Ignition GTM, Inc Revenue, Valuation & Funding (2024)

hey folk mike folks my guest it is derek osgood he's a former marketing executive founder building ignition the collaborative go to market platform helping product and marketing teams get new products to market faster and more effectively before this he was an early higher at rippln where he stood up the product marketing function helped scale the company to 20 million in arr as product marketing leader everywhere from startups to major brands like playstation derek has launched over 100 products and his products have generated over 1 billion revenue now he's building the platform he wished he had all along the way derek correa take us to the top yeah yeah let's do it i'm excited awesome first off this is like one of those things man we are launching products like crazy at founder path this problem is like a mix of like google docs apple notes someone is sold on like jira so we sprinkle in some jira and click up mixed with like handwritten sketches from the last team retreat it's terrible like why hasn't something like this existed before dude i have no idea it's it's this cluster at every single company i mean i've been now i've seen this at dozens of companies that i've consulted for that i've been at in-house and it's always just this dumpster fire of tools hodgepodge together and the real thing is none of the tools actually do any of the work involved so they're all like systems that are just built for documenting and tracking the work in what is a really specified and like important process in any company and so teams end up having to do all the actual research and competitive intel in a completely separate place that ends up completely siloing the information away from the teams that need it in order to execute the process so it's um i think that you know probably a big part of why it hasn't been built so far is just it kind of requires a product marketer to start it um because of the fact that it is such a product marketing specific function and there's not a lot of product marketers who start companies honestly and yeah i think like i haven't seen too many of them so that sort of is my only hunch on why this hasn't existed but uh it's it's a messy problem and you know it's tough to solve but um important so so before i dive deep into like the actual products i want to go deep here um how do you think about pricing on this thing right what is your own go to market what's the average customer pay-per-month to use this yeah yeah so we we charge on a per editor basis so you know our whole structure is based around the people who are actually like leading the launch process one of the big downsides to all those other tools you were talking about there is that they charge for every single user seat so a lot of the teams that need the information involved in the launch process like for example sales and support it doesn't make sense with their business model for you to actually have seats and for them to even be able to access the information that they need hence why you have a lot of meetings and stuff so so yeah we charge um you know at our base tier 29 per editor per month and then you know our kind of primary tier that most teams use it's a 99 per meter per month so um you know small teams end up looking somewhere in the like three to ten k range um you know on an acb basis so yep yep is that your sweet spot right now like before you really start to go up market or mid market we have teams of all sizes so we have you know big companies right now like square and smart rent using us um and then we also have you know a bunch of like small five to ten person teams using us we allow some peoplepreneurs using us as well for their own like personal launches so oh wow uh well okay so now i'm curious don't mention the name of the customer but what what what um your largest company how many editors do they have on one like for one brand yeah yeah so the biggest editor account right now is actually it's only 15 but they plan on expanding that pretty significantly i think they're planning on like doubling or tripling over the next couple of months they're still kind of getting out of the implementation phase okay so 15 editors at 99 a month your biggest customer is sort of like 1500 a month today something like that really interesting 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 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 than what you can get now inside of founder path 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 founderprep.com and hover over products click on get your evaluation 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 man so this is great okay i want to come back to how you plan to expand like your net dollar retention obviously would be dependent on how many people you can classify as an editor like who's needed in the process but let's go back to sort of like base case here for a second these small editing teams like you call them editors but what are their job titles on linkedin today yep so typically it's a product marketing manager or a product manager um the role of product marketing ends up being done by people with a couple of different titles so sometimes it's like a just generic marketing manager if you're talking about like cpg companies it ends up being a brand manager um so it's there's a variety of different like shapes and sizes of product marketing but functionally it is the product marketing function um and then you know sometimes the product manager ends up being the kind of primary collaborator collaborator with them um they do have you know there's smattering of like other marketing folks across the editor spectrum as well so marketing ops teams are often involved and then oftentimes you have like a comms person um sometimes some design teams