How Digits CEO Jeff Seibert grew to $29.9M revenue with a 94 person team in 2024.

hey folks my guess it is jeff cyber he's a serial entrepreneur and one of insider's top 100 seed vcs he's created products that are required by google twitter and box and angel invested in more than 60 startups and start on the netflix phenomenon the social dilemmas newest company digits is revolutionizing business finance jeff you're ready to take us to the top i'm ready looking forward to it nathan all right what's more fun exiting to google or starring in a netflix show oh man both for very different reasons and i'd say neither were expected um i sat down for a nice two-hour interview back in 2018 and had no idea i would be front and center in the trailer in the movie etc so what a surprise that's amazing okay you're working on digits today but we need to capture some of your backstory so let me put this in a point in time just so everyone can relate how old are you today i am 36. when did you launch your first company i launched my first company back in 2008 um so i guess when i was 23 or so and that was a tiny startup called increa we ended up raising money from dfj we ended up getting acquired by box in 2009 as the first acquisition era and levy ever made um and so that was a quick run but learned so much in that journey and and be honest with me there financial windfall for you or not really more of a good learning experience it was a learning experience except for the fact that box went on to ipo a decade later and so did you get stock we did it was an entirely stock deal and so in retrospect it panned out that's hysterical okay so it's a 100 all stock deal maybe at the price at the time not exciting but then you look back and go if you held that felt really good exactly and i not only held i still hold a lot of the shares today so i've been riding it the whole time did you do you have any interesting and interesting takeaways there you know a lot of people will look at the vc path and you've now gone through many cycles and invested on the other side if you're only optimizing to build like a happy healthy life and you want to be in sas and you want you know 10 20 million bucks many people would arg i mean i look fair enough i would argue you have a better shot at bootstrapping and building a 15 20 million dollar business than you do doing what aaron did which is dilute yourself down to sub five percent ipo time over a decade long period and deal with all those stresses from your vantage point do you agree or disagree with any of that today i agree with you back when aaron started box it was a completely different world it was very hard to convince these companies to adopt quote cloud quote sas right they were at the forefront at a lot of this and so i think he took the path he had to to build the business but today you're right i think it's a different world and if you have the opportunity to bootstrap a business i think you're in great shape very interesting okay so that was your first a deal and so sorry right how old were you when that happened that then i was 23. 23. okay so what would you skip right out of college or skip college or what yeah right out of college basically senior year my co-founder and i just failed to apply to jobs and so we started working on our own stuff got very lucky to raise a small seed round half million dollar seed round terrible terms honestly looking at it from today's point of view um but it was enough to get started and we hired a couple engineers and built a product that's amazing okay so and creo then exits the box do you stick around box learn a little bit or no you get bored and leave yeah no i stayed two years they made me an engineering manager and sent me to boston to launch their r d office on the east coast and that was a fascinating experience sort of first time in a management role at a bigger company i had great time building out a team out in boston and that's where actually the idea for crashlytics came from and so ended up giving notice a box and starting uh my next thing so crashlytics was launched in 2011 i think you would have been what 26 at this point 27 now yep 26 i think yep 26. okay and what was the original idea behind crashlytics yeah so it turns out mobile apps crashed so if you think in 2011 uh you're we're two years after the the sort of launch of ios apps right those came in 2009 oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 interviews i've done manually saves you a lot of time well we've done this we've built it into the beautiful interface inside of founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're going to see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're going to get a different valuation a vc is going to pay a different valuation private equity firm is different if you're going to do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when i hover over here right so the teal is what a vc would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on youtube all these datas are built from real-time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raised they sold 22 to their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of sas valuations and what you can get now inside of founderpath and we're thrilled to bring it to you all right we're going to go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your valuation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform i hope to see you there all right let's jump back into the interview everyone's building apps the app store is flooded with reviews 10 of them mentioned the word crash it was a very unstable very early platform and i became obsessed with crash reporting through my work at box because we were facing our own internal issues with our mobile work and our mac os work and ended up building a prototype on the side and i asked box hey can i work on this nights and weekends would that be cool and to their complete credit they were like yep great go for it it's totally unrelated to box and if it's good maybe we'll use it and so started building they let you own the ip that wasn't tied up in your ip and employee agreement with twitter box exactly and that's what i asked him for and they let me own it free and clear that's amazing so yeah huge props to box and aaron for doing that um and ended up of course the side project gain steam got more interesting um and so ended up giving box of many months of notice had a smooth transition out and then started working on crosstalk full-time um it looks like you had what 10 11 people participate in the seed round in 2011 at crashlytics did aaron write a check into that did some of your former you know bosses write in checks into that not at the time um aaron did join as an advisor after the seed round uh which was great but yeah we ended up because we're in boston we wanted to really raise from the local ecosystem and so we got a group of 10 boston angels to seed it which was fantastic as well as a local from there called flybridge capital uh what was the market like in 2011 for that for a seat it was like was a five cap out of the question it was it was yeah we raised one on five that's exactly it oh okay good that's great um and so yeah that worked well of course again in today's language like crazy different world um but we were very happy with it and we ended up