How Appify Grew ARR to $1M and Average Contract Value to $125K in Under Two Years (Interview with CEO Jen Grant)

Introduction and Guest Background

Nathan Latka

00:00Hey, folks. My guest today is Jen Grant. She's the CEO and has led appify, an enterprise rapid app development platform since February 2020. Previously, spent fifteen years enterprise software as CMO of Looker. You guys remember we had those guys on back before the sale. Elastic and Box, all billion dollar outcomes. She's also spent four years at Google leading marketing team and holds degrees from Wharton and Princeton. Jen, you ready to take us to the top?

Jen Grant

00:21>> I'm I'm ready to go.

Recap of 2020 Interview: 45 Customers and $200K ARR

Nathan Latka

00:23We were just reminiscing because we had had you on back in October 2020. You had 45 customers, $200 k in ARR. You were just getting going. What's the update? Has the product changed?

The Pivot from SMB to Enterprise

Jen Grant

00:32>> Yeah. So almost everything has changed. So I'd say the first thing that changed, and, you know, I think this is really great for your audience because this is exactly how a startup early stage kind of growth happens, where we sort of started out saying, yes, this is for SMBs. This makes sense. Let's do volume. Let's get insights.

Nathan Latka

00:52$400 a month was your average ARPU back then?

ARPU Growth from $400 to $10K and $125K ACV

Jen Grant

00:54>> Right. Our ARPU was pretty low, but, oh, we were gonna get the volume. And what we realized in the last two years is that the product itself really speaks more to an enterprise play. And as we started really digging in and finding that product market fit, it was much more useful for larger enterprises. So now our average selling price is 125 k. We're, you know, we're we closed a big 336 k deal. You know? It's like

Nathan Latka

01:22Is that your biggest annual contract right now? 350 k, something like that?

How Enterprise Sales Cycles Changed the Business

Jen Grant

01:26>> Yeah. Yeah. Exactly. Wow. So we've got these big, big contracts. Of course, you have to change your entire the way you run the business because instead of this sort of fast volume, like, get them up and running, you have these longer sales cycles. There's, like, ten, fifteen people at the company. You're meeting multiple times to sort of get everybody on board. You sometimes have to work with procurement and, you know, legal and contract negotiations. So it's

01:51>> a complete It is a different business from what it was two years ago. So exciting and it's absolutely the right thing. But it was funny when I listened to the podcast again, was like, holy crap.

Nathan Latka

02:02This is wild. I mean, I don't think I've ever interviewed someone where in a two year span, they've gone from an average ARPU, monthly ARPU of 400 to 10,000. Right?

Jen Grant

02:10>> Yeah, that's right.

Nathan Latka

02:11So how do you turn off all the small companies without pissing them off and getting negative G2 reviews?

Jen Grant

02:17>> Yeah, no, and that's been one of the challenges. And I think I would give us maybe like a B plus So we have a couple of our smaller customers, they're up and running, they're super happy. We continue to support them when they have a bug or they have a question, we're there. But there were plenty of and one of the reasons we shifted to enterprise, there were plenty of SMB customers that didn't really have the resources

02:42>> for an app building platform. Like, they just didn't have time to build apps. And so in some cases, it was very easy to say like, hey, guys, you know, you never really built an app, so let's be friends. And and in some cases, we pointed them to other products that we actually thought were better fitted for an SMB, a simpler solution that we Which would be what?

Nathan Latka

03:05My audience will help understand what you do based off that analog, like a web

Jen Grant

03:08>> Some of the ones we think about are GoFormz is a great example. So it's a much simpler kind of app but is faster to get going. I believe you can even upload a PDF and all of a sudden you have an app. And that's the kind of thing that many of our SMB customers, that's all they need. They just wanted to go from paper to an app that does a whole lot of great for

03:32>> their business. And for us, what we started to realize is some of the value that we were offering is that we can From a technical standpoint, we can integrate into multiple data systems and we can create apps that have data from Oracle and SAP and Salesforce and Zendesk. And the minute you say that, you realize no SMB gives a crap. They just want their one thing. But every enterprise has that issue with these data silos everywhere.

04:03>> We often hear from companies that they say, Oh, my HR onboarding. First, have to log into Workday, and then I log into this specialized onboarding system and I fill things out, and then they have to log into this other system. And so, this idea of like, Great, build an app that makes it really easy for the user, and in the background where nobody can see, it'll deal with the fact that that data goes to this system,

04:28>> that data goes to that system, and all of this sort of complexity that typical enterprises have in their technology stack. So that was really the, like, insight was like, holy crap.

Nathan Latka

04:40We would have this That's a shift.

Jen Grant

04:41>> Great thing for enterprise.

Nathan Latka

04:43That's a shift. What's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually. Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second, but you log in,

05:07you connect your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company,

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Current Customer Count: 15 Enterprise Accounts

Nathan Latka

07:07back into the interview. How many now? How many if you do ignore SMB, how many enterprises would you say you're working with now as paying customers?