or editor seats so um it does vary a bit company company but primarily we go after you know the product marketing team is kind of our main entry point interesting and and how does this so if i was looking at this and saying how can i get this done without paying for have ignition i would use something that my like development team uses like linear right a project management tool because that's really what's going to drive if this thing gets released on time and then i like sort of figure out a way to make the engineering trello board or kanban board work for all the marketing activities what are you building inside of your platform that we're not going to see inside of project management tools for developers already yeah so i mean one of the big downsides of doing that is just you are intermixing two totally com totally different lines of work that have completely different needs in terms of communication so it's not just about project management when you're talking when you're talking about launching stuff and a lot of people think about their launches as the checklist and so we do all the project management stuff and you know you can kind of replace linear or jira or whatever you're using on the dev side um with our product when you're talking about marketing but there's a lot of strategic documentation involved as well so you also need the ability to actually document this stuff in written format in a way that's not buried within tasks so we're taking the kind of project management we're marrying that to documentation we're then marrying that to asset management so you can actually store all the marketing assets that are created in the launch process manage approvals on those and then push them into the tools that you need but the real magic here is that we're actually taking all that stuff and that's just the baseline like how do you document and like plan the launch and we're marrying that to tools that help with research upstream and then downstream communication of those plans so upstream we have competitive intelligence tools and customer research tools where we'll help you collect customer feedback into your roadmap identify surveymonkey type form video recordings exactly exactly and then we'll we'll pipe that into the planning process itself and then downstream we help with communicating that stuff to all the teams internally that need it because those teams don't need one kind of master plan and they don't need to just see the list of tasks what they need is specified bits and pieces of that planning information so your sales team just needs to know what's the messaging how are we talking about this what assets are available to us so you can push just that content to them through email or slack so they don't need to go like sift through a tool in order to find it and then on top of that you know we're also helping with some post launch measurement and doing a couple other things that you know you just can't really get in the pure play project management tool but ultimately what we what you're getting is full end-to-end management all the way from customer research through to strategy through to the post-launch communication and measurement got it okay and put this i guess how many brands you have using the platform today as customers yep so we've got about 800 companies on the platform right now um you know again ranging from small little companies to very large ones and it's across a range of industries too some of them are sas companies some of them are cbg product companies um so all across the across the map and if you looked at like if you took the number of brands you have on the platform and then divided into that right the number of total seat number of editors in your case what's the average team size would you say yeah so the average team size like it's probably around three or four editors in a company um but you know that varies dramatically based on which segment you look at so if you look at kind of our larger segments it's closer to you know 10 to 11 folks and then if you look at you know the smaller groups it's two or three yeah yeah okay and put this on a timeline for us when did you write the first line of code for ignite yes we we wrote the first line of code in march of 2021 so we we might i met my co-founder in december of 2020 we kind of started thinking about it kicking around you know the idea doing some idea validation um through january and then we you know did some mock-ups close some customers closed around funding in february and then you know started building in uh in march we february 2021 yes 2021 what was the seed how much was the seed round yes we raised a precede that was about uh 1.8 million and then we raised another round of funding in um in december of last year so total raise we've raised about 5 million um and basically that's when we launched our beta in january of this year got it so you sort of closed like jan first basically another 3.1 million on top of the 1.8 you already raised what makes this so expensive obviously these are i mean most pre-seed rounds you're selling 20 equity seed rounds you're selling 15 to 20 i assume you're probably right in the standard range right yep yep okay so let's say you've been deluded on average 15 now twice like why do you need this money to get going why couldn't you scrape by and bootstrap and keep a hundred percent yeah so we we likely could have for a while um i think you know part of it is my co-founder like you know need to take a salary um also the other other component here is we are building a pretty large surface area platform so in order to solve this problem you really have to solve all the like 10 000 little paper cuts that are involved in it and it's a pretty big bundled aggregate solution it's very hard to build just like one individual part of this