How HG Insights CEO Elizabeth Cholawsky grew to $35M revenue and 200 customers in 2024.

this is the top where I interview entrepreneurs who are number one or number two in their industry in terms of Revenue or customer base you'll learn how much revenue they're making what their marketing funnel looks like and how many customers they have I'm now at $20,000 per top 5 and6 million he help on global domination we just broke our 100,000 unit sold Mark and I'm your host Nathan lka okay top drive this week's winner of The 100 bucks that I give away every Monday is Kim dust she's in the entertainment industry and is currently working a full-time day job and doing her side hustle on the side Kim congrats for you guys this chance to win 100 bucks every Monday simply subscribe to the podcast on iTunes now and then text the word Nathan to 33444 to officially enter again text the word Nathan to 3344 for after you subscribed many people ask me what tool I used to sell my first company heyo the answer is the top inbox.com I used it to send emails schedule emails to be sent out later and set reminders inside my inbox so I would know when potential buyers were actually interested and I easily remembered to follow up with ones that hadn't replied to me you can try it for free at the top inbox.com Nathan laa here this episode 536 coming up tomorrow tomorrow morning you're going to learn from Justin Mcgill and how he raised 150 Grand then his CTO left now he's cruising at 30,000 bucks a month year curring Revenue with his company lead views top jop good morning Nathan Latka here our guest today is Mark Godly he has helped he has held leadership positions at technology companies of all different sizes from pre-revenue to publicly traded he's best known for driving Revenue at significantly that significantly outpaces industry growth while rejecting herd mentality that really is well you know thought of throughout the entire industry he breaks many of these molds Mark is equally proud of his accomplishments outside of work finding time daily to read workout and cook all while being being an Engaged father spouse and citizen Mark are you ready to take us to the top absolutely that guy sounds pretty interesting let's have some fun all right tell us what HG data does and how you guys generate Revenue uh HG data is in the competitive intelligence space whatever that means uh to to break it down we build data sets used by sales and marketing teams to do Precision targeting at scale is the phrase we use um so the Gen the general gist of what we're trying to accomplish is the days of mass marketing from a B2B perspective are over people are expecting you to know something about them their company before you reach out and we provide information that we believe allows people to do that at a scale never never before possible and when did you launch what what year was the company launched in uh I am not the founder uh Craig Harris founded the company in 2012 after a prior exit he had built a similar techn similar company in the philanthropic space realized that um uh for-profit companies had a lot more money he sold the prior brand and customer base to blackb uh CRM company maintain the underlying IP and decided to be a greedy capitalist uh by applying the the same methodologies to the B2B Arena what a beautiful thing I love greedy capitalism so Mark you uh just to be clear you are not the founder CEO but you are the cro today right the chief Revenue officer yes I have a fancy title that not even I'm uh sure I know what it means it's one of those Silicon Valley buzzword C we love money so you could argue I mean many people would say the cro is actually more interesting to talk to than the CEO right that's where everything happens uh fair enough fair enough to to to be specific about what I do I handle all the market facing functions for the company which includes um sales marketing product service all but engineering and um you know one could argue given what I do manage to some degree indirectly engineering uh has a is highly influenced by me as well great so walk us through some of the economics of the business today how many customers are you currently serving here in December 2016 um customers so that's an inter interesting very interesting topic that I hope we delve into a little bit more when the company was founded it it it served largely the Enterprise space which is very different for early stage uh startup companies so we started selling to companies like HP IBM Etc uh and only in the last year or so have we started to go uh down Market to be very specific because I know you're a guy that's going to pull those out of me sooner or later um we have about 15 to 20 Enterprise clients my Enterprise clients I mean folks that are spending mid six figures with us again the likes of the ibms the hpus of the world six figures annually Mark absolutely yeah recurring Revenue model yeah um and then the other traditional customer we've had is OEM Partners who use our data set as part of their product and those folks uh are names like the data.com of the world the Discover orgs of the world the dam Brad streets of the world uh the predicted vendors like lattice engines and Lead spaces and these kind of folks we have about 50 of those um they spend about high five figures so you know 80 to $100,000 with us annually um and then what what's most interesting is uh We've really transitioned from being a data company to a product company