How ClearMetal CEO Adam Compain grew ClearMetal to $4.3M revenue and 100 customers in 2019.

you're gonna love this interview just got done editing it i'm glad i got it live for you i'll be in the comments for the next 30 minutes hanging out answering any questions you have in fact leave a comment below about data points or what you think is going to happen to the company and i will respond to every comment additionally if you're just loving the content click the thumbs up and i will go and check out your profile as well and give your videos some love as well in the meantime enjoy the interview hello everyone my guest today is adam campaign he's the founder and ceo of clear metal before clear metal he spent five years at google launching their geocommerce technology in 19 years as the executive director of send and on property started he holds five technology patents two degrees from the university of michigan and an mba from stanford all right adam you're ready to take us to the top yeah let's do it all right so what is clear metal doing what's your guys's revenue model how do you make money sure we are an enterprise sas company so pure sas revenue model uh and what we do is we're actually solving the problem uh in global supply chains where the largest retailers and brands are feeling like the amazon effect is pushing them and their supply chains to a point where those supply chains can no longer perform in terms of delivering products around the world to the customers that need them and it's not being made any easier because the data and systems and methodology used in supply chain historically is largely static and so our belief and our solution is that the winning companies are going to treat transportation like the continuously evolving system that it actually is what they need to make that happen is a technology platform and solution set like ours that helps them continuously plan for global transportation and freight needs continuously monitor as inventory is moving around the world and shipping containers on ships trains and trucks um and continuously resolve issues that inevitably come up as you're moving billions of dollars of inventory around the globe with a pretty complex logistics eco so adam who's actually paying you is it the e-commerce seller that's shipping 20 000 units of shoes in the next cargo container from you know taiwan to l.a yeah it's the big brands uh retailers suppliers and manufacturers so really it's any company and some of the largest that you'd imagine that have a raw material like a wood pulp or a rubber material or plastic or oil um all the way to finished goods like clothing apparel shoes like you mentioned that's making its way from a factory or mill overseas into a distribution center or warehouse or a retail store or an e-commerce site that you and i buy off of okay so give me a give me a sweet spot here on average what do one of these customers pay you per year to use your technology and why do they pay you that what are they getting yeah sure so typically we're looking at uh six figures and seven figure contracts typically we're looking at i'd say load of often made six figures and then um you know low seven figures per year the reason the value of the product is so high is obviously because of the value we provide what we're tapping into is the ability to make customer facing decisions so if you're a big industrial supplier producing a material that goes into i don't know unilever procter gamble's supply chain we're talking about a lot of material and value so what we help these companies do is make more intelligent decisions about how to distribute that product into a business or into a consumer's hands and that's on the order of you know multiple billions of dollars of hundreds of millions of inventory so in short not to ramble here we make better decisions we help them make better decisions for customer service purposes and actually for inventory management what i mean is lowering the amount of excess buffer stock that you have to keep on hand to make sure that your shelves and e-commerce sites are full making different more efficient transportation decisions so you can ship let's say more by an ocean-going vessel than spending money to ship by air and then you actually make your whole supply chain team a lot more productive because they're able to manage issues as inventory moves in a more efficient manner so adam would you say 300 000 a year is a fair sweet spot for you guys then um sure it's a sweet spot we have deals in that range but higher uh pretty often as well yeah okay yeah by the way everyone has obviously power economics right there's two customers that make up a lot of your thing there's also really small kind of users but i want to get in the sweet spot just because we're short on time so if let's say let's say someone is paying you 300 per year what are you pricing against like what's the what is like what's the utility metric is it is it pounds of things shipped or number of cargo shipments or dollars saved or what yeah so our pricing model is basically a um a fixed platform fee for all the services we provide across that planning uh monitoring and resolution capability and then the variable fee comes in with the volume of shipments that they have globally so if you're a company that is moving a lot more inventory than less measured by what those skus weight containers uh it depends on which category we're serving but the easiest way to think about it is amount of containers full of shipments so containers okay we're importing you know 10 000 containers a year or 100 000 containers a year that's where your price might be a little bit different in tier but there's still that base platform fee for all the underlying data science and ml and services we provide okay okay interesting and that base fee is it the same no matter how much you're shipping or do you have stages as well you can get like the less features the the middle features or all the features and there's different price points on that base as well at the moment we actually have a fully loaded product that's a standard uh tiered base rate okay so on someone paying you 300 000 per year how much of that is gonna be that fixed rate just to unlock everything um we uh so you're talking about percentage or absolute uh whatever you're comfortable sharing i'm just trying to get a sense of what's the if again if someone's paying 3000 bucks per year are you talking like 100 000 base no matter if they ship nothing or 100 million units or got it got it yeah i mean typically you know we're talking probably uh call it 50 60 percent of the fee would be affixed and the variable component is often a lesser component of that okay let me let me see if i got that right so of 300 000 spend with you guys you're saying 50 to 60 percent of that will be fixed and then the other 5 40 to 50 will be variable uh that's exactly right yep okay so this flat fee to unlock everything is variable across every customer account say again nathan that flat that flat fee that every customer pays is variable across every customer account based off the total projected volume that year no so well let me clarify what i'll share is look we have a tiered sas pricing model which is pretty typical and then the two components the larger portion of that annual subscription fee call it 50 60 is gonna be that fixed rate depending on your tier as a customer i see okay that's what i was asking in other words you don't charge every customer no matter what a hundred thousand dollars per year to unlock everything even if they ship nothing what you're doing is seeing what category they're in and then there's economic split you know 50 50 ish between the flat fee plus the you know number of cargo full car container shipped that year yeah that's basically right but just to be extra clear there is no customer we have today that does not play does not pay a fixed platform fee for all the services we provide got it okay that's helpful that's helpful okay let's get your backstory here when did you launch the company or when was the first kind of line of code written sure we uh at the turn of 2015 so call it 2015 is when we founded the company okay and when you get your first dollar of revenue uh let me think actually right about that time so we were uh kind of lightweight prototyping incorporated the company because we had our first trial customer at that point willing to pay dollars and we couldn't have been personally reliable into the corporation behind it okay wait so just to be clear you wrote the first line of code in 2015 and actually collected in your bank the first off revenue the same year for a complex piece of technology like what you guys had to build to make this work uh it's correct i mean it's certainly not as complex as as it is today but yeah we were under a commercial contract with first dollars collected within the first year we wrote code yes okay that's pretty great that i mean it's great so i mean have you been able to bootstrap this then or have you guys raise capital so we raised capital in 2015 we were actually founding the company out of stanford's business and engineering schools my two co-founders um and we were bootstrapping at that point for probably nine months close to a year before raising our first round of capital we've now gone through three rounds of capital with a total investment of around 25 million or so adam that's a lot of dilution why did you have to raise so much um i honestly for what we're building i don't see it is that uh that much well everyone would say that everyone no in all seriousness why couldn't you keep being scrappy keep pulling contracts forward keep pulling annual pricing forward why'd you have to sell part of the company...