How Grow.com CEO Rob Nelson grew Grow.com to $10.5M revenue and 1.3K customers in 2018.

hello everyone my guest today is rob nelson he's the founder and ceo of grow.com a cloud-based analytics software company for small to medium-sized businesses grow helps companies accelerate their growth by accessing all their data and measuring their business results in real time he's an entrepreneur at heart and a technology enthusiast his previous company logico was acquired by afs in 2012. rob are you ready to take us to the top yeah let's do it i love it a ceo on the road that means he's hustling he's driving to close his next deal thanks for joining us man that's right you bet man all right so we had you on back in november of 2016 and you were very gracious and being very transparent at that point you had about 70 employees you'd raise 13 million in funding about 600 customers doing somewhere around 330 grand in monthly recurring revenue i want to get an update on those numbers but first for newbies to the show tell them what you do and how you make money what's your business model yeah so we focus on simple business intelligence built for the small to medium-sized business market we define smb market as one to 50 million in revenue so think uh a an easy way to connect all of your data to all the different applications that you use pull that in and see all of your business metrics in real time and to just quantify that in terms of average price point to really hone in the s b space are you still around the 500-ish per month range yeah five six hundred bucks a month is what we charge and it's unlimited users unlimited connections unlimited updates um so doing some really cool stuff um you know where you can track your entire business on your phone tvs around the office uh you know that that's a typical use case with so many unlimited kind of value-based metrics what leverage do you keep yourself to drive upsell and expansion revenue um you know the uh the upsell and expansion comes from uh the number of metrics that a customer's tracking so at you know five or six hundred bucks uh i think our standard is 50 metrics 50 reports that they can track on average customers are tracking about 80 and um so pricing kind of scales up from there okay and do you scale also by seats or unlimited seats no matter which plan unlimited seats yeah no matter what plan so rob you're a nice guy you know i'm uh i you know it's in an effort to you know democratize the data get it out there and our whole philosophy is like hey we don't care if you're in finance sales ops you know connect to the apps that you use pull that data back get some real-time insights and share them with the team yep and now what are you at today in terms of total customers we've got about uh 1300 oh wow okay so you more than doubled over the past 13 months that's impressive we've more than doubled in the last 12 months yeah that's really impressive and if we multiply by that 550 main that puts you somewhere around 700 grand a month in revenue or about you know call it 8.4 ish million in ar right yeah a little bit higher than that average deal size for us is uh average deal size ends up being about 8 100 a year in acv annual contract value yep yep no that's great which comes out to about 6.75 a month and would put your mrr somewhere closer to 8.7 grand instead of the 715. so yeah that's great have you broken 10 million in arr we're just about to ah very that's a good way to start the new year that's good stuff um what's driven most of the growth i mean did you ramp up paid spend what's driven it um we have ramped up paid spend i mean um but we've got um you know some healthy unit economics i mean we've got um uh around 40 on the sales team uh 35 to 40 on the sales team um we're doing a lot of paid spend i'd say we've got about a 60 40 split between organic paid versus organic trying to get that down to a 50 50 this year okay what's significant there by the way like in a given month how much we spend on paid uh we spend about 100 120 unpaid yep and is there a particular channel performing really well that's not a mainstream kind of adwords one uh facebook has always done really well for us um yet you know it doesn't perform as well as um like google but you know it's it's a lot less expensive um but still the bulk of what we do comes from facebook do you need any conferences sponsorships or no we do oh yeah i mean we're sponsoring disaster next month and um and we did sastoc and you know several others this year yeah we have good success of conferences okay and then in terms of fundraising have you raised additional capital are you still right around 13 million now we've we've uh we're just wrapping up the series b um and we're coming out doing a whole press release with that in about two to three weeks oh good this episode actually will not go live in fact everyone hearing it right now it will be june um are you comfortable sharing what that amount is if i promise you no one will hear it until then you know i need to keep that i need to keep that one under wraps until we launch that's okay not a problem uh we can people can check that when this when they hear this they can just go google it and figure it out but good stuff what about economics in terms of churn what's your logo turn out currently monthly you know we're about two percent um you know i think healthy smb churn so um yeah that's what we've been uh targeting and of course we're we're trying to get that down a little bit lower but um that's where we're at okay and you know as you're ramping up you know the fundraise i mean a lot of times people ramp up fundraising when they have dialed in economics where they know they can plow money into a channel and generally not see diminishing returns um what are you spending right now to acquire customers and how quickly do you like to get your money back in terms of payback period um you know we've we've got a payback period of about um six to seven months okay that's pretty good and so that's why when i say we've got healthy unit economics and you know i'm thinking about that that cac payback period yeah so it's seven months then your acv average is 8100 i mean you're spending about four grand ish to acquire those guys in a worse worst case scenario yeah and then you talked you touched on your team briefly um earlier but uh you said 40 i think sales people what's the total team size today and where you guys all based yeah we're all um let's see i guess we're not all based here in utah um in you know our silicon slopes area that we call it um we've we've got about just over 100 people and um this past year we opened an office in london and so we have maybe eight people in london okay and they're cranking and exceeding targets and doing well um so that's that's kind of a team dynamic uh yeah maybe 40 between sales marketing um you know probably 30 between product and engineering okay and why you mentioned you're obviously just closing around did you create additional competition in terms of did you have people say wait don't raise let us buy you before you get way more expensive and if so um how do you make a decision between whether to exit or raise capital and keep going yeah i mean we never really ran into that i think that the market our space will go through a consolidation but we're not there yet and um so we didn't have potential buyers and if we did i mean we're we're really not that interested i mean we want to build something uh significant something special we feel like we can own and dominate this smb space nbi um what we're looking to do is become the hub spot of bi um you know and really own and dominate that area how do you beat uh you know a company like clip folio or some of the others that you know well in the space i think one of the things that sets us apart from portfolios you know bi is complex uh especially i think for smbs without i.t departments without a lot of technical resources and so we have a whole onboarding team a whole client success team that's been i think key to who we are and and the support and success our clients have so um you know we've got data consultants a whole team of data consultants to help stand clients up to help them be successful and really get the insights that they're going for well i'm i'm it's it's been fun chatting with both you and alan as you both grow because you're pretty i mean you're pretty neck and neck he's obviously raised a little more but you guys are about equal in terms of revenue and and customer bases so it'll be fun to watch that as that goes i mean are you seeing though is there anything um when your sales people are on cause and they're saying well i'm thinking about clip folio and grow is there a single thing that's winning you these deals like a feature or is it just great onboarding and stickiness and customer support yeah it is i think uh you know in that kind of scenario or power bi i mean a lot of these where it's it's totally self-serve it's like hey go try it out you know see you know test it out and run a scenario and and test grow at the same time and just do a side-by-side comparison yep um i think open and trans you know being open and transparent is kind of our best approach in that way in that regard you do a great job i'm...