How Gummicube CEO Dave Bell grew to $4.8M revenue and 150 customers in 2018.

hello everyone my guest today is dave bell he's an entrepreneur and recognized pioneer in the fields of mobile entertainment and digital content distribution he's been featured in and is a frequent contributor to inc magazine newsweek venture beat website magazine mobile marketer and many others he's currently the co-founder and ceo of gummy cube the leading global provider of data technology and services for app store optimization dave are you ready to take us to the top right all right what does app store optimization mean so app store optimization essentially means understanding how to acquire users and grow your app um across all channels using the best data possible focusing on things like building organics understanding what users are searching for in the store understanding what influences conversion in the app store and also across your all of your channels and improving those metrics having a having a plan in place to systematically test and systematically uh expand your presence and improve your conversion interesting okay and what's your revenue model is it a pure place ass company yeah it is a it is a sas company so uh we have a platform called datacube and a platform called split cube those platforms uh one uh data cube is used for keyword metadata optimization and market intelligence inside the store split cube is a platform kind of like optimizely for apps that's used for an av testing solution particularly for like apple app store for example where you can't run live a b testing um and what we can do is we can literally emulate apps to our pages or search results allow you to drive some traffic in and heat map what users are doing when they uh when they hit those pages so before you even go live in a store with changes you can understand uh how they might impact your conversion and what variants of creative work better and when you combine that together with kind of targeting the right keywords and understanding what users intend to download when they search for example you end up with a much better funnel and of course a lot of this activity when you understand what converts really well when you understand the way users search and what they hope to find that also translates into optimization of any of your other marketing channels because at the end of the day you're trying to create one big pipe or one big funnel that gets the right users to your app and maximizes your growth and so by leveraging aso not just for typical things like search optimization or conversion but also leveraging that data to impact your other channels you can have a much bigger impact and that's what our technology allows people to do and dave with that in mind i know you have a bunch of different customer profiles i imagine but um what does the average customer pay you per month would you say um so i mean it can vary so our our business model uh is dependent on the number of apps that you have live it's dependent on the number of territories that you that you want to address um you know typically for like an enterprise model for example uh you know we could uh we could range anywhere from you know 1049 a month for pure self-service uh all the way up to fifteen hundred dollars a month per application if you're looking for some help too so gummy cube is unique uh in that uh we understand that one of the biggest problems with sas is that a team might sign up use it once and then other priorities might come up and you never use it again some people address that through customer success kind of light touch we actually have a team that can go in and kind of help helping form and educate and kind of help almost drive the next steps of the optimization process to ensure that our customers are getting the best or the the best results from our technology so jake and dave just to focus the rest the interview because we were short on time would you say like the appropriate average might be you know a thousand bucks a month typically or is it less than that no it's it's more than that so most most people that we work with are kind of at the 2500 per app per month level okay got it that's fair enough that that's helpful to understand and so with that in mind i'd love to learn you know kind of put all this on a timeline so when did you launch the company what year so gummy cube has been around for almost a decade we launched gummy cube in 2010 uh we are actually the oldest aso company in north america we were founded three years before you know sensor tower for example even existed as a technology or a tool um so we've been doing this for a long time and friends annie in your space uh kind of so apparently has one function inside of a broader tool that lets you understand uh what some of the keywords that your app ranks for but the reality is that app store optimization is very nuanced um it's not the same thing as chart boosting in the stores uh the data that you get in terms of how you understand search volumes uh can vary depending on the tool that you're using some very accurate some not accurate and one of the things that gummy cube really set out to do was create technology that from the ground up was mobile so not just importing the google keyword planner into mobile but looking at how the algorithms worked kind of reverse engineering them okay so app annie is not a competitor uh some people view them as a competitor some people try to use them for the purpose of aso but the features and functionality aren't really a perfect replica of what we have with datacube okay interesting what's your team size today how many people yeah so we have 35 to 40 people in san jose we also have offices in berlin uh in tokyo and uh in portland where we do a lot of our technology development oh great okay so san jose remote locations 35 folks and over the past decade how many customers have you scaled to yeah so we uh you know we have a lot of customers generally our customers range from what i call kind of startups that are very serious about their business so they're investing in growth all the way up to uh to enterprise right now you know we serve upwards of 150 enterprise customers um so you know uh you know folks like your news corp for example uh you know uh and their subsidiary so uh we also work with you know great startups like you know limebike and folks like that so um that's the type of company that uh that we typically work with so dave can i take kind of that 150 enterprise times the average enterprise you know monthly payment you said earlier 2500 you guys are doing