How Databox CEO Denis Hallai grew to $20.5M revenue and 1.6K customers in 2024.

hello everyone my guest today is peter caputa he is the ceo and founder of a company called databox the company is a monitoring company uh basically sorry it's a tool to monitor company performance data all in one spot really on any device peter are you ready to take us to the top i am all right so you emailed me this beautiful email before the show i know you listen so like let's just jump right to it what's what's revenue today and then let's go back and get more of the story uh we're doing a little over 91 000 mrr okay and what are people paying you for uh do you mean how much or well yeah so tell me more about the product and then tell me to rpoo got it um so the product allows companies to pull all their performance data in from other tools so we integrate out of the box with like 60 plus other tools and then you can also integrate data in a variety of other ways and once you get the data in there they can visualize it however they choose we make it pretty easy to drag and drop or choose templates based on the data sources that you connect so you can get up and running quickly and then you can set goals you can set alerts there's scorecards you can mod so you can get data coming to you the most important metrics and then also you can put on any device we have a very award-winning mobile device a mobile app that's on both the stores that you can download and use to monitor uh we also you can put data up on tvs as well and so what are people paying on average per month for this 140 bucks a month okay so how many customers are you at today 650. 50. okay and give me a sense of growth rate take me back a year how much are you doing in a month uh 23 000 um i'm sorry yeah they're on 23 000 mrr in at the end of may last year may 2017 scaled nicely so more than 3x that to date where's most the growth come from uh organic uh just doing a lot of organic marketing organic search against social just a lot of content marketing and so tell me about the team and how many of the team members are focused on those organic channels we have 20 people total uh the majority of the teams in product and then we have pretty much uh three people in each of sales marketing and service a little heavier on the service side a little lighter on the sales side so three people in marketing basically okay and what are some of these you mentioned kind of seo some other things what are what's the like the number one organic tactic they're using to driving new customers uh we do a lot of uh content sourcing we do a lot of roundup posts uh we have a lot of agency partners who write guest posts for us since we integrate with so many tools the topics that we can cover are pretty diverse so like one day we'll write about uh reducing your bounce rate in google analytics the next we'll talk about the new features and facebook ads that you should be taking how do you get the partner to take the time to write the guest blog post for your blog that's where a lot of people get stuck in this whole process they can't convince other people to take the time to write for them um well in the beginning it was a lot of personal relationships i built the channel program the agency partner program at hubspot and so i tapped a lot of agencies uh to do that um at this point we have a pretty refined process which would take me like 20 minutes to explain but we have people that are constantly reaching out on social we have a list of past contributors that we ask to contribute to new posts we always give a link back to them when they contribute and a lot of it is just very short stuff so we're only asking them to take like five minutes um to contribute to a post which then becomes you know a post with 50 contributions i see i see and do have you have you this is going to be very meta have you written a post on your post process no but i just reported a podcast yesterday with for for it that i think will get published next month give a shout out for that which podcast the entrepreneurs hq okay good we'll we'll link we'll link to that in the show notes that'll be good all right because i mean that's if you figure a way to scale that that's fantastic now quickly because you mentioned hubspot when did you leave hubspot uh 2017. so a little year and almost a half okay i mean so you were there for the ride how early were you there 2007. i was 15th employee oh yeah so you saw yeah yeah so let me ask you a question i mean yeah a lot of people would say when you go through a journey like that obviously you had equity you built some and i'm assuming a nice chunk of wealth for you for yourself it's hard for someone that just was made kind of wealthy right to then get motivated to jump in and start something new so talk to me emotionally in your brain in 2017 when you left how did you deal with the extra money and and keeping yourself balanced i always had a goal of of making money like enough money to be comfortable at least um like i literally wrote in my high school yearbook like that i wanted to make a million dollars by 30. i missed it by about 10 years but yeah and i like so and i didn't make enough from the ipo myself to like retire yeah so i needed to do something um i also knew i wanted to do a startup again i just love the part of the business where you're designing the strategy and figuring it out and that can still be relatively one person you know like and i can stay involved and all that whereas with hubspot you know it's thousands of employees now a lot of decisions were made and baked uh and i i didn't have that ability to continue to influence that so i knew i wanted that rush quickly since i i have you and you're the guy i mean what was the number one thing that i mean what was the number one leverage point you were able to execute in terms of growing the value-added reseller program at hubspot that's what you owned right yep um the agencies in like you know a decade ago to like five years ago really struggled marketing agencies really struggled with cash flow because most of their business was projects um web design projects short-term seo engagements etc and so what we did is we figured out that we could teach them to sell a set of services that they deliver on an ongoing basis under a retainer agreement and allowed them to improve their cash flow and that's really what you know attracted a lot of agencies to the program uh and allowed us to really help a lot of them grow from like guys on the dining room table to multi-million