How Owler CEO Jim Fowler grew to $10M revenue and 100 customers in 2019.

hello everyone my guest today is jim fowler he is the founder of a company called our the crowdsource competitive intelligence platform that business professionals use to outsmart their competition gain insights and uncover the latest industry news and alerts before hour he found a jigsaw in 2003 and with ceo until it was acquired by salesforce in 2010 for 175 million bucks jimmy you ready to take us to the top yes sir all right owler so first off i love the platform in fact i paid to put a promo through you guys and it did you know fairly well you've built a massive network of business professionals why are they using our give us the overview uh we've got over uh three million business professionals using this now on a daily basis and um it's a crowd source platform where you get information about companies that you care about whether you're a sales person a ceo a product person and you when you give information about it you get a lot more information back which is the beauty of a crowdsourced model so business professionals use us to stay on top of companies that they care about either from a competitive perspective because they're customers uh or because you know they're they're um potentially a an investment company as well a lot of investors use this as well and explain to me with any kind of data platform like this source of truth and how you get data is obviously critical for folks understand so explain how you capture data sure so most of many of our users use it for free it's a premium model in a way like linkedin and the idea is is that you're getting news in particular but we also give a lot of other insights about companies so for instance we might say that hey this company just acquired another company uh and at that time we'll ask them to do something like perhaps rate the ceo of the company or um hey what's the uh if for a private company estimate the revenue of that company so we kind of use a wisdom of crowds model to get information about these companies that's very difficult to get yeah uh revenue of the employee is one of the most important ones how do you so obviously if you know someone is on the inc 5000 you see the revenue someone will report that an hour you have really accurate numbers on those kinds of companies there are a lot of companies though that are pretty private and the knock i've seen on owler is that there are some where you might or your crowd might say the revenue is 2 million but the ceo is like nathan just you know we're doing like 30 million right so how do you make sure you don't lose the trust of these kind of three million daily users right so the the we actually had to deal with this at jigsaw as well because what people want when they deal with business information or any kind of database is they want perfection and they want it for free usually and uh the reality is is that all we have to do is be a lot better than duna bradstreet and we blow those guys away so we've done every year one of our critical benchmarks is how good is our data comparative to dun bradstreet and we we blow them away in terms of accuracy unfortunately it's not perfect and so what we're trying to do is just provide the best possible that we can get yeah and these people that are you know you know i early on when you launched because you came back on september 26th i became a user of owler and so occasionally when i get an email i would actually go in and rate a ceo or you know i talked to a ceo and then saw it wasn't accurate on aller so i put in the accurate information like like whether it was revenue or employee accounts or things like that who are typically the ones that are providing that feedback is it usually investors or ceos wanting their profile to be accurate so they update themselves like who is they usually it that's a great question it was the same with jigsaw which is of course also a crowd you know crowdsource database it's really interesting um because i've always gone in and really tried to get a handle on who are these i call them data geeks and you're clearly one of them and we love you we worship you um and the reality is there's no wrong no reason to it it's um humans are kind of like ants or bees you know we we are workers and we want we like to build things and make them right and it's it's that gene that gets triggered and it can be from everywhere um sometimes it's sales people sometimes it's product people sometimes it is we love by the way um investors uh because they have a very good view so we really look hard and our algorithms weight different votes differently by the way it's not just a you know there's a lot behind the scenes in our algorithms yeah an investor who's sitting on the board who gives a revenue update you know you can probably trust right what we have found is that people tell the truth far more often than they lie because what we try to do is go out and say okay we know this answer now how do we figure out who's giving us correct one of the things we thought at the beginning was you know if you competed with a company you would go and give inaccurate information about that company we've actually seen that does happen but it's not the norm it's we found some really there's always really crazy interesting things you learn from crowds yeah okay that's okay so this is interesting again i love the model we geeked out there a little bit but tell me the revenue mod how do you guys make money so we we uh have just launched a premium model now and that's doing really well um but uh we also do huge data deals it actually follows a lot what we did with jigsaw where we go out um we've actually now closed a couple of deals above a million dollars a year with customers because