How Beamer CEO Spencer Coon grew to $10M revenue and 550 customers in 2024.

quick context this was recorded March 28th and 29th so a couple weeks ago at my live event SAS open.com we had a thousand software CEOs there if you missed it we hope to see at the next one September 5th and 6th in New York City SAS open.com but for now let's jump into the recording I think over the next 20 minutes I'm going to talk about um you know what are the drivers for this acquisition to happen how did it come through you know what went well what did not go well What mattered to the team both in terms of emotions egos uh now you have Founders on one side you have the investors on the other side and then you have operators like me on the other side right so obviously it's a it's a very interesting Dynamic that uh has happened over the last few months quickly a quick background about me so I've been in SAS for maybe 15 20 years mostly as an operator uh self financing and selling for uh companies so I started off as an executive at a at a growth Equity Fund called camber Partners you might have seen some of those teammates like Justin or uh will around um so we had a thesis um and we started to look out for a bunch of companies I think personally I looked at 150 companies over the last um 6 months and I think beer was a company that kind of really stood out in its own uh definitions one um it was led by two Founders it was bootstrapped it has grown itself to being uh um few million dollars of Revenue without any external financing uh led by a very international team between Spain and uh States and we decided to make an offer and and acquire them so so we made an acquisition of beamer uh but that came with its own challenges right so Beamer has been a tool predominantly serving a lot of SAS product teams and marketers um that was around August 2023 uh but Beamer is a very successful product but it has it has come to a point of its own inflation right as you know in Tech markets things change very very Dynam dynamically so what was a successful product at some point started to get featurization bootstrap settle but doesn't work for Venture investors or or even growth Equity investors so there was definitely a call for higher growth hey how do we grow the business uh at a higher rate right so that's definitely one um uh inflection moment um I think the second thing is as I kept during the due diligence process of beamr I kept speaking to almost 120 customers of beamr and and there was a lot of common synergies is like hey you know uh you guys offer release communication or launch Communications but do you also offer onboarding do you also offer guides as a capability versus just uh uh you know uh ability to release uh products or or update users so there were at least 70% of the customers uh came back and said hey can we have a better guides product so there was also the need from the customer side right uh I think most importantly when when we start thinking about m&a or something we we wanted to have a clear checklist in terms of what matters to us and what matters to uh others the most important thing is hey is this a complimentary product what do I mean a compliment product right complimentary product means we want to keep the same ICP like we don't want to change the ideal customer but we want to offer him an you know additional skew right that's where I think during this customer conversations guides was a very common feature so complimentary product definitely it has to check mark second thing is the audience wise as I said Beamer historically has been selling to about 2,000 plus SAS companies predominantly focused on product teams and product marketing teams so we didn't want to shift away from that audience we don't want to build a tool for sales teams or the HR teams so we want to stay focused on that um uh audience right uh third is the business has to be profitable so Beamer historically has been profitable since day one as a company although it was strongly held by the founders so we want definitely wanted uh the business to be more profitable as well um fin fin bootstrapped it mattered to us because if if if the cultures were very similar uh if the growth Evolutions were similar not a lot of venture investors at the table it would be much easier for us to even finance and make the transaction happen and uh I think be beer historically from day one had a product Le growth model we didn't want to acquire a company which has sales as the primary driver and also so the go to market was also a a big Focus area and and last uh lastly it was about customer centricity uh you know are does the customers truly love the product do they have a strong retention and is there a strong word of mouth among I think uh we we we wanted a Target that check all the boxes and I think we found couple of companies in the guide space um not just in the States but internationally we checked all these boxes targeting the ICP bootstap um goto Market uh sometimes we had to be flexible enough to extend that bootstap to say hey if they are relatively less Venture back haven't raised a lot of money but if they have raised probably a million $2 million that still is an acceptable option right so we we started off um with an option we met a company we dated we went all the all the 9 miles and the day we are able to sign the term sheet you know the marriage broke so it's just the very day um you know uh when we were able to sign so we spent like 3 months going through the diligence talking to their customer uh flew internationally and met their team met their investors their investors were also convinced everything was coming together and and it's almost a 4month effort from my side and and uh uh their side again they also have spent a lot of time uh Etc unfortunately the marriage did not happen right so that was a big shock for us because we spent so much uh time and and most importantly I think the legal bills weren't