How Intermix CEO Paul Lappas grew Intermix to $840K revenue and 25 customers in 2018.

hello everyone my guest today is paula lopass he is the ceo and co-founder of intermix dot io he owns multiple patents for cloud computing and performance analytics and in 2007 he co-founded gogrid one of the early cloud computing companies which agreed over 50 million dollars in ar paul are you ready to take us to the top i am thanks for having me you bet okay that's a big cliffhanger we have to finish up the go grid story before we talk about intermix what happened to the company the company got acquired who'd you sell to 2011 by uh data pipe a big a big data center uh cloud provider yeah what was the ecosystem like back then yeah so i mean was it a good exit or a soft landing or what we had the opportunity to blow it up to be much much bigger if we had taken on a lot more capital it's uh it's very expensive to build cloud services um but uh we're really really happy with the outcome that's great all right intermix so did you go directly into intermix after go grid or if not what was the in between story so i spent a couple of years consulting with a few companies to help them bring their products to market you know i had focused on technology at go grid and i really wanted to spread my wings and learn more about other sides of the business marketing and sales and so um you know i sort of was helping some other other startups i landed in 2013 in how i got the idea for intermix at a company called um criticism criticism he was later renamed to actually what much better name was it was a crash reporting tool for companies developing mobile apps and it was um super super big platform we had a little library that ran on over 1 billion devices across apple and android and what was really interesting about the company is that we were sitting on a ton of data for example we could we could tell you um for android how many activations were done on the att network in los angeles in january um because of the data that we had and it wasn't it wasn't part of what we were selling but my co-founder lars that joined intermix at the same time as me that's where we met approached me one day and said hey can we put this data into a place where we could sell it i have a few companies that would be interested in buying it some private equity firms other consultancies that were just interested in this industry data that was really hard to get and so i said sure you know how hard could that possibly be and i hired a data scientist to help me uh to do that and almost immediately when that person joined they were like okay great where's the data um i was like well it's here it's it's in all these databases you know just go out and find it you know and he's like no um i need to have it all in one place it needs to be clean and complete and correct and i need to be able to run my tools on it my specialized data science tools and i said okay um interesting and then i spent three months doing that and getting the data to a place where where it was useful and really at the time i talking to other peers in the industry realized that a lot of companies were having the same challenge in making data scientists successful and so um you know decided to leave that company and lars and i joined up to start intermix uh shortly after lars was the data scientist no lars was the head of business development at criticism did you bring the data scientist with you or no uh i did not come on paul night well you know you kind of people that you would hire later stage um are different from people that you need to start a startup such a diplomat smart guy all right talk to me about how people can we understand the product i think because you just give a great story tell us tell us how you monetize is it a peer play sas company it is yeah it's a it's a sas company we uh we sell to enterprises uh it's a subscription and uh people will either prepay for one year or two years okay so on average i'm sure you have a lot of cohorts but we're short on time what would you say like an average company might pay per year to use your tool it's between five fingers moving up to six fingers uh to six figures now okay okay got it and that's kind of first your eighth cv so call maybe anywhere between 50 and 100 grand yeah what do they so let's let's role play for a second if i sign up today for 50 grand give me a sense paint paint a picture here what would i get for that so what you get for that is a single dashboard whereby your your your uh data teams the ones that are there that are that are building out your data lake infrastructure um that your data scientists plug into you'll get a single view into all the apps that are connected all the users that are running queries the way that data flows through that system and a very very easy and quick ability to aim figure out is everybody having a good experience are apps working is the data lake working or if not why and what the cause of that so that you can very quickly pinpoint where data's getting stuck interesting okay very good and uh put this on a timeline for us so what was the official year you launched so we launched at the end of 2016 and one of the interesting things nathan is that we got to revenue our first dollar of revenue came only six months after we wrote the first line of code for the business i i love that you lead with that it's like a technologist who says you know what all techies don't just only focus on product we made money after six months well sorry maybe not maybe not made money you had revenue in six months right that's great i want to get the story behind that first dollar in a second but let's go backwards so today how many customers have you scaled to so we and now have over um over 25 customers we're still a seed stage company nathan so we're still quite small and we're looking at nine dollars what do you mean when you say you're still steve how do you define that so the way that i define that is we're still um you know we have a lot of revenue we have good customers our churn is really really low how low tiny it's um we're um you know over 100 revenue retention because a lot of our customers will expand with us what about gross churn though if you peel back that onion um so our platform is focused on amazon redshift right now which is a a major cloud data warehouse yep so as companies ship to other data warehouses where they might turn off of us i snowflake or uh bigquery yeah and so our vision is to support all of those databases going forward but for right now we're small so i mean is that code for like is that good for like maybe 10-ish annual revenue turn on a gross basis or like what is churn today annually gross it's under under five percent oh i mean that's super healthy okay so you lose less than five percent of revenue annually you more than expand that same core by five percent so you have net revenue retention north of 100 at this point yes that's great okay yeah take me back to the backstory so you you said define seed stage and i and i said how do you define that yeah well you know we're at the point where we're still figuring out the right go to market right what is the best way for us to acquire a dollar can we make at least three dollars you know can we make that money back within one year consistently and and have enough data points where we can go to an investor and say hey if we if we million of your dollars we'll be able to grow at this at this rate over the next two years um we're close to that at this point but we're not quite there yet so we're still we're still at that stage of the company have you capitalized the company if so how much have you raised to date we've raised a little bit over five million dollars okay across uh two rounds of funding and why'd you decide to raise instead of bootstrap it sounds like you're able to get revenue going pretty early yeah well you know when you're building hard tech like we are you need software engineers and software engineers are expensive and so are you all in san francisco you gotta have i'm sorry are you guys all in san francisco um not all hq is here but we have engineers in new york and europe as well so we're distributed and how many people total nine people total nine okay that's great and then look i mean if i take the 25 customers right times we'll stay on the minimum side so let's say 50 000 ac i mean you guys are you've got to be either flirting or just past kind of the million dollar ar mark or is that something you're gonna pass in the next couple of months yeah we're gonna pass that within at the in the in about q2 time period that's great and can you can you can you give me a general sense of growth year over year so if you're out call it 70 grand a month today where were you a year ago so i mean we're growing at over 12 per month at this stage nathan um adding adding new customers not only are we adding new customers but the acv is also growing and our expansions are approaching over 30 percent of our monthly growth at this stage you mean a lot of revenue growth is coming from expanding old cohorts that signed...