between the ages of 15 and 28, you know, uh, when I started Lightspeed. And basically that moment, uh, of, "Okay, I'm not gonna build another custom piece of software for another Apple dealership. You all want the same thing. We're- we're building Lightspeed

4. 5:36 – 7:21

   Lessons on Product-Market Fit with Lightspeed

   1. DDDax Dasilva5:36

      here."

   2. HSHarry Stebbings5:36

      So if we go back to that first product, did we have product market fit from day one?

   3. DDDax Dasilva5:40

      Mm-hmm.

   4. HSHarry Stebbings5:40

      And I'm just interested, when you think back to that, what are some of your biggest lessons from that zero to one discovery on that V1?

   5. DDDax Dasilva5:47

      The first two years, um, I coded literally till 4:00 in the morning.... for that first two years, every day. Li- I was fueled on, I don't know if you know Tim Horton's here in Canada, but it's, like, these French vanilla coffees that are, like, all caffeine and sugar. So I was just, like, fueled by these things and I'm just, like, coding all... But what, what was, I think what helped the product market fit happen is, when I wasn't coding, I was with those, I was with those early four customers. You know? And they were, like, I picked a variety of different customers and I'd sit, you know, with those customers and watch them use the software and then iterate quickly so that if something didn't fit with their workflow or, or, or it didn't consider something that they needed to do with their inventory, there would be another iteration of the software that was out s- you know, within a week or so, that got them closer and closer to a perfect workflow.

   6. HSHarry Stebbings6:37

      How did you think about building what they needed and not what they wanted? 'Cause sometimes what they want isn't necessarily right.

   7. DDDax Dasilva6:43

      100%, right? And so that's where you've got to be, and I think that's, like, a little bit of where the tech support background comes in of, like, "Okay, the u- this user wants to accomplish this, and they think they wanna do it this way. But from your observations of what they, of what their operations look like..." And that's why you have to kind of... In our, in my case, I wanted to be physically there with the customer. It's probably not possible for every type of scenario, but I wanted to observe what it looked like, you know? And I wanted to see what they were trying to pull off, so that with what I wanted to create as a user experience, maybe we're gonna leapfrog their expectations of, of what we wanted to do. And so there were, like, nobody asked for, uh,

5. 7:21 – 9:09

   Would Early Funding Have Changed Lightspeed's Path?

   1. DDDax Dasilva7:21

      the mobile checkout. No, we, we didn't raise money for the first seven years.

   2. HSHarry Stebbings7:25

      Okay.

   3. DDDax Dasilva7:25

      Yeah.

   4. HSHarry Stebbings7:25

      This is what terrifies me. This scares the shit out of me, though.

   5. DDDax Dasilva7:28

      (laughs)

   6. HSHarry Stebbings7:28

      No, no, because, like, today, you-

   7. DDDax Dasilva7:30

      You don't want people hearing that. (laughs)

   8. HSHarry Stebbings7:31

      N- Well, no, no, no. So I, I've interviewed the founder of Klaviyo-

   9. DDDax Dasilva7:34

      Yeah. Mm-hmm.

   10. HSHarry Stebbings7:34

       ... UiPath, and ServiceTitan, and all of them said the exact same thing to me, which is, "We were so close to the customer, because we couldn't afford customer support." (laughs)

   11. DDDax Dasilva7:44

       Right.

   12. HSHarry Stebbings7:44

       "And we had to just do it all ourselves."

   13. DDDax Dasilva7:46

       Yeah.

   14. HSHarry Stebbings7:46

       And I asked them this question, "If I had given you five million on a 25 million price, like you could probably get today if you go to the Valley, would Lightspeed, in this case, have been the same as it is today?"

   15. DDDax Dasilva7:59

       I, I don't, I don't think so. It prob- it probably could be something different and as, uh, uh, as successful, uh, which I don't know what it would look, maybe necessarily look like, look like. But those seven years of bootstrapping, like, we're, we're in our profitable growth phase where we're now, you know, out of this growth, growth, growth at all costs phase, and we're now into balancing growth and profit. That's like the early sev- early first seven years, where we were profitable, uh, and we, we ran the company and grew with a great degree of balance. And, and I think that that's, that those are, that's a great part of our DNA. We also had a really good seven years of, of really solidifying our identity, and that, I think that strong sense of identity and, and who we are and what we represented and, and how we did business, um, helped a tremendous amount when we took VC money, when we went public, and also when we, uh, did M&A. Because when you bring, when you merge other companies into your company, you have to have a strong sense of identity to allow other companies to be able to flourish, um, as a part of your company and not try to suffocate them out of insecurity, you know? And so, that, that, I think that strong sense of identity is, uh, allowed Lightspeed to do a lot of the, the, the big, the big things it's

6. 9:09 – 12:32

   What Dax Would Change with More Early Capital

   1. DDDax Dasilva9:09

      done.

   2. HSHarry Stebbings9:09

      What did you not do, that with the benefit of hindsight, you're like, "I wish we had done if we had more money"? Could be a second product earlier, it could ge- geography-wise earlier, could be more engineers at w... What did you not do that, with the benefit of more money, you wish you had done earlier?