cheap as you know that itself ran up to 200k um but then I think uh you know like as folks say there is there is success in Failure uh I think then then at the at the close heels of losing someone I think we were res resilient enough to bounce back and find someone who is a better ideal match so um I think the hope is that you know m is always a probability game so in case if you don't find someone uh it doesn't mean that's the end of the world so you quickly bounce back and find someone else um and we found an idea match but I think that was the interesting piece so when when when we reached out to this company called user flow uh that was isben one of the founders and a very respectable name in the plg space so he said uh if you look at the subject line you know the subject line is need an onboarding solution right it's it probably sounds very desperate uh from saying that hey we lost a deal we need any deal right now right so this this was one of our investors Scot and uh I think in 5 minutes the founder replied say thanks for your email we are 100% bootstrap and we plan to say stay so so they're like hey yes it's a great ideal match but they didn't want to um you know get into this marriage right um and then and then there's couple of events so so I think what what what I would um IDE is if you're driving uh m&a the best thing that can happen is an operator talking to another operator uh like founder talking to a founder or a CEO talking to a CEO I think that's the best momentum so I have told my investors maybe you should stay in the back seat let me see how this conversation go uh right so I reached out to ismen um again his answer was pretty much uh no I said that's fine let's let's go and meet so I had to fly down to San Francisco the very next day and I said I'm going to wait in this bar until we meet right so so I think the first half of the day he didn't turn up but in the second half of the day he turn he did turn up at least for a coffee right so I thought what is there to lose so we sat we we kept talking we kept talking I think I think around 8:30 or 9ish I think we had a deal on the table so I think the point I was trying to make is it's always best if this you know CEO to CEO conversation can happen or a Founder to founder conversation can happen um it's it's very different when when an investor is in the mode right so yeah I think second time we could have hit a you know roadblock but thankfully this time around we were were able to turn around the ship and uh just a very quick summary about user flow and I think my first conversation with as been um he's a very direct uh uh person he was a very successful founder with a company uh he built in the past called Cobalt he was very clear we have no reason to sell why you know they were uh at 4 and half million AR 50% profit growing 50% year on year 100% plg three member team and they had no reason to sell for I think that was his direct answer I have no reason to sell I don't want to waste your time I don't want to waste my time you can fly back where you came from right I said that's fine uh that's fine so we kept talking kept talking finally I think we were able to convince him and um you know see I I I think the piece I told asban is hey asban it's great that you guys build a business what are your vision for the business right and he articulated me the vision for the business and I felt there are clear gaps in his vision right because he was trying to take the product either in the support direction or other direction so I felt there are gaps in the vision that means that at some point you're going to falter and at some points you're going to sell so if you're going to sell 2 years later why not sell now right so I think there was a lot of interesting conversations and I think I was able to drive couple of these conversations well because I was on the cell side four times before as a Founder myself this time I was on the buy side so the mental model was was very interesting for me because I was on the sell side multiple times before this is the first time I was on the buy side anyway I think it's great that we are able to partner with it but it's an incredible uh uh business I think through through our Discovery we found out that they had the best uh onboarding and the guides product in the marketplace uh which which was phenomenal that was very consistent uh across all the customers that I have spoken to in terms of due diligence right uh because how could a product with just three people in a very short time frame of 4 years could get to this level of ARR without financing I think the product speaks for itself yeah I think we we spoke about uh some of this trajectory you know they they they started off in late 2019 uh they launched the product in uh early 2020 since then I think the trajectory has been pretty fantastic for them uh some very very credible uh logos I think these are these are the three member team that I was talking about Asin and Sebastian they they the founders one of them based in States the the other rest of the team is based out of Denmark um which is where some of the successful companies like gendus has come so finally we are able to get the Beamer and the userflow uh marriage together so uh it's a happy ending I would say um I think I think in our next step of the journey right uh I think the post integration probably the business drivers drive a lot of these things how do you scale how do you integrate the team how do you scale the product how do you scale the goto Market those are some of the challenges that we are going through um but pretty pretty interesting stuff so far uh I would say right U I think what we have learned through the process right um uh you know Beamer has been you know a very different product serving its own audience uh the common synergies are both companies have you know a SAS majority SAS customer based so we have about 4,000 SAS companies that we serve globally