Crossbeam Revenue, Valuation & Funding (2021)

just got done editing this interview you guys are gonna love it before i do that though i want you to know that i'm going to be in the comments for the next 30 minutes or so answering your questions if there's additional questions you want me to ask the ceo next time i interview them leave them below or if you're just loving the data points i get ceos to share click the thumbs up button below that's your way of telling me you're loving this stuff and i'll get you more of it additionally again i'll be in the comments answering any questions you have all right for 30 minutes enjoy the interview hello everyone my guest today is bob moore he's a ceo and co-founder of crossbeam a collaborative data platform that helps companies build more valuable partnerships he previously co-founded rj metrics which was acquired by magento and stitch data which was acquired by talent bob you ready to take us to the top yeah great to be here yeah okay so i want to have you on after i saw a linkedin post where you did a great post tomorrow on rj metrics now you came on the show again i want to say it was two or three years ago talking about rj metrics so for people that missed that episode just give us the quick overview what did that company do yeah so we were a data analytics platform that mostly sold into e-commerce companies so pretty much anybody who sells anything on the internet could have been our customer and we helped them do analytics on their transaction data so they could know things like customer lifetime value study cohort analysis and basically help find more customers like their existing most valuable customers okay and what year did you launch that that was 2008 uh the day lehman brothers collapsed we launched that company that's a heck of a time to launch yeah it was a ride you weren't ex lehman you lost your lehman job and said i'm going to rj metrics that wasn't your case right no i was uh my co-founder and i were in finance in new york we worked over at uh insight venture partners the veteran capital firm but uh the lima thing was a very unfortunate coincidence yeah all right so the reason i won't have you on is again you did a great post-mortem on this which ties into your new current company cross-beam related to kind of being a true platform versus just like you're not really a platform but you use the word market your platform in your marketing so talk to us what happened with rj you launched the company what happened over time yeah so we when we started that company you know sas was kind of in its infancy and the model at that time was very much around building these big monolithic platforms so you know you want to build something that will be a one-stop shop where the end user doesn't have to worry about all the uh the op stuff going on in the background you just kind of click a few buttons you get the value out and you move on and for analytics that's actually a lot of pieces so rj metrics to make it work we had to build a huge data pipeline infrastructure where we could extract data from all the places that people's data might live like their shopping carts and their advertising platforms and their backend databases then we also had to have a place to put that data so we had to build a data warehouse that would house all that data when we pulled it out that could live on our infrastructure that we could worry about scaling and making sure the queries were fast and then we had to build all the stuff you think about when you think of analytics which is the dashboards and all of the components that allow you to make custom reports and have alerts and things like that so it was kind of this three-part stack and it worked great in certain industries particularly in e-commerce but as the market evolved and because we were a company that was bootstrapped at first and around for for a pretty long time we kind of got almost lapped on the technology side in that there were pieces of that stack where entirely new generations of technology came out that actually broke the stack apart and made the best practice completely different from an implementation standpoint and probably the biggest thing in that world was this thing called amazon redshift which is a data warehousing platform that makes it really easy to quickly and scalably store large amounts of data in the cloud um redshift and later google bigquery and companies like snowflake innovated on this model and basically if you think about that data warehouse as being like in the middle of the stack what rj metrics was it broke our stack right in half because no one wanted to use our little piece of a data warehouse that we built for analytics they wanted to have their data in their redshift cloud in aws or in their their gcp cloud um you didn't build those integrations yeah so what we ended up doing um is really kind of uh hunkering down and what we watched happen was we really just started selling just to the markets where they didn't have as much as a of an investment in owning that stack themselves and it took us from a world where we were trying to sell to every company that sold anything on the internet down down down down down down to like specialty retail by the time uh you know we ended up selling the company and look that's a big vertical uh but you know it was not a multi-billion dollar outcome so to give people context what year did you sell rj metrics to magento 2016 that deal happened okay what month do you remember june 2016. okay so guys to give you context episode 233 of the show robert or bob came on this was february bob of 2016. this is way back in the day so yeah and you know i probably wasn't talking about any of this stuff uh no you weren't but i wanna i think perspective is important to understand history right so when you came on the show then you had shared that you had about um 11 oh sorry 400 customers 800 a month average acv had just passed about 4 million bucks in arr about 