Software Founder and CEO of TimeControl Chris Vandersluis knows how to pivot. The seasoned veteran, titan of timesheets, chatted with the GetLatka team ahead of Nathan’s Founder 500 event, where the timesheet management OG is scheduled to speak.
Vandersluis founded HMS Software in 1984, a full 5 years before Nathan was born, as a custom programming shop. The CEO is a prolific spokesperson on enterprise time management systems and has been featured in Fortune magazine and several other publications. Vandersluis shared with Latka the highlights of his entrepreneurial journey, including how he became the 100% owner of HMS, how he earmarks and distributes bonuses each year, and what’s next for the SaaS, founded in the year made famous by George Orwell’s classic book and Apple’s Macintosh Commercial.
- Team of nearly 25, 8 engineers
- 280 enterprise customers
- $3.6m ARR
TimeControl SaaS customers spend an average of $300-600 MRR, some top $10,000
According to Vandersluis, his primary business at HMS Software is the B2B SaaS TimeControl. This enterprise timesheet system delivers auditable timesheet systems for billing, attendance, and tracking people’s time. The founder explains that their SaaS works differently from their competitors in that TimeControl can:
- Track time and attendance
- Capture project-oriented time
- Track specifically for R&D tax credits
- Forecast with project scheduling and timing (in the upgraded version)
Vandersluis shared that the average cost per user ranges from $3-5 to $50-60, depending on the number of seat subscribers. Most clients spend $300-600 each month, while a few large enterprises hit $10,000+ monthly.
$240,000 MRR YAG to $280,000 MRR, boosted by pandemic
Founder Vandersluis shared that HMS Software is growing organically by both design and intent. He reiterated their target audience is enterprise customers and that they won’t ever add many customers at once. Yet, the pandemic did provide an unexpected boost in cash flow as several on-premise customers converted to the cloud, boosting their MRR in one year from $240,000 to $280,000.
Team of under 25 FT; 2X with consultant / implementation network
Vandersluis shared that his team of 25 full-time employees includes 8 engineers. While most of the company’s staff are in Canada, they’re virtually all remote. The founder shared that his team is augmented by roughly 25 additional global consultants and implementation specialists to support those 280 enterprise customers.
Multiple pivots from 1984 before reaching a $15,000 ACV model
Founder Vandersluis shared with Latka the different ways HMS has pivoted since 1984 to get to where they are today. “We started out in 1984 as a couple of guys doing custom programming,” explained Vandersluis. He believes they lucked in the project management space because he and his partner were working for a couple of companies that needed it. That evolved into HMS becoming a distributor for a Canadian product management software. In 1994, Vandersluis bought out his partner “in a deal we were both happy with.”
Pivot to software publishing, now $3.6m ARR
After buying out his partner in 1994, Vandersluis pivoted to becoming a publisher, and TimeControl ultimately became the software product. “To me, Time Control was low-hanging fruit. We wrote several timesheets for clients, so I was sure I could sell it as an on-premise solution.” The previously-bootstrapped investor brought in a few investors in 1999, then bought them out in 2006 to reestablish 100% equity and control. Vandersluis shared that their ARR is now at $3.6m and continues to grow.
“Probably couldn’t turn down $30m, but then what?”
Latka queried Vandersluis about acquisition offers. The seasoned founder quickly exclaimed, “We are not for sale, and I am not looking for an exit.” Vandersluis added with a grin, “Many of your listeners have called Nathan.” Vandersluis ultimately paused to say he probably couldn’t turn down $30m. But added, “I love my work. I get to take care of companies like AMD and General Electric. We get to be a small part of what they are building.” He concluded, “At the moment, I’ve got a pretty good deal.”
Potential to acquire
Given founder Vandersluis’ clear stance on acquisition, Lakta queried him about the potential for HMS to acquire another company. Vandersluis shared, “Every once in a while, I get an offer to buy something. Would I? Maybe? But so far, there hasn’t been a good fit.” He clarified that while he is open to the possibility, the prospective partner company would have to be a solid strategic fit for his current business.
How HMS splits their nearly 30% profit
Vandersluis revealed that last year, HMS Software closed with just under 30% in profit. Latka asked the founder to explain what he does with his profits, noting that many founders wonder how to calculate bonuses. Vandersluis replied, “Every year, I calculate what’s left over. The profit. What do I leave for growth, and what do I take out?” Last year’s roughly $1m in profit resulted in 20% being divvied up amongst the employees as bonuses. Vandersluis quickly noted that the 20% of the profit isn’t a guarantee or promise but depends on the circumstances of the year. He split last year’s $200,000 among employees based on tenure and role. He set aside $200,000 in dividends for himself and left the rest in the company.
Since he’s been a GetLatka guest previously, Founder and CEO Chris Vandersluis came to the interview prepared, with his current book within his grasp. He’s currently reading AI 2041: Ten Visions for Our Future by Kai-Fu Lee and Chen Quifan. Chris doesn’t follow any CEOs. His favorite tool continues to be LinkedIn, adding that “Nathan, I think I’ve said that in every interview with you.” He gets 5-6 hours of sleep per night. The longtime founder is 64. He lives in Tampa and is married with three children: two stepsons (one in high school and one in middle school). His daughter lives in Canada, working as a successful influencer. Finally, when asked what he wished he had known at 20, Chris replied, “I wish I had known to be more patient and take the long view.”