the last year or so by offering uis and skins on top of our data for the mid-market companies that don't have the internal teams to to onboard third party data sets and uh we probably have 100 to 125 of those uh with an average ASP about 25 Grand so you add all that up which I know you're trying to do as I annual sales price ASP yes yes that all adds up to we'll finish the year somewhere between 10 and 12 million uh which is we've doubled the business each of the last four years so if you roll that back you know it was one and a half million then three then six and now 10 to 12 guys don't you love it when I have a guest on that's listened to the show it's like I I don't even have to be here I just let Mark you just talk to the microphone and just give it to my people you know all the questions I'm G to ask all right so you'll finish here in 2016 with around 10 to 12 and you said you did about 6 million in 2015 yes okay very good so uh break down that Revenue in 2015 you said is was more topheavy and and your hope is that in 2016 2017 you're going to kind of go increase the customer base but lower arpus exactly so when I came into the business uh a couple years ago and largely was responsible for putting the go to market strategy in place again it was these large Enterprise clients and honestly I thought this was a great problem to have because most SAS companies start with selling to their buddies that are other VCB companies that don't have a lot of Revenue um or budgets and then they eventually try to Leap Frog into Enterprise we've done the exact opposite um in that we have a very very uh secure Enterprise client base you know I can I can throw out that that silly Silicon Valley term of negative churn all of them come back and actually spend more money with us and what we're now endeavoring to do is um I would say make the use of that data that we sell which is hundreds of millions of rows of data much more usable by a 25-year-old bdr you know two years out of college or much more usable by a marketing coordinator so we've created use case specific experiences and we're selling uh rather than selling the data we're selling subscriptions to those uis and that's why the ASP is is coming down from from six figures down to frankly low low five figures in the $20,000 range well any of this like if a big company that's paying you you know let's call it 100,000 bucks they signed a two-year contract they're paying you 200 Grand on that if they see you introduce lower pricing do they call you and go hey give me the lower price like does this cannibalize any of your Revenue so there there in is the the tricky balance we're trying to walk matter of fact it's not just the large Enterprise customers Nathan keep in mind what I said earlier it's also the OEM Partners matter of fact if I get real specific I'll tell you that 50% of our revenue is direct clients the other 50% is Partners those partners that are about 50% of our Revenue wait and hold on hold on those those Partners sorry those those partners are are people like full contact discover org not full contact specifically but that ilk those type of companies okay so here here's the tricky challenge they are selling into the midmarket in OEM space directly so how do I enter that that market without cannibalizing them that's what I worry more about because at the Enterprise space the product is differentiated they have access to Columns of data and longitudinal analysis that the midm market has no interest in so those big boys see they're introducing mid mid-market products it really doesn't apply to their use case what I'm worried about is how can I how can I double in7 without pissing off all my partners and saying we're going after their clients that's the that's the Rob that frankly we're in the process of trying to figure out what's Your Gut tell you how you're going to do that right now I know it's not perfect well I come from a background where cannibalization and channel conflict is um what a vpf spends 30% of his or her time on and it's a freaking nightmare what I'm really uh intrigued about at HD data is those OEM Partners they actually don't use our data in a client uh facing way they use our data as an ingredient to predictive work scoring work filtering work where our data is not exposed directly to their client and so what I'm hoping happens Nathan is we introduce products that don't compete with them but actually can sit side by side in that enormous sales and marketing stack that's been created and will actually end up collaborating and helping each other so for instance when when a client buys my HG Focus Chrome extension and says this is great can you score my leads with it I can say to them no I don't but go go work with one of my partners that actually has already done that for you got it that's the Hope let's do this interview a year from now if I'm still sitting in this chair probably means we've been successful we'll see we'll see what happens yep very good okay let's let's get into some more of the UN economics let's focus just on your Enterprise sector to make it simpler so you said did about 6 million 2015 you'll finish out 2016 between 10 and 12 million what's each kind of customer paying you on average per month or per year whatever is easier so we do it Nathan so um on average $250,000 now now that's that's very misleading because the way these Enterprise clients evolve is they will start with us in year one with some kind of