How Cremeglobal CEO Cronan Mcnamara grew Cremeglobal to $3.5M revenue and 60 customers in 2024.

hello everyone my guest today is cronin mcnamara he his passion is in applying data and predictive models to solve problems to help people to make better decisions his vision is a world where everyone makes better decisions based on real data and expert models today he's building crem global we're going to jump into it today cronin you're ready to taste the top sure thing nathan all right so what is creme global doing if you want to follow along at home at c-r-e-m-e-global.com sure well global is a data science technology company that i founded over 10 years ago it was a spin out from trinity college in dublin and what we do as a company is we create and deploy data science models and data structures we we have a platform for deploying those on the web in a user-friendly way and we deliver those to uh big companies and government agencies all over the world from here in ireland okay and um is this specific to any industry like life sciences or no yeah yeah well our core area has been in food nutrition chemical personal care and cosmetics so all around the life sciences space so we do a lot of scientific modeling for those industry groups looking at the chemicals and nutrients and products and how that can have an impact either beneficial or potential safety issues for consumers i suppose the unique thing about crem is that we deliver all of that through a data science technology platform as well as with kind of expert services to back that up so so cronin let's seven of the ten top cosmetics companies let's just and this is gonna be horrible because we're way more sophisticated than i'm about to say but just because my audience will know it let's say the kardashian clan use you and all their makeup products what kind of what kind of data will you be giving kylie jenner about her lip gloss sure well the basics can be all about the potential safety of those products and making sure that consumers will not be exposed to any ingredients that could cause you know harmful effects even rashes or potential more long-term effects and then secondly it can be all about the benefits of those products so and when those products are used in combination with all of the other products that people use on a daily basis we have a lot of data on all of that and the benefits of the aggregate how did you get that data what are your inputs yeah good questions so we've collaborated with industry over the last 10 years or so to put together these data sets and they come from various sources some of the data is open data that we can curate from the web other data sets come from market research companies and those data sets were gathered more for marketing purposes and we've repurposed them for scientific modeling around these product formulations and then thirdly we've actually created data portals that industry have been uploading data to for the last number of years how do you incentivize that um we well the industry has got together through a trade organization that and they want this data to be available industry-wide but this is very proprietary data so we've created secure data portals where everyone can upload data in a structured way we anonymize that data and make it available in a scientific model for the industry groups to then use to make better decisions interesting okay and help me get a sense here i mean you're working with it sounds like big companies on average what's what's the company going to pay you per year per month for access to your tools yeah we generally work on an annual um fee um and it's delivered as a web service but it's more an enterprise business model in a sense in the way we do business it's a business-to-business kind of enterprise sale and that the license fees for our products can be anything from twenty thousand dollars to a hundred thousand dollars per annum for an organization just depending on which data sets they need which models of how many people etc need to access those models so what would you would you is it fair to say the average those closer to the lower end of that call at 20 30 000 bucks a year and i guess the average is around around the 40 market oh okay so okay so not not not so much there that's good so you're right in the middle and how why would someone pay you a hundred thousand a year versus twenty thousand a year is it based off like number of skus or just number of data sets or number of seats what axes do you use yeah it's not necessarily the number of seats because there may be only a small number of specialists within these organizations that need access to this type of information and also then whatever data sets so we could have us data european data south american data and different databases built uh that we curate and we've installed in those um systems for them so it just depends on the combination of models and data sets that they require okay and put this on a timeline for us when do you launch the company okay um 2005 we launched so we've been around a while that's a long time okay and have you from a capitalization perspective did you bootstrap a raise bootstrap okay still bootstrapped yeah we've been um organically funded through just customers and building up the products and services over the years customers are the best investors how many customers you have today um it's not like in the thousands it would be more in the um under 100 customers so it's actually kind of i was your model in the thousands you'd be a massive multi-billion dollar company you only need two or three customers to make this thing worth it so so you said how many do you have that's where we're trying to get to so we have in the in the order of 60 to 100 customers you know yeah and that's all you need and then and then kind of break down what your team looks like right now to service those 60 customers how many people on the team great question so we're a team a team of about 35 people all based here in dublin ireland although um 90 percent of our businesses outside of ireland but we can support that through um online support and then travel to uh meetings and conferences so it's it's quite a unique team and that we have the software engineering team which um are responsible for the engineering around all of our platform and data science cloud services and we have a data science team specifically who build out these models and and design the models and data sets that are required now we have a specialized food nutrition and chemical and toxicity team where scientists with phds and masters in those fields who really understand the main very well so those three groups collaborating together is quite a unique proposition and i think that's what our clients really value so 35 people based in dublin right now churn's critical in a sas company what's your churn look like today yeah that's a good question as well but um we're not purely sas so um about a third of our businesses sas and the rest is services and those services break down as two different things actually one we have those lot models we can license which is the sas part of the business secondly clients might say to us you know what we're not going to license that but can you run some number crunching projects for us and give us a report so that's the services part of the business and the third part is quite interesting now and that is um that the clients are asking us can you build us a new model that looks at a slightly different angle our requirement around our own business operations our own product development so the third part of our services are just the third part which is the services business is actually putting together new models and data sets for clients and then deploying them on the cloud so same question on churn right so you can still have services