How Lob CEO Leore Avidar grew Lob to $100M revenue and 8.5K customers in 2024.

hello everyone my guest today is lior abhidar he is the ceo and co-founder of a company called lob prior lab he was a technical business developer at amazon web services and a quant derivative trader at citigroup he's a university of michigan graduate and is passionate about always getting a good deal and building a great company culturally are you ready to take us to the top i'm ready all right so you said you like good deals that means you like take tons of vc money right those are great deals uh depends depends on the deal have you bootstrapped or no no we're venture-backed okay well then you you have to say that you love it then i do love a good deal but i don't know if every vc gives you a good deal so it depends that's why i said fair enough so sorry i cut you off you said you raised two and a half 29.4 million oh okay a little bit more than two and a half all right twenty twenty nine and then uh let's jump back to the kind of the back story here so what's the company do and are you peer play sas uh so we are sas plus and we offer a suite of apis for businesses that connect the online world to the offline world so we have two core products uh the first product is an address verification api so if you've ever been to amazon's checkout page and you've fat fingered your billing address or shipping address the pop-up that you see behind this the pop-up that you get we power that behind the scenes for a lot of e-commerce companies and then the second product is a print and mail api so all the mail that you get um we offer a api similar to sendgrid but for physical mail that allows developers or companies to send physical mail this is so fascinating so our magazine is doing very well it's the sas magazine that goes out to sas ceos and i have spent personally so much time trying to use clearbit and all these things to upgrade my airtable address fields so that when we send them all to our printer and our shipper in michigan they all get shipped properly and then that didn't work because there was no tracking so i had to jack up the price of the magazine to put tracking on every magazine to then validate and now i personally email everyone to make sure they got it and then i manually type yes no to know if it was the right email i'm hoping you can solve all my problems i mean that is actually one of the problems that we solve so we have oh we can get into it offline but that is the core of the user that we're the user problem that we're trying to so how do you price is it based off like number of api calls or what so uh i've tried to coin this new business model called sas plus okay so we have a subscription for our platform so um take a custo an enterprise customer would pay us a million dollars a year for the feature set that they are purchasing so that's pure sas and then there's the usage based component so as you send out physical mail we're going to charge you 31 cents per postcard or for a letter um a little bit higher amount and then you pay that at the end of the month so it's a combination of both okay based off kind of getting at flat fee and then on top of that usage exactly yeah um let's just for a second talk about the flat fee so i'm sure you have a huge a variety of different course customers you serve on average though what is that flat fee customers are paying you per month so new customers are typical deals around 52 000 a year okay i'm just on this side okay guys so that's about called forty three hundred bucks a month something like that four four million dollars ah you cut out there sorry lure give me that one more time uh so we do uh anywhere from our average of 52 000 all the way up to large enterprise deals of over four million dollars okay got it so again 52 a year would be about 4 300 per month or something like that for kind of average year one acv yep yeah okay interesting and then um put this stuff on a timeline for me when you launch the company we launched in 2013 23 and i mean were you like working in like the mail room at a printing place and you're also a software engineer at citigroup and go i can merge the two no so i was actually i was at amazon web services and i've always been a big believer in apis so i was there uh in 2012 and i saw them pioneer amazon ses which was their email api and my co-founder at the time was at microsoft and so he was the one who was sending a lot of physical mail and he was sending it at scale and so a typical campaign would would take them between 60 to 90 days to do it and if i wanted to send the same type of scale but in an email format i could do that in 30 seconds and so that's kind of where the aha came up we saw the future of restful apis we were both developers and to be honest what we just wanted to solve was harry my co-founder we just wanted him to get off work earlier so that we can go and play video games so that was what we were optimizing for when we started the company when we were 24 years old i love that all right so you guys launched the company and then how many people are you at today we are at 82 people today and how many customers are you serving we have over 5 000 customers that's amazing and that's not like some number right that's paying customers paying customers yeah yeah got a push you know you got you know you venture back ceos you make stuff up all the time it's crazy i mean i think everyone defines customers in a different way so there's even even us who have five thousand plus paying customers we only talk about our true customers as anyone who's paying over fifteen dollars a month for three months straight so uh we even try to narrow our focus a little bit more and that number is closer to 600 right now well wait wait so help me understand that so i thought you said kind of average first year is 52 grand but then you just said 15 a month so we have our self-service so again the core set of our customers which is what i primarily focus on is fifty two thousand dollars oh i see when what do you call those users like mid-market enterprise yeah mid-market and enterprise so we also have the self-service so we have a long tail of developers as well um but primarily i would say like eighty percent of our revenue comes from our mid market and enterprise customers yeah yeah i mean by the way fairly typical pattern i guess the follow-up question i would have is cut out all the self-serve people so if you just look at your mid-market enterprise deals you're talking like 100 customers 200 customers 600 oh that's the 600 number yeah okay fair enough got it um let me talk about growth here for a second so 2013 you launched what growth channels did you use to sign up your first call at 100 users so we started off with kind of looking in our backyard which is in san francisco so we were trying to pioneer other companies that were trying to use direct mail as a channel so y combinator companies back when we went through y combinator were early customers of ours we had a couple of really big enterprise customers so microsoft was an early customer how did you land well harry was at microsoft so we knew a couple of people and so we were able to figure out who the right decision maker was to at least test it out um just hustled our way in we actually when we launched on hacker news in 2013 we got a lot of interest from enterprise customers um and yeah that was probably like the biggest what's an account you closed enterprise account you closed that came from first touch was the hacker news article do you know any of the top of your head i want to say oscar insurance interesting interesting okay quite some time okay and then now fast forward to today i mean how are you getting most your customers out today at scale uh so seo is still really good from us um we do a lot of trade shows webinars dinners so we'll bring together some thought leaders um a lot of the decision makers or buyers in our space um no leo what's the what's the title that dinner like how to send better mail i mean how do you how do you make a dinner like this sex sexy um well the topics are always unsexy but it's you know we just had one for a lot of vp of marketing for direct mail they're all all trying to innovate in their space and so they're looking for innovative technology so we'll bring people together and it's not so much as us selling our product we're going to just foster a dinner where we're talking about topics and through that lob will come up but mostly just let's talk about let's get a bunch of people who respect each other in a room and let's talk about how they're innovating with indirect mail so let's back into then you're doing all these things seo may have an seo team some content people these dinners you obviously pay for trade shows you pay for fully weighted cac for a new 52 000 your customer will you spend first your acv to get them are you that aggressive no so probably our cac is around 13 000 right now okay and this is just blended across all our channels i mean that's healthy right that's what is that that's looking at like a four or five month payback period yeah...