Founder Interview
How DialSource Reached 121% ACV Growth and Tens of Thousands of Seats Inside Salesforce and Microsoft Dynamics (Interview with Joshua Tillman)
- Interviewee
- Joshua TillmanFounder and CEO
Company Metrics at Interview Time
Annual ACV Growth (year before the interview)
121%
Annual Gross Seat Churn (year before the interview)
13%
Team Size (at interview)
About 40
Total Funding Raised
About $7M
CAC per Account (at interview)
About $12,000
Historical Snapshot
These numbers were reported by Joshua Tillman during the interview and are a historical snapshot, not current figures. See Conquer’s current numbers.
Key Takeaways
- 01DialSource grew ACV 121% year over year in the most recently completed year
- 02Gross seat churn was 13% in the year before the interview, with net seat expansion of positive 15%
- 03At the interview, DialSource was well into the tens of thousands of seats across the high hundreds of accounts, from five-seat accounts to several thousand seats
- 04Rack rate pricing starts at $115 per seat per month, dropping to around $50 at high volumes such as 5,000 seats
- 05New accounts start with approximately 55 to 60 seats on average
- 06The team is approximately 40 people, mostly based in Sacramento with some in Austin
- 07Total funding raised is approximately $7M, with the first dollar raised around early 2015
- 08At the time, Tillman said DialSource ranked number one for sales and number two for support on the Salesforce AppExchange, and sixth overall among thousands of apps worldwide
- 09Marketing, which DialSource barely had a year and a half before the interview, drove 30% of its lead traffic at the time, with a lot of new accounts landed through conferences
- 10The Sacramento Kings, DialSource's first NBA account, had, he thought, just finished their fifth year on contract and were going into a three-year renewal
Company Metrics at Time of Interview
| Metric | Value | Source |
|---|---|---|
| Annual ACV Growth (year before the interview) | 121% | Founder interview |
| Annual Gross Seat Churn (year before the interview) | 13% | Founder interview |
| Annual Net Seat Expansion (year before the interview) | 15% | Founder interview |
| Rack Rate Pricing (at interview) | $115 per seat per month | Founder interview |
| Volume Pricing (approx. 5,000 seats) (at interview) | About $50 per seat per month | Founder interview |
| Total Seats (at interview) | Well into the tens of thousands | Founder interview |
| Total Accounts (at interview) | High hundreds | Founder interview |
| Average Starting Seats per New Account (at interview) | 55 to 60 | Founder interview |
| CAC per Account (at interview) | About $12,000 | Founder interview |
| Team Size (at interview) | About 40 | Founder interview |
| Total Funding Raised | About $7M | Founder interview |
| First Funding Year | Early 2015 | Founder interview |
| Marketing's Share of Lead Traffic (at interview) | 30% | Founder interview |
| Contract Terms (at interview) | 1 to 3 years, generally 12 months paid upfront | Founder interview |
| Salesforce AppExchange Sales Rank (at interview) | #1 | Founder interview |
| Salesforce AppExchange Support Rank (at interview) | #2 | Founder interview |
| Salesforce AppExchange Overall Rank (at interview) | #6 of thousands | Founder interview |
| Guest Age (at interview) | 36 | Founder interview |
Growth Breakdown
ACV Growth and Early Revenue
DialSource closed the most recently completed year at 121% growth in ACV compared to the prior year. Tillman noted the company was already doing low seven figures in revenue before raising any outside capital around early 2015, and has grown substantially since.
Customers and Seats
The company serves well into the tens of thousands of seats across the high hundreds of accounts. New accounts typically start with 55 to 60 seats, and land-and-expand dynamics drive significant seat growth within existing accounts, contributing to net seat expansion of 15% in the year before the interview.
Team
DialSource has approximately 40 employees, primarily based in Sacramento with a handful also in Austin. The team includes recently added customer success management, sales, marketing, and internal finance talent.
Funding
The company raised approximately $7M in total funding, with the first external capital coming around early 2015. Before that, DialSource was bootstrapped and generating millions in revenue. At the interview, Tillman said there was perhaps another round or two of funding in front of the company, and that it was chasing its next round.
