How Crossbeam CEO Bob Moore grew Crossbeam to $10.2M revenue and 19K customers in 2021.

quick context this was recorded March 28th and 29th so a couple weeks ago at my live event SAS open.com we had a thousand software CEOs there if you missed it we hope to see at the next one September 5th and 6th in New York City SAS open.com but for now let's jump into the recording we started progressively missing the numbers worse and worse so if you can't beat them join them and in 20 months we got to as many paying customers as it took us 8 years [Music] hey folks if we haven't met yet my name is Nathan ladka I launched and sold my first software company back in 2015 and went on to write a book about it which you guys made a Wall Street Journal bestseller purchasing over 30,000 copies thank you so much for that after the book I launched this show and went went on to create founder path.com I raised a large fund to do non-dilutive deals with B2B software Founders so far we've invested in over 400 software Founders totaling $150 million here in 2024 we're doing three to four New Deals per week so if you're looking for Capital and don't want to give up Equity go sign up at founder path.com for free to get your offer all right let's jump into the interview appreciate it uh okay thank you hey everybody um I know we're in like the part of the afternoon where it's nap time so hopefully we'll be able to keep everybody pretty entertained and engaged for this one um I love talking about this topic um currently I'm the CEO of Cross Beam uh we'll kind of get to a little bit of the Cross Beam story but that's not what most of this talk is about most of this is about my first SAS company which is a business called RJ metric which I started back in 2008 uh and just the incredible ride that we had there and how ultimately I think a series of decisions uh led to us missing out on what was probably A2 to three billion dollar market opportunity um so um first of all I just want to acknowledge right like there's there's some lights at the end of the tunnel as you look out at the market compared to say 6 months ago or 12 months ago but by and large I think something thematically that you're probably hearing over and over again today is that uh there is a bit of uh the tail end of a SAS apocalypse going on where it has just been significantly more difficult to sell to generate leads to convert to function in a Roi positive cash efficient way than was 18 months ago 24 months ago Etc um and part of the reason why I like talking about the RJ metric story is because I've kind of seen this movie before uh and there are some moments in that story that remind me a lot of this moment that many Founders are finding themselves in in this market right now so let's hop in the time machine we go back to 2008 I'm wearing cargo khaki shorts among other things uh that's me on the left my co-founder Jake Stein um he and I worked at Insight Venture Partners which is is now known as Insight Partners which is an awesome investor up in New York we were junior junior junior employees basically cold callers on the investment team and uh a side effect of being able to do that job for a few years is we just got to meet a whole lot of companies and see what kind of needs they had and we identified what we thought was a really cool idea which was let's bring this idea of business intelligence which at the time was dominated by on premise physically installed software into the cloud into this Cloud movement that was happening um and they didn't even have SAS as a popularized term yet things were called asps or application service providers I think I don't know if anybody remembers that era but we decided to quit our jobs and launch this thing that basically followed uh the Paradigm in the bottom right there it's going to do three things it's going to suck all the data out of your databases where it's really difficult to query and it's sitting in your production systems it's going to store it in this centralized data warehouse that we host and we maintain uh so that you can run analytical queries on it and then we're going to give you this awesome reporting platform on the front end where you can uh build dashboards and charts Etc uh so we stood up and we quit our jobs on a Friday in September 2008 and on Saturday Leman Brothers collapsed uh and we found ourselves out in this market where we had planed to raise Venture dollars we had come out of a venture fund we thought at least hey maybe the fund that we were working for would back us we got nothing and uh we looked at our bank accounts and we said let's attempt to bootstrap this thing and that's precisely what we did for the first several years of the business we were kind of the tortoise and the Tortoise of the hair story right like we had some Market pool but we kind of were early to the market and we iterated our way through uh just Revenue driven growth this glorious era of bootstrapping where we were able to kind of March along uh to get to our first several million dollars of ARR mainly just through uh adding another customer adding more dollars using that to hire and creating that cycle um and by 2011 uh the market started to wake up and we found that we were actually in a much cleaner place of product Market fit like the market was actually uh looking for and actively seeking out analytics tools like these and we found this really awesome sweet spot of course when the market wakes up on a category if we were the tortoise there were a bunch of hairs as well so what we saw we raised about $25 million in that you know 2011 to 2014 Range in that same era a whole universe of other players directly in our space were raising an order of magnitude larger Capital you've got at least three companies here that raised at least $100 million to do precisely what we were doing Domo in particular on the right uh was just raising as much money as they wanted uh at any given time Josh James the founder of amateur uh founded Domo and uh kind of had a blank check from a lot of VC firms so we found ourselves out in this market where there were a lot more dollars a lot more competition and while the market was blooming it wasn't blooming as fast as the dollars going into it were right um and then something else happened that ended up being even more important than all that which is Amazon web services launched this product called redshift uh Amazon redshift was the first player in the large cloud-based scalable Data Warehouse Market it was great remember I mentioned that little middle circle in our product stack where all the data got stored and we would host it for you and it's where you could run all the queries efficiently this thing was like that only no lie a hundred times better uh we had forked my Sequel and built all kinds of bells and whistles on it this was like a completely re-envisioned repl platformed way for people to analyze their data and uh it was better it was better than that chunk of our product um so it created this really interesting Paradigm Shift where the middle part of the stack died for us and a whole new market of products like red shift like snowflake like uh Google released a product called Big query Microsoft has an offering in this area came along and just changed where people physically wanted to store their data and once people rep platform their data into those data warehouses well a whole host of other companies came along that could sit right on top of those data warehouses provide the charts provide the dashboards provide the data modeling and not have to worry about all the hard stuff on the infrastructure side so meanwhile we're still doing all three we really have to solve these three big technical problems but we know our middle piece is not going to win and right under our noses we were watching this new thing emerge known as the modern data stack uh and this movement I didn't realize it at the time it was happening in analytics but it was happening everywhere it was happening in marketing and sales Tech happening in HR Tech happening in cyber security happening across all these different categories where the emergence of uh not just the cloud but also the API economy the extreme ease with which you can build interoperable products was basically taking the world into this massive unbundling cycle where you used to buy this one kind of Monolithic solution that was a sweet solution now the better move the preferred move was that you buy your software in stacks and those Stacks are interoperable with one another and what happened as a result of this movement is that we just saw our Tam get completely crushed at RJ metrics because on one side all this money is pouring in to companies that are doing exactly what we are doing which is making it really really hard to scale in an economically efficient way but on the other side nobody even wants that stuff they don't want it from us they don't want it from good data they don't want it from burst they don't want it from Domo that market kind of stinks because there's been a shift in how people buy software that we don't actually line up with so we're getting crushed in the middle here and the way I always like to talk about this is like Founders are constantly on the hunt for product Market fit product Market fit is the thing uh the buzzword that you will hear all the time and very often Founders think about this like okay the market is what the market is and I don't control it and it's kind of in one spot and then where I have power...