How Komiko CEO Hal Howard grew to $720K revenue and 2K customers in 2017.

launched this company guys back in 2015 after a long stint not a stint actually a tenure at Microsoft almost two decades he launched in a company called Kimiko which is helping folks enrich their CRM that the plug in a world it's an add-on to CRM is complimentary not competitive up to ten people now full time based up there in Seattle doing about 60 grand per month they get that number because they've got about two thousand employees across a large set of customers using their tool they charge about 30 bucks a seat that's about 60 grand and mor get about 120 grand last year hoping to hit that million dollar and you'll run right by the end of twenty seven this is the top where I interview entrepreneurs so our number one our number two in their industry in terms of revenue for customer base you'll learn how much revenue they're making what their marketing funnel looks like and how many customers they have now it's $20,000 per Tov I haven't experienced he's had bent on global domination we just broke our hundred thousand unit so mark and I'm your host Nathan Laska business of 7:46 coming up tomorrow morning Derek joins us he is a six-figure poker player who quit to launch his own agency why'd he quit still lucrative poker game for a startup hello everyone might guess today at how Howard he is a founder of a company called Kimiko now before that he was a leader of the Microsoft Dynamics ERP development team from 2004 to 2014 so he's seen it he's been there he's done that how are you ready to take it to the top sounds great let's do it very cool so tell us it start from the beginning tell us first what a Kimiko does and let's hear about how you acted in Microsoft and got into it in the first place sure Kimiko is the sales intelligence tool that basically helps our customers understand what engagements with customers are working uses a combination with your data mining machine learning techniques to understand what patterns of engagement with a customer working and it does it by going directly to primary data sources not just your CRM but things like email calendar phone logs etc to understand what's going on do you do you pay for kind of other data sorta sources just to check that like full contact clear bit things like this we have integrations with all those kinds of services as well yeah yeah I know and and quickly what is your revenue model it's a subscription service it's cloud service classic when I use your usual broom looks like these sass yeah yeah all right take it back to the launch store here 2014 you're sound like you're killing it at Microsoft you're having a ton of fun there what was what was it like working now and then why'd you leave yeah well I mean if you look at my history of Microsoft and I was there for 20 years and worked on essentially four version one products and I like sort of building things and building things from crashing and 2014 we reached a point with Dynamics ERP business where I felt like I had a great team around me people who were capable of moving the business forward and keeping going forward and I was interested in starting over again and building something new so you know I looked at opportunities to do that within Microsoft felt like the best opportunities existed outside and so family-owned company and we went for it he could have done anything like use this concept well essentially you know my time in business applications I became convinced that there were a lot of new technologies that weren't being exploited very well in business apps and business applications typically or you know form in front of a database with some kind of a report being run at the end of the day and most users of business apps use them more as a burden than an actual benefit right now your sales person and you have to do a bunch of data entry in CRM you don't love your CRM system right and that's their stuff but it should be something that helps you day-to-day understand what's working with the customers and so oh I'm down again you know whole idea man Kimiko is to do that is to make it useful for people that actually use it and what's the average customer paying you average customer pays anywhere from 30 to 35 dollars per month per user and you know good customer for us is you know we have customers ranging from three years up to five hundred got it how many total users are there a chronic across all your paid accounts like are we talking ten thousand a hundred thousand a million two thousand at the moment and growing every day okay so so there's 2 tallis just to make sure we're concerned there's basicly 2000 seats is the term I two thousand seats across how many businesses around 50 businesses in code that's great and so it's obviously lunch done in 2014 you just tell me or your Percy price was on the low end kind of 30 30 bucks you have two thousand so what you're doing a minimum 60 grand per month right now I'm going like that right around there come tell me more about the team kind of makeup so you launched again back in you lost you right after you left Microsoft right in 2014 I took a few months off to consider various ideas and then basically founded coming to February 15 so yeah we've been at it for two and a half years now let's be on you convince yourself that when you left Microsoft you were going to just vacation the rest of your life and you're sitting in Boca and go okay I can only have so many Coronas and limes and I can only lay in the Sun so long I want to get back into it right it was minutes but yes but pretty much pretty much pretty impressive I can basically guess almost exactly without it right it's 2015 and what do you add today in terms of your team size and help me understand the makeup yeah the team is pretty small we're actually only ten people the advantage of you know cloud services today is you don't have to have huge infrastructure and use teams to actually build a significant product so it's we're we're ten people today and you know we'll grow a little bit over the coming year or whatever else is customer demand grows how many years okay so again and are you the kind of engineering co-founder or are you the business kind of co-founder but the reality is that my co-founder and I both do a lot on the sales side and we also do products engineering work as well