Growth Strategy
Live Events and Conferences
A lot of DialSource's new accounts were landed through conferences. Marketing itself was new: the company barely had a marketing presence a year and a half before the interview, and by then that function drove 30% of its lead traffic. DialSource was a marquee sponsor of the American Association of Inside Sales Professionals (AAISP), and Tillman was due to give a keynote there the day after the interview.
Webinars
In addition to live events, DialSource began running webinars as a complementary demand generation channel, bringing in experienced SaaS marketing talent from other established organizations to sharpen messaging.
Land and Expand
DialSource's automation and analytics capabilities create a strong ROI value proposition that drives seat expansion within existing accounts. The company built a comprehensive customer success management team specifically to ensure clients continually grow into the platform, resulting in very low churn and frequent upsells.
Enterprise Security and Compliance Differentiation
Because DialSource controls its own hardware, software, and carrier network end to end, it can pass rigorous security reviews required by publicly traded and heavily regulated enterprises. Competitors relying on third-party integrations cannot match this, giving DialSource access to accounts others cannot win.
Microsoft Dynamics Expansion
DialSource diversified beyond Salesforce by launching on Microsoft Dynamics, bringing in NFL teams and completing the rollout of Madison Square Garden Holdings. Tillman said strategies like this let the company grow in size and in redundancy, which translates into the value he would accept at an exit.
Best Quotes
“We are more like a native IVR PBX inside CRM.”
“We facilitate enterprise communications inside the CRM. So we help organizations make and receive phone calls based on the data inside their CRM, and allow intelligent and dynamic routing of that inbound phone call or that outbound phone call based upon data contained within the CRM.”
“We closed last year at 121 percent growth of ACV of the year prior. As you can imagine, we're a lot bigger now than we were at that previous state.”
“A lot of it is through conferences. We didn't really even have a marketing presence just a year and a half ago. It's something that's new to our organization, which now drives 30% of our lead traffic.”
“I would say it's probably somewhere around $12,000 per account to land that account ... that is reducing.”
“The Sacramento Kings were our first NBA account. I think they just went, they just finished their fifth year on contract going into a three year renewal.”
What Happened Next
At the time of this interview, DialSource had raised about $7M in total funding and had closed the prior year with 121% growth in ACV. Joshua Tillman said the business was not yet in the right position to warrant the dollar amount he would accept for an exit, with another couple of hard years of work and perhaps another round or two of funding in front of it. These figures are a point-in-time snapshot from this recording. Visit the company profile of DialSource (now Conquer) for current numbers.
View Conquer’s current profile and metricsFull Transcript
Chapters
- 0:01Introduction and Company Overview
- 0:27What DialSource Does and How It Makes Money
- 1:00Product Explanation: Enterprise Communications in CRM
- 2:57Business Model: Seat-Based Licensing and Contract Structure
- 3:17Pricing Per Seat and Volume Discounts
- 3:51Total Seats and Account Count
- 4:25Company Origin Story and Salesforce Partnership
- 6:35Fundraising History and First External Capital
- 8:04Year-Over-Year Growth and Revenue Trajectory
- 10:08Growth Drivers: Conferences, Webinars, and Land and Expand
- 13:58CAC, Payback, and Unit Economics
- 17:39Setting the Exit Number: Competitor Comps and Market Outlook
- 18:56A Hypothetical Acquisition Offer
- 19:40Famous Five Rapid-Fire Questions
Introduction and Company Overview
Nathan Latka
00:01Hello, everyone. My guest today is Josh Tillman. He began building his company, DialSource, in 2005 while studying at the University of California Davis to seal the gap between business and consumers through analytics and automation. The engineering firm has since changed the way modern enterprises communicate earning Product of the Year honors in 2016 and 2017. He received the Sacramento Business Journal's 40 under 40 award in 2016. Josh, are you ready to take us to the top?
Joshua Tillman
00:26I am.
What DialSource Does and How It Makes Money
Nathan Latka
00:27All right, tell us about DialSource. What do you do and how do you make money?
Joshua Tillman
00:31Sure. Well, first I'd say we are a group of professional nerds. We enjoy tackling many of the largest, most complicated problems and enjoy the luxury of designing our own hardware and our own software from the ground up, allowing us to take our custom built technology and wrap it around some of the largest problems for the biggest enterprises in the world using either salesforce.com or Microsoft Dynamics as their CRM.