between between both the products historically very product Leed very customer focused teams and run by a very very small teams right um I think m& is a game of probability uh you know uh as as I mentioned about the first time we almost came close and we were in a room the day of signing when when the other Founders decided to walk away right all due respect to them they have their own uh reasons but it was also an emotional turmoil for the you know for us for the investors having spent so much time so it's a g of probabilities you got to live with it um I think the main thing that that uh kind of worked in our favor for the second time is when you keep asking these questions to to The Operators themselves hey what's your vision for uh uh the product where where do you see it uh 3 4 years usually when the investors come in the room their first focus is on financials they are like hey give me your you know pnl statement give me your balance sheet give me your you know how does your net retention look all of those all of those are important but I think when The Operators talk to other operators I think the emphasis should be more on hey what's your product Vision together are we serving the same customers or a different customer base how do you see the market landscape changing is there a Synergy for us to come or not come I think that debate that healthy debate should happen um between between both teams and and how do our customers benefit from is so one of the things we did during the diligence is we looked at the combined customers funny part is we had almost 15% of customers that were overlapping both the SKS so we went to all of them and had very detailed conversations hey what do you use Beamer for what do you see do you do you feel good about this marriage or how would you feel so we did a lot of that due diligence which really helped shape our thinking uh as well so that's a good exercise so I would say lead with product vision and focus I think culture PS a very important uh role especially if you have distributed teams working in uh different time zones and and how they have started so we had team teammates in um Spain Denmark Canada and Argentina Etc so the question is you know culturally are we aligned have they grown the same way have they been financially uh disciplined enough to to operate in business I think in that way there was there was a lot of synergy had we been a massive venture-backed business that acquired a bootstrapped business culturally I think it would have been bit more challenging to to have the founders stick around right um and the other thing is you know um uh go to market motion right right I think the key question is for us hey you know post close are we able to continue on the same go to market motion or should we have to start a new go to market motion right thankfully both companies have historically been uh majority on the plg side with only one of the founders doing some level of founder Le sales so it's not uh we we didn't have um uh uh you know uh um you know sales Le motion we had something like a basic sales assist that the founders were themselves able to do uh as well so in in that way the marriage came together so these were some of the uh Lessons Learned From the process what yeah sorry sorry for that cude graphic but yeah that's that's pretty much it yeah thank you so much yeah hey folks if we haven't met yet my name is Nathan ladka I launched and sold my first software company back in 2015 and went on to write a book about it which you guys made a Wall Street Journal bestseller purchasing over 30,000 and copies thank you so much for that after the book I launched this show and went went on to create founder path.com I raised a large fund to do non-dilutive deals with B2B software Founders so far we've invested in over 400 software Founders totaling $150 million here in 2024 we're doing three to four New Deals per week so if you're looking for Capital and don't want to give up Equity go sign up at founder path.com for free to get your offer

hello everyone my guest today is spencer he started his career in banking is now a three-time sas founder for beamer highbox and join cube he loves running hyperline bootstrap b2b sas companies outside of san francisco and it's been based in spain and chile and moving to boulder colorado here shortly spencer you ready to take us to the top yeah let's do it all right so beamer is your current baby what's the company doing is it a pure place sas model yes it is a pure place sas and beamer is essentially a change log and notification center uh that that mostly sas companies can use to notify their users in-app about their latest product updates and get feedback what does that mean in-app is this for like mobile applications only or just more like it is like an intercom competitor specifically for their notification function yeah typically for web apps but we have a ton of customers that also use beamer in in mobile apps as well so it can be either so this is again if people are looking like what are you replacing right now for the customers that have started adopting you what are they replacing you with or sorry they're what are they replacing with you yeah totally so basically it's a way for them to with no code required build a what's new or notification center to showcase their latest product updates so it could be like new feature announcements it could be improvements could be bug fixes uh but essentially instead of them having to develop it in-house like you may have seen uh some companies do they can just use is that what they do right now that's what i'm trying to ask is that what they do right now they do it in-house or what what tool are you replacing honestly the majority of them are just using email to announce their latest product uh update so that's obviously like super inefficient there's uh issues with you know emails not being seen the spam folder promotions folder it's not