How Cirrus Insight CEO Phil Dixon grew Cirrus Insight to $7.7M revenue and 150K customers in 2018.

hello everybody my guest today is brandon bruce if his name rings a bell it's because he's been on before he is one of the founders of a tool called cirrus insights and at six foot eight he's probably one of the tallest perhaps the tallest founder to be interviewed on the top brand i believe that's true but he's an endurance athlete and world traveler and has built serious insight into a top-ranked productivity platform for gmail and outlook with 150 000 users and over 1 million dollars in monthly recurring revenue brandon are you ready to take us to the top let's do it nathan great to be back with you you bet yeah so last time you were on my gosh i want to say that was 12 to 18 months ago and you were doing at that point you told me about 640 in monthly crank revenue so that's up huh yeah yeah so we're up over a million now which is a great milestone uh for the company and got to be on the ink list uh last it's been an exciting i think the trials enablement space and we're hoping to you know be a driver in that space so during dreamforce salesforce's big conference this year we acquired a small company in sweden called attach that we're really excited about because we had started using it internally and really liked it so it basically enables you to do document management and attachment tracking but the coolest kind of whiz-bang feature of the whole thing is i can send you a slide deck right by a link and then i can watch you view the slide deck in real time and that's just plain cool it's neat to be able to see are your prospects viewing the slide deck at all and if they are what pages are they looking at when do they abandon do they even make it to the pricing slide or some other important slide that you have in there so we were kind of captivated by it and we were you know thrilled to welcome them aboard and join them to our team we'll chat more about attach here in a second but give us some more updates on the business so last time we spoke you were i think you told me each customer's paying about six bucks a month is that still the case or have you driven up the arpu a bit yeah it's got it's up a bit from there should be a higher above eight now as we introduce more plans more bundles so we've been trying to build out more of an all-in-one sales stack right so instead of having to go out and assemble multiple pieces and try to connect them all together and integrate them which we struggle with as a company it's like a full-time job for somebody just to make sure all your tools work together we're trying to build those tools into a core solution so that once you have a crm in place whether that's salesforce or something else then we can be that one additional tool that powers the actual selling activity so everything from prospecting at the top of the funnel so we built some integrations with inside view and full contact and others all the way down to the signing of the contract at the very end which we now use attach for with the hello sign integration and then we cover the meeting scheduling and the email tracking and so on and so forth the drip campaigns through the middle of the of the cycle so we've been focused on that and focused on kind of driving up that rpu as a result of having a more complete stack and how many customers now uh so on the cirrus insight platform it's about 150 000 like you mentioned and then we've picked up certainly additional users from several years ago we acquired assistant.2 which is the calendaring the scheduling service and then most recently attach so when you take those two in addition that puts us up to about a quarter million total users yep two now when you say 150 000 are those paying customers or those are users yeah on the cirrus insight side those are pa paid users got it so about 5 000 companies with about 150 000 total users under those companies and then for the other applications assistant 2 is a free application for gmail and attach also has a free version so most of their user bases respectively are free and are you okay so so that's helpful to understand and real quick before i ask you more questions about how you found attaching how you did that deal um have you raised any additional capital or you're still at half a million uh yeah so originally we had raised half a million from angel investors and then since that time but again this goes back probably three four years we had raised an additional uh 500 to 750 so our total raise all in has been a little over a million since the time we started six years ago but we haven't taken on any additional capital i'd say in the last three years so founding year was you said back in 2011 yeah end of 2011 so we're officially six years in uh four days from now it's crazy right i mean i think uh in many respects we sort of surprised ourselves because software moves so fast i think there's almost an anticipation for many of us that get into software that like hey we'll hit it hard and then two three years from now it will either have not worked or it will have worked really well and we will have done something there'll be some sort of merger or acquisition or some sort of liquidity event and so now we're six years in and we're like okay let's keep uh let's keep plugging away and see what the future holds yeah so so break break down this attach kind of thing for me so first thing i want to ask there's a lot of people listening right now that have companies that are sub you know 100k and monthly recurring revenue who are looking to sell to companies like you how does a ceo like you determine what companies to go out and acquire and how did you land on attach you know for us i think the keys are it's got to be complementary to the existing stack that we've built already so a tool that replicates identically some of what we've already built is probably not going to be attractive but if it fills a gap if it's a missing piece and so we had specked out and even started building how are we going to do attachment tracking and how are we going to do the e-signature at the end when someone sends out a contract and we want all that to be logged into salesforce and tracked but we knew that it was going to take us pretty long time to build it because it's a complex project and so when i looked on the market there were certainly large companies doing this which we can't acquire them we'd more be a target for them um and so we were looking for companies of that fits into that metric right where they reached a certain size they've got a really nice built out product somewhere in the range that you're talking about you know i would say companies that are in you know pre-market so maybe they're at zero all the way up to you know 100k maybe even a bit more than that but that are looking at their options i think you know if it's a company that's just super super fast growing and maybe they're on the verge of raising money or kind of charting their own path then that's probably what they're going to do and i've talked with several of them in in various industries um but if they're looking at the market saying hey we'll be better together we like what serious insight is built we see where where we can all fit together valuations are going to go up for both of us if we combine forces that's a perfect situation so when you have the tough conversation with the attached founders i mean how do you value the company i mean i usually these things they start with a rational conversation about some multiple on either top line or bottom line and then there's the emotional side which is the art and the harder part yeah right i mean there's lots of different factors that that go into it that you can either say oh yeah it's not based on that at all but to your point it's always based on that or some of it right so there's the hey here's what our mrr is but there's also here's what our cash burn is and how long we can stay in business and there's also how much have we raised in total are our investors going to get a return are they going to get their money back uh are they going to take a loss so we had a tax raised capital yeah attach had raised how much passed and so that was a consideration um that's a great question i don't have the number off the top of my head like more than a million uh no no and i think yeah and for viewers that are online right now they might be able to check you might have it in your database or they might have it some of the online but we're not talking like that we're not talking all these companies that has raised like 10 million where the investors want like 100 million or bus kind of deals oh yeah and i think honestly for a company like us that's that's lightly funded in a lot of ways bootstrap that's going to do as we did this acquisition just out of cash um then that would be a very very difficult if not impossible acquisition to do because if venture capital or pe is involved then they're going to want to protect their interests and get paid and there's almost always going to be a pretty big lawyer and cp cpa bill attached to it whereas if it's a small company then you can go in and it still took a lot of work still took a lot of due diligence a lot of lawyer time etc to do the deal but...