about 370 per month right now something like that um it so it's not that straightforward uh it's it's uh it's a it might actually be a little higher than that i don't reveal revenue numbers publicly uh however you know what i can say well dave one of those by the way one of those has to be wrong because i'm just taking i'm just multiplying so either your arp is lower or higher or your customer account is higher or lower yeah so here's here's where the variable is the variable is we don't charge per customer we charge per app or per territory that they want to uh that they want to target so it's a little bit higher than what you said okay uh and that's because most of our customers have more than one app got it fair enough and then take me back you know if you're doing north of that today you know what's growth look like year over year what were you doing a year ago yeah so we've uh we've almost doubled since last year oh great or realistically in the last 18 months we've almost doubled that's great so call maybe november 2017 doing half of 400k per month maybe 200k per month or something like that where's most like growth coming from is it adding new apps to the same customers or is it brand new customers all together uh it's it's both so we've we've added uh we've added a lot of new customers but a lot of a lot of folks uh have also been adding apps so like when you work with game publishers for example they have an entire portfolio and you kind of uh will land one and then have good results and other product managers will come to you so there's been some land and expand but there's also a lot of business development that goes on and we have a lot of a lot of great inbound we have a great business development team that we built and have you been able to resist the temptation to raise and bootstrap the company or did you decide to raise no we bootstrapped the company so great i love that yeah so this is our this is my third mobile start fourth mobile startup actually my last one uh i was a co-founder of play phone where we raised 60 or 70 million dollars uh this one we decided that we were going to you know we already had a lot of great relationships and a lot of great developers that we knew so um we built the product we did a lot of the the data aggregation machine learning in the first few years completely bootstrapped it uh and then you know we funded the rest with revenue from our from our customers i love look that's the best investor right we we call vc vested customers there right that's bootstrapped for you um talk to me you know in any sas company churn is really critical what is your churn today and how do you make sure it stays low yeah absolutely well and you know you have to look at churn in a few different ways when you're in a business like ours right you have you know smart development sign up but they really want kind of a balanced approach to their aso and they want the best technology you've got startups and then you've got enterprise right and so again i'm not going to reveal our exact churn rate but one of the things that we do to really uh um have the best experience and results for our customers is that we put a lot of service into it so again i think the failure of a lot of sas companies is to have an allergy to service i think that uh you know at the end of the day being able to help your customers not just use the product but make good decisions when they're using the product is extremely important um will you charge by the way dave for the service or you just subsidize it you give it for free yeah i know it's sass like i said we have rates that that range from kind of pure self service all the way to uh you know what we call full service aso where we provide help and uh sorry dave i didn't understand that they pay for that extra help though have different subscription rates depending on the level of help you want okay got it yeah okay so did you sorry you i thought you're gonna expand there i cut you off anything else you want to add there about how you use services plus sas yeah so you know again i uh you know for us there are a lot of components that go into aso from like keyword metadata optimization to knowledge about kind of conversion factors and what works or doesn't work in various categories of the app store so to the extent that we can leverage our team to you know help make good decisions uh to help guide people in the direction of kind of what is working in their category uh and you know even kind of get our hands dirty and do some of that work uh you know we're happy to do that some of our customers would probably refer to us as their agency even though we're not formally marketing ourselves as an agency but that's just because we're happy to get very involved but at the end of the day it's it's kind of a sas model yeah since you want to talk about specific churn data let me ask a different more vague question um because you're growing kind of your customer base if your gross revenue churn per year is low enough your expansion obviously revenue puts you above 100 in terms of net revenue retention annually is it true that you're above 100 net revenue retention annually uh yeah we're we're i would say that's an accurate statement i i would say that our i would say that our churn uh particularly among our enterprise customers where you don't have issues like uh you know we're have to raise more money right uh is is very very low yeah yeah churn low revenue retention obviously high and what are some of the pricing axes you're able to expand accounts by it sounds like one is kind of number of apps on the platform are there any other kind of usage based things you upsell against um so you know obviously our focus is apps for optimization so the biggest most important factor is is kind of apps and territories because that's how we aggregate data and that's where our costs are um you know the other the other kind of new variable is we do have our testing product called split cube where you can do multivariate testing in addition to what you do with data cube on the keyword metadata side and so that's kind of a new product add-on that we're just introducing now uh where you can kind of optimize the conversion on your funnel as well so that's going to be kind of a dial to turn as well that's great another kind of a product upsell basically yeah yeah and then talk to me i want to get kind of in your brain and get a sense of kind of how aggressive you are so in terms of investing and acquiring new logos and new customers and new game developers or media companies uh are you you know are you happy