Jen Grant

07:14>> We've got about 15 enterprises. So, it's still, you know, that's the other change is that when you're When I was at Box, for example, we were constantly saying like, you know, 15,000 customers and then we had a 100,000 customers and then we had 8,000,000, you know, it's like you have these really big numbers of all these customers. And you're in the enterprise, and you're like, 15. Yay. Yep.

Seat-Based Expansion and Landing Bigger Deals

Nathan Latka

07:3640 customers that pay you 1,000,000 a year is a great business.

Jen Grant

07:40>> Exactly right. And so you have to kind of reset your expectations and what you count, and you start saying, okay, well, what's our average selling price? Like, when we have 15 and our average selling price is somewhere between 150 and then expanding to these 350 k deals, like, that's not so bad. So we'll be okay with that.

Nathan Latka

07:57Yeah. That makes ton of sense. I mean, now, you know, can I take those 15 customers times $13 k a month? I mean, you guys are north of a 2,000,000 run rate at that point just in your enterprise cohort.

Jen Grant

08:05>> We're not quite there because we're a little land Close. Scan. We're actually right just about at the 1,000,000 ARR, which we're really excited. Like, Fair literally, we're, like, just about to go bing and get that.

Nathan Latka

08:17We're having you on at the right moment then. So you're still expanding some of these accounts maybe more. So what is that expansion look like? Why someone would pay you $100 k a year versus $350 k? Is it seat based expansion, feature based expansion, something else?

Jen Grant

08:26>> Yeah. It's seat based. So what we're seeing is one great example, one of our older customers, they started they built one app and they had about two fifty people using it. Then And they built their second app and they added additional 300, and there was some overlap of app users. Now they're at five apps and they're just shy of 1,000 users. So that was one where we landed small and then grew over time. Nowadays, I'd say

08:49>> in the last six months, I hired an enterprise VP of sales, so that also changed our selling motion. So we're landing a lot bigger in the last couple months. The deals that we're looking at, we would land more at the 100,000 range, And then the expansion is like, oh, and then we'll get to 400,000 or those that kind of range where we're like, okay, 1,500 users or Yep. Our biggest deal right now is 8,000 users. So

09:16>> that one we were like, woo hoo. Okay.

Nathan Latka

09:18Cool. Let's do that one. You mentioned the recent higher enterprise sales. How many folks are full time on the team today?

Team Size: 35 People and a Lean Sales Motion

Jen Grant

09:23>> We're still pretty small. That's one of and, you know, as you, I'm sure, have heard from other entrepreneurs and everybody's reading in the news, this is not the market to go crazy. And we're sort of feeling a little lucky that we've kept it tight. So we're at 35 people today.

Nathan Latka

09:38Yep.

Jen Grant

09:38>> And we kept our sales team to two SDRs, and we have an AE, and then our VP of sales, he actually sells. So we just have those four. Then we

Nathan Latka

09:47have so two SDRs, one AE, and then one head of enterprise sales?

OEM Channel Partnership with CSG

Jen Grant

09:51>> Then the head of sales. Yeah. The other reason for that is we found this whole and this is really rare for a startup, but we found this channel to use. So the second thing that's interesting that we sort of discovered about appify over the last two years is this ability to connect into any data source works in kind of a white labeled powered by appify way. So we announced it in April. We did a deal with

10:18>> a software company called CSG to stick appify on top of their software and give them a mobile app, like a well formed mobile app that they can build. And then long term, they want to build other apps and they want to have this sort of platform capability connected into this sort of robust data source that they've built over the last 20

Nathan Latka

10:37So that's your go to market. That's your unique channel, those partnerships.

White-Label Strategy and Staying Lean

Jen Grant

10:40>> Right. And so then we kind of white label it, give it to them. They do a lot of the work and they have the sales reps that are out there selling. And so that also allows us to stay lean, which in today's market turns out is a really good thing.

Nathan Latka

10:54Yes. No, that makes tons of sense. Now you raised 8, 9, 10, 11, 11,500,000 ish. Right? Nothing else raised since 2020. Right?

Funding and Runway Planning

Jen Grant

11:02>> That's right. Yeah. So we're still kind of running on that. And like every other startup, we're looking at our road or runway and saying, okay, are we okay?

Nathan Latka

11:10And Well, do you optimize for right now? Right now, where we're at, are you trying to plan for twenty four months runway, thirty six months, something else?

Jen Grant

11:16>> We're planning for a year runway because these OEM deals, we don't actually need to hire any more sales because of the kind of awesome expansion effect of the channel. So we're able to kind of grow the way we want to grow without actually adding headcount. So we kind of like, we need that year to sort of say, okay, let's sell the crap out of this. And that gives us some of our engineering innovation will continue, but

11:46>> we also are sort of like, okay, let's just go sell the crap out of this for the, you know,

Nathan Latka

11:50six So, nine Jen, so with 35 employees, I don't know where you're based in The States or maybe not even in The States, but if you if you have an average I mean, it's an average salary of $120,000 per year for 35 employees, that's a $4,200,000 expense. You feel like you've yeah. Got You're not that high, though.