are you actually writing writing out code each day not me the team does that it's been a while since I wrote code for a living but I do a lot of the design work and sort of ideation around the product that sort of thing this is a very very fragmented and competitive space right up you see company like tout app which just sold for a not so good number you you have other kind of companies that are raising money like pipedrive right 19 million I think deli with clothes I mean there's tons right do you see yourself playing in the crm space or you a customer of the CRM in other words you're just going to enrich the CRM yeah right now we CRF is complementary you see around we don't see ourselves replacing something like Salesforce for example we we actually partner with Salesforce and most of our companies most of our customers actually had Salesforce and we're complementary to it now we're driving a lot of value there will the value equation shift over time between what we charge for our app and what sports is able to punch or maybe you know that's not typical when you can authorize the platform layer or something as price does drop so we're going to drop maintaining the value when they're in their price point so but just to be clear will you ever have people coming to you like I see your customer your customers listed here like let's say Far East hospitality right when they when they come to you are they saying how help me understand why to use you instead of pipedrive like are they comparing you and their CRM decision or is a different decision set it's a it's a different decision says they've already pro we decided on the base serum system like how they're going to manage our activities message stuff what they're looking for is intelligence beyond right as what would actual being you know the in Far East case in particular their hospitality organization runs a big hotel group we're currently working with corporate locations routes there those those has all the relationships with corporate clients and so on and so managing the relationships those corporate clients what's working what isn't what patterns of engagement work that's what they're looking for got it makes it sense let's jump more into the kind of economics here so in a space like this churn can sometimes be high what do you guys that in terms of gross monthly turn we don't we we don't lose customers certainly where the pointer and our evolution where we don't lose customer we've lost in total over the history of our company for customers and one was acquired and therefore but wasn't a candidate anymore one had a huge management changeover and the other two were early days stuff where we were testing with them and decided to not support the scenario that they were they were calm what are you it's not easy to get 2,000 seats sold what are you doing to acquire new customers what's your kakak yeah up until the end of last year it was purely inbound like we were essentially listed in half exchange and down you know on our own website nicer stuff people were coming to find us you know fortunately my co-founder and I have a pretty good deal of the contacts from all the big businesses we've clashed over time and and so we we were able to drive a lot of business just by end down people referring reaching out to us that's everything earlier this year we did start an outbound campaign we real I found a lot of success in the customer success account management space and we recently launched a partnership effort with gainsight where we're integrating with them and what they cost unity that it doesn't cost us anything it's you know in terms of it may cost us in terms of development dollars but there weren't any wasn't any expenditure to go into getting site they didn't pay us we can't pay them we're just working together okay and what value do they get so essentially what gang site does is customer success tool and primarily they're focused on on how the customer engages with the products and the work you're doing there and motorsports and so forth where we focus on the people-to-people engagement component of it so they're building a platform for customer success our component of the platform which is you know the people people metrics really really help enhance the value proposition on their overall so make this entity side to boot shut this thing or guys raise capital we did raise a little capital so we do the initial things friends and family around and then we did a seed round last year August led up organizational boundaries go up here out of Seattle and so we have raised a little capital ml total what was it about two million in total okay got it all convertible notes or have you been priced yet so we priced the the seed round where the initial realms convertible notes okay okay got it makes it the way you priced your seed round but the round after that what convertible note before that though okay folks go round was all convertible notes because work we had no idea what the company worked at that time yes there's Espen and we said you place the seed round what's your what's your what will make you really happy in terms of a revenue target for 2017 if we exit 2017 and you know million you know ARR I'd be happier if that's that's 18 months from the time we will introduce really launched a product or started commercializing to give you a million that's a pretty good mention benchmark bascomb basis that'd be about 88 grand in December of 2017 you're currently at 60 grand halfway through the year yeah that's right so I think we'll get that mark it's just a matter of driving hard to get there and like what you do in total 2016 revenue 2016 was like we barely started we the year like 15 grand in revenue so me bull just total oh if you add up here just literally you're buying attacks you're 2020 gotta ask me growing rapidly which is always a good thing and then do you have any any weird cost you put above the line with your gross margin we don't have any weird cost we would above the line basically so you know gross margin process you know right now even at subscale sort of scenarios you know maybe eight nine dollars to host each each tenant and you know 30 to 35 dollar price we've got pretty good with more so what you average that out for me I mean you're talking like eighty percent eighty five percent seventy percent we're probably