building the team um and then it was a very quick story basically 14 months from launch to being acquired by twitter yeah no flybridge participated in the one on 5 in 2011 that's also convenient they look at your monthly updates they go jeff please let us leave your lead your at least be involved with your a you raised five on in the a round what evaluation was that at oh man ancient history um i think around 18 or so okay and was this crazy was this like a like a 50 100 x revenue multiple do you have real revenue at this point we had we had zero revenue the product was free of course of course all right um and so yeah crashlytics was all about scale so we launched we got very lucky with timing we ended up going from zero to 300 million devices within the first 12 months and how did you do that uh went viral through developer ecosystems and so we had built this tool it saved developers a ton of time it told them in under two seconds the line number of code they needed to fix and it just spread like wildfire across mobile app development and so that's what really got twitter interested because all of a sudden we had built a device footprint larger than twitter's in just 12 months interesting um this is okay fascinating so okay got it so that that led to that growth now twitter acquired the business i get credit if i'm wrong here but i believe it was in 2013 around for around a 38 million deal price and mainly was that mainly stock as well it was uh yeah it wasn't 38 it was over a hundred well over a hundred okay okay um and that was mostly stock yes um and their motivation was hey mobile's obviously the next big thing we need a mobile developer platform twitter had recently made a mistake and sort of killed off a good portion of its api platform and we were sort of brought in to reinvigorate that and lead it going forward interesting and when you look at sort of twitter stock price like over time right did you end up sort of holding there just like you did at a box or did you sort of get out as quick as you could uh a mix of both uh i took some off the table held some fair fair i was gonna say 2013 i mean even today six years later 2013 twitter stock price is 69 70 bucks if you timed it exactly right was a great sale considering it dropped to what 17 15 in 2017 something like that right exactly and i don't know the exact thing but i blended the the whole right yeah like a smart like like your account and your financial strategy people would probably recommend so right right okay very cool story here so you then take money you take earnings from them do you go directly into digits from crashlytics so yeah i stayed uh four years at twitter in 2015 they named me had a consumer product and so that was fascinating basically moving over and leading the core app development and the core product efforts um took off from twitter in 2017 finally took a vacation for like nine months um and then we got right back together and started building digits well honey you skip over uh your coral fascination and your production credits uh how are you balancing these things on the site along with your your you know the wine company i have uh i don't know i love just being involved in really cool projects and these are all more from the investor side and so one of my good friends from college is jefferlowski the director producer of chasing ice chasing carl and now the social dilemma um and so was just honored to be involved super early in those projects i'm a huge climate change advocate and so that was really fun to sort of see the development of those films and start learning about the documentary film world and then of course that ultimately resulted in an interview around the social dilemma and that just was a fantastic success you never expect a documentary to have all that many viewers and now over a hundred million families have watched it on netflix it's truly unbelievable interesting so that was really cool to see sort of in the interstitial period right after twitter i mean this for me for you this isn't accidental going from zero to 300 million accidentally mau at crashlytics going from you know no viewers to 100 million viewers like accident i mean there's something you're doing here that it's my job to like decode for everyone else so let's try and think about that in terms of digits what is digits today and how do you go from zero to 100 million mau accounts maybe as fast as possible great question so uh we started digits with the goal of building a real-time finance dashboard for small businesses so if you're a business owner today the story hasn't really changed for decades you have no choice but to hire an accountant or bookkeeper and they're gonna do your books each month and two to three weeks after the end of the month they're going to give you your books and it's basically a pdf or an excel sheet of your profit and loss your balance sheet etc and that process really hasn't changed and the challenge there is you're now waiting right two to three weeks after the month i'm not worried about december i'm worried about february and so if you compare that to the product side and what we had with crashlytics this was literally real time to the second insight on how your app was performing and you have google analytics you have a b testing tools you have all of these real-time dashboards why doesn't that exist for business so that's the premise for digits of course way harder to build than it sounds and so we've been basically in heads down r d mode for three and a half years now we started the company mid 2018 and we are approaching some big launches this year so we're really excited how the products come together and you ask about distribution i'd say one of the key things is we focus we did the same thing at prosthetics we focus more on distribution than on the initial first product it's basically how do you orchestrate how do you engineer getting it into this market and having it spread and so crashlytics was hard viral we were we were likely one of the first developer tools to think about virality and when a developer sorry when a developer started using it they actually put it in their app and we broke their build in the nicest way possible so that every other engineer on their team would find out about crashlytics and then start using it and so of course we're not going to break your accounting but we think about it in similar ways with digits how do we build viral workflows into the end of month close into you sharing a report with your investors into you giving maybe your head of marketing access to just the marketing spend if you think about finance from a viral lens it gets really interesting and why hasn't quickbooks thought about it this way why hasn't fresh books who have their mouse trapped with invoices like why haven't some of these players thought about this already that's a really great question um i think you'll need to ask them i would say both of those products started a while ago in a different mindset with different teams right like quickbooks has had 80 market share since 1992 and so yes they've started to innovate a little bit more recently but i think they are very much grounded in some of their earliest approaches and we'll see what we can do to outrun them mm-hmm okay so i'm on your pricing page it looks like you're you guys are