Offshore Engineering in Bangalore

Jen Grant

12:05>> Yeah. Most of our folks are in Bangalore, India. So we do have a large that's where engineering is, so it's also very efficient.

Nathan Latka

12:12Yeah. Cut that in cut that in half, and your your annual headcount is probably somewhere more like million, 2,000,000, something like that, not four.

Jen Grant

12:18>> Exactly right. Yeah. So so we're able to get a lot of efficiencies as well since our customer success and our engineering and support are all out of India.

Nathan Latka

12:27We two minutes left. Teach me about that. How did you find the anchor point in India to hire that first engineer and customer support rep?

Challenges of Hiring in India

Jen Grant

12:33>> Yeah. And I think that's a great, great point. It's hard. I would say, not for the faint of heart. If you don't know someone in India already who has been there, done that, it's not a good strategy. Even though you look at the financing and you're like, Wow, that would be great. Because it turns out it's actually really hard to hire in India. It takes three months. So even when someone accepts a job offer in India,

12:59>> they have to stay in their current job for three months. And very often, they shop your offer.

Nathan Latka

13:05So,

Jen Grant

13:06>> they accept your offer, they shop it, they may find a better offer, and three months later, when you're dying for this head count to start, they're like, Just kidding. I'm going somewhere else. So it's very painful and hard. And what makes it work is those anchor people. So in our case, our founder, our CTO, is originally from India. Spends, you know, maybe six months, three months, a year out there. He's wonderfully charismatic. So he goes out

13:33>> and everybody gets excited and, you know, pumped up. And so he is able to bring in people from his network as well as excite the team we have. And so that's been able to and even then, we we still have people that don't show up on their first day of work.

Nathan Latka

13:48Yeah. I know. That's that's an art.

13:50Crazy. Yeah. It's an art form.

Jen Grant

13:52>> Yeah. It's a good strategy, but it is not you know, you you can't walk into it thinking, oh, I'll just hire people in India and it'll be fine. You've gotta have those anchor leadership there to make it work.

Famous Five Rapid-Fire Questions

Nathan Latka

14:03Guys, Jen, on that note, let's wrap up here with the Famous Five. Number one, last business book you read.

Jen Grant

14:07>> Oh, it's still Simon Sinek. So

Nathan Latka

14:10Okay. Latest. Start With Why.

Jen Grant

14:12>> Yeah. Start with why was the first and the leadership ones were the next one.

Nathan Latka

14:17Number two, is there a CEO you're following or studying?

Jen Grant

14:20>> Oh, that's a really good point. It's so hard nowadays. They're making documentaries about everybody and how they're all crazy. And so I, like, hesitate to give you an answer on that one. I can't even say anyone right now.

Nathan Latka

14:33What would the title if Aaron Levie has a video made about him on Netflix, what would the title likely be?

Jen Grant

14:39>> Oh my god. Crazy Young People.

14:43>> Here you go.

Nathan Latka

14:44Number three, what's your favorite online tool for building appify?

Jen Grant

14:51>> I you mean as far as the apps that are built?

Nathan Latka

14:53No. No. No. Sorry. Sorry. Tools you use to build the business.

Jen Grant

14:57>> Oh, to build the business. Absolutely. Calendly. So useful.

15:01>> Yep.

Nathan Latka

15:02Good one. Number four. How many hours of sleep do get every night?

Jen Grant

15:05>> I'm good. I get eight hours.

Nathan Latka

15:06Oh, wow. That's great. What's your situation? Married, single kids?

Jen Grant

15:11>> Married, four kids.

Nathan Latka

15:12Wow. You're busy. Okay. And do you mind me asking how old you are?

Jen Grant

15:16>> I am not 50. I'm 49.

Nathan Latka

15:19Very cool. Very cool. Very that's a big exciting birthday. That'll be fun. I hope you celebrate.

Jen Grant

15:24>> Coming.

Nathan Latka

15:24All right, Jen, take us home here. Last question. Something you wish you knew when you were 20.

Jen Grant

15:29>> I think I wish I knew not to take everything so seriously. I think when we're 20 years old, everything is like the world is ending. It's not it's things are good, things are bad. It's all gonna be fine.

Nathan Latka

15:41Guys, really impressive story here. Appify helps enterprises launch apps, manage them, data in and out, all of that stuff. I've never had an interview where over two years span, I interviewed Jen two years ago, she was doing $400 average ARPU across 45 customers. She's now doing well north of that. So now call it thirty, forty customers, but they're paying much, much higher ARPU. She's more than 10x the average contract value moving to the enterprise and her

16:04total revenue's gone from about a 250,000 up to about a million dollar run rate today. She's celebrating passing that metric, is a big one, very exciting, without raising new capital between that period, which is really fantastic. So, Jen, we're rooting for you. Thanks for taking us to the top.

Jen Grant

16:16>> Thank you. Great. Great to meet see you again.

Nathan Latka

16:20One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday, 1PM

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