churn we we tend to have fairly low churn uh we have long-term kind of relationships with our clients how low i mean are we talking four percent a month one percent a month because um annually it's in the low single-digit percentages and and we could have three-year license agreements with clients so it doesn't go month by month in or like a normal sas business we tend to tend to sign up clients for annual licenses by the way there are plenty of sas companies that do annual licenses yeah now are they paying for three years all up front not necessarily yeah so it's a three-year contract they pay it each 12 months exactly yeah okay do you have meaningful pricing do you have meaningful pricing levers where you can drive real expansion revenue and if so what do you expect a year one customer to expand to in year two and we don't really have the metrics to back that up because we're not dealing with the hundreds of customers so uh they're quite unique in their requirements some will stay more or less the same for every year on year others might double year on year and then some might cut back again so of your team of 35 is there anyone dedicated to kind of customer success and upselling exactly yeah we've we've set up our business team to be um on account management um focus so um we do a lot of outreach for new business but of course um i guess the vast majority of our business comes from retaining those clients and customers that are already here yeah so sorry chronometer the question is so how many of your 35 are based on account management or customer success yeah yeah okay we have a team of about seven or eight in a purely on customer success okay and are they quota carrying on based on expansion revenue um a smaller number would be quote carrying about three people in our team at the moment are are purely based on you know um commission typed uh business mike my question my question though is are you incentivizing upsells to your to to peop to your some portion of your sales team where they're they're getting commissions on upsells not commissions on new sales but commissions on upsells yes oh you are okay great interesting very cool yes all right and then um i assume because yeah renewals are vitally important plus upsells and and cross-sells are obviously even better yeah yeah so they get they get rewarded on both considering that sales team and then considering any other marketing you're doing i mean what is your fully weighted cac to get a new 20 000 a year customer would you say ah good question did you measure that not really in in a pure sas metrics kind of way um so we don't we don't really have that well ignore sas for a second whether you're selling an e-commerce brand on amazon or any everyone has a customer acquisition cost number even a services business so so how do you think about your customer acquisition cost yeah um well we think about it in terms of the total um wage bill for the business development team our marketing and travel budget um all of that comes together and i guess out of that all of the sales get generated including all of the retaining of existing customers and and new new clients so are you willing to spend 20 grand fully weighted to get a new 20 000 your customer you're happy with the 12-month payback um i think we would get um our ca our cost of acquisition would be lower actually if we um add all of that together look at the total sales that team is doing um year on year um i think they get paid back a lot quicker than that this do you think maybe a six month payback period is actually more okay so just to be clear because i want to make sure i'm understanding you're not putting words in your mouth if you're gonna sign up an account that's worth a hundred grand a year what you're saying is you're you're totally comfortable spending fifty thousand dollars to sign that account up and having a six month payback period um when you put it like that it's it's actually not quite we wouldn't quite spend that much um on acquiring those customers so um let me think about it a little bit more carefully um so i would say we would spend it for the same hundred thousand euro client acquisition i'd say we spend more like a twenty thousand years okay yeah expense yeah okay good so you're getting paid back in like three to four months uh yeah yeah that's that's good that's good and then look we can cut and i assume by the way since you're bootstrapped you're you're profitable right yep yeah that's great congratulations thank you um and then we're investing quite heavily in this platform um to try and make it even more extensive and modular so ultimately we want to be able to create and deploy models and data sets even quicker and easier for our partners and clients and eventually with this platform which we're calling expert models um we want to be able to open that up to third-party data owners third-party developers so we can actually start to create a little ecosystem of modelers data sets all on a platform so ultimately that would be more of a kind of sas business that we're trying to grow makes perfect sense yeah what are you what are you growing at right now year over year we are growing at around 20 30 year on year at the moment okay that's healthy and then i mean you said earlier you kind of said 60 to 100 customers let's just assume that the conservative 60 60 i mean if i take 60 times that average acv you said about 40 grand that would put you guys at about 200 grand a month right now or about 2.4 million bucks in annual revenues is that about right it's a little lower yeah but yeah we're a bit above that actually yeah but you did you break well lower and above are two different things sorry your number's a little lower than our actual number so we're available got it have you broken three yet um in total revenue we have we're just about there yeah when do you so this how aggressive are you being in 2019 in terms of what your revenue goal for this year we're trying to grow that by another 30 oh wow okay exactly so get up to like four or four and a half something like that yeah that's great congratulations on that growth um very good all right let's wrap up with the famous five number one what's your favorite business book oh great um built to last that's a good one number two is there a ceo you're following are studying right now um i like to follow elon musk number three what's your favorite online tool for building the company um online tool expert models number uh four how many hours i sleep to get every night at least eight and what's your situation married single kiddos married with one one's son and he's eleven oh well he's great oh great and how old are you i'm just in my early forties okay early 40s last question what do you wish your 20 year old self knew yeah that's a good question and and i think um being a founder and a ceo of a company is a real learning curve i'm a techie and a scientist by training um i think it's more just to kind of don't put up with um nonsense from people and try to cut that out a little bit quicker out of your life because you never do it really guys if someone's bringing bad energy in your life get rid of it coming from cronin again launched creme global back in 2005 today 60 customers paying call it you know 40 50 grand per year they've broken 3 million bucks in terms of run rate growing 30 percent year over year they're bootstrapped which i love and profitable with the team of 35 in dublin low single digit revenue churn per year spending 20 000 bucks to get a new hundred thousand dollar per year account so three or four months payback period again helping cosmetics brands food companies think that things things like this understand based off data if their products are harmful or helpful to consumers all right chronium thank you for taking us to the top pleasure nathan