pre-revenue pre-launched today you have a wait list that's correct yes okay so talking about how you funded the business you can't obviously operate for free for four years right so we are fortunate to be very well backed we raised a 10 million dollar a round from benchmark in 2018 right when we started uh and then we raised a 22 million dollar b round from gv and when was the b round that was oh man 2019 okay and tell us a little bit about how you look obviously you're going to use your past you have a lot of experience these guys are going to see you as someone who's a repeat founder but how you package your story is critical to getting those deals done in the most non-dilutive way possible so how did you package yourself yeah i think the key is to really show the size of this space these financial products are absolutely massive in revenue and in market cap and so on and so showing the big opportunity here showing that we're in this for the long run we have seen the short 14-month like start and sell and sorry story like that's not what we're going for here we think we can be a major player in this space for decades to come and i think that story resonates with these investors and they've seen that wayne and i can execute build a team build a product and so now we just need to go do that in this market and do you guys do anything crazy in terms of dilution you know most folks series they are selling call it 10 to 20 same thing with series b were you guys sort of in those ranges i'd say slightly more advantageous given our background but yeah roughly in those ranges fair fair uh okay and how did you how did you approach negotiating evaluation since like you have to point to some metrics is it literally like we wrote this code it's now like we're moving forward do you have you don't have maus yet right right yeah there's no mau yet um there's no revenue yet it's pre-revenue um those are honestly my favorite pitches because you can really focus on the vision you're not sort of weighed down by like where it is today we're really focused on how big can this be how great can the solution be for this market and what the investors need to do is talk with business owners talk with people in these spaces and feel their pain and validate that opportunity and then i think you can sort of connect the dots and see that yeah this is a very large market party rounds are hot you did one you've got i asked aaron a question because now you got them back on board uh with a check in your party round how did you structure the party round and you have i think 40 50 people in this thing how did you did you build a funnel with 300 and then narrow down or how did you build it this was this was a stressful process so yeah we have a lot 72 angels in digits and these are the ceos of box it's aaron of github it's nat of twitter etc etc um and it was really built from our network through crashlytics of people who had seen the seen heard of the product um met the team and when they heard we were doing something new honestly we were honored that so many wanted to be involved it was definitely a process to make room for folks to sort of coordinate everything but we really viewed it because digits is targeting small businesses we wanted as many supporters of the startup and small business ecosystem in the round as possible and so that's what we've been really pleased with the support we've seen from our angels we're going to start using them to get out to market as we launch and so yeah really honored for their involvement why not include any um like one to many folks have relationships with accounting firms already in the party round as a distribution hack or did you do that and i just don't see them listed here yeah we uh that's a great point um i'd say in the remember this was our first round this was back in 2018 so we were really early on strategy and everything and this was all through our immediate network um now we are talking with a lot of those folks and so interestingly going forward very cool okay um if folks want to check it out they can go to digits.com it's best for cfo's listening to go check it out is that right and accountants not founders directly yeah if you ever had a finance cfo accountant anyone in that space would love to chat with them all right jeff let's wrap up here with the famous five number one favorite business book oh man uh how to win friends and influence people number two is there a ceo you're following or studying so many of them um i would say oh i'm really interested to see what parag does at twitter i know i'm well i'm psyched for this that will be that's that was a big change uh number three what's your favorite online tool to uh as you build digits ah uh wildcard answer whimsical so figma's great that's been awesome but i'd say whimsical's really cool for flow planning do you use plaid we do yes any any feedback there have you always used them did you switch to them are you liking it not liking it we've always used it i think it's they're probably one of the best in the space i obviously have there's pros and cons to them um but i do respect what they've done in the industry and i think they're in a now increasingly strong position yeah number four how many hours of sleep to get every night six and a half that's fair alright in situation jeff married single kids uh married no kids married and no kids did you meet her was it the scuba diving or the wine club how did you meet her we actually met back in college so it's been a long time fair okay so she's she's seen you evolve through all of your all of your interesting uh yes well before any startup very cool okay i already got your age i believe 36 today what's something like last question something you wish you knew when you were 20. uh the importance of distribution so without question and crayo failed the re like the reason we went and got acquired by box was because we didn't have the distribution we needed to raise an a round and we didn't spend that focus and so that's why we have been so obsessive with crashlytics and the films and now digits and so on on that guys there you have it jeff with digits.com 30 million raised to date coming out soon here we'll watch closely mainly focus right now on getting the product right and setting up distribution hooks to make sure that when growth is turned on and revenue is turned on that churn is very low stickiness is very high and virality and that k factor is way above one he knows what he's talking about he sold many companies before both the box and twitter spent time at both them oh and stocked up both of them uh it'll be eager to see what happens once that paywall does go up and those things do turn on at digits.com helping accountants manage uh books much more efficiently than in the past jeff thanks for taking us to the top awesome thank you so much nathan one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2pm central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathan lacka dot com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode and if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive i am on these shows but i do it so that we can all learn we have to counter those people we got to push them away click the thumbs up below to counter them and know that i appreciate your guys's support all right i'll be in the comments see ya