dollar agencies yeah because you really helped them with their whole business right you put together here's a template contract to use this yeah yeah we did everything from like here's what you should sell and how you should price it to here's exactly the scripts that you should use and your sales calls and the questions you should ask and and how to deliver it of course and yeah we did a lot of that stuff yep that's great okay so fast forwarding again back to data box now so was 2017 year one yeah uh no the company was founded actually in uh 20 late 2014 2015 early 2015. um they raised 3.8 million um a ceo another ceo joined about that time they were trying to sell to the enterprise that didn't work um you know the ceo actually went back to the investors to take your money back i don't know if we can make this work but the founder who's the third time around um basically took you know basically said no we're not doing that they pivoted more towards a self-service model away from enterprise and started started basically marketing to the smb um and that's around the time when we met well okay so what happened there did you buy the whole company and keep that one found or what'd you do no no we kept the whole team that was that remain that the previous founder had gotten rid of uh the go-to market team basically um parted ways to the with the go to market team which is all in the us but the majority of the product and customer support team which was in slovenia um was retained and so i joined you know it was like 12 people on the team um and they were all they're all amazing stall still with but are you i mean if i look to the cap table is it very clear that you're like a co-founder twenty thirty percent like did you get a big stake in it or or i i don't understand are you like a hired ceo or i no i got a stake okay okay i was gonna say a guy like you you could pretty much do anything after hubspot you know you might as well go do something you own a big chunk of that you also think could be a really big pie yeah i probably could now that you say it i probably could have negotiated for more but i don't know it doesn't matter right as long as you're happy right because look the difference between two or three percentage points long term doesn't really matter right okay good uh so 3.8 raised today that's all i raised the one i raised 1.1 million on a convertible note when i joined a bunch of the hubspot executives put in amounts uh one of the existing investors put more in uh and then i got two other uh funds to put some money in okay so call it kind of four nine five million all in yeah four point eight yeah uh is is david cancel being too aggressive has he raised too much money uh you guys must text message you guys must text message about this sitting on it uh yeah i've gone the opposite way right um although you know he's got an amazing traction with that viral and freemium model so i have no idea i don't know i don't know how his metrics so i don't know that's fine you guys stay in touch the eggs help spotters stay in touch a lot of yeah a lot of us do yep yeah a bunch of the excellent fighters invested in data box so keep in touch and you know hang out with them once in a while i see cancel quite a bit uh we you know we go over there once in a while are you in boston yeah yeah we're based in cambridge yep got it very cool uh let's talk about churn real quick so walk me through your churn what's it today and how do you manage it turns too high from where i want it to be it's uh uh four to five percent this month it's a little right right below four percent on the uh customer turn number our revenue churn number hovers between two and three percent okay monthly monthly yes okay and that 2.5 revenue turn is that net or gross uh walk me through what you mean by that so do you include expansion revenue back on that i do i'm including the expansion so that's net yeah so you lose i'm gonna make this up you lose five percent but you gain you know 2.5 percent back so yeah yes okay good two four uh net revenue turn good and and walk me through i mean is expansion revenue like a critical growth driver for you right now or is it really just get more subs in the door um no it's still more of a get more subs in the door um approach i think that's where we're getting the major that is that is where we're getting the majority of our revenue we have a pricing model that scales with usage and so a lot and we have a free version it's pretty generous a lot of people start with the free version um they kind of continue testing and building out with their dashboards on the platform and they might hit a limit and they'll upgrade to the basic and then maybe a few months later they'll upgrade to our plus plan or something like that so and then we also with agencies i have expansion where they're adding new clients uh to to the platform got it walk me through okay so so that's helpful to understand uh with that churn number in mind what do you assume kind of lifetime value is and how do you keep yourself honest about that number because it can get crazy quick yeah the um so based on that cure number and my asp lifetime value right around like a little bit lower than 4k yeah and you gave me the math on this i think you're taking 140 bucks a month times your gross margin of 70 by the way why is your gross margin so low i mean most sas companies like 85 86 where's your why do you have more costs there um i added all of my um support costs in there because because we don't charge for any services right now at some point we will i just hired a director of customer success so starting to shift a little more focus there but but i included all my i have basically three or four heads there that makes sense that's good okay so that's an aggressive gross margin in terms of being very conservative which is good so 140 bucks asp divided by 2.5 monthly churn gives you kind of lifetime value in terms of dollars and you multiply times 0.7 gross margin to get about 3 900 bucks in ltv that's right and what do you what's your cac right now it's pretty low so it's basically just uh my marketing team of three people we don't sp we don't spend anything on paid uh my biggest expense was a thousand bucks on t-shirts so um yeah so our cac i have around 315 bucks and 12 bucks um per customer we're adding about 80 to 100 customers a month and payback period is what two three months it looks like yeah it's quick right two and a half yeah yeah so are you generally getting more aggressive with that or less