business unit or specific pilot of sorts that typically they're spending $50 to $100,000 on that's the proven ground of our data once they see that it performs incredibly well by the time you go from a from a a pilot to the first annual subscription the first annual subscription is probably saying I want all your data in North America for 250 grand um they then use it and say wow that was pretty cool our Roi was significant on that what do you have in AA what do you have an APAC what do you have in Latin and so what happens over time and that gets to that silly negative churn uh uh phrase I used earlier is our renewals on our Enterprise accounts go from 250 to 500 750 do we have accounts over a million dollars that they're spending with us in year three and four good okay so if you had to tally up a total customer base you said 15 to 20 Enterprise about how how many oems uh probably 50 okay so you have around a 100 customers well so the the a little bit more than that because I mentioned the last year we've gone into the midm market and we've acquired somewhere between 80 and 100 I was on an airplane this morning so I actually couldn't go into Salesforce and pull it directly but somewhere between 8 to 100 in the midm Market at that at that 20 $27,000 ASP so 200 customers directly is the number I think you should be comfortable telling your your listeners about and then again the OEM Partners um I got 50 of them they're they're using our data across hundreds of customers um and they're actually to some degree building our brand and building the market for our competitive intelligence data by using it in so Mark closing out kind of 2016 here December or you probably have a good guess of what Mr is this month what is it I actually don't follow mrr um again I'm not just being what's that you only follow annual the annual contract renewals yeah I mean at this stage of our company's growth we just closed our B round of funding earlier this year it's all about expansion uh 12 and change our total funding through the B round I think is 24 Grand million I'm sorry 24 million yeah imagine that 24 Grand you're on a SE salary we're focused really about about uh uh building this new space we are losing money by Design we expect to be cash flow positive if things go as planned by 2018 and we have enough cash to get there with a lot in the bank um so honestly we don't look at Mr as much as we look at ARR you know ARR um you know is going to be somewhere north of that 10 million uh if the next three weeks of contracts in in Redline right now go as bed and what about don't don't count um upsell uh Revenue what is your gross annual customer turn uh so how do you want me to calc it in in number of customers exactly is this an important number for you guys if you don't know it not it's less than 10% we don't we we've been incredibly fortunate that we have close to no churn no matter if you look at Revenue churn or client churn now interesting you know uh go look at one of the posts I I did a blog post about two months ago about let me give you a real specific we've had one six figure churn in the last four years so you do the math on that yeah we may lose a 101,000 customer here or there but in aggregate it's not very meaningful against the overall base of business what are you willing to spend to acquire a customer well we're trying to bring that down so so given that most of our business has been that high five figure and low six figure or mid six figure number most of our sales team which right now is about 10ish people of our 80 total employees you know um you know we're paying these people uh north of 150 definitely north of 150 obviously what's that north of 250 um for the ones that are performing yes probably not for the average okay so we're looking 2 to 250 um on on a whale Hunter of sorts but as you move down Market you know those numbers don't don't play out so we're building an inside bdr team ourselves we're looking at more of a high velocity sales model um and we're hoping that the product is so good and we design it so well that we can you know bring in a $60 $80,000 $100,000 uh type early early career inside sales rep and just scale the hell out of the so Mark what is current CAC I actually don't know that I and I'm not being north of north of what just give me a Range what do you think it's definitely north of Nathan I totally honestly don't know if you had if you had Craig on he wouldn't know he wouldn't know either we we need our CFO for that well how do you how do you okay I mean obviously it's important because you said we have to get it down immediately when I ask the question so you know it's too high well I know it's too high because you don't find quarter million dollar sales rep selling $25,000 products got it got it okay good makes sense where are you guys based you got a team of 80 where are you at the company is based out of uh Santa Barbara a beautiful place to work um I live in San Francisco and Silicon Valley and come down weekly of the 80 people most of them are here there's a little bit of a silicon Beach thing going on here with a couple other really uh success uccessful tech companies that are um finding refugees from the bay area or people from La that are sick of entertainment that know how to code that want to come up and live in Paradise awesome hey Mark where's the best place for folks to connect with you online if they want to watch you keep building this thing uh probably LinkedIn