   3. DDDax Dasilva9:25

      So when we did get money, we went, we, we started to, we, we transitioned our product into the cloud. Uh, I think we did it, we did it in, we did it at the right time. Uh, we could have done it a couple years earlier, and, and it could have benefited us to have done it, uh, done it a few years earlier. Our cloud product was out by, you know, 2013. Uh, you know, Square, uh, some other, some other folks like ShopKeep had, uh, which we acquired later, uh, maybe had a couple years on us because of that. But maybe that might have, uh, maybe that might have sped things up in our, in our journey, potentially.

   4. HSHarry Stebbings9:58

      Why did you decide then was the right time? Seven years in's a, it's a long period of time. When did you, why did you decide then and what revenue were you at when, when you decided to raise? I'm fascinated.

   5. DDDax Dasilva10:08

      We were at 10 million. Um, and, uh, it s- it was actually ju- you know, the, those folks that I just mentioned, Square and, and, and, uh, that, uh, it was a New York POS company called ShopKeep. They were, you know, there was new players coming onto the scene, um, 'cause at this point we were, we were competing with legacy black plastic POS systems. It was easy, you know, to compete with them. But then other, other, you know, uh, uh, POS systems that were more forward-looking, more cloud-based, uh, like Square, even though it was very simple at the time, and like ShopKeep, which was an iPad POS, which we had but ours wasn't cloud based. They started to come out, and even though they were very simple, they had hundreds of millions of dollars being funneled into them. And it started to be... I went from a, from the perspective of like, "Okay, I have no finance background, I haven't really looked for investors," to, "Maybe it would be, uh, maybe not a bad idea." And we didn't actually go out looking for VC money. We, um, we did, we were f- you know, we were masters of the trade show. We'd done Macro for many years and then we switched to doing NRA, which is National Retail Federation, that happens in, um, in New York. And in, in 2000, think it was 2000, uh, Januar- January of 2012, a number of VCs come to our booth, uh, looking for the future of retail, 'cause every retail player's there. And they identified Lightspeed, uh, as, as that. And within a few weeks, we had Excel partners who, you know, the investors behind Facebook and, um-

   6. HSHarry Stebbings11:32

      Good old Ryan Sweeney.

   7. DDDax Dasilva11:34

      Yeah, Ryan Sweeny is, uh, was our, was our partner, J- well, Ryan and John. And then within two weeks, uh, of that, they were at, they were at, in Montreal, uh, at our office. And then within a few weeks of that, we had $30 million.

   8. HSHarry Stebbings11:47

      Wow, so it was a 30 million-

   9. DDDax Dasilva11:48

      Invested.

   10. HSHarry Stebbings11:48

       $30 million investment.

   11. DDDax Dasilva11:50

       Mm-hmm. Well, it took, actually, the diligence took a few months. But or t- within a few weeks we had a term sheet.... and so it wasn't something that I contemplated, it wasn't even something I fully understood of, uh, all of how all that worked. You know, uh, par- participating preferred crew, I didn't know what that meant, you know? (laughs) But yeah.

   12. HSHarry Stebbings12:07

       So wh- when I, when I hear you speaking, and Lightspeed's a phenomenal business and you're a phenomenal entrepreneur, seven years to 10 million in ARR. I mean that respectfully, but in today's like SaaS investor benchmarking, it's not fast enough growth. But now you're at clo- well, you'll end this year at like close to 900 million in ARR.

   13. DDDax Dasilva12:24

       Yeah, yeah, th- th- so this, um, this fiscal year that we just finished, uh, was about 900, but this fiscal year we are foc- forecast to be a

7. 12:32 – 13:33

   Do Modern SaaS Investors Overlook Potential Gems?

   1. DDDax Dasilva12:32

      billion in revenue.

   2. HSHarry Stebbings12:33

      Uh, okay, but my point being-

   3. DDDax Dasilva12:34

      Mm-hmm.

   4. HSHarry Stebbings12:34

      ... like that was kind of slow trajectory and so it's like, do you think SaaS investors today have broken models that will miss great companies like Lightspeed given the new demands of venture?

   5. DDDax Dasilva12:46

      I know that when I've mentored companies that are building these, these SaaS solutions, um, they're ha- you know, they're having to b- in order to have attractive metrics that are gonna be interesting to VCs, they're shortcutting a lot of the, a lot of the product development and like the ba- the basics of building a business like we did. Obviously, there's less room to, to, to, to test and battle test, uh, and get to something really phenomenal potentially. I, I'm sure there's, there's outstanding entrepreneurs to get there, uh, despite all those constraints of having to do it quickly and prove and pr- you know, prove, um, prove what they've got is worth, uh, a big term sheet. The slow burn, you know, like th- I think that's, there's quality that happens in, in, in that process and, you know, let it cook,

8. 13:33 – 14:34

   Lessons on Winning in Competitive Markets

   1. DDDax Dasilva13:33

      right?