Product Explanation: Enterprise Communications in CRM
Nathan Latka
01:00And what does a tech actually do? I mean, is this like a CallRail or these kinds of call tracking companies?
Joshua Tillman
01:06No, it's different in the space. The best way to think about it is that we are more like a
01:12native IVR PBX inside CRM. So we have...
Nathan Latka
01:17Well, my audience won't know all those... Hey Josh, my audience won't know all those acronyms. Can you say that spelled out?
Joshua Tillman
01:23Sure. In a simple explanation, we facilitate enterprise communications inside the CRM. So we help organizations make and receive phone calls based on the data inside their CRM, and allow intelligent and dynamic routing of that inbound phone call or that outbound phone call based upon data contained within the CRM. Are they an existing contact? Do they have a revenue opportunity associated to Is there a technical case? And based on these data points, we create analytics with inside
01:55the CRM and use those data points to then automate the labor intensive processes and procedures that sales and service reps are supposed to do at the end of the conversation, often take a lot of time to do, and if not done, the most common scenario, then the data does not exist within the CRM for management to make actionable and intelligent decisions.
Nathan Latka
02:17Do you do call recording and say things like salesperson one who always beats quota brought up the word price right at the beginning of the call versus everyone else does it at the end?
Joshua Tillman
02:26Yes, do. And we can do all kinds of things like maintaining compliance on state, federal, and national levels so we can automatically identify is the lead or contact in a one party consent state versus a two party consent state, and automatically not only record the conversation, but only the right part of the conversation to maintain compliance, pump in analytics, sentiment, and other types of things into the reporting capabilities and the real time call monitoring all with inside
02:55the CRM via DialSource.
Business Model: Seat-Based Licensing and Contract Structure
Nathan Latka
02:57Okay, and business model wise, is this a kind of a pure play SaaS model or pay as you go or what?
Joshua Tillman
03:02It's typical enterprise software model. There is a seat based license and there's a telephony component. And of course the size of the contract dictates, is it a 50 user one year deal, or is it a two and a half thousand user three year deal?
Pricing Per Seat and Volume Discounts
Nathan Latka
03:17On general, what do you charge per seat per month?
Joshua Tillman
03:19The rack rate starts at a $115 per month per seat, and then drives down based on, like mentioned, the amount of seats and the term of contract.
Nathan Latka
03:28How significantly will it drive down if I'm signing up 5,000 seats? I mean, we go as low as, you know, $50 or a $100 or what?
Joshua Tillman
03:35We would probably be around that $50 mark for that size. I won't get into too many details, but we do have accounts that are sub fortune two fifty of the fortune 500 that do have seats that are into the many thousands
Nathan Latka
03:35Yep.
Joshua Tillman
03:35That do have price points as in that range.
Total Seats and Account Count
Nathan Latka
03:51And without getting into specific customers, because obviously you can't do that, what are you doing right now in terms of just total seats using DialSource?
Joshua Tillman
04:00We're well into the tens of thousands of seats on DialSource. We're into the high hundreds ish in terms of accounts, but as you can imagine, an account could be five seats, an account could be several thousand seats.
Nathan Latka
04:12Got it. So, I mean, it's fair to say you've got north of, call it, you said low 10 thousands, 20,000 seats. Those are folks that are companies that are paying you for one of their employees to be using your platform via Microsoft or via Salesforce.
Joshua Tillman
04:24That's correct.
Company Origin Story and Salesforce Partnership
Nathan Latka
04:25Okay. Give me more of backstory here. When did you launch the company?
Joshua Tillman
04:28So I started this out of an undergrad at the University of California. I was writing a research paper with a handful of friends on telecommunication technology, database, and outsourced labor. That college paper then turned into a publication in the American Computer Machinery Journal. I was then contacted by some early players at salesforce.com in the early mid 2000s, and as a handful of 20 fresh out of the University of California, we started building some prototypes and selling
04:58a cloud based CRM with built in telephony into real estate, into insurance, and other industry segments. And it was that point we were contacted by Salesforce to build our unique hardware in the programming language of Salesforce, becoming the first native communication system for Salesforce. And twelve years later, we still are the only fully fledged
05:25for sales and rank as the number one sales application on the Salesforce AppExchange, the number two support application on the Salesforce AppExchange, and the sixth ranked application of thousands worldwide as a result of that technology.