because like for example if we built just the project management component of it we would get sucked into building purely a project management tool for most of the life cycle of the company because that's just where customer demand would end up pulling us and we probably would have never had the time to devote to building some of the tools that help with automating a lot of the other like work involved in the process so i think mostly it's the surface area of the product um you know we just had to build a lot of stuff in order to have it be meaningfully differentiated from what you're already kind of packing together in a documentation tool or project management tool that's fair that's fair what's how many folks on the team today and of the team size how many are engineers yeah so the team's about 21 people now um fully distributed so you know we're pretty capital efficient in in the team that we're building um and almost all of them are engineers so i'm the only actually we just hired our first marketer um so we now have two business people um myself and him and then our qa engineer and our designer and then the rest are all engineers so tell me about you mentioned remote and capital efficiency have you found is it the eastern block is it argentina is it somewhere else where where do you love your developers to come from all of the above so we have folks in india we have folks in eastern bloc we have folks in argentina our design that's rare most times people find one area they build around that you diverse you could just argue diversified right but do you have a point person in each of those how did you find the first person like say in india for example yes we have we have a point person in each um so the first person in india he came through angellist um was just really he was actually our first our first hire um and so he came through angellist uh when we were originally you know forming the company and we just loved him and we loved what about poland so poland was i sifted through every single designer profile on dribble and i found uh i found one that i loved and pinged him directly um argentina we ended up going through a recruiter so we knew that we wanted to build a team in a u.s overlapping time zone so you know we wanted to build out a team there so we uh found a recruiter there again lucked out with a great point person he ended up bringing one of his friends um on as a referral and then uh you know the eastern bloc was through uh an agency that we originally hired when we first started building um and we've just continued building out uh over there that's amazing can you share the original agency you worked with when you started uh yeah it's com it's an agency called avrony veroni like eat like should like if people listen should they go google them and use them too were they good yeah they're great we love them okay e e v r o and i uh r o o n e o n e f r knee interesting very cool i always love people you know they find these agencies talent all over the world it's crazy like my i don't know you're probably not able to answer this but if you can be very valuable 21 on the team based in the u.s building a great product i look at the ui looks fantastic what is your with this distributed thing and you talk about capital efficiency what you're all ignoring your salaries like you and your founder what's the all-in person fixed expense per month right now so on a per person basis no don't tell me peep individual salaries i mean just total head count expense monthly excluding founder salaries oh total head count expenses is about 150k okay interesting so okay 150 times 12 divided by 20 people okay that's an average that's not okay so not you're still that's 90 000 on average per person so now these are not cheap salaries but you're maybe getting better talent because you're looking around the whole world yeah exactly i mean we we did this you know in not necessarily just to save money but more so because you know we think that there's talent all over the planet and you know it's you are my co-founder he used to work at facebook and he consistently says you know our engineering team is as good or better than any of the engineering teams that i worked with at facebook so yeah um you know i think we've gotten really lucky with some of our early hires and they've ended up you know continuing to flush out a really nice um quality team yeah all over the world did it ever frustrate you that when you have you ever tried to motivate like someone have evroni with a little equity kicker like to get more of their time but they just don't understand it or they don't care about it you're like i can't use equity to motivate these folks it's all cash it's funny yeah i mean like a couple of our folks they they have started to like kind of see the the light on equity and you know they're they're like now excited by it um but i think it's it's definitely like it's a totally different dynamic you know if you go try and hire in silicon valley everybody is demanding maximum equity and you know like everywhere else in the world people you can i have to force it on people i'm like hey look you have to take equity because i want you to have a slice of the pie here and they're like i don't care i don't want it like it's all engraving yup yup yup now if we if we got the starter story there we understand we got mvp going we need your team size say if we take those 800 customers times an average of three editors a pop at 99 bucks a head that's a rp per uh per brand of about 300 bucks a month uh times 800. can we sort of back into your mr that way would that be fair you're doing about 240 grand a month right now it's probably not totally fair so a lot like a big chunk of those 800 companies also came through an absolute launch that we did so you know that is lifetime deals and