   2. HSHarry Stebbings13:33

      I totally agree with you. I think we should actually ban companies that are not like extremely capital-intensive from raising for the first five years. It would be fascinating to see the outcomes of those companies and compare them like for like. Can I ask you, you mentioned the increase in competition there. What are your biggest lessons in how to play and win in intensely and increasingly competitive markets given the journey that you've been on?

   3. DDDax Dasilva13:56

      It's always good to create your own greenfi- y- your own green field, your own, you know, blue ocean, whatever, whatev- (laughs) whatever metaphor you wanna come up with. I think it's important for when you're competing that you know the actual value, like our value is not that we can take a payment. Our value is that we are run- running a complex operation for, for, uh, for one of these businesses, and that is, that's their s- that's their source of truth, that's their source of, uh, uh, like that's we're creating the competitive advantage for them, uh, versus their competitors, you know? And so you've gotta find that segmentation where you, you're clearly, you clearly have that right to win and you've got the right product

9. 14:34 – 22:11

   Key Lessons for Global Expansion Beyond North America

   1. DDDax Dasilva14:34

      market fit.

   2. HSHarry Stebbings14:34

      What are your biggest product marketing lessons on how to expand that core customer ICP from say retail to also add in, say hospitality, without alienating the core that you've just acquired?

   3. DDDax Dasilva14:45

      It's always a little bit of a risk to defocus, um, and I think right now, now that I've cu- I've been back at Lightspeed for five months as CEO, you know, uh, I was executive chair for two years, I think there are areas where it's, it's gonna be helpful for us to, to focus again where we've decided to spr- like spread our wings maybe in too many places, too many regions, across too many products, a lot of acquisitions. It's always exciting to grow the business, especially when the market's rewarding growth.

   4. HSHarry Stebbings15:13

      Can I ask you, when you think about your early go-to-market and early distribution, what did you not do well? What do you look back on and go, "Ah, that was a big mistake." And what do you learn from that?

   5. DDDax Dasilva15:22

      Well, the reseller strategy was really successful. In those first seven years we had zero, we spent zero money on, on advertising, right? We, but we spent a lot of money on these reseller conferences twice a year and we'd have like three, 400 people show up, and actually when the VCs came and saw that they, they went undercover. (laughs) They went undercover under false identities, it was a lot of fun. Uh, during our Dallas, uh, certification camp our term sheet went from 25 million to 30 million because they were like, "Wow, you got a massive community of people around from like Saudi Arabia and like, in like Europe and Australia and all over the US and Canada," and like everywhere people are coming to learn how to sell Lightspeed and are al- generally also users of Lightspeed. I think we did a good job at first of integrating our direct go-to-market effort because we had internal salespeople, but we always gave priority to the reseller. I think as we got bigger, you know, we had struggles with, "Okay, when does it become a direct lead? When does it become a reseller lead?" Some of the resellers weren't as fast as the other ones. We're like, "Oh, if we kept that as a direct lead, we could just close that on our own." And then as we went into the cloud and there was less of a need for s- a reseller to do hardware, we started to lean more and more towards doing everything direct. And then as we did high velocity sales model, we went very direct, you know, and I think we cut out a lot of the, the reseller energy and I think that lo- a lot of that network died away and I think that might have been a mistake because now we're trying to bring, bring it back a lot because there is more complexity now. If we're, now we're doing the more complex hospitality businesses and so on and, and we're, we're building that, that partner channel. Obviously, it's a new evolved way of, of go-to-market with partners and we have a very huge direct effort and an outbound effort on the street, so.

   6. HSHarry Stebbings17:09

      Was it always a high velocity direct sales model?

   7. DDDax Dasilva17:12

      No, at first it was all resellers. Uh-

   8. HSHarry Stebbings17:14

      No, sure, but like, no, totally, but when you move more to direct sales-

   9. DDDax Dasilva17:18

      Yeah.

   10. HSHarry Stebbings17:18

       ... the traditional cons- like idea perceived notion is that actually it's quite a slow sale cycle. They're not generally that technology adopting.

   11. DDDax Dasilva17:28

       Right.

   12. HSHarry Stebbings17:28

       They have slower adoption cycles. Was it high velocity? And also, like your ACVs were still pretty high then, like so was it high velocity and high ACVs? I'm fascinated.

   13. DDDax Dasilva17:40

       I mean, our, our sales cycle was like 30 days. It was, uh, like f- I think th- it's not enterprise sales cycles, you know, for-

   14. HSHarry Stebbings17:48

       What, what was the ACV-

   15. DDDax Dasilva17:49

       ... for this mo-

   16. HSHarry Stebbings17:49

       What was the ACVs then? Back, this is back then, so not obviously currently.

   17. DDDax Dasilva17:52

       So, sorry, what's the, what's the acronym?

   18. HSHarry Stebbings17:54

       Uh, uh, uh, average contract value. Like the average...

   19. DDDax Dasilva17:56

       Oh, okay, yeah.

   20. HSHarry Stebbings17:57

       Okay.

   21. DDDax Dasilva17:59

       Yeah, it's- it's like a few, uh, you know, sub-5,000 in- in a lot of cases, you know.

