How Beamer CEO Spencer Coon grew Beamer 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...