What it says
What this says
Current to 11 Oct 26Final internal board pack from Nell Ashcombe dated 17 Jan 2024. It reports contracted recurring revenue of thirty-nine thousand pounds from two customers and a headcount of nine. It is historic and not a contract.
What it is: the CEO's quarterly board pack for the quarter ending 31 Dec 2023, marked Final. It is for the board and states revenue as "contracted annual recurring revenue taken from signed order forms".
Claims: contracted recurring revenue is thirty-nine thousand pounds from two customers, and headcount is nine, up by two. The pack says implementation fees are excluded from recurring revenue.
Risks named: small customer base, cost ahead of revenue, evidence of value and knowledge held in heads. It says "Renewals will depend on" evidence of value.
Not settled: the pack names no customers and gives no usage figures. It is long out of date and should not be read as the current position.
As found in this document
The document
Body
B-Brain - Board Pack - quarter to 31 Dec 2023
Status: Final Prepared by: Nell Ashcombe, Chief Executive Officer and Co-founder Date of pack: 17 Jan 2024 Period covered: the quarter ending 31 Dec 2023
Headline numbers
| Measure | Position at 31 Dec 2023 |
|---|---|
| Annual recurring revenue (contracted) | thirty-nine thousand pounds |
| Customers | two |
| Headcount | nine |
The short version: we now have a second customer, contracted recurring revenue has doubled since the previous pack, and the team has grown by two.
How to read this pack
As before, revenue means contracted annual recurring revenue taken from signed order forms. It is not pipeline and it is not invoiced revenue, though the two should agree and I will say so if they do not. Anything I cannot trace to a signed document is left out.
Revenue
Contracted annual recurring revenue is the thirty-nine thousand pounds shown above. Two customers now contribute to it.
A few things worth being clear about:
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- The figure is the annual subscription only. One-off implementation fees are separate and are not in recurring revenue.
- Doubling sounds bigger than it is. We went from one customer to two, and the base is still small.
- Concentration has improved but not gone away. Losing either customer would still be a very visible event.
Customers
Two customers are now on the brain, each running inside their own Snowflake account.
What I am watching, and what I would like the board to hold me to:
- Adoption. Are people asking the brain questions as part of their normal week? Questions asked is the best single measure we have, and I want to see the trend, not a single number.
- Freshness. Is the data in the brain current each morning? A brain that answers on stale data is available but not useful.
- Champions. Who inside each customer cares about this, and what happens if they move on?
- Evidence of value. For each customer, what would the brain say if we asked it what it was worth?
Having two customers gives us something we did not have last quarter: a comparison. Where the two behave differently, that is where we will learn the most.
People
Headcount is nine, up by two over the quarter.
Commentary:
- The additions were made to support delivery and the customers we already have. We have not hired ahead of the pipeline.
- The team is still small enough that account knowledge is shared informally. That works now, and I do not expect it to keep working as we add customers, so I will bring a proposal on how we write it down.
- I am conscious that every hire moves our costs before it moves our revenue, and I will keep saying so in these packs.
What went well
- We won the second customer and the contracted figure doubled.
- Both customers are live and we have kept the first.
- The team grew without losing its focus.
What did not go as well
- Our pipeline is still thin. Two customers are encouraging; they are not yet a pattern.
- We still do not have a repeatable way of showing a customer what the brain has changed for them. I said last quarter that was on us, and it still is.
- Reporting remains largely by hand. It is accurate but not efficient.
Risks
| Risk | Why it matters | What we are doing |
|---|---|---|
| Small customer base | Each customer is a large share of recurring revenue | Keep both relationships close; keep building the pipeline |
| Cost ahead of revenue | Headcount has grown faster than customers | Hold further hiring until revenue supports it |
| Evidence of value | Renewals will depend on it | Agree usage measures with each customer and report them regularly |
| Knowledge held in heads | Small teams lose knowledge when people change | Write account notes and share them across the team |
Priorities for the next quarter
- Add further customers, and be disciplined about which ones we pursue.
- Put a simple value measure in front of each customer, based on how the brain is used.
- Move monthly reporting onto a repeatable routine, so the figures in this pack come from one place.
Asks of the board
- Note the position at 31 Dec 2023.
- Challenge the pace of hiring against the pace of customer wins.
- Tell me where you would like more or less detail in this pack.
Closing note
Contracted annual recurring revenue is thirty-nine thousand pounds, from two customers, with a team of nine. The numbers are small and I would like them to stay honest. As before, this is taken from signed order forms and not from what we hope to sign.
Best, Nell