   22. HSHarry Stebbings18:03

       Wow, okay. And so th- how do- I'm sorry, I'm fascinated. How do you do it? You call them up and say, "Hey, Dax, um, do you- do you need our help? We're at Lightspeed." Do you go into the stores? What was it?

   23. DDDax Dasilva18:13

       When it was our direct sales model, like, we're doing a lot of, uh, performance marketing. You know, it's, uh, it's l- for people that are looking for- for- for retail point o- point of sale systems or later hospitality point of sale systems. You know, you're- you're generating all those leads, and you're qualifying the leads, then your salespeople are closing. And then the close rates, you know, we had really, really strong clo- close rates because we prospected, you know, leads that were very much in our, um, in our- in our wheelhouse. It was a good- w- they were a good match for the product. Now, today we're going after ICP merchants and, um, we're making a transition with locations, where before we were going after everything and a lot of our, uh, everything in- in terms of, like, every range of GTV, right? So 500,000 and above is really where Lightspeed's determined where we can- where our product is the best fit. Uh, but we have tremendous a- we have a lot of customers that are sub-500,000 as well.

   24. HSHarry Stebbings19:06

       I went to the site though, sorry to interrupt you, Dax-

   25. DDDax Dasilva19:08

       Mm-hmm, yeah.

   26. HSHarry Stebbings19:08

       ... obviously before this, and it's like, I mean this in the nicest way, but I don't know how to say it nicely. It's super enterprise-y. Like there's no PLG motion there.

   27. DDDax Dasilva19:16

       Mm-hmm.

   28. HSHarry Stebbings19:16

       Like, I- I couldn't, like, sign up and- and see much. It was-

   29. DDDax Dasilva19:21

       Right.

   30. HSHarry Stebbings19:21

       ... heavily enterprise. Is that deliberate?
10. 22:11 – 28:44

    Reducing Implementation & Hardware Costs to Improve Margins

    1. DDDax Dasilva22:11

    2. HSHarry Stebbings22:11

       Can I ask on- one final one on the products and then I wanted to go to your leadership. How much of, like, cost is on, uh, implementation, hardware, and how do you think about kind of reducing that as much as possible? 'Cause that's a real hit on margins.

    3. DDDax Dasilva22:24

       Yeah, and that's why we don't do, um, like that's why hardware sale's not a big focus for Lightspeed. Our revenue is- is, uh, primarily software subscription revenue and, uh, payments revenue.

    4. HSHarry Stebbings22:34

       Do you think the markets understand the two and how they should be valued?

    5. DDDax Dasilva22:39

       You know, there's always like a- there's al- there's always a debate of whether we wanna be c- uh, considered a software company or a payments company. What's better for Lightspeed? I mean, I- I- I- I think that my preference would actually just be that the markets understand us as a profitable growth story. And, you know, we've got three quarters of EBITDA positivity under our belt, um, and we still remain a bit of a sh- of a show me story for the market.

    6. HSHarry Stebbings23:01

       Why do you think you're a show me story? 'Cause I just tweeted before this show-

    7. DDDax Dasilva23:04

       Mm-hmm.

    8. HSHarry Stebbings23:04

       ... that you're one of the, uh, most underestimated or misunderstood-

    9. DDDax Dasilva23:07

       Yeah.

    10. HSHarry Stebbings23:07

        ... public companies. Sorry, I mean that in the nicest way.

    11. DDDax Dasilva23:10

        Mm-hmm, yeah.

    12. HSHarry Stebbings23:10

        Aye, and positive. Um, but like what- why are you a show me?

    13. DDDax Dasilva23:14

        So I think we've been a- a- a growth- a grow, grow, grow story for a long time. Uh, last year we spent the- almost the entire fiscal year rolling out Lightspeed Payments and- and making, and converting a third of our base, uh, making sure a third of our base was converted. So now we've got this really great foundation for profitability. I've spent a lot of time and focus on cutting OpEx. And so I think we're doing a lot of the things the market wants to see. I think that it just wants to see that, plus softer revenue growth as opposed to payments growth for a few quarters.

    14. HSHarry Stebbings23:44

        Did OpEx get too high? Was that something that needed to be brought under control?

    15. DDDax Dasilva23:48

        Just hasn't been- it just hasn't been a focus and that's part of the reason why I think it's important for the founder to come back, you know? 'Cause you can- it's a new phase for the company, being a profitable growth story.

    16. HSHarry Stebbings23:59

        Talk to me about that 'cause, you know, you're- you're chairman, you can be chilling on a beach or, you know, doing whatever you want to do. You know, you obviously weren't chilling on a beach, but you can do whatever you want to do.... in a different capacity. Why did you decide to come back, and why was then the right time?

