How Cloudcheckr CEO Aaron Newman grew Cloudcheckr to $29M revenue and 600 customers in 2021.

hello everyone my guest today is Aaron Newman he's the co-founder and CEO of a company called cloud checker the cloud management company he's here lunch for and has founded and sold three successful startups he's an acclaimed speaker and author on technology topics enterprise 2.0 and the Oracle security handbook Aaron has been awarded multiple patents and database security and social media Aaron are you ready to take it to the top absolutely all right tell us well first off there's not many people that get excited about writing a Oracle security a handbook so what what is going through your brain what what excites you about this space well I mean the Oracle security handbook was probably about 15 years ago so you know I love to find spaces brand-new spaces and and really be where you're inventing and innovating all right so that's what's excites me so this was back in what not 2003 2004 when security was a brand new and so for me that was all about kind of pioneering you know vulnerability assessment activity monitoring in the database world and and that's where you know I had two startups around database security then I had a start-up around social media when that was hot hold on Aaron take us back what were the names of the two database companies one was DB secure so that was 1998 and when I wonder that one that one got sold to a public company in Atlanta ISS okay and what year that was 2000 okay and for how much all right it was about two million dollars okay a second about four million dollars yes and what about the second one the second one was a company application security Inc raised a bunch of money they raised about 20 million dollars sold that III stayed active for about five years and then it ran for another ten years after that and that got sold to Trustwave okay which got bought by SingTel Singapore Telecom what was general size of that deal when you sold it it was about 35 million okay good so investors got out a little bit of return there for common holders and then you stayed with them for a couple years yep and then I went and did a social media listing platform so that was kind of a fast one so people were taking what was on marketing companies want to monitor what was on Twitter what was on Facebook what was on blogs and they were doing social media campaigns they wanted to measure it they wanted to measure sentiment demographics Geographics around it so we brought we bought and this is 2006 we started ingesting all that content and putting analytics on top of that so this is like a almost like a sprinkler kind of tool something like that yes absolutely but this is 2006 to 2009 very early in the space and what happened to that one and that got bought by a UK company all Tyrian I'll tear him okay but did you bootstrap that one or raised bootstrap that one right so it was funny was the year 2008 it was very hard to raise money so could not raise a dime for that one and would you would you grow that one too in terms of ARR before you decide to sell it uh it was very early right so we only ran in about two and a half years and we were our a our our was running in the kind of hundred thousand dollar range okay so small early yep yeah but we got I mean you know we got about six million dollars for it so you know was it was fairly successful I would argue based off your background that tech was pretty incredible yes I mean it was cutting-edge it was is actually interesting because we were doing we had our own data center and that was the learning lesson around why not to build your data center cuz a huge waste of time a huge suck of you know I was physically ordering hard drives in memory and they were shipping him I was driving him to the Dana Center and installing him and and by the end of it I was like this cloud thing makes sense yep so yep I bring the point upon your tech because I'll have all these CEOs calling me go you know cuz I help a lot of companies buy and sell no go Nathan you got Aaron on he only had a hundred kar and sold for six million that's like a thousand ex return I'm like Mia but he had incredible tech that wasn't a financial purchase on a revenue multiple that was an incredible tech play correct yes all right cloud checker tell us about how you got into it well so after after exiting the last one we we kind of realized this cloud really makes sense and this is 2011 so it's been about seven years and back then people looked at us and they were like I'm never putting in my data center in an Amazon cloud or a Microsoft cloud and having lived and breathed it I said you know what it's it's like the power companies right people in the 1850s people built their own power plants eventually they figured out not an efficient thing to do we're going through that steam cycle so you know we I I immediately said everything's going to the cloud everything going to the public cloud we bet big on it and we started building management platforms around it and so what is the main is first off we understand I think at a high level technically technical listeners might understand that but for someone who is a CMO at a b2b SAS company hearing you right now how should they think about what cloud checker does well think about it as your move all these tools in the data center to do everything from manage your inventory help you track costs help you make sure you're utilizing your resources well when you move it into the cloud all the tools that worked over there they don't work in the cloud because there's fundamental differences you don't have I P addresses that are round for months they're they're gone in hours so how the tool interacts with it has to be rewritten so we have to throw a lot of the old tools away and reinvent things and so we've we've written those tools that approach the cloud from a cloud friendly way to do inventory management to do security to do cost optimization and allocation yeah and then to give us a sense if someone's to sign up for you on average what are these what's the average customer paying you per month would you say assuming it's pure place s so we range anywhere from we have customers as small as 100 bucks a month to you know 50 a hundred thousand dollars a month okay so it's a pretty wide range our average price is maybe two thousand three thousand dollars a month AR mr r and and you've I believe yes you wouldn't have this on your pricing page if you didn't test it because I can tell you're a data-driven guy you have a very interesting layout on your pricing page where essentially pricing you lead with 2.5 percent of your cloud bill and at the bottom it says get started at 500 bucks per month that helped us understand why you structure pricing that way well it's designed to be like the cloud right you want to get in easily so if you have a small a small cloud deployment you know you don't want a B ton of money for if I pay a thousand I would I want a management platform that cost me you know two thousand three thousand dollars so we have to design it to scale with what you're doing yet let it grow as our need for infrastructure and all that grows so it's really designed to image or mirror what a what a cloud deployment looks like you start small and you grow and I you know previous companies we had enterprise sales cycles where it'd take a year and you finally land a million-dollar deal to sell them software um that doesn't exist anymore it does it's just as much harder now it's sign up tomorrow put it on your credit card for a couple hundred bucks a month and then grow with it and by the time a year into it our sales cycle is really that first year where they're using the product at the end of it they got a big deployment and now they have to decide whether this has been valuable or not how do you track the where and how do you track how big their cloud spend is well I mean part of a you know part of what we're doing is cloud is cost optimization and allocation so we have visibility into there oh I say into they're spent so we can tell them and and it's interesting because people wonder is a counterproductive for us we're trying to keep your bill down we're trying to help you run it efficiently but we never see a customer's actual spend go down what happens is they run things so much more efficiently in the cloud that they move more workloads in and so it may be more efficient but your your dollars spent the amount you're running in the cloud is always going up I want to try and really paint this picture so my first company heyo when we are doing 60 70 grand a month in revenue I would always look above the line above gross margin we have four or five grand in a we just call it server costs that's essentially our cloud bill yes yes got it so you would we would connect with cloud chucker you'd analyze where that five K spend is going you maybe reorg some stuff maybe it drops down to four grand but it's more efficient so we actually put more in it so now it's six grand a month and then we're paying you two point five percent of whatever that is starting at five bucks a month correct okay yeah talking about the security component I think I get the optimization component you make it run smooth or is Vladimir Putin your best friend every time he hacks you see more customers no I mean you know we try not to use Fudd you know...