Nathan Latka
05:36Has Salesforce approached you to buy the company?
Joshua Tillman
05:39I'm not at liberty to discuss that.
Nathan Latka
05:41Why haven't you sold to Salesforce?
Joshua Tillman
05:45I don't believe that our business is in the right position to warrant the dollar amount that I would accept for an exit. I believe that we have another couple hard years of work in front of us, perhaps another round or two of funding in front of us to build the team to get to where we want to go. Part of that strategy was diversifying our technology from not just being the leader for Salesforce, but over to
06:13Microsoft Dynamics. And so we've launched many players within the NFL. We recently just finished launching all of Madison Square Garden Holdings on our Microsoft product of DialSource. And so these type of strategies allow our organization to grow in size and in redundancy, which of course translate to the value of the organization, would accept for an exit event.
Fundraising History and First External Capital
Nathan Latka
06:35So I have some follow-up questions there. Number one, how much have you raised to date total?
Joshua Tillman
06:40To date we've done about 7,000,000 in funding.
Nathan Latka
06:43Okay. And obviously, I imagine that was not all just convertible debt. You've done a priced equity round at this point?
Joshua Tillman
06:49Correct.
Nathan Latka
06:49Okay. Got it. And when when when was day one start date? I know it was in your dorm room, but what what year was that?
Joshua Tillman
06:56That would have been 2005.
Nathan Latka
06:5702/02... Okay. Wow. You've at this a while. Ten ten, eleven years. That's great. Well, more than that. Yeah. Fifteen years. No. Okay. 2005. Go ahead.
Joshua Tillman
07:04To your point, though, we were a bunch of college students looking to solve problems, and then that morphed and we started generating hundreds of thousands of dollars and into millions of dollars, but we really were a technology engineering firm first and foremost. It wasn't until just a handful of years ago that I would say we really pivoted from being top engineers to also building a sales and marketing team and a business around the technology.
Nathan Latka
07:29Sure.
Joshua Tillman
07:29Which is atypical for how technology companies build, by saying, let me go raise funds, put a model together, and then scale. We were already doing millions of dollars in revenue before a single dollar was ever raised.
Nathan Latka
07:42What year did you raise that first dollar?
Joshua Tillman
07:45It probably would have been around the early 2015 time frame.
Nathan Latka
07:50And what was trailing twelve months revenue when you do that? I'm curious how big you got bootstrapped.
Joshua Tillman
07:56We were we were doing 7 figures at that point. We were doing low seven figures.
Nathan Latka
07:59Okay. Call it $2,000,000 to $3,000,000, something like that?
Joshua Tillman
07:59Yes.
08:02A little bit more on the north on the high side of that.
Year-Over-Year Growth and Revenue Trajectory
Nathan Latka
08:04Okay, and what are you growing at now year over year? What do like to aim for?
Joshua Tillman
08:09We closed last year at 121 percent growth of ACV of the year prior. As you can imagine, we're a lot bigger now than we were at that previous state. I would like to see this quarter at about equal to last year's revenue. So we're growing quite a lot, but we are also stacking many of the largest enterprise organizations into multi year contracts into DialSource as well.
Nathan Latka
08:43Payable upfront?
Joshua Tillman
08:46Generally. So it's generally we're getting like twelve months upfront. And then as you can imagine, nobody's paying thirty six month contracts upfront in the whole. That will happen
Nathan Latka
08:46You'd be
08:56a genie if you figured that out.
Joshua Tillman
08:58Right, right. I'd like to think we would, but we're happy to do twenty four and thirty six month contracts. And in the larger deals, you know, we might take biannual payments, but it is contract paid upfront. And then there's a lot of land and expand when organizations realize moving from using outbound calling and automation analytics for sales processes, but then also using the similar type of intelligent inbound dynamic routing or service calls, and tying service to
09:26sales, as we see rapid growth in our accounts very, very regularly, more often than not.
Nathan Latka
09:33This number I think is going be aggressive, but I'm going to do it anyway. 20,000 seats. You said your price point typically starts about 115 a seat. Obviously, it goes lower with bulk deals. But on the high end, that puts you at around 2,300,000 per month if everyone was paying a 115 per seat or about 1,000,000 a month if people... Everyone was paying to $50 per seat. Is it fair to say you're somewhere in that range
09:55between 1 and 2,000,000 in MRR?