100 people all that sounded about right 22 million raised yeah i think we were um the arr was a couple million bucks higher by the time we sold it but yeah that's that's kind of the ballpark okay so you you so two things are happening here you're exiting to june in 2016 and there's another thing called stitch that comes off this so i want to get to stitch in a second but wrap up the magenta story was it public what what the sale price was uh it was not public now okay so it's private but you had raised 24 million to a date correct yeah yeah okay and doing somewhere between four and 10 million are at that point yeah yeah yeah so it was i would say uh a classic like base hit uh didn't knock it out of the park but we were we were happy with the outcome yeah not not you don't own a private jet but uh you're you're not also worried about where you're getting food from tonight yes there you go very good all right stitch what what is it how did it kind of spin out yeah so if you think about that stack i was talking about before so we had the data pipelines we had the data warehouse and then we had the cool charts and graphs when the data warehousing industry shifted what we had were kind of like the two other ends of the thing and one of them was this really cool data pipeline infrastructure that if you think about what data pipelines are at their core it's really just a way to get data out of certain systems and placed into other locations in a way that scales where the end customer doesn't have to worry about you know rewriting a script every time somebody's api changes we built a system that allowed us to support that kind of data connectivity for dozens and dozens and dozens of sas tools and when we sold to magento they weren't particularly interested in getting data from dozens and dozens of sass tools nearly as much as they were about getting data from magento um you know we became magento business intelligence there and really focused in on helping magento customers get better analytics out of um out of their e-commerce data so we were we had this leftover piece of technology that was the data pipeline stuff should people think about that like like a version of mulesoft or zapier or yeah it's a great i mean uh the fact that talend was the acquirer is is a really great kind of proxy for that which is kind of in that data integrations universe so making the plumbing that allows all of your cloud connected systems and uh on-premise systems to talk to each other to have data parity be correct and to help your analytics have data flowing in the right places at the right time uh so if you're a good example too is like if you're using a tool like looker as a business intelligence platform the question is how did the data get to looker because looker doesn't actually you know go out and you know manage hundreds and hundreds of little scripts that run and pull data out of all your little uh services and locations that's the kind of thing that an etl tool will do and that's extract transform load and that's what stitch is stitch is this kind of core etl um so yeah so we really we had this leftover thing from rj metrics and we were able to negotiate in the magento deal that we retained ownership of it so we actually just took that uh rebranded it as stitch data jake took over as ceo while i was at magento for the earn out and uh basically built this business up um off of this core technology and team that we had started with so did you have to give any of that so the stitch roll out you said negotiated kind of this piece your own did magento have any equity in stitch no they didn't did your early investors that put 24 million bucks into rj did any of them have equity in stitch yeah they did so you could almost think of it as like you know everybody owned that i everybody that was in the cap table uh for rj had had kind of a stake in stitch because it was effectively you know a mini rj that was kind of carbon copied out so um yeah the cap table of stitch ended ended up looking a lot like the captain uh rj at the time the upsell and what did give me can you give me a general sense of what you scaled stitched to total number team i think you stayed bootstrapped right uh yeah we didn't put any new net new capital into the business uh when it got acquired i think the team was in the 30s um and from a like magnitude standpoint it was almost the same size that rj metrics was when we sold it so 28 months we grew stitch up to about what it took eight years to get to get rj so again somewhere between four and ten million bucks in ar yeah yeah okay interesting and then talon 2018 they did publish this was kind of a 60 million dollar cash deal correct yep that is correct yeah yeah okay good so then after you've learned all this platform ecosystem how does stuff get in the look or how is it not you got a text message when looker sold to google for 2.6 billion dollars what was the text message yeah uh uh jake said uh uh i forget who said what but one of us texts the other like hey looker just got bought for two 2.6 billion and the consensus was basically like uh we up yeah they they won uh hands down um with with that number yeah and that was jake that was obviously a co-founder at rj yeah stitch sends you that june 6th at 10 22 a.m and you're going now we messed up so so you've learned all this now you've launched crossbeam right so are how you launched crosstalk in 2018 you raised i think 12 15 million total mainly from first mark what are you building a cross beam that rj didn't have yeah so crossbeam really is a platform to help companies build a go-to-market layer on top of these technology partner ecosystems that they have so um you know what rj didn't really have was an ability to hook into other platforms in a way where it helped create value that flowed in both directions rj was almost like where your data went to die like we pulled data in from all these systems and we analyzed it but the outputs of our system