fullcast.io Revenue, Valuation & Funding (2024)

hello everyone my guest today is dharmesh singh he's a lifelong learner who's looking to add value to every relationship he touches he co-founded full cast dot io with bala in 2017 to transform how go-to-market operations are done based off his prior experience scaling opposite salesforce and microsoft are actually ready to take us to the top yes sure all right so help me understand the space you're playing is is it sort of a pure play sas company in the rev-ops space that's correct uh we intend to be the platform between crm systems and financial planning systems specific to any niche sas companies for example or for anybody no yeah i know we've got customers across sas and outside sas as well so where our our niche is essentially anybody where there are large enterprise sales teams that have the notion of territories and segments and you know multiple roles in the selling mode that are involved in selling motion so we intend to streamline all of that and who do you feel like you're replacing or how what are they how are they solving the current need that you're solving what are they using to do it yeah so the basic problem that is that planning is extremely manual that's done in excel spreadsheets by sales strategy folks and that gets never gets you know visibility to on the op side of the house so ops is executed in crm systems uh manually through custom code or through it support and so our new view is that as companies scale and change cycles getting get shorter the loop between planning and execution needs to get streamlined and it needs to be always on right so we need to take planning out of excel into a sas based platform that's always connected to the crm systems and it reflects and stays in sync with all the changes that are happening on top of crm people are leaving the company people get promoted all the time sales as companies evolve is enforcing and defining new runtime policies all the time right my routing policies change uh who gets to own accounts change you know depending on account status uh it might be an account manager it could be a csm you know all those those runtime policies that need to get enforced and that stuff is done either through custom code or depending on id so we are essentially uh building this platform so teams can have a no code experience where they can come in and build the plan click on a button push the plan into execution and then keep it sync all the time so and our mesh when these when these teams fall in love with you and they really integrate you what do they start paying on average per month um our average deal size across customers is about 70k for the year uh right now um and you know that's the average we got some customers that are starting with only about 20 reps and they're as low as you know 30k uh we get customers at 600 reps and they're all the way up to 150 200k yeah okay got it so your upsell revenue and your expansion opportunities right now purely based off number of seats uh number of people as well as modules so depending on are you looking for territory segmentation are you looking at quota are you looking for other planning head count planning so uh all those different modules and take me back to sort of day one right so so when you found the company we founded the company end of 2016. uh we left salesforce in in december of 2016 to go work on this full time who's we how many how many founders uh me and my partner bala uh the two of us we were at salesforce we worked at microsoft uh so we've been together for about 14 years and then we decided and and uh did was this an internal need you saw like how did you know this was a problem so we are experienced planning at microsoft which was a six-month process and bala and myself we were part of the sales uh planning customer for life team at salesforce and dealing with 1500 sheets being sent to 400 managers august to february and so we started looking at solutions internally to start streamlining the process and uh we looked at tools like anaplan out there and none of them could meet the need of what we wanted to ended up doing then bala and his team built a prototype version internally for salesforce and we felt that you know i think there's a need for this in the mid market uh that we should go out and build a platform dedicated to this function now how did you guys use the initial capital get the thing going uh hustle uh now initially when we left uh we built a business around services and to scale uh smb uh customers and get them to start getting more uh uh more robust around sales operations and while we were we built that cash flow engine we were prototyping our basic mvp out there uh and then we raised a little amount of seat funding uh in june 2018 and uh double down and building the platform um how much was that round four in 2018 uh 2.75 okay yeah and uh we then uh built the platform uh moved to the mid market segment and switched over from a services to a sas uh only uh business and we launched the product in one year february 2019. so sorry you turned off all services and switched to pure sas in 2018 or 2019. 2019. okay got it and so this is obviously a great way to build a sas company right so to deal with the cash flow and the initial code getting developed to just do consulting in the space that you're going to you know solving problems for anyway what did you grow revenue to in 2018 on the agency and sort of services side about a million dollars on agency and today none of your revenue comes from that though correct correct none of it comes from revenue so we ejected all the all those services customers uh we moved to pure product and a product when we started uh when doing out at the end of that transition was close to about half a million dollars still uh because it converted those services customers onto the platform so sorry just to be clear are you saying in 2019 you ended with a run rate sas only of about half a million correct i see and what do you think you'll close this year at uh close to 1.3 1.4 okay so healthy growth where's most growth coming from is it selling up selling new seats and models or new logos all together it's new logos uh and it's change of icp so you we sell to customers like mongodb udemy you know essentially the mid market space auth0 uh so we've got uh essentially net new customers because we just ejected out of the smb into the mid market completely how many total paying customers today 15 15 and how many did you finish last year with uh last year we finished with about eight eight okay interesting and so talk to me on something economics so you've only raised a 2.7 or did you decide to raise more capital we are uh looking to raise some capital now mm-hmm i'm very focused um so we are raising about we're not ready for a series a yet so we're just raising on a note uh about about a million to two million dollars what we think we need for the next 12 to 18 months so because that plus the revenue coming in from customers should allow us to uh really uh start um investing and hiring more people that we need to support the growth of this how many people are on the team today total okay 10. how many engineers yeah um we got among we've got 10 ftes plus contract employees so if you were to sort of mix the contract and fds you got about nine engineers okay got it how many of the engineers are full-time or none of them full-time so we've got four full-time a four full time okay got it and at this level i mean have you hired your first sales rep or are you still doing most of selling no we have a dedicated salesperson uh we hired him as an sdr uh we learned the ropes on the we learned about