you know they're not recurring revenue so um and i actually don't really want to share revenue numbers at this point but um our revenue numbers are ticking up pretty decently but uh you know we're not we're not quite at that at that level why why does a guy like you that understands product and user feedback so much do a lifetime deal you know those people they're not going to expand they're not going to give it to a monthly so it doesn't help your cash flow it doesn't help your valuation really right because because because the lifetime deal destroys all the unit economics with sas why waste your time with a lifetime deal so i i actually think that it is one of the most valuable things that we've done in the lifetime of the company um it was mostly for feedback like basically you know we did our beta launch the product was pretty broken when we did our beta launch and you know we purposefully shipped something that we knew we weren't going to be like super happy with um and then we did a lot of work on it over the course of like q1 q2 and we decided hey we need to really stress test this before we go do you know any kind of like more concerted user acquisition and start scaling anything up and so that was why we did the appsumo deal and we got tons and tons of feedback and it was drastically more engaged feedback than i think we had been getting through the early part of the beta just because people had paid up front and you know regardless of whether or not it was a lifetime deal or it was a recurring deal we were getting much much more valuable and like very tactical pressure testing of the products so obviously like they do but if you then go build all the things they complain about are they going to pay you a bunch more and move to monthly plan we don't care i mean like honestly if they if they derek right you're getting feedback but from the wrong people in my opinion if your girlfriend to a jc penny shopper who got the free jeans for five bucks if they brought in a 10 discount you don't want feedback on how to build world-class jeans from that person they're gonna and moan take up customer support and they're going to guide you the wrong direction so why do you care about that feedback no matter how engaging it was yeah because honestly the pro the problems that are that that user versus the problems that are a larger company user they're almost identical when you're talking about launching products like i actually fundamentally disagree with the idea that they are the wrong user they're just users that have a slightly smaller company that are that they're doing this in but the problem the the feedback that they give us it's identical to the feedback that we get from our larger customers so it's not like we're getting you know useless feedback here um it's just coming from a different source and definitely there's like support burden there but i i will never complain about having to you know spend a little bit more time on intercom because you know for me like more customer interaction is better and you know there's not so many of them that they're going to end up eating up how many how many are there how many came from appsumo uh a couple hundred okay so so as i mentioned say 50 of your total user base right now when you said 800 customers couple hundred from appsumo probably about that yeah have you come up with a good way to convert them to monthly recurring like you spend all the time getting their feedback you build great tools from is there a paywall like have you have you done well there yeah yeah so so basically like once they reach a certain user threshold we you know require that they convert to a um to a deal yeah yeah so once they've reached a certain threshold of editors and then there's also like one tool in our product which is basically our customer research tools which is a paid add-on and so you know a decent chunk of them have also converted to the paid add-on that's smart there's a lot of other jobs they give the whole thing away for free there's no way to convert them it's literally just like you just signed up for life because you sort of lifetime deal so technically if you have to shut down in six months well no you better refund everybody or six years even it's a lifetime deal but you've built a nice thing here what is the editor limit is it two or three or four what is it so at the base here it's three and then if they bought one of the higher tiers like the maximum is 10. so once they you know there's a couple of agencies for example that they have you know 10 plus users that they're that they're using right now that you know they're converting got it got it so when i asked you about how many customers you had earlier really you've got 400 that are like true recurring customers that are non-appsumo another 400 came from appsumo of which you've converted some portion of those in the monthly recurring some along those lines okay fair um very cool all right let's um let me see if there's anything else that i missed here i guess talk to me real quick as we wrap up here about go to market you've tied up and linked up very closely with a large community in the space walk me through how you did that if there is a deal is there an economic relationship there uh so there's their investment so they're ceos and investors of ours um so basically product marketing has an economic relationship for sure yeah yeah um yeah so he was one of the first checks in actually um product marketing alliance they're one of the biggest communities of product marketers out there um i've been pretty engaged in the community since before ever even thinking about starting ignition like i did some speaking for them um early on when they were first getting started and um i think you know generally we basically went to them first they were one of the first