    17. DDDax Dasilva24:13

        What's great about be- being- being the executive chair is it's great for a founder 'cause you can be on the email, you can be on the Slack, you can be in the... get the pulse of the business, but you really aren't in the day-to-day operations. You know, you can kinda see it happening, uh, and unfolding online. Um, but being in the chair is very different, you know. And I think that we are in a new phase, and we've had- we've pulled off some in- incredible things, the acquisitions, getting two flagships, uh, making the payments thing. A lo- lot of the, the market was skeptical on the payment that we'd be able to execute on the payments thing. All that's been done, but now I think we're in this growing up phase. Like, we are no longer a teenager next year. We're turning 20, right? Like, I want us to be a great adult. You know, we're, we've, we've, uh, we know what the formula is, you know. And I think that, uh, that's... it's a good time for a founder to, um, lead people through some, maybe some structural changes, you know. Like-

    18. HSHarry Stebbings25:09

        Can I be honest? Uh, so you may not-

    19. DDDax Dasilva25:11

        Yeah.

    20. HSHarry Stebbings25:11

        ... be able or willing to ask it, but, like, you come back because something's not right. You don't change things that are working perfectly well. What was not working perfectly well?

    21. DDDax Dasilva25:19

        We all want to see, um, investor confidence return, uh, in the stock.

    22. HSHarry Stebbings25:25

        Mm-hmm.

    23. DDDax Dasilva25:25

        I mean, that's not been a good story. Uh, and I think that the story is, (sighs) the story is the profitable growth, uh, adult version of Lightspeed, right, that's got all of these things in balance. Uh, and I think that I felt, JP felt, the board felt that the founder... it's a good, it's a good moment for the founder to be able to tell that story and lead the team through the transitions that are necessary. And we had to do some... in the five months I've been back, we've had to do some tough things. We had, we've had to do, uh, reduction in force. Um, we've had to, you know, get into capital allocation strategy. We've had to, um, you know, had, had to make some big, clear statements, uh, that, that, that, uh, calm down nerves about no more, no M&A, no large M&A, and, and show great growth numbers, show so, show like, a great forecast of a balance of profitability and growth. Like, so there's been lots of, lots of, uh, not resets, but clear definitions of what it's gonna look like for investors, and now I think that they, they want to see that consistency.

    24. HSHarry Stebbings26:25

        That you mentioned the RIFs. What are big lessons in terms of how to do RIFs? Well, respectfully, as hard as they are, you're not alone. I think everyone does RIFs this last 18 months, horrible as they are. Any advice on how to do them as best as can be?

    25. DDDax Dasilva26:38

        So it's the first one I've done, because we did a b- Lightspeed did one the year before, but it was my predecessor. And (sighs) I, I, I didn't... I underestimated how emotional, uh, that process would be. You know, it's, it's difficult. People are so excited to be a part of this story, um, and to let, to, to, to let, like, talented Lightspeeders go is... and when you're responsible. I mean, you have to do it for the greater good of the company. Um, but it's hard. It's hard. I, I think we learned a lot from the first time. I mean, there's coordi-... there's a lot of logistics and coordination over those emails that go out, and the packages, and how people are informed or informed that they're staying. And there's... I, I, we actually pulled off a very flawless execution. We got, we got a lot of high marks from folks on, on how it was done. I think it's one of the toughest things I've ever had to do, 'cause we've never done... I'd never done layoffs personally at the company, and that's almost been 19 years, you know.

    26. HSHarry Stebbings27:36

        If the M&A worked so well, do you agree with the decision and the statement that we won't do large M&A moving forwards?

    27. DDDax Dasilva27:42

        We did a couple of really great things with our acquisitions. But what we haven't done and we haven't finished doing is all of the backend, backend integration, so th- there's a lot of cost that we can pull out, pull out. There's a lot of things that we can sunset over time. Um, that work hasn't been done. That's like the third phase. And so I'll be giving like a plan at our capital markets day on how that's gonna look, but I don't think that we should be adding more, um, until we've done that. And the market doesn't want to see more confusion added to the picture when we're trying to simplify and focus.

    28. HSHarry Stebbings28:17

        What do you think the market doesn't want to see but you think is still beneficial to the business?

    29. DDDax Dasilva28:22

        Like, I don't think that large M&A would benefit the business either. You know, I think that we accomplished what we wanted to do with the last... like, all the M&A that we did between 2020 and 2022 of like consolidating all the complex hospitality and retail players that were like a, a similar size to us, we did that, right? There's not really another list of, of, of players that we

11. 28:44 – 30:58

    Misaligned Capital Market Expectations vs. Business Needs

    1. DDDax Dasilva28:44

       wanna do that with.

    2. HSHarry Stebbings28:45

       What do capital markets, like, not want or want to see that is opposite to what's actually good for the business? So they may say, "Oh, we want just US," and actually it's better to continue building out an international portfolio. Or they may say-

    3. DDDax Dasilva28:59

       Oh, right. Mm-hmm.

    4. HSHarry Stebbings28:59

       ... "Oh, we don't want product expansion," and then it's actually better to build product expansion. Where is there a misalignment between what the public market wants and what's good for the business?

