How Engagio CEO Jonathan Miller grew Engagio to $6M revenue and 200 customers in 2018.

hello everyone my guest today is John Miller he's a marketing entrepreneur and thought leader he's currently the CEO and co-founder of engag oh and account based platform and orchestrates outbound interactions across departments and channels previously his name might look familiar he was co-founder of a Marketo a leader and marketing automation he's a speaker and writer about marketing best practices and his author of multiple marketing books including clear clear and complete guides to account based marketing sales development along with Marquitos definitive guide to marketing automation John are you ready to take us to the top it was good all right so everyone knows Marketo let's pick up the story there when did you leave and why would I leave Marquette oh yeah I left in 2014 the I mean the reason why you know Marketo just got to be a bigger company you know and as we passed you know a thousand employees it started feeling less like my baby more like a job you know and so I was craving kind of going back and doing the entrepreneurial thing again and then it was just a question of finding the right idea yeah your what you like being there on the early days scraping hustling right first customer kind of stuff yeah I just love how impactful you can be when like you you get 24 things done and in a day rather than needing 24 people and they meeting to get one thing done yeah so did you put that suit jacket on just for this call I did all right talk to us about the new company do you how did you launch engage EO right in 2014 after you left yeah literally it was a long weekend in between okay so that's that's funny you you didn't take any break at all well you know Marketo actually had a sabbatical program so I had the opportunity to take a couple of months the summer before in Italy as part of you know still being a marketing ploy so I had my break and then I was ready to kind of hit the ground running okay so usually founders you know that build something like a Marketo then spin out it's usually they saw some like wow we really need this in Marketo but I got stuck in meetings and bureaucracy I could never actually execute it so I'm just gonna leave and start it myself was that the case here and if so what does engage you do that Marketo just couldn't yeah well it was exactly that you know for me it was more I knew I wanted to you know go start another company I knew I wanted to start something that was in marketing technology because that's my love and my passion so the question really is what's the idea what where where did I see an opportunity you know in marketing technology and as I sort of looked at you know the landscape and where people were focusing and so on you know I kind of came across this you know new style of marketing called account based marketing and it did reflect back to a pain that I did have back at Marquette Oh because you know you know we're kind of when we were doing our marketing we were innovators and sort of the demand gen inbound marketing kind of model it's what I call fishing with a net yeah we create content we'd run campaigns you know we cast that net out there we didn't care who responded we just care did we catch it off no and that worked for a long time at Marquette oh but as we started to try to move up market sell to bigger more complicated more enterprise companies turns out those big companies don't just happen to swim into our net all right we had to find ways to reach out to them that was hard with Marketo the tool wasn't really set up to support that mostly because marquetta was a lead based system and on a count paste system you know and so that's where I started selling to opportunity for this new new kind of platform and marketing technology instead of fish with nets it's something I called fishing with Spears because we're gonna reach out to those big fish proactively that was sort of idea it makes a lot of sense walk me through so today I'm sure you have loads different customer cohorts but two questions one is it a pure place ask company and two if so what's kind of the average customer paying per month for your solution it is a software service solution we do annual contracts so I tend to think things more in terms of annual contract value as opposed to monthly recurring revenue so our average annual customer values about 30,000 okay 30,000 and walk me through what they're getting for that typically is it but like a seed based approach or what it's not sea based you know typically marketing software isn't sold by the seat just because you know you don't have that many users in marketing and frankly I want to have as many people touching the software as possible so I'll come back to the actual pricing metric in a second the what you get its couple key things you know the first we call an account foundation you know effectively the challenge is tools like Marketo and Salesforce and your corporate email system all the stuff you've got it tends not to roll up to the account level you know leads and Salesforce don't tie to accounts for example so the first thing our solution does is just aggregate all your account information together uses something called lead to account matching to tie it to the right account and then we can expose that information back out so it's not super sexy but it solves a real challenge is you know you're trying to be a cow paste your other systems aren't we're gonna make everything account based John just to be clear when you say lead to account you're talking like Suzanne at company XCOM and Joseph at company XCOM are two separate leads your system would say that's actually part of the same account it's just two people under the company X account is that accurate that's correct and you know the challenges if you get a list from a trade show or you know somebody fails in its form on your website they may not even put in a corporate email just they might put in a gmail address right and you know sometimes you know you might have bad data in your system so you might have two copies of the same account so a lot of science ISM which are the right things to roll to roll things up to the right account once you have that foundation then we have two other main things that we do the first is we actually let you orchestrate multi-channel plays for reaching out to accounts so this is the spearfishing super simple example is you know an email from your CEO to their CEO we'll probably more effective than an email coming out of your marketing automation system so how do you manage the workflow of you know somebody else drafting the email for their seat your CEO and then they just approve it so different tactics for kind of activating and reaching out to accounts and then the third piece measure I mean Marketing measure is done using quantity based attrex how many leads did you generate for example that doesn't work in a VM it's more about quality you know am i reaching out to the right people at the right accounts and so you need different ways to measure if it's working and we provide those solutions got it so year one was again 2014 you took a long weekend essentially you have not bootstrap I believe you've raised how much have you raised today a little over 30 million and why did you decide to write it I don't know if you do that right of the gate but why did you decide to go to the funded path versus the bootstrap path honestly it was because of the hype that I had coming out of it you know I mean I I could have bootstrapped and built a prototype and gotten some customers and all that but I don't think I would have actually gotten a better valuation then I was getting literally just being John Miller coming out of Marquette oh you know and if anything you might have actually produced you know reduced it because they'd be basing on a reality and not based on rights yep yeah no that's a really interesting and and honest perspective that I appreciate that walk me through we've scaled to today total customers on the platform a little more for 200 customers you can do the math because it sold you the ACV yeah you get you can get a sense of what our annual recurring revenue looks like today yeah that puts you at about 500 a month right or about six million annually yep we still have a good chunk of our cash left just about you know just under half of it so we got lots of runway still to keep building yeah our solution talk to me about growth so if you're at about six million in AR in terms of run right today where were you a year ago we don't disclose kind of numbers but we're growing we're growing fast can you give us a range triple digits ain't high single digits or double digits yet probably high doubles high double digits okay great and whereas most that growth coming from is it focused on kind of expanding accounts you already own are really bringing on brand new accounts it's a good mix of both you know I mean we do have a fair I mean we practice what we preach we drink our own champagne we do account its marketing we have our target accounts and we do a generally good job of reaching out and and engaging with the companies that we want to talk to we actually have you know 95 percent of our target accounts know who we are which is which is pretty cool and then you know typically our larger customers the ones that are most likely to have significant expansion or and so you know obviously that's an important part of growing in these SAS business net revenue net revenue retention assuming...