in context it's not engaging can't get feedback so most mostly we're replacing that or like blog posts as well where people host their their updates interesting okay and pricing wise give me like an average customer pays about what per month to use the tech about 100 bucks a month okay we have three different plans but the average customer is out 100 a month and how do you so what and how i mean is the company young or old when did you guys found the company super young i mean we launched it about two years ago uh so that's when we did an appsumo uh promotion uh which was kind of the first time we actually exposed to the public it started out you know totally bootstrapped as a side project that we uh developed for uh another sas company we're working on highbox um and yeah so it's just two years old so let's start there real quick so appsumo promo deal how did that pan out really well i mean i think we got it uh being used by about 500 companies uh just from that one absoluma promo which just lasts like two weeks uh so there's a really good way to get exposure get some word of mouth going it's a really it's a product that's really conducive to being product led because like intercom it's a widget that our customers will install publicly on their web apps um so it's really easy for people to discover us just by using like we work for example like we have customers like intercom hotjar drift so any user of those products will actually see beamer in action um just by using those products and and many many people discover us that way that's how we generate a lot of leads that beamer price listen on appsumo was 49 bucks if i multiply that times 500 customers you got from there that puts you know that absolute campaign about like 25 grand or something like that in total sales is that about right yeah it's about right but again you know those are lifetime deals so that was a one-time thing and we've never done any lifetime deals again well so this is what i'm getting at right so 25 grand you know they usually keep seventy percent other founders have talked about they usually keep seventy percent of the revenue you get thirty percent so you're getting really like maybe like five-ish grand basically to fuel so maybe development on beamer i mean why do the lifetime deal at all it really just it just jeopardizes your sas like the key sas metrics you can't like lifetime one lifetime sale doesn't enable you to drive any recurring revenue yeah totally i mean that was never a play for us that had anything to do with generating revenue so the whole idea behind that was generating exposure getting users getting feedback and getting beamer our widget out there installed on a lot of sites and web apps so that people could discover it and could start to grow start that viral snowball which is exactly what happened um so yeah and also like the the water the lifetime version that you give for that you can put limitations on it so like we have a watermark on there it's an extremely limited version of beemer it's nothing like like our pro or enterprise plan do you know how many of the 500 upsumo lifetimes you converted to a recurring plan uh yeah probably something like 10 percent okay 15 not not super significant i mean the vast majority of our current mrr is not from those appszoomer customers but i do think that was important that along with product hunt uh product display like those two things are what gave us for sure that initial kind of uh active user base that then people started discovering us from so so product that beamer product hunt launched 431 upvotes number five product of the day on august 4th 2017. do you remember what kind of user growth you saw that day and i think that was our earliest beta i think we had a version 2.0 that came out here on product time and that was actually even more impactful in terms of growth um so yeah i mean definitely that you know that combined with the uh the appszoomer promo was what really started things do you can you i'm trying to quantify what you saw from proct in terms of uplift can you try and quant i mean do you have a general sense of how many maybe free trials you got from product hunt altogether yeah probably around 200 something like that i mean it was like quite a long time ago i'm not really sure now but yeah i'd say around like 200 free trials from that interesting so you would recommend both those things to any sas founders kind of first month startup launch plan product on to appsumo or is that accurate if so anything else yeah absolutely i think those two things were super key for us and then uh yeah i would recommend like cold basically cold outreach to a very defined uh buyer persona so like we knew for example that we were building this for product teams and within product teams specifically product marketers so we knew that if we went and reached out to product marketers at some of the top like sas companies uh that you know if we did it in a very personalized way that we could probably get land some uh you know high profile logos to start which is really key for like validation and then for in our case since we have such a product led growth model where people could see us in those products it was like especially important so i would say those three things so what was the title of the person you called email.hotjar to get them as a logo uh i don't know if we could email them specifically but a lot of our the logos that you see on our site uh we did and it'd be product marketing but it could be anyone on the product team really could be a product manager as well and what so can you use a real exam can you name a logo where you know it was a cold outreach kind of that's how you got them i can't remember which one specifically to be honest for cold okay definitely some of the ones well i'm trying i want to walk through the steps on this so people listening can copy it so what is the message you find a product marketer how do you go