    5. DDDax Dasilva29:08

       Yeah. I think when it comes to M&A, what I've heard, and I've spent a lot of time listening to shareholders. It's one of the best things about being a public company is you get some really direct feedback-

    6. HSHarry Stebbings29:16

       (laughs)

    7. DDDax Dasilva29:16

       ... uh, from, from people that are bought into you, you know. And, and their, their very frank feedback is Lightspeed doesn't need further distractions with, with a new, with new M&A projects. You know, ingest and, and digest, uh, all of the things that are a part of the company now, uh, and make, make sure all of that is, um, creating value, you know, and that's, uh, and, and that it's... that the company is generating profit. At the end of the day, I think there's a, there's another thing that, that I haven't mentioned, that when, when we went public in 2019, you know, we were a much simpler company at 70 million in revenue, uh, on the-

    8. HSHarry Stebbings29:54

       At 70D.

    9. DDDax Dasilva29:55

       Yeah. Now we're a billion in revenue. But because of acquisitions, because of the way we've grown, it used to be so easy to model the business. It was locations times, um, subscription revenue and, and, and, uh, you know, it was easy to model Lightspeed. Today, it's extremely difficult for pe- folks to model Lightspeed. And that's... and investors can lose interest if it's super hard to model, you know. And, and that's part of why I wanna clean up the location, uh, the que- the question around locations in, in, in anticipation of capital markets day, because one of my goals is to simplify.... simplify the complex. You know? (laughs) Simplify so that people can model this business again, because that allows, um, when there's understanding, investors can buy back in.

    10. HSHarry Stebbings30:35

        Simplicity sells. Anything that's-

    11. DDDax Dasilva30:37

        Yeah.

    12. HSHarry Stebbings30:37

        ... confusing, people are generally lazier than one gives credit. Uh-

    13. DDDax Dasilva30:40

        And, and, and that's why when they sniff, uh, when they're like, "Uh, Lightspeed doing another, doing more M&A," then it's like, okay, well it's never gonna be easy for us to understand this business ever again. And that's the opposite of the direction I wanna go to.

    14. HSHarry Stebbings30:51

        I, I, I totally agree with you there. 70 million in revenue, respectfully, in today's SaaS market is insanely low to go

12. 30:58 – 35:00

    Should SaaS Companies Go Public Earlier?

    1. HSHarry Stebbings30:58

       public. There's a generation of investors now that are saying, "Hey, SaaS companies, you should go public earlier. Your approach is the right approach and building in public is the right one. Not staying private till we're 700 million in ARR."

    2. DDDax Dasilva31:12

       Right.

    3. HSHarry Stebbings31:12

       "... and taking in it." What would you advise founders who may be in that position, where they're at 100, which is amazing, and they're listening to some going, "Go public," and they're looking at others saying, "There's a lot of free public, um, well, f- sorry, private market capital. Stay private"?

    4. DDDax Dasilva31:27

       I would say it's been my favorite phase of, of the company. Despite the, despite the challenges, being a public company, I think, is so good, has been so good for Lightspeed. It's really a graduation. Uh, it's a graduation in your processes, it's a graduation in your storytelling. Um, you get a ton of, like I, I mentioned earlier, you get a ton of feedback from shareholders, um, that have a tremendous amount of pattern recognition. Your business improves. If you're listening, your business improves. How it feels different from VC, we've had really, we had some really great VCs with Inovia and with Accel, um, and some pension funds, but you really feel like there's a couple of personalities that are your, that are your bosses. Or not your bosses, but your, your key partners. Was, whereas when you're public, um, it's your, it's yours to screw up, you know? Like i- i- investors can come in and come out, um, but it's you, uh, ultimately it's, it's, it's really you and your team that you're failing. Maybe answerable to some, to some key, key shareholders, but by and large, it's a, it's a very freeing and independent sort of way of operating.

    5. HSHarry Stebbings32:27

       As I said, I love your business. And as I said, I tweeted the thing that's most misunderstood. At 900, give or take, um, and 2.7 billion market cap today, it's like 3X, is there no desire to take it private? Like I would be chomping at the bit to take it private at the mispricing of my business at that stage.

    6. DDDax Dasilva32:48

       Yeah. I th- I think we're definitely in a transition. Um, like we talked about it. Uh, it's, we're in this profitable growth phase. It's a bit of a show me story. Um, there's some, there's, I would say out of six check boxes that we've, we've nailed five in the last couple of months, and there's like maybe one more to go on software growth and location growth. And then I think we're there, in terms of like the, the shopping list and the k- we have to show consistency. But I feel like there's a lot of value we can create on the public market.

    7. HSHarry Stebbings33:14

       What trait as a leader are you almost ashamed of but has been very contributing to your success?

    8. DDDax Dasilva33:21

       I have a certain degree of fearlessness. (laughs) Uh, there's a, there's a, there's an appetite for, for risk. There's a reason why, uh, when I went into conservation I'm like the, the person that's like ready to go into a jungle and, and not think about it. Or all the things that we've done at Lightspeed that seemed, that would seem like bold moves, um, I didn't hesitate to, um, obviously to learn about the situation, but, but to go for it, you know?

    9. HSHarry Stebbings33:48

       Where's the hesitancy in fearlessness? That feels a bit like a job interview question, when it's like, "What's your, what's your weakness?" And they're like, "Oh, I work too hard."

    10. DDDax Dasilva33:55

        There's a risk of getting burned by that, right?