Joshua Tillman
09:55Yep.
Nathan Latka
09:55Got it. And where were... And and I guess you already told me a 121% year over year growth. So you were doing what? Like, $87.50 a month, twelve months ago? Yeah. Close. Something like that.
Joshua Tillman
10:07Not too far off.
Growth Drivers: Conferences, Webinars, and Land and Expand
Nathan Latka
10:08Okay. That's pretty good. And what's driving most of the growth? So it seems like you've really mastered land and expand. How do you get the initial land?
Joshua Tillman
10:17A lot of it is through conferences. We didn't really even have a marketing presence just a year and a half ago. It's something that's new to our organization, which now drives 30% of our lead traffic.
Nathan Latka
10:29Conferences.
Joshua Tillman
10:31Conferences.
Nathan Latka
10:31Wow.
Joshua Tillman
10:31Now we're doing webinars. We have some heavy hitters that have come from other well established SaaS organizations in our space that have joined the growing DialSource team to help us iterate faster within the messages. I'll be speaking tomorrow at the AAISP, the American Association of Inside Sales Professionals, where we happen to be a marquee sponsor, now I'm a keynote speaker there. So things like that have really helped us to drive the message out across.
11:00But one of the reasons why we do so well in the land and expand is we have a very unique ROI value proposition around this heavy automation and this heavy analytics that cannot be replicated by any other technology.
Nathan Latka
11:13Why not?
Joshua Tillman
11:15Because other technologies have integrated the telephony and a large component of that is whether they're using something like Twilio to integrate the telephony into Salesforce, they can't control ecosystem. Since we designed our own hardware and our own software and built our own carrier network, we have the ability to control the solution end to end on a per account implementation. Or should something go wrong, like we outgrow particular vendor, we can slot them out and slot somebody
11:42else in because we control the entire stack. That is not something that can be replicated by integrating external technologies together.
Nathan Latka
11:51Got it.
Joshua Tillman
11:52The other large component is around security and compliance. Because of what I just mentioned and that we control our own ecosystem, we purposefully built unique security controllers into our ecosystem so we cannot log into the client's org, we cannot see any of the client's data, And unlike an integration, we do not pull any of that data out of Salesforce and Microsoft. So when you're getting into the large enterprise organizations that are publicly traded and heavily regulated
12:18on SOX or HIPAA, this is an area that we can only hit on and none of our competitors can walk through these global security reviews, not touching, nor seeing, or having any access. And the enterprise has become a lot more savvy into the security compliance as these vulnerabilities have been in the last couple of years.
Nathan Latka
12:38Josh, with this kind of integration and this kind of security, these kind of features built in, your churn must be exceptionally low. What is your churn annually today?
Joshua Tillman
12:47Negative 15% last year.
Nathan Latka
12:48In terms of logo, what is it? Assume that you just gave me as revenue churn.
Joshua Tillman
12:52That was actually not revenue, it's seats. So I'm less concerned with logo as I am with seats as mentioned, know, I could lose one logo, that's five seats and another logo could be 2,000 seats. So I'm looking at churn as a seat basis.
Nathan Latka
13:06So that was a net seat basis then, right? What was gross?
Joshua Tillman
13:13Correct.
13:1413, negative 13.
Nathan Latka
13:15Got it. So your total additions were 27%. That's how you got to the negative 15.
Joshua Tillman
13:20Yep, yep, yep. We were signing more accounts and we were signing more seats per account than anything else.
Nathan Latka
13:25That's right. If you take your current base the year you started with, you lost 12%. However, you added 27%, which puts you at positive 15% kind of seat expansion.
Joshua Tillman
13:35Correct.
Nathan Latka
13:36Most of that came from new deals or from expansion in current accounts?
Joshua Tillman
13:40It was a combination of both, but we didn't have this in years past. One of the big reasons for that is we built an extremely comprehensive customer success management team.
Nathan Latka
13:48How many
13:49people on your team?
Joshua Tillman
13:49We're about 40 right now.
Nathan Latka
13:52Oh, wow. Okay. Is everyone based there in Sacramento?
Joshua Tillman
13:54Mostly. We have a handful also in Austin.
CAC, Payback, and Unit Economics
Nathan Latka
13:58Oh, great. Okay. I'm I'm in Austin right now. Cool. Last few economics questions. CAC, what are you spending to acquire these guys?