or on Twitter M Godly 21 is my personal handle folks I may have to stop doing the podcast I will tell you why I have found a business and I'm ready to go all in it's the one I want to take public by the time I turn 30 it's called the top inbox.com and here's why I know it's going to be big very big there are so many other companies charging way too much for this right now yesware tout app Boomerang that's to do things like send later reminders and autof followups for salespeople inside of your Gmail inbox I'm doing it I'm going to do it for free we have so many people using it it's growing so fast and we do many of the things that salesp people love we don't require people to leave the inbox to go log into a website it's so simple to use and I have to tell you I mean salese are like drooling over this thing they're like licking the the drool off their keyboard they're loving this thing so much the top inbox.com go install it now use it for free people okay I like you cuz you're listeners use it for free before I decide to start charging for it go right now to the top inbox.com okay top tribe I have to tell you many people go Nathan you came out of nowhere your website scrolling so fast how' you do it the answer is simple so I use HostGator I don't know if you guys know that but I use HostGator and the reason I do they have like about 4500 free templates I can use cuz I don't code they've got a great e-commerce plugin and guys I bug the heck out of their support they've got 247 support which I love so what I've done is I've worked with them you guys know I make great deals if you go to host g.com Nathan you can sign up get your own domain for 30% off and a 45-day money back guarantee okay again I make great deals for you guys go to hostgator.com naathan to grab that now all right top tribe we link to that in the show notes at Nathan lat.com thtop 536 again/ thtop 536 Mark let's wrap up with the famous five these are one word answers you ready uh one word is tough for me but I'll try all right number one what's your favorite Business book I don't read business books I think the world's much too interesting for that um I am reading right now a book uh called Devil in the White City by Eric Larson fantastic historical novelist number two is there CEO you're following right now um the folks in the startup community of mtech and sales Tech are folks that I watch Pretty closely um and two guys that I would suggest you reach out to to maybe talk to that I think are doing amazing work would be Henry shuck of discover org and Jonathan stern of Zoom info okay and we had if you guys want to check out Henry we had him on back on the 18th of December that's Nathan la.com thetop 512 they just passed 70 million bucks in ARR at discover org.com who was the second one Scrappy dude who was the second what was Jonathan Stern okay Jonathan stern of Zoom info very good number three is there favorite online tool you have so on the personal level uh I use Flipboard and Stitcher daily you you you'll appreciate Stitcher on the business perspective I use gagal amp to allow our employee base to amplify our social um coverage and then lead forensics is one we're bringing on board we have high hopes for to do reverse IP lookup to convert uh unknown visitors to known visitors on our website number four yes or no to get eight hours of sleep every night um I I had three I had three daughters in diapers uh over a decade ago so the answer would be no six hours I get up at 5:00 a.m. I wish I could sleep on less what's and how old are you today I'm 47 years old all right so last question mark take us back 27 years what do you wish your 20-year-old self knew so I actually think I've won the lottery of life um if the implication of that question is what would you do differently I actually have no regrets that being said general advice I would give any 20-year-old live living below your means gives you tons of options um think about your life you want at age 50 and work backwards we're running a marathon not a Sprint it takes planning sacrifice and resilience and then don't define success or Happiness by your paycheck there you guys have it from Mark godle cro at HG data they're serving around 200 customers they've raised 24 million bucks did 6 million 2015 Revenue will break the $10 million Mark here in 2016 uh KAC and arpo and all that right now is focused on Enterprise they are moving down Market to service more people with their backend data set with a team of 80 People based in Santa Barbara mark thank you for taking us to the Top If you enjoyed Mark today go back and listen to Dominique yesterday he's a 24-year-old founder but now he's a venture capitalist at humming Burg VC in Europe top drive I love giving away free money I feel like op are giving away cars and I have something special for you today how many of you have heard our super sharp guests talk about success they've had with Facebook and Google ads well all of you listening right now yes if you're listening you get $100 in free AdWords here's how you get it okay again thanks for listening get the $0000 from Google right when you sign up with my website host provider HostGator go sign up now to get your free money hostgator.com Nathan again that's hostgator.com Nathan okay top tribe I'll see you bright and early tomorrow morning and don't forget before you listen to any other episodes subscribe on iTunes right now for your chance to win a 100 bucks every Monday [Music]