    11. HSHarry Stebbings33:59

        Have you been-

    12. DDDax Dasilva33:59

        Um-

    13. HSHarry Stebbings33:59

        Have you been burnt by fearlessness before?

    14. DDDax Dasilva34:01

        There's areas that we've marched forward. We've had to course correct, you know? Uh, it's, it's, it's definitely, I think, I think it's, it's, it's easy to, it's not easy to be fearless, it's not easy to necessarily have courage, but it's, if you take it in the context of, okay, we, we're, we're okay with failing, we're okay with iterating, we're okay with like, uh, rescuing a situation-

    15. HSHarry Stebbings34:23

        It's so funny. I ask this question of like many billion dollar founders, and it's like, I give you like 50 traits of mine like, I'm like r- rudely impatient.

    16. DDDax Dasilva34:35

        (laughs)

    17. HSHarry Stebbings34:35

        Where like I will be really horrible because I'm so impatient. And it's like, it drives actually real velocity and cadence.

    18. DDDax Dasilva34:42

        That's it. (laughs)

    19. HSHarry Stebbings34:43

        No, but it's no, no, no. When you go over and say to someone, "Are you lazy or stupid? Right now I'm thinking both."

    20. DDDax Dasilva34:50

        (laughs)

    21. HSHarry Stebbings34:50

        It doesn't build great culture, you know?

    22. DDDax Dasilva34:53

        Yeah.

    23. HSHarry Stebbings34:54

        So, th- but I just find it funny, 'cause people often struggle and I'm like, "Fuck, I have so many that I could say for

13. 35:00 – 36:57

    Leadership

    1. HSHarry Stebbings35:00

       myself." Do you think you found yourself as a leader at some point? I know that sounds really weird and spiritual, and I don't mean that, but like, I, I, I think you learn who you are in leadership.

    2. DDDax Dasilva35:11

       Yeah, I didn't think of myself as a leader, you know? And then, that, that two-year period I spoke about where it was like 4:00 AM in the morning, that was me transitioning from me being that independent software guy, uh, one-man show, just a little bit scared of my team. Like this te- this software was selling really well and this team was growing. I was like on the third floor of this apartment building. I rented the second floor for Lightspeed. Um, and that second floor started to grow (laughs) like there's lots and lots of people starting to show up there day, you know, 'cause we were selling, the revenue was coming in and we were, we needed more folks. Eventually I had to start talking to these, these people and I, I had, was forced to be a leader. And, uh, we talked about the dreamer that I was as a kid. I was like an introvert, you know? And I think Lightspeed's pushed me to, um, be able to articulate a vision, to be able to communicate, uh, but it didn't come naturally. Uh, and I think that's something that I think a lot of people that, that, um, that are, that are in startups that might be passionate about solving a problem, they, then they have to figure out, "Okay, now how do I be a leader? How do I lead these folks? How do I inspire these folks? How do I pivot these folks? How do we, how do I convince the market? How do I talk to media?" This is, it's, it's not necessarily something that everybody knows how to do just 'cause they start a, start a business.

    3. HSHarry Stebbings36:27

       Do you know what I find worrying today? I interview the world's best founders and now the world's best VCs.VCs are better at communicating than founders are.

    4. DDDax Dasilva36:35

       Right.

    5. HSHarry Stebbings36:35

       Something is wrong with the world when that is the case, huh?

    6. DDDax Dasilva36:38

       Mm-hmm.

    7. HSHarry Stebbings36:40

       I don't know why that is. I think it's 'cause VCs sell cash and so-

    8. DDDax Dasilva36:43

       (laughs)

    9. HSHarry Stebbings36:44

       ... you have to get, yeah, you have to get really fucking good at selling if it's like-

    10. DDDax Dasilva36:46

        Yeah, yeah.

    11. HSHarry Stebbings36:46

        ... $1, $1. Well, my dollar's prettier than your dollar.

    12. DDDax Dasilva36:49

        My dollar's di- not different than the- the other dollar, yeah. Mm-hmm.

    13. HSHarry Stebbings36:52

        Yeah, yeah. Yeah. I just go, "I'm not a dick," and it's like, poof, done.

14. 36:57 – 50:07

    Quick-Fire Round

    1. HSHarry Stebbings36:57

    2. DDDax Dasilva36:57

       (laughs)

    3. HSHarry Stebbings36:57

       Uh, listen. I wanna do a quick fire with you, Dak.

    4. DDDax Dasilva36:59

       Yeah.

    5. HSHarry Stebbings36:59

       So I say a short statement. So let's start with, what do you believe that most around you disbelieve?

    6. DDDax Dasilva37:05

       I really believe that individuals matter. Um, like I, I've seen individual business person and individual conservationists make such a huge difference. Um, I feel like there, people feel like there's, like, this huge ocean of problems or ocean of- of- uh, of- of just the status quo or the zeitgeist that not, individuals don't really make a big difference. But I have s- I have some incredible examples.

    7. HSHarry Stebbings37:29

       Do you think that's the case? In a world of Greta Thunberg, Attenborough, um, influencers like Ronaldo or Messi or you name it, I think we're in a world where people realize that individuals are everything. Individuals are bigger than the biggest companies in the world.