didn't really go anywhere you just kind of came to rj and consumed what rj created in the modern sas economy that is kind of a very antiquated way to look at things stitch on the other hand is almost the exact opposite right it's all ecosystem no glory stitch pulls data in from one sas tool and pushes it out to another sas tool and it's just kind of like the plumbing in between and ironically we ended up building you know a lot more value at a much more rapid clip uh at stitch and it's because the maturity of the api economy and all the interoperability of all these sas platforms has created basically a new channel a new growth channel for sas businesses which is selling through and building market through your partners and all the different companies that your technology integrates with that you help make their products more valuable and they help make your products more valuable through integrations uh and through you know being able to basically play nicely with the data that uh you create and with uh the people that you work with so uh the question that was always at hand for us was how do you actually scale that um you can say a lot of really good things about partnerships and how companies work together but how do you actually point back and say 36 of my revenue last quarter was driven by my partner ecosystem how do you make sure that you're turning these relationships into new leads you're accelerating opportunities you're making your existing customers more sticky and making those accounts grow what crossbeam is doing is unlocking the data layer that can allow companies to do that you can almost think of us as like an escrow service for data where if you want to answer questions like how many customers do we have in common and who are they or are my sales reps currently selling to any of the same companies that your sales reps are selling to that's a really hard set of questions to answer in the past without over sharing data and over sharing data is not something that companies are very interested in doing right now uh nor should they be what crossbeam allows you to do is we are we're kind of like switzerland we sit in between two companies that are partnered both sides connect their data and they can actually analyze the combined data set to find these overlaps to find these opportunities to collaborate while keeping all the rest of their data private and secure very interesting that just unlocks all these new motions so follow up question on that first but scale wise today i mean are you talking like you're early and like five beta customers enterprise or you're at like 5 000 people using a freemium model yeah somewhere in the middle so we've got over 100 companies that are like fully onboarded on the platform hey they're paying a chunk of them are paying us now uh so like there's there's real revenue there um you know when we raised the series a we were pre-revenue still so that was just three months ago um but uh we've got a we've got a really solid quarter on converted customers and we're kind of like firing up the revenue engines now but it's it's still early days yeah yeah i mean do you think what do we have we have like 10 days left in 2019 yeah what did you guys set a revenue target for this year i'm trying to get a sense of how fast you go from zero to a million ar yeah i so if we hit our targets it'll be six-ish nine-ish months total will get us from zero to a million okay and i think we're based on this quarter we're pacing toward that so it'll be like april next year or something like that uh yeah that would be i mean it'd be a slam dunk but i think it's doable i think that that's like uh if things you know continue to go according to plan fair enough okay so let me let me just tell a story real quick so there's a lot of bd teams that like salesforce uh or or intuit that use their app exchanges to basically go after m a targets right if you do really well in their app store they'll buy you but those companies let's use the smart sheet into intuit example mark mader right from smartsheet doesn't want to share all this data with into it without knowing if it's actually going to happen is that a good use case intuit and smartsheet will use you to see where they overlap yeah this literally happened to me when we were selling rj to magento because we had other potential buyers and all the buyers wanted to see our full customer list before they gave us a term sheet but they don't care about the whole customer list they just want to know about the ones that overlap with their customers so that exact use case so m a corp dev due diligence even during venture investments it's a whole category of use cases um that's in the solutions part of our website um i don't love it as much as the day-to-day sales enablement stuff because it's less recurring but the value proposition is is very real yeah really okay wait so just to be clear i mean as you scale do you think you're going to build a bigger business selling into bd teams and potential aquatic companies being acquired or it's the sales it's the sales use case i think it's the go to market i think it's the whole go to market funnel so it's it's marketing sales and kind of account management customer success um there's really clear-cut recurring use cases for all of those uh that sit within our stack so i think that's really that's the that's the primary uh method of growth in the big recurring use case interesting okay um for people listening right now that wanted they you know in their seed deck they said we're a platform we're a platform because i thought it would juice their evaluation but they know deep in their hearts they're not actually a platform yet and they're going how do we actually build what we just sold how do you actually become a true platform not just one that you use in your branding yeah and i would like i would also just challenge the idea like do you want to be a true platform like bill gates has this definition of a