How Leadspace CEO Alex Yoder grew Leadspace to $20.4M revenue and 200 customers in 2019.

hello everyone my guest today is doug buscher he's a ceo of leadspace the leading customer data platform for b2b uh folks lead space was the ra was rated as the leader and by forrester in 2019 has over 200 customers including leading b2b brands like amex zoom sap salesforce and microsoft doug you ready to take us to the top absolutely all right customer data and just data products in general it's a very fragmented space how are you kind of carving out a niche here well it's kind of interesting like i was a salesforce i was the cmo of salesforce before this gig when everyone talked about engagement and now everyone is talking about data the thing that matters is about ai and intelligence and how you figure out that data and i think the new technologies are changing the way b2b companies and b2c companies can do that yep okay so maybe describe can you describe how your customers are using you today maybe amex or someone you can talk about yeah sorry you broke up a little bit so talk about microsoft they've talked a lot with us pretty much now if you go onto a microsoft site you fill out a form or give them some information we're helping them get information about who's the company who you are so they can get the right information back to you they can we can use all the different data sets that we have the models that they have what they can actually figure out in terms of how to best personalize and send you information that's relevant to you and that's a huge win both for the customer which is really important so you don't get a lot of spam you don't get a lot of rubbish and all that kind of stuff but also for the company so that they can actually engage you with the right products and services so they can be more successful so how help me understand how this is different from like a discoverorg or or a clear bit or any of these other kind of tool providers or data providers sure what the point about a customer data platform is more and more companies recognize you need lots and lots and lots of different data sets so discover is great they're a partner of ours but they are just one data set clear bit is just another data set what you need to do is bring all these together at the person the company and also this new category called intent and actually use that to sort of blend that data create a single source of truth a single identity so that you can use that to build models and intelligence so that's the difference between a data platform and just a data provider and we work with all the big data providers whether it's discover zoom dmb all of those kinds of guys bombora uh you're talking zoom info not not eric won zoom sorry superinfo zoom is also a customer of ours as well yeah well zoom info is now discoverorg you know it's incredible they pulled that deal off now now doing about 320 million bucks in arr yeah it's it's a great business and i think you know with dmv also going private right you're going to see an interesting battle now between discover and d and b as they sort of really look to consolidate the data space you're talking dun and bradstreet right indeed yeah very good all right let's uh give me a general sense here of of kind of sizes i'm sure you have customer courts that are all over the place but on average what would you say a customer's going to pay you per year to use your technology yeah as you say it is all over the place and we bought reachforce which is a forms product and so they have some pretty small customers maybe 5 10 15k a year okay but we also have customers which are in seven figures so we sort of see the gamut but typically we're working with enterprise software companies and they will typically spend six figures something like that because what they're trying to do is really kind of enable a sales team of thousands of people so we'll call it ten thousand dollars a month is maybe a sweet spot for you or something like that uh another zero to that yes no that was 100 that was a month ten thousand a month oh ten thousand month yeah yeah yeah and okay so let's just stick with this kind of persona we've made up so if i'm gonna pay you about ten thousand a month or 120 grand a year what kind of metrics are bounding that pricing plan do you upsell against any value metrics or how does that work uh so we tend to follow pricing quite similar actually to a like a marketo or one of those guys which tends to be on how big the data that we're working with is so if you have a database of a million records that might be that kind of price it's it's fairly standard in this industry about pricing like that versus a seat based model and then yeah you know we do data three real things data management so that's the core offering which is to create that single source of truth then we help customers building various different models look like models predictive models whatever and we tend to you know potentially add incremental price for those models that help you get more information and then we have activation points if you activate into live ramp for ads or salesforce or marketo or you know your site then we have those connectors and they tend to be one-off integrations that we do kind of like number number of api integrations essentially feeding the system exactly yeah yeah interesting okay very good put this on a timeline for me when you launch uh so the company is israeli originally so the founders out of you know the israeli nsa was doing anti-terrorism kind of stuff amazing story and that was back in 2010 and then we moved and i joined five years ago that was when we moved the company really to be focused on the us market so five years building a great product in israel now we still have r d and so forth in israel but really the company is based here in san francisco in the you know two months ago we bought reach for so that's also giving us a presence in austin and so that's really the scope of the company today did you come in with the battery b round eight was that part of what were you like an eir there after salesforce or something no i did battery were part of bringing me in um i came in when we decided to move the focus of the business to the us you know how these israeli companies tend to be there was a point at which the board said are we just a technology player and we're going to sell to somebody as a piece of tech we are real business and that's why i came in because i think there was enough momentum in the business for us to build a us office but at that point though battery was already an investor in the company they were actually one of the i think the actual first investor originally in this company and how much raised today total uh we've raised today about 40 million total okay 40 why is it different uh different than like the 56 million listed on crunch base you know crunch base is a approximate estimate that they take from lots of press releases and things in terms of how much we've raised in terms of capital so it's it's reasonably close okay not a bad data source okay i mean that's a pretty big difference right i mean basically what you're saying is the 17 you know the 17 million series a and 2011 they're essentially not that didn't really exist you just had the 18 from battery and the 21 from arrowroot uh yeah i mean there's some other capital raising there in terms of things like debt as well right that all get kind of rolled up into the numbers that they report as you're in crash bank were you around when the company leveraged debt to drive growth or was that before your time uh we had when i joined we had a little bit of debt and as we continue to grow in terms of revenue that's allowed us to get greater debt capacity so we continue to grow on that front why have the fundraising's been basically equal so i mean this is you know the pattern you typically see right is like okay you do like a b and then a c is like triple a size and then triple size you it's basically been like a 17 to 20 million dollar round you know since 2011 once every like three years oh why i mean by the way you could just be printing money and you just don't need more capital i'm just curious why yeah so a couple of things on that it's a really good question by the way um so one thing is because we have a strong technology platform we are not you know just selling ourselves to an investor on the basis of our revenue right we are selling ourselves on the fact that we have a really strong technology so a lot of our investment goes into our r d team in israel right that's kind of the asset one of the most important assets that we have in that way it's a fairly fixed amount that you're using to continue to build that skill we have about the same r d team that we've had over the last couple of years and at the same time our go to market our sales marketing has become more efficient so what we've seen is we continue to invest in building the product but we're really reasonably self-sustaining in the way that we actually grow the business just a little different from some of our smart competitors in this space which has spent a ton of money building a brand and throwing money at sales people and doing all that kind of stuff but never really sorted out the underlying product so that's why you see us being fairly fixed and we're at a point where now...