How Blackthorn.io CEO Chris Federspiel grew Blackthorn.io to $20M revenue and 600 customers in 2026.

hi everybody I always like to better understand who it is that's talking to see if it'll be of interest to me you know are they at 500k or they are error they had a billion whatever so I'm going to start with our obligatory up into the right graph so we're at about 14 million ARR now I've been doing this for seven and a half years we've got 105 staff and we're a little unique we're in 25 States and 15 countries we've been remote since we started we have a big well I guess it's all relative 18 million debt facility 14 of which we've drawn so far but we have no board it's just me we have no VC and we plan to be Break Even well 23 is not it's the end of 2022 it's our fiscal 23 so soon so over the next 20 minutes I want to cover product Market fit and then once you have that going a bit wider and then growing your ACV based upon this so uh we're a pretty open company so I'm going to have a lot of pretty open metrics during this I hope find that interesting so the first thing is finding focus and how we went about this so we sell apps on the salesforce.com app Exchange in the payments and events uh Realm and we initially thought okay we're selling infrastructure it's payments and events anybody will buy this thing well what we did is over time we looked at all the leads that were coming in and we saw most of them were from higher ed and non-profit at the time we had no go to market and I thought go to market was like this baloney term but it's a real thing for sales and marketing teams to really focus on so what we did was that we flipped it over and we ended up focusing on higher ed and non-profit so with Salesforce I asked hey you know what are your metrics on higher ed and nonprofit you can see some of them are quite small but a lot of them are quite big so we didn't want to sell two three four five k subscriptions we wanted to do 50k 100K plus space subscription so we had to go up market and find out where these different customers were same thing with nonprofit it turns out a lot of nonprofits have really a lot of money and they have very sophisticated requirements you can't just sell something really basic and they really need a lot of time so there's a lot of business there and nonprofits which I never really understood and it turned out being uh quite lucrative so in order to figure out what it is that we wanted to do we started with two products to do payments and events on the Salesforce platform we ended up building nine uh products which I really don't advise you to do and over four years from about mid 2015 till early 2019 I just one by one made products and killed them and we initially had a form Builder which we call Blackthorne documents which had a lot of competition from Conga and draw Loop and it turns out that this didn't work we had a big customer portal where if you're familiar with Google App Maker before they killed it it was a multi-tenant data normalizing portal where you could build stuff like uh contextual declarative this is too many words and no one understood what the heck we were doing and it wasn't solving any problems then there was our billing app where Salesforce had steel brick which had invoice it or invoice it and then that thing got really popular stripe release strike billing and we're like okay we need to kill this thing and then we were going to do an e-commerce app in Salesforce book Cloud craze so you know all these things didn't work so what we did is we wound it down so we initially were funding a lot of the business from Professional Services you can see over the first few years we were doing about a million a year of proserve that was paying for about 10 of us to work there and we had a few apps that we later killed so a lot of our payments customers were non-profits they said hey give us a donations app this thing doesn't work for us we built it and and uh unlike Field of Dreams uh they they came but they didn't come because no one wanted to pay for this thing so if you have to have a a go to market Cadence where you're selling a 3K product you can't scale your company so we killed our donations app we killed our billing app our document link our Connect app and then we focused just on events and payments and some of our Revenue comes from our stripe Revenue share which I'll talk about so this is our org chart the reason I'm giving you some of this information is because there's a lot of things that I hate doing in the business I really don't like selling and marketing and accounting and uh Cs and I I don't really like doing any of these things so I I really like doing product and Engineering so what I did is I changed our org around and I have just two people that report to me which is going to be a third once we find our CTO so if you know someone we're hiring but it's just going to be our CEO our director of product and our CTO and the reason I wanted to do this is because I don't really like managing people I really like working with product so I took two devs that have been there for a long time and I said we're going to make some new stuff so they form like a little r d team with me and we're bringing new stuff to Market which is what I really enjoy if any of you have been on your path for seven eight nine years it gets kind of boring so if you can change it up or at least it did for me if you could change it up or go back to what you wanted to do like that's been very rewarding for me so after we found our product Market fit with nonprofits higher ed and payments and events we then said how can we take this thing a bit further so I surveyed some customers that I thought were of interest to us and it was like 40 or 50 that I thought were our Target and I said you know what is it that you need and one of them uh that was of Interest was a developer I knew who made this app called pcify he said let's partner and I said you know why don't we just buy you guys they were 130k ARR we agreed on 850k purchase price we did a down payment we paid over two and a half years I think we still have a few more payments left there he went off on his merry way he's like I hate Salesforce I never want to do this but you can have our app that's great and uh he was selling his app for like his biggest customer 6K the first deal we did we didn't change the product at all we just sold it for 60k actually because he just Founders don't know how to do pricing and I'll get into that so that ended up being pretty good but then all of our hired and non-customer non-profit customers they wanted to send SMS so I looked on the app and change and I thought who can we buy because we don't need to actually build this thing we can bolt it on where one of the benefits of all being on Salesforce is that stuff kind of all works together it just doesn't exactly work that way but sometimes you get lucky so I tried some of the apps that looked appealing and one of them was texty and all of our customers wanted the app so instead of building we didn't need to do the integration works I went went for it this was another single developer uh company uh so I reached out to Clint and he wanted to sell and this really helped us with our nrr so they were at 550k error I said hey you know what do you guys want to sell this thing for they said 6X and I said okay that sounds fair so it ended up being like three and a quarter a million and so we did 1.2 million down payment we didn't have the money to do this so we actually funded it through debt uh the other two million were to be paid over 24 months which we paid over our own uh cash flow and they were going to be incrementing payments so they started small and then they grew with the size of our company and they agreed with that they ended up taking a senior position and when we got a debt facility they wanted to pay the whole thing off so that was a little twist of events um but we actually were able to buy this through debt without dilution so uh something else that happened with product Market fit is just to be weary of Partnerships so we tried to do a lot we tried to integrate our payments app with two other app exchange apps and that took a lot of time and resulted in no Revenue a lot of payment gateways reach out to us but none of them were going to bring us any business they just wanted to integrate us to say hey we're on Salesforce but they weren't going to bring us anything so we didn't do them a lot of events applications they they have there's so many things you can do with events they all want to integrate none of them wanted to bring us business so we ended up not doing any of those and then a lot of people they all want to have contracts and conversations and Technical Integrations and it never became anything so the original thesis was to make a payment app on the Salesforce app exchange that could integrate with stripe at the time no one integrated with stripe now just everybody knows stripe but we said hey why don't we have a revenue share and...