on linkedin search the title product marketing well no but it's only product marketing because our tool beamer specifically is a tool that serves the product marketing role i understand okay what i'm trying to get is if people say that they want to sell to the cto and so they're going to search cto not product mark what i'm asking is what process are you using so you know it's product marketing where do you go find the product marketer at hotjar yeah so you can connect on on linkedin obviously we had some good uh success with that so find them on linkedin send them an email or just connect with the email sound like basically just saying something like hey uh you know i noticed that you're product marketer hotjar in our case what we would see is that these companies didn't have an in-house change log that they were currently using to showcase their product updates we said hey i noticed that you don't have a change log and it's you know we're an active hotjar user for example if we use the product i think that's a good in as well saying hey i use your product and so i'm familiar with the fact that you don't have a change log it's kind of hard for me to discover what's new in your product and give you feedback about those changes uh we actually just built something that could help you with that are you interested in connecting something like that they say yes then what their email in some way then same thing similar message so so let's say you get their email or they say yes is it then a demo call or like walk me through the funnel in terms of when they finally pull out their credit card yeah if it's higher profile then i would say it's a demo but uh so in these in these cold outreaches too when they're not like landing on your you know content or whatever because they're specifically looking for what you were doing uh then yeah i think a demo is definitely the best call so i would definitely recommend you know having the calendar just an easy way for them to go pick a time that works for them something automated and um yeah a call from there so between appsumo product time the model you just you know cold emails you just recommended so how many customers say do you have paying so today we have about 550 paying customers that's all in the recurring planning ignoring the appsumo one-time stuff it's completely ignoring the one-time lifetime deals okay got it that's great okay and then team today how many folks so there's just five of us so that's kind of one of our core values is being as as lean and mean as we can so yeah swat team approach all right yeah yeah so five of you guys again uh you just told us 550 customers 100 rpoo you guys have passed a half million dollar run right it sounds like then correct yeah that's right i think we're about like 650k that's great and and where do you see the majority of like your future growth coming from what's the tactic or the strategy yeah totally so in terms of like how we generate our paying customers so about 75 comes from organic so that's content marketing which we'll keep doing uh seo and then just people like seeing us like i mentioned in in other products so like as many like high profile logos that we can get where their customer bases are very similar to ir our ideal customers like intercom for example um any like sas companies that sell to other sas companies that's perfect to us uh so like trying to get in with as many of those guys as we can uh referrals so like from our watermark so getting our watermark and as many of our in-app widgets and emails that we send out as possible um even on paid plans like if we can uh and then ads is not significant like right now it represents about like five percent of the leads we generate and i i don't foresee that becoming like an important important part of our play yep yeah i mean you or when i look on ahrefs and i look at some of the organic keywords you're ranking well for beamer obviously but also release notes product changes product marketing books change log software all these are critical inbound for you totally yeah and then another part of the strategy will be adding like complimentary add-ons or products so for example we just launched an mps tool which is not it's totally separate from a change log but it solves a need that the same profile uh buyer could have so like product teams also need to understand if users are satisfied with the service overall not just for a specific change so we'll add many more complimentary features like that too so we can upsell our current client base yeah and then when i go into your page strategy i click the paid search tab on ahrefs you know i see some running ads it says change log widget easy to use in quick install gitbeamer.com you know 70 clicks a month i mean it is how much are you spending on these kind of this paid stuff per month would you say i think it's like 300 or 400 bucks a month very very little it's not a significant part of our uh of our lead generation strategy really interesting okay so so you've done this basically not basically you have boots dropped this entire thing are you guys profitable today or are you kind of operating right at breakeven you're reinvesting everything no we're extremely profitable i mean so we only spend to get that uh like 54k of mrr right now we only spend about 24k a month okay so we're super late so what do you do with the other 24 000 in profit each month you just let it pile up in the bank account yeah so i mean we're we're evaluating strategies for that yeah we may at some point wild yacht parties and sp spanish harbors totally in the med not yet but we may let's see interesting well so i guess let me let me we don't want to spend on anything that we're not confident we're going to get a high roi on so until we find those other channels we'd prefer just to yeah let that accumulate up issue dividends are shareholders yeah this is always like the challenging question because it's it's actually