aggressive i'm kind of status quo right now um you know we raised a bit of money there was a little bit money left over from the previous round but i'm actually shooting for cash flow break even here in q3 oh great um and so i'm i'm not trying i'm not accelerating too much it's kind of i want to get my i got my marketing processes in place i got most of my sales process in place now we're getting more of our customer success processes in place and then um i'm hoping i can reduce that that customer return number further uh and raise a raise a large round yeah it's gonna say it sounds like you're you're building more leverage for yourself get to profitability and then go raise so that no one can have you by the balls right exactly yeah very good said very eloquently right by yours less solutive yeah now let me ask you a question if you had the option to raise debt capital let's say you want to raise three million bucks versus you know three million in equity i mean have you considered debt capital before i haven't i'm not the best on the financial side of stuff um i don't know what the benefit to that would be it's just non-dilutive basically right it's dead but no personal damage literally again alone um i had we hadn't thought about it at this point my ambition is to build a like similar hubspot build a very big business in the smb market uh i'll keep i'm purposely keeping my cac low for that reason my price low for that reason who the hell wakes up and says i want to build a huge business and the highest churn cohort of business as possible it's just you're sitting you're signing up for hell no i'm passionate about it like that's my roots i got uncles that run small businesses what's that what do they do you know plumbing construction you know automotive like a lot of consumer stuff i got an uncle that sells medical equipment i just i i'm passionate about that i love working with smbs they don't there's no there's no bureaucracy um you know it's dollars and cents uh and like i i started my first business you know a few years out of college and you know worked with a lot of smbs helping them do their marketing and uh so i was just passionate about it i like it i hate the bureaucracy of big companies and you know kissing is that is that what made you kind of pop out of hubspot it was too big at that point yeah i think part yeah part of it yeah all right very good let's wrap up here uh with the uh with the famous five peter number one what's your favorite business book my favorite business book probably uh baseline selling by dave carlin baseline actually real quick before i go to number two people always ask me nathan why do ceos come on your show and like they're so cool sharing numbers and stuff and i go you know what honestly i don't know sometimes you're a guy you listen to this show right yeah yeah cause you don't you email me ahead of time tell me the psychology why does a guy like you come on the show and you're totally cool being so transparent uh i why not like i've learned a lot from other people being transparent um i'm proud of what the team has done so far there's no reason to hide it i don't see any reason that keeping it secret i've always found that the more i share the the more people care about what i'm doing yeah i didn't mean to make that rhyme but it did peter the answer i wanted to hear was that i'm very charming i beat the hell out of people they have to give it to me but you gave me none of that you gave me none of that well i listened to some of your things i can't believe people come on to this call like expecting to avoid uh telling you like their chair number that's like what i do yeah i'm like you're an idiot for not managing your time anytime you're gonna commit 30 minutes to something you should research what you're getting into right yeah all right peter number number two who's your ceo you're following or studying right now uh i i enjoy what cancel is doing since you mentioned him i think uh he's uh he's built an impressive product organization and he's slapped on a marketing uh organization that's getting the message out um so i think what he's doing there i i owe a debt of gratitude to brian halligan um i learned even though i gave him a lot of crap while i was there and uh he wasn't always easy on me i learned a whole hell of a lot of things and now that i'm in his more in his shoes as a ceo like i really appreciate what i learned there three what's your favorite online tool for building your business online tool for building my business uh we couldn't do without asana the project management tool um i'm big fan of being transparent up and down the organization uh and even external as we talk as we just talked about and so asana gives us the abilities for everybody the newest employee me any of the managers to see what's going on in the organization and and be aware of vendor dependencies and and all that number four how many hours are slippery getting every night i am a solid eight to nine hour sleeper that's great i love that in my sleep yeah which the only thing that really cuts into it is if i get hooked on a netflix show at like nine o'clock and i can't stop watching what's the last one you got hooked on uh black lightning right now yeah all right and what's your situation married single you have kids i am married uh 13 years now i believe congrats right 10 year old 10 year old boy all right how are you 41 41 last question peter what do you wish your 20 year old self knew uh sas economics i started a sas business back then and like there wasn't really a word sass it meant you know being sassy yeah so yeah no i wish i understood the fundamentals and the dynamics of it and and the importance of focus on processes and efficiency and and just the levers that the drive grows guys there you have it from peter grew the value out of reseller program at hubspot now joined data box which helps you pull all your data to one place you can track performance and get insights all in real time right now doing about 91 000 bucks a month in revenue that's up from 23.4 uh k per month and uh sorry 23 400 bucks per month in 2017 about a year ago so healthy growth rate there they've raised about 5 million bucks really 1.1 though on kind of the new product after the the changes in the organization serving 650 customers paying 140 bucks a month four percent gross customer return per month 2.5 net revenue churn monthly with his team of 20 people based up there in boston peter thank you for taking us to the top no that was fun thanks nathan