to spend up to 12 months of first year acv do you acquire that customer or are you more aggressive at 18 19 20 months um we tend to be fairly aggressive so we have a very business development oriented model versus a self sign up model so uh you know we are we are not you know a company that leverages free trials or gives things away to acquire customers so people need to contact us we need to do some business development we need to go there and meet their team and we need to kind of do the presentation and invest a little bit of time up front uh but but that pays that pays dividends down the road i mean you know like i said at the end of the day when you have a client you have to invest in their success and when you're educating a client why you're different and you know how to how to view the data and what the value uh proposition of your product is you've got to invest a little time as well you know my background when i was at play phone you know we were closing enterprise deals with customers like walmart and best buy and big guys like that so you know we are very skilled and know what it takes to kind of go in and kind of inter-departmentally win those deals even if it takes a little bit longer yeah so just to be clear though i want to i really really understand how you've done that especially if you have other past experience so if you've got someone paying you 2500 bucks a month or 30 000 bucks and kind of first year acv what i'm hearing you say is you're going to fly there give a presentation you're happy to spend maybe 16 12 maybe even two months of acv to get the customer i mean is it accurate yeah i would say that's accurate or even a little more because a lot of our customers like i say they have they have more than one app they have some of them address 30 territories at a time right so there are a lot of customers that scale beyond 30 000 a year for us and so we really invest um we invest that time in making sure uh you know making sure that that we can educate and that we can um really be a resource to these guys as they're making the decision yeah payback payback period is a ratio obviously between costs and what they pay you so if someone pays you more per year called 100 per year instead of 30 grand you you still might stay aggressive there and spend up to 100 grand to make the acquisition fly four people out instead of one person out things like that i mean is that fair to say no matter what the cohort is you're spending about 16 to 20 months on acquisition uh yeah i would say i would say that's fair i mean i would say uh i would say that it's you're right it's a factor of how many people we leverage to get on the account but i mean there are some partners where you know where we close them in a month there are other partners where you know it might take 12 months sure of course so um you know honestly for me uh i i'm more focused on retention and winning the client um and i think we make a lot of our a lot of investments up front uh because i think you know that's what you have to do in the enterprise space right you're not gonna you're not gonna close the deal in a day yeah makes good sense uh any plans to raise capital or your happy stand bootstrapped we are always open to fundraising um you know i've done that a lot in my past um but uh but i think we we're gonna run bootstrap for now at least the foreseeable future um i think that one of the benefits of of being bootstrapped is that you know we really get to build the business in a way that makes sense instead of building a business for someone else's model uh and so um i think that's helped us grow much faster i think it's helped us be much more nimble um and you know we'll see if there's an investor or a strategic partner that comes down the road that kind of really shares the same vision uh you know we would we would definitely do that yeah very good all right dave let's wrap up with the famous five one word answers here if you can number one what's your favorite business book my favorite business book that's an interesting one i think there's one uh that i uh that i read frequently in the past called 40 laws of power uh which i think which i think is interesting um but i'm also a big fan of uh like uh kind of books that document other folks i thought the steve jobs biography was really interesting too i think i'm probably more into those number two is there a ceo you're following or studying right now is there a ceo that i'm studying right now um i'm not not really studying other ceos or what they do there are some ceos that that i admire uh i think that you know the ceo of microsoft is doing a really really good job right now kind of turning around from the balmer era i think that's one of the biggest kind of success stories in tech kind of uh kind of rebuilding the business and focusing around sas in a lot of ways so you know that that's something i think that i would say i'm closely following and number three what's your favorite online tool for building your business my favorite online tool for building my business so i would uh now i would say generally speaking uh it's not a tool but it's a channel um it's it's it's seo and search engine optimization and we do we work with a lot of tools on that from uh you know from moz to uh to guys like ahrefs but you we really believe in organic and so that's kind of where we invest for our own growth number four how many hours of sleep do you get every night four to five okay that's good and what's your situation married single kiddos uh single and uh i have one cat who's like a kid okay very good and how old are you dave uh 35 35 last question what do you wish your 20 year old self knew that's a that's a really good question i think i wish that my 20 year old self i knew knew more about uh i guess the importance of experience and how that might color decisions i think uh you know when i was when i was 20 i i valued disruption and change but i think you know it's not necessarily needed to hit your head against the wall a few times and other people have already done that yep guys there you have it gummy cube founder app store optimization platform launched in 2010 today working with 150 enterprise brands doing north of 375 grand per month in revenue about doubling year over year so healthy growth again all bootstrap net revenue retention annually over a hundred percent they've got nice pricing axes that allow them to drive that up spending car you know payback period 16 to 20 months to acquire the customers again team of 35 in san jose and other remote locations dave thanks for taking us to the top thanks