really an unfair question because i can say like anyone can say well why are you making money and then say isn't that doesn't that point to the fact that you don't know how to spend money to grow but the flip side is bro you're profitable that you're making money that's how you should build a business so like there's not like there's all there's both sides to the equation but you kind of obviously want to balance like can you be highly profitable and also drive additional growth somehow you know using your creative imagination on different acquisition channels totally and i think the barometer for us too is like we we three x revenue or mrr in the last year and we're still growing like 10 percent a month so sorry like 15 a month a year ago so like a year ago we were like 240k we were like 20 like we're at 20k mrr yep a year ago yep so in my mind that growth rate is totally acceptable i think it's a nice growing pretty fast but like manageable for a small team it's what we want if at some point that um has a severe downtick i think that would be a spot where we'd say hey we might need to invest in some other like growth strategies but for now we're pretty happy with that so of the five on your team how many are engineers uh two are engineers and then there's one like designer ux guy no sales rep right there's no commission structure here it's too cheap no it's like i probably spend like a little less than half of my time doing some sales but we definitely have no dedicated sales team or people with quotas or anything like that interesting what about you obviously no churn is huge what's what's monthly churn look like about two percent for us that's also super healthy what am i missing i'm like i'm hunting here for like negatives like i can't find any yet yeah i mean well that yeah i mean we we like it like for sure we were working like i mentioned before on like a product before this and we saw this business opportunity saw the traction was getting the feedback i think the key is it just it solves like a very real need and we made it super easy um to use which i think is another like thing i would emphasize for other entrepreneurs is like making your product as easy to use as possible is is really key so who are your closest competitors would you say i mean like some people will say like intercom could be a competitor because you can use it in a similar way right you could send like an intercom in-app message or pop-up to announce a new feature but the problem is that if you send a message on intercom's chat badge you know that typical icon bottom right those messages just like get ignored because people are so inundated with automated messages from bots it's hard to get user's attention in that way and then if you've seen a pop-up that's fine that will get their attention but when they close that out there's no history of those product changes anywhere they can't go to an easy spot and scroll through a feed and say hey these are all the awesome changes these guys are making for me that are making this product valuable so yeah it could be thought of it as a competitor but it's in my mind it's more of a compliment like intercoms for the live you know chat experience with your support and sales teams and beamr is more for like announcing these these product changes i secretly wish when i asked someone like you a question like that you go yeah our biggest competitor is intercom but like i use the product and it's like not a great product i never open like my users never open the thing and yeah they're bigger than us but you know what we're profitable we're bootstrapped we're based in spain we're a swat team and we're going to beat the hell out of them we're going to die instead instead you say we don't compete they're like complimentary so nice yeah yeah you know you got to be all right all right all right spencer let's wrap up with the famous five number one favorite business book so favorite business book i think would be it doesn't have to be crazy at work so it's we definitely try to apply a lot of those philosophies like don't celebrate craziness you know don't celebrate sleep deprivation try to work on what matters not busy for just you know being busy number two is there a ceo you're following or studying yeah probably because i've read that book and many other books jason fried i just like his like bootstraps you know kind of mentality remote culture and and just having worked on that for 20 years i think is pretty pretty cool number three what's your favorite online tool for building the company besides your own uh i was gonna say high bucks no that's your own anymore so give me a different one uh but no if it wasn't my own i would say intercom i mean we think it's a great way for people to like for us to like get real-time feedback and conversations with our sales and support teams so we like intercom number four how many hours of sleep to get every night probably about seven hours that's great and then situation married single kiddos single and no kids which probably explains the former answer fair enough and how old are you i'm 32 32 last question what do you wish your 20 year old self knew uh just to focus on what one niche you know understand one niche really well become an expert in it i think that's key and then probably also to buy bitcoin guys getbeamer.com helps companies with chain logs communicating to their customers what's been updated what changes what new things they can use they launch back in 2018 they're bootstrapped they do about 55 000 a month in revenue and take 24 000 a month for the bottom line highly profitable today rely on 75 organic growth the other is really seo or very little on paid less than 300 bucks per month team of five people two engineers continue to grow about two percent monthly churn or about 24 to annual as they look to continue to scale effectively and profitably spencer thanks for taking us to the top yeah i appreciate it nathan