Joshua Tillman
14:06It depends upon the department, right? I mean, it's different if I'm bringing in an enterprise SaaS seller with ten years experience who's holding $2,000,000 a year quota versus bringing in one of the top PhD computer scientists out of the University of California without any real experience. And so we've aligned ourselves with the University of California to bring in a lot of these heavy hitters without the experience.
Nathan Latka
14:34Really Josh, just sorry, I meant with your, I meant to acquire customers, not to acquire team members.
Joshua Tillman
14:38Uh-huh, misunderstood you.
Nathan Latka
14:39That's okay.
Joshua Tillman
14:42So I would say it's probably somewhere around $12,000 per account to land that account But right that is reducing.
Nathan Latka
14:54Why do you talk about your CAC in terms per account, but ARPU and other metrics are tied to seat numbers? Like in other words, what's your CAC per seat, or do you not look at that?
Joshua Tillman
15:03We haven't been looking at that. It doesn't translate the exact same way as we were looking at for the seats. But to be honest, there are always areas of improvement. We brought on some deep talent into our internal financial departments across controllers and others who are helping us make more analytical decisions as we grow, as we're chasing our next round.
Nathan Latka
15:27Sure. What is the... When a new account joins you on average, how many seats do they start with?
Joshua Tillman
15:34Starting is probably around 55 to 60.
Nathan Latka
15:38Okay. It. So 50 people come on paying that minimum. Well, they probably don't get that cheap price of $50 per seat with only 50. So it's probably closer to a 100 or one fifteen.
Joshua Tillman
15:46Correct.
Nathan Latka
15:47Yeah. So 50 times one fifteen is $5,700 a month. You're paying $12,000 to get them. Your payback there is less than three months. That's healthy.
Joshua Tillman
15:54Correct.
Nathan Latka
15:55That works. Interesting. What do you assume lifetime... This is a dangerous question because it sounds like it could be actually infinite, which would be dangerous. But what do you assume lifetime value is on these accounts?
Joshua Tillman
16:05It's a lot. The Sacramento Kings were our first NBA account. I think they just went, they just finished their fifth year on contract going into a three year renewal. Same has happened at several subsidiaries at Vista Equity Partners and some other large ones. And so to your point, we're extremely sticky and our development roadmaps outstrip the problems our clients identify and they're constantly growing into the technology that we're standardizing as best practices, whether it be Wall
16:34Street, academia, the USCs, the Stanfords of the world that are on our technology, and sharing these best practices. And then as a result, we built these implementation and customer success management teams to make sure that our clients are continually growing into solving problems, and that causes major land and expand and very, very low churn.
Nathan Latka
16:53Yeah, well, I mean, what do you assume lifetime value is on one of these guys? Look, if I do it on a per seat basis, you mentioned you have gross seat churn about 12%, that's 1% per month. You could assume a seat stays with you for about one hundred months, times that 150 says each seat is maybe worth $11,000 to you, but that's really fishing at kind of not hard numbers there. What do you assume?
Joshua Tillman
17:13Yeah, it's a difficult one because of the age of our organization and the fact that the size of the accounts have changed dramatically over, let's call it the last thirty six, twenty four, and even twelve months for us. So the size of the account, the price per size, the and fact that they're going into multi year contracts makes it very difficult to determine what is the actual average cost of the lifetime of that account. I don't
17:37have that number off the top of my head.
Setting the Exit Number: Competitor Comps and Market Outlook
Nathan Latka
17:39Question. I asked you why haven't you sold a Salesforce, and you said you've got a few more hard years of work to hit the number that you have in your head. How have you come into whatever that number is?
Joshua Tillman
17:49I'd say it's like looking at comps and buying a house, right? I've looked at other players in our space that have raised hundreds of millions of dollars on multibillion dollar valuations.
Nathan Latka
18:01Name one or two.