    8. DDDax Dasilva37:44

       You're right, eh, because you can have large figures, but can large figures make change? Can large figures actually do anything? As Greta The- Thunberg, like... There's a lot of awareness, but like, I think when I look to, for example, you know, let's say Paul Watson, uh, of Sea Shepherd saved every species of whale in his 50-year campaign, uh, putting his body and- and- and the crews between pods of whales and whalers from Iceland and Japan. Or- or a business example, Steve Jobs. You know, it's th- there's individuals can, that I admire, whether it's in conservation or whether it's in, uh, uh, technology, there are people that actually make things move. Um, and I feel like there is this whole thing of Instagram influencers and- and, uh, um, but I want pe- (laughs) I want action, right? I wanna see can indivi- can individuals cause results to happen? And that's what I wanna believe and that's what I see in the things that inspire me.

    9. HSHarry Stebbings38:40

       You're not into the personal brand content build, are you? Like, uh, before this, you know, you're- you- I don't think you have a Twitter.

    10. DDDax Dasilva38:46

        Mostly on Instagram.

    11. HSHarry Stebbings38:48

        Yeah. Okay.

    12. DDDax Dasilva38:49

        Yeah.

    13. HSHarry Stebbings38:49

        Interesting. Um, tell me, who's the best board member that you don't have that you would like to have?

    14. DDDax Dasilva38:55

        I'd love to f- have a founder, um, of a comparable company to Lightspeed that's sort of maybe done a similar journey but in business software, in SaaS, maybe in payments, but that's gone on- on a similar arc or beyond it. Hopefully beyond what we've done, uh, 'cause I'd love to learn, love to learn from that kind of f- person.

    15. HSHarry Stebbings39:13

        Tobi at Shopify would be one I would say, "Hey." That'd be-

    16. DDDax Dasilva39:16

        Yeah.

    17. HSHarry Stebbings39:16

        ... a really interesting addition.

    18. DDDax Dasilva39:17

        Well, I'm friends with them. I'm friends with them, uh, but you know, we- we compete enough. Uh, there's enough overlap that- that probably that wouldn't work. But, uh, definitely, you know, close with Tobi and Harley.

    19. HSHarry Stebbings39:27

        What's the most contrarian or unorthodox advice that you'd have for founders listening?

    20. DDDax Dasilva39:31

        Everybody so loves their pitch decks, you know, and, uh, I always, I always see a little bit of a frown when I'm, when I suggest to folks that, um, the thing that made a huge difference to me is that I was forced to write a three-year business plan in order to get our early grants. Like, I got a $6,000 and an $8,000 grant, you know, when I was basically on unemployment when I started Lightspeed. Uh, and that three-year business plan, I just thought it was so much BS. I was like, "Oh, I just gotta do this and mail it in" and, but it- it was a written component and a spreadsheet component and that- that, uh, business plan, we actually hit that business plan on the nose in year one. Um, no, we- I think we- we- we failed it a little bit on year one, but year two we hit it on the mark and year three we exceeded it. And it actually changed everything about our pricing 'cause we actually had to run everything through spreadsheets. It actually solidified and deci- made, helped us decide what we were doing and what we were not doing and I know it's not fashionable and I know that, uh, people love their 10- 10- 10-slide pitch deck, but that's not a business plan. I think people are a little bit scared by the rigor of what having to write an essay and then have a three-year spreadsheet of what you're gonna do. I don't know. I think it's necessary. I don't think we'd be the same company if we weren't forced to do that.

    21. HSHarry Stebbings40:46

        It's so funny. I say don't even bring me a fucking deck. I- I'm on, like the opposite si- 'cause I'm like the- you have a the-

    22. DDDax Dasilva40:54

        I'm gonna, I'll- I'll fight you on this one. (laughs)

    23. HSHarry Stebbings40:56

        No, no, no. So let- let- so you have a thesis and th- I think there's a difference between, like, having a idea and a vision of how the world and your company transpires. But I think projecting out, like a three or a five year financial model, I mean, fine, do it, but it's fucking poetry. And I actually think you might align yourself to it, which might misdirect you from the real opportunity.

    24. DDDax Dasilva41:16

        Yeah. I- I- I definitely hear, I definitely hear those concerns. You know, and I- I- I'm not a big master planner.

    25. HSHarry Stebbings41:23

        Mm.

    26. DDDax Dasilva41:23

        I actually, spiritually, I really believe that you kind of lead, uh, the- the bigger plan's always gonna be better than your stupid plan that you come up with, with your head.

    27. HSHarry Stebbings41:32

        Hmm.

    28. DDDax Dasilva41:33

        But I think that that three-year business plan, if maybe the- maybe the- maybe the model and the projections are meaningless, but the clarity of writing down what you're gonna do and what you're not gonna do, 'cause there's so many ideas that people have when they're starting.

    29. HSHarry Stebbings41:45

        100%.

    30. DDDax Dasilva41:45

        And just writing on paper what are the core elements, who are your customers, and actually the pricing is a really interesting one.

Episode duration: 50:07