more like seventy five percent gross margin ya know now obviously get better with time that you have a fixed cost structure built in there but absolutely and we're not you know the cluster you obviously have to stay a little bit ahead of where customers are but we you know initially we're way ahead or across from lowering costs and then dropping as we get up a scale if if Benioff bridge is out to you and says we love this or clear Victor full-contact and right to a two million dollar check to yourself career yeah I don't think what what would the number of e well I'd say you know based on our OS financing around it would have to be at least 25 so you know and how do you get to 25 based off your last financing around you what multiplier are you doing well I'm you know the last financing around the post money number was around 11 million dollars so we'd want to double that for our investors got it he said post money was 11 or pre money first money was last money raised he said 1.5 guess you're pretty 19.5 for nine something like that many of you listening right now don't have time to listen to every b2b staff video that I've interviewed if you want to get access to the database I've created with the year where your growth rate customer counts margins and many many other data metrics and data points you go to GDP lhp ka kaam here's the thing though and this is that database I keep to myself it's so freakin valuable and you preserve the quality of the data and make sure that the people that have access to it have a true advantage I'm only letting 10 companies on each month they were full this month but you're going to get lock accom to get on the waiting list for next month and look there's people on the waiting list I mean the biggest species you've ever heard of he's probably heard of them they're big probably actually billions and billions under management so it's an impressive waiting let's go get on now and get flat calm all right guys I talked about this earlier but I scheduled like so many meetings it will blow your mind I mean all my podcast interviews right 101 floors I talked to monthly I scheduled and you know what I do it so efficiently I get them all to agree to my calendar so all the calls are back to back to back that means I'm not switching in between tasks all day long I give them some - let me very efficient it's so critical to use it to be called acuity scheduling to do this at make them record calm /schedule it eliminates them back and forth between me and people I'm trying to meet with it makes it very simple and most importantly they helped me keep my no-show rate very low because it's an out reminders helps you look very professional so good in a Tanaka comm /schedule just sign up and you get a great deal you know you guys know this I hit people hard I made great deal and gather the CEO has given us a great deal if you sign up like normal people okay on their website you only get a 14-day free trial to use my link may seem like on board flash scheduled to get 45 days free okay it's the best it's free but in a selective tomforde slot schedule right now to sign up and I'll see you there very cool good Sahel let's wrap up here with the famous five number one what is your favorite business book execution Larry Boz be because we're at execution there's nothing I like that number two is their CEO you're falling or studying right now well had the good fortune of working with Satya Nadella day-to-day before he was the CEO Microsoft and admiring quite a bit so I'd say he's probably the number one guy that had the most chance to work with obviously Bill Gates said before him and we'll Steve Ballmer had a chance to work with both of them not as closely as soccer but certainly had a good chance for both feminine as far as people to admire Elon Musk is pretty linear the top of the list I think Brazil audacity in Bekaa did you know stature was going to was going to be the next CEO I made you know early on ten years ago I had a pretty good idea that you would see was going to be one of the contenders at least or remain great candidates within the company and certainly you yeah all right number three what's your favorite online tool like Hostgator our favorite online tools yeah host you or does any online cool any any online tool I don't really have a favorite online - I don't think what's funny to use the most the one one I use the most is actually because of my wine collection and so forth service called Benvolio they it's a seller management tracking software basting notes better number for how many hours of sleep to get every night right usually about six actually and that's pretty normal for me in college it was more like three and six is like feels like a luxury what's your current situation how you married thing I'll be up kids married two kids you know one in college one in high school and yeah we're having a great time and how old are you I'm 49 will be 50 this year laughs congratulations last question take effect 29 years what do you wish your 20 year old self knew don't worry man and everything's going to work out just fine it's 20 year old I was like so so so focused and driven on on a bunch of stuff that wasn't that important and and you know it's all going to work out if you just keep at it so they're they're going to have it from from how do not worry loosen up a little bit drink some wine have some fun go to Boca or Venice he launched his company guys back in 2015 after a long stint not a stint actually a tenure at Microsoft almost two decades he launched in the company called Kimiko which is helping folks enrich their CRM it's a plug-in it where it's an add-on to see around is complementary not competitive they're from ten people now full-time based up there in Seattle doing about 60 grand per month they get that number because they've got about two thousand employees across a large set of customers using their tool they charge about 30 bucks a seat that's about 60 grand in Mir get about 120 grand last year hoping to hit that million dollar annual run right by the end of 2017 again churn super healthy so economics too early to tell how thank you for taking us to the top if you enjoyed how today go back to listen to Jose yesterday I also say a simple question I'd say you're killing it with 1.5 million dollars in revenue are you going to replace PowerPoint