platform that i like which is that the economic activity that gets generated as a result of you existing um in your partner ecosystem is actually greater than the economic activity that you generate for yourself like at that point in time you kind of like the fulcrum has tipped and you are in platform territory but in reality you know a platform in theory is this this fundamental layer that stuff gets built on top of what we're seeing out in the market is that the big success stories you look at companies like zoom companies like slack you know the latest ipo crop in sas i would argue that very few of them are like true platforms what they really are is super nodes inside of a really healthy ecosystem uh it's not that people are just building on top of them it's that they are building on top of people who are then building back on top of them and there's a fluidity and a bi-directionality to how that works that makes the whole platform metaphor kind of moot and kind of outdated and i think honestly vcs are getting skeptical of that like you see the platform word in a seed stage deck and i think an eyebrow gets raised yeah yeah i keep an eye out for that okay let me let me try and let me try and learn something here so let's stick with video conferencing for a second uh you would call slack a super node or sorry zoom a super node right build a healthy ecosystem can you name a platform company that you think is a platform company in the video conferencing space oh that's a great question um i honestly i i jumped to saying no and the main reason is like when you think of that bill gates definition the question is are there companies that would literally would not exist if not for having completely been built on top of uh you know uber conference or or you know you go to the big enterprise side kind of the go to meetings side of the universe and in that regard i think almost by definition the vertical of video conferencing is inherently an ecosystem-centric product because what you have is sales enablement on one side and then you have kind of communication and team collaboration on the other it's not that you build a whole collaboration suite sas product on top of a single video conferencing platform almost anybody that wants to build on a video conferencing will build on multiple of them and therefore none of them can be the platform with a capital p that they're built on top of um when i think of platforms i think of like you know amazon web services i think salesforce is a platform uh because their their app store is a true true uh there are companies that are entirely existent because the only thing they do is provide technology on top of salesforce and that those are platform powered companies on that bob let's wrap up here with the famous five number one favorite business book oh uh i really right now am actually a big crossing the chasm fan like it holds up it like it keeps coming back in my life that book will not go away it's the only one by the way it's the only one that is like in that space where you look at it and you go this little orange cover and this crossing again it is still valuable two decades later it's still true it's not fluff yeah number two is there a ceo you're following or studying oh uh i'm a huge uh elon musk fan uh i think for many many reasons but i like the idea of like you know in your second or third generation of companies like really taking that step back and saying what will my great great great great grandkids be glad i worked on um and i you know i think about that a lot uh and i think he's he's taken probably one of the most awesome approaches to that number three besides juron what's your favorite online tool for building crossbeam oh i have rejoined um uh i'm like a superhuman addict to be honest uh superhuman is big in in my day-to-day i think it's probably the tool that i spend the most time in but the the has also somehow saved me the most time uh simultaneously and that's an interesting paradox number four how many hours of sleep you get every night uh i just i have a three-month-old at home uh so it's a bad time to ask me that question uh but i still like six is kind of the gold standard for me less than that i'm not super functional so six to eight okay and you got a little okay so one kid two how many kids well that's my first uh my daughter annie she is uh yeah three months old wow okay so married a kiddo how old are you i am 36 as a couple weeks ago amazing all right take us home what do you wish your 20 year old self knew oh uh listen more um and be as intellectually honest as humanly possible uh because the things that aren't going right are the things that will probably turn into the best things you can possibly uh you know have his outputs a couple years down the road i thought you were going to say that looker would sell for 2.6 billion start looker whatever you do just just start looking well guys on that note it sounds like it did again bob moore launched 2000 2008 rjmetrics waste raised 24 million bucks eventually acquired by magento in june of 2016. they were doing somewhere between four and 10 million bucks in ar they spun out a piece of tech uh magenta didn't value called stitch boots dropped that up to about 30 people another 4 to 10 million bucks in ar acquired by talland in 2018 for 60 million through all this he learned the importance of what it means to build a healthy platform ecosystem or ecosystem around your tool and built cross beam essentially escrow service for data launched in 2018 about 15 million raised 80-ish to 100 paying customers hoping to hit a million bucks in ar by april 2020 bob thanks for taking us to the top hey thank you good round up these ceos rarely give these kinds of interviews i hit them hard i get the data and i want to do it more so if you want to get more of this stuff make sure you subscribe up here and then additionally go check out one of my other ceo 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