Joshua Tillman
18:02So we have InsideSales.com, NewVoiceMedia, Five9, ConnectAndSell, Outreach, SalesLoft. I can continue to go on while we continue to dominate the Salesforce AppExchange, Microsoft ecosystem, and take the biggest names away from some of these players into multi year engagements. And so I believe that the market is heating up in the alignment of where CRM has been in the last ten years to help management make more informed decisions while onboarding extra work and activities for the
18:32sales and service reps as the past. And I believe the future will be technologies that should increase output for sales and service reps while increasing transparency, automation, and analytics without having them to do more work. And I believe that we are leading this charge, not because I say so, but because of what our clients are saying and where we rank, and that is a very different way to identify problems and build technology as a solution to
A Hypothetical Acquisition Offer
Joshua Tillman
18:56those problems.
Nathan Latka
18:56So Josh, let me ask this acquisition question in a different way. Are you married?
Joshua Tillman
19:01No.
Nathan Latka
19:02Oh, darn it. Are you still close with your parents?
Joshua Tillman
19:04Yes.
Nathan Latka
19:05Which one are you close with?
Joshua Tillman
19:07Both.
19:08I'll be seeing them tonight for dinner before I take off for three weeks of
Nathan Latka
19:08Perfect.
19:11Okay. This is perfect. You get an email right after this interview from from Benioff. He offers... Let's say you're doing between 1 and 2,000,000 a month right now in revenue. So let's say you're doing, know, between 10 and $24,000,000 a year. Let's say he offers you kind of a 10 x ARR. So quarter of a quarter of a billion dollars. If you tell your parents that you turned down a 0.25 of $1,000,000,000 acquisition offer tonight at
19:33dinner, do they get pissed at you?
Joshua Tillman
19:35They would only be upset if I took it.
Nathan Latka
19:37Interesting. Interesting. Josh.
Joshua Tillman
19:39Not enough.
Famous Five Rapid-Fire Questions
Nathan Latka
19:40Let's wrap up here with the famous five. Number one, what's your favorite business book?
Joshua Tillman
19:45Hard Things About Hard Things.
Nathan Latka
19:46Good. Number two, is there a CEO you're following or studying right now?
Joshua Tillman
19:50I am constantly changing that as I want to learn from the greats and from the not so greats.
20:00Most recently I've been tracking what Elon Musk has been doing and why he's been making the very, very difficult decisions that are high risk and take lots of money to do so.
Nathan Latka
20:09Like selling flamethrowers for $2 a pop.
Joshua Tillman
20:12That was an interesting one. But some of the stories previously on launching Tesla, SpaceX, etcetera.
Nathan Latka
20:18I'm kidding. I'm kidding. Alright. Number three. What's... Besides your own, what's your favorite online tool for growing the business?
Joshua Tillman
20:24You said favorite online tool?
Nathan Latka
20:25Yes, sir.
Joshua Tillman
20:26DialSource.
Nathan Latka
20:27Besides your own?
Joshua Tillman
20:30Salesforce.
Nathan Latka
20:31Alright. Number three. How many hours is...
Joshua Tillman
20:32Four.
Nathan Latka
20:33How many hours of sleep do get every night?
Joshua Tillman
20:35About four and a half.
Nathan Latka
20:37K. Four and a And you already told us you are not married. What about any kids? Any kids?
Joshua Tillman
20:41No.
Nathan Latka
20:42Okay. And how old are you?
Joshua Tillman
20:4336.
Nathan Latka
20:4436. Last question.
20:45What do you wish your 20 year old self knew?
Joshua Tillman
20:50That I didn't know anything.
Nathan Latka
20:53There you guys have it from Josh. Again, building something special here. Started as a thesis paper in the dorm room. You never think those things are actually gonna turn out to anything good. It's worked out for Josh and his buds. They launched the company back in... Let's see. It would have been back in 2005. They started reminiscing on it. Launched it, grew it to about $3,000,000 in ARR before taking a dollar of funding. They've since raised
21:13about $7,000,000 serving 20,000 seats, paying a minimum of $50 a seat. So they're doing between a million and $2,000,000 per month right now in revenue, up a 121 year over year. So about $750,000 just twelve months ago. Churn, this is gross logo churn less about 1% per month net. That's a 15% expansion in seats year over year. Spending about $12,000 on CAC, super healthy payback, looking to continue scaling with this team of 40 folks in Sacramento,
21:40helping people really understand sales calls, inbound calls, how to funnel them, where to put them based off data inside of Microsoft and Salesforce. Josh, thanks for taking us to the top.
Joshua Tillman
21:49Wonderful. Thank you for the opportunity. I thoroughly enjoy