the problem space and then we he's graduated into a full cycle ae role with quarter so uh i mean too early for quota i mean right now you know he it's between him and us uh the quota is you know uh whatever the company's number is with one point three one hit uh i do help a good get involved in sales to help him with that uh but we don't have any official quota yeah yeah no that makes sense now if you go and do go raise on a note call 102 million obviously you want to minimize any amount of dilution what cap would you try and raise at uh we're raising at a 15 million cap it's a safe note okay got it yeah interesting and uh the first 2.7 was on a safe as well no that wasn't equity price drone how does that work how do you go i mean usually you start with the safe and it converts at the next equity round you're sort of going backwards equity round and then safe why do that uh we're looking at the safe note more as a bridge financing because we don't want to rule through a series a till we go past two million dollars in error and so the thing we are trying to balance is we've got customers signing up and uh we need to hire customer success we need to hire another additional sdr and you have two options either you continue uh hiring just on demand uh just in need kind of time based on the customer growth or you invest a little ahead of time uh to prepar to plan for the growth right and so if you're going to invest a little ahead of time uh more in you know finishing some of the engineering work that needs to get done everything else then you you need a little money not a whole lot uh and you know if you can get past two two and a half billion dollars you know you might you're better suited to do a much larger series at that point of time and darmesh when you raised the 2.7 million in 2018 what valuation was that at um we did it at 10 103 and how did you what the pitch for that besides your it sounds like a great track record that's probably most of it but how did you when you shared the p l with those vcs and you said this is all agency revenue how did you make sure you prevented them from going ah we're not giving you that big valuation this is all agency revenue how did you make your agency revenue in asset versus liability um they saw the what they saw was the mvp the prototype and so they under they had a clear understanding of you know the product itself because we are beyond we had we had already prototyped the mvp we had kind of uh taking some of our services customers and then started moving them to the platform already so it was like okay how big is the market there's a huge market we're going after this you know we think it's at least it if not anything it's a piece of 10 billion dollar market uh our views we're building a new net new platform uh there is no platform for ops and we have we see this huge rise of rev ops which is essentially a title but with underlying point tools there is no platform right and so we want to be a platform much like marketo was marketing automation and you know sales forces for crm there needs to be a platform for revenue organizations end to end and talk to me about this raise obviously when you raise capital you're planning for a certain amount of runway to get to your 2 million in revenue how much burn net burn are you are you putting out right now monthly we are almost cash flow neutral oh okay i mean that's pretty good so you don't so you don't really necessarily need to raise you haven't made those hires yet that would contribute that is what i meant when i said that you know for us we could either you know just hire in time as we bring on customers and we have a ratio uh for that or uh in some cases you need to hire a head like engineering is an investment yeah some sales is an investment you're making for the head so like we know we're growing we need to invest in those areas and so the decision is do we stall that investment and just you know do it peanut butter it as customer revenue comes you know we just take a little amount of money and invest in that growth a lot of folks listening right now launch their mvp with an outsourced dev team they realize at some point they want to bring that in-house you're doing this right now help me explain the challenges of that transition um you need to have the processes built internally uh uh to to in to be able to in source also it helps when you've been working with the outsourced partner consistently because you've built some repository of knowledge that you don't want to lose right and so our goal is to uh not uh go for a company but we want to bring the same people on fte roles because they have subject matter experts so you'd hire them out of the agency to join you full time correct yeah how do you do that without pissing off or how do you pull them away from the agency so that is a great question so we started when we started up with the agency we started with that principle clearly defined so we have when essentially uh we they are for all practical probes they're full-time employees because they work only for us uh we we set up that structure we just didn't want to deal with the structure of putting in an office and registering an office and you know all the stuff in the new place so he said you you guys can do this on your own over here uh we'll pick that battle up later that's great darmesh on that note let's wrap up here with the famous five number one favorite business book uh good to great number two is there a ceo you're following are studying i love the atlassian ceos uh both of them uh scott uh i've tracked him for a while and i you know i agree with his values and i agree with the way he's built the company so yeah uh there are lots of great ceos but yes atlassian is top of mind for me and if you guys want to learn more from atlassian we just had their cro carmen dush on the show uh i guess it was two weeks ago you can check it out at getlocker.com learn more about their growth from you know high volume low arpu low touch to the arpu expansion enterprise sales motion now today number three darmesh what's your favorite online tool for building your company uh favorite online tool for building a company we love basecamp uh we love uh google chat those are the two tools that we depend on no we don't have a diet company on that actually number four how many hours of sleep to get every night about six and situation married single kids matted with two college green kids oh great and how are you i am fifty 50 last question what's something you wish you knew when you were 20 um i wish somebody had told me i should get started sooner on this entrepreneurial journey uh but uh yeah i i think that that'll be it guys fullcast.io playing in a rev-op space their ex-salesforce folks launched in 2016 built a million dollars worth of agency revenue to fund the change over to pure sas in 2019 now have 15 customers paying average acvs of 70 thousand dollars a year very much in enterprise sales motion doing 1.4 million in ar to date and continue to scale raised 2.7 million back in 2018 at a 12 million post money valuation team at 10 today four engineers in-house one quota carrying well one sales rep who's an ae is about to scale out that team and uh starting with the head of engineering they're gonna try and raise here another round uh call in the next three to six months targeting a one to two million dollar note on a 15 cap we'll see what happens darmesh thanks for taking us to the top thank you 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 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m 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 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