people that we reached out to when we said hey we're gonna go raise some money um because we believe very deeply in the benefit of community and you know whether that's your own community or leveraging somebody else's um you know we wanted to be really tightly coupled with those guys both for the imprimatur that their brand confers to us as experts in in the space but then also for promotional opportunities and partners can they ask you to pay for that placement or did you get it for free since the founder invested uh so we've gotten some placement for free we've also you know done some like small paid sponsorships but we've gotten you pretty good discounts on that stuff as well what's smart like i see sponsor i i put my email in to get the the dropbox doc send the status go to market report 2022 i see says sponsored by ignition are we talking like a 5k sponsor we're like 50k sponsorship there typically they charge 50k we didn't pay that like we paid i see okay cool so that's a good relationship for you guys make sense for let them as a strategic investor um anything else in terms of go to market this worked really well for you we're talking very meta here go to market platform for go to market thing yeah totally i mean we've done a lot of cold outbound so you know we have mostly been using cold outbound outreach as our primary like acquisition vehicle um a lot of our acquisitions come through word of mouth and just being you know act i call it like being a professional community member just going and being active in product marketing alliance responding to people's questions uh going being active in you know other other forums and whatnot where people are talking about go to market and like trying to get that insight into this stuff um we've done a decent amount of podcasting as well so um you know we've since day one started to build out a pretty robust like content program and podcasting program both for seo purposes and then also for a lot of like thought leadership around this space because it's an area where there's a lot of content but not not a lot of it is very good content and very actionable so um you know we've done a decent amount of content as well but we've been pretty light on you know our actual like marketing activity to date we just kind of recently in the last month or two started kind of scaling up um you know trying to aggressively acquire folks i mean do you think you can break a million dollar run right by january or you guys are averted by december this year that's the goal i mean i i think you know we'll see if we end up getting there but i think uh you know the the target is definitely to get to a million or so by you know end of the year i see very cool and obviously no revenue exactly one year ago right yeah yeah i mean we had no revenue a couple of months ago yeah so when was first revenue what month uh first revenue was july june july okay got it okay august september yeah so you're literally like i guess that's a little confusing right so if you have like hundreds of customers though paying 99 bucks i mean a bunch of those free users or something some of them are free yeah i mean like not all of them are paid yet um but yeah we we didn't we had a lot of them on the platform for free during the beta we didn't start charging until actually july and so that's when we started rolling people off of the free plan we've been you know relatively like light-handed in trying to convert the free users that were in our beta to paid users because you want the product to be at a point where they're excited about paying it before we start really pressuring them to do that so um yeah all make sense let's wrap up here derek with the famous five number one favorite book uh favorite book of all time is uh it's a fantasy book and it's called the king kill uh king killer chronicle name of the wind um but famous business book is a good degree number two is their c is there a ceo you're following or studying uh i mean still definitely following parker at a rippling uh you know i think um i've always always admired him and uh continue to do that what's the last revenue number they put out publicly uh i believe the last public revenue number that they put out was a while ago and i think it was um something like 20 to 50 20 to 30 million um you left right around there then yeah yeah yeah okay very cool number three favorite online tool for building ignition uh favorite online tool linear honestly i love later me too number four how many hours of sleep to get every night uh four that's not healthy no no it's realistic it's probably closer to six but uh you know i think um lately it's been four and when uh situation married single kids uh single one okay no kids no kids single uh just moved to l.a you know and how how are you derek uh i am 35 35 last question something you wish you knew when you were 20. uh be more aggressive like go start you know when i was 20 i was working at playstation which was fun learned a lot but you know i think i i wish that i'd started starting companies earlier guys have ignition.com they help your go to market teams plan go to market launch new products for example uh they've got 500 to 800 folks who are actively using the platform they've converted some portion of those into paid users they've got eyes on breaking a million dollar run rate by the end of this year maybe early january 2023 we'll see what happens uh they've got 21 folks on their team right now spending all in head count outside found our salaries about 150 grand per month so healthy burn they raised 3.1 seed and another 1.8 pre-seeds and plenty of cash to work with to drive that growth um 17 of the 21 are engineers so heavy engineering org we'll see what happens next derek thanks for taking us to the top yeah thanks much more thing before you go we have...