they'll of course everyone builds this database it's a corpus of information that that really doesn't you know have a mirror anywhere else in the market and so we're able to go out there and in a data as a service or a sas model uh you know do these deals where we get multi-year contracts to use large-scale mm-hmm and are you these explain to me kind of what's in one of these million dollar kind of deals if i'm paying you a million bucks per year are you feeding into like i'm now the direct api connection to salesforce and the alloy information updates on my salesforce records are like what typically is included in that that's actually our pro where we actually pump our a lot of the news alerts about companies into salesforce um the uh it's all api deals um with these big million dollar deals so they'll they'll want um different fields in our database so it's a very jigsaw really brought the concept of data as a service to market and now many people do it um you know duna bradstreet copied that model for you know i'm quite proud of that um but the whole point is is that uh it's all about just taking whatever of our fields and we have many fields in our database some people want them all some people just want some of them what's the most popular uh field that people want for sure it would be uh revenue private company revenue it's just a difficult one to get a number of employees because if you think about it every company uses those two fields to set sales territories now do you will you do things like analyze all of the the nordic right government reports and then use that because they have to report certain things then use that as a sample code to project upon similar u.s companies and project or guess their revenue um that's a hell of an idea nathan and no we don't do that yet right now we're really focusing on getting the the u.s market because they don't have to report i i think a lot of u.s listeners may not be aware as you are that most of the european companies require private companies to report their revenue something that we would certainly uh not like here in the united states um but no we don't do that yet we as we get larger we will yep okay good and then put this i remember i think you said you launched in 2011 is that right uh yes we did yes we did 2011 and then um when so one thing i always like to ask this is especially true for you because i think you you if i remember right when you came on back in september 2016 you guys had raised 19 million we had yes correct how much today yeah 19 million yeah any more since then or still 19 million total we just took some debt which is very common so once you start having a you know regular revenue stream we took some debt um and then we took a strategic investment last uh last summer so that yeah yeah so that was but just that was small who was the strategic was it public uh so uh yeah well actually i i think it's public um for sure let's make it public who was it it was uh the founder who's no longer ceo of morningstar so you would probably know him well so well look this is an interesting add-on to a pitch book kind of hub and spoke m a roll up in the data space kind of model right i mean are you in acquisition talks right now with morningstar oh well first of all i couldn't comment on that if we were but no we are not i can i'll i'll uh uh say that no that's not morningstar isn't exactly where we go although there's a lot of really interest we have several um uh hedge fund customers um that use us to get our data um obviously as you well know on wall street having any sort of edge on any sort of data about companies you might invest in is huge so we have a lot of customers there but no morning starts not in the yeah okay so total total in the company then at this point is is what 20 21 22 like how much debt did you undertake in uh three so total would be if you include debt 25. 25. okay so this listen this debt model is uh becoming very interesting a lot more sas companies are doing this because you preserve equity right as the founder who did you choose to work with on the debt deal was it like a cibc or hercules or tamiya or what we actually worked with silicon valley bank uh okay so this was very much like a three four five percent term loan kind of thing exactly exactly did they take uh warrants yes jim jim's giving up warrants now i would never have expected this why'd you do that uh it's just the model it's a small amount of warrants really i mean it at the high level it's just a mechanism for taking you know capital into your business uh to grow without giving up so much equity so it's a far it's far less dilutive than equity warrants are just a model to do that yeah very good okay so launched in 2011 uh uh your first line of code was then i know you were building this freemium model and you could afford to do it because you were able to tell your jigsaw story and raise a lot of capital up front how much total capital do you remember this this is probably gonna be painful how much total capital did you spend before your first dollar of revenue do you remember oh boy that'd be tough we we pushed off revenue for a long time to grow our user base over a million um and so i would say what was it 2014 so we had raised certainly you know that 19 before first dollar revenue yes so that's what i'm saying you spent you potentially spent many millions between 2011 and 2014 correct yes yeah but no way do you do that without having a prior you know jigsaw was a was a great outcome no way does that happen and you know without that so all right very good so build the mvp first dollar revenue was in 2014. what was that first deal size was like 100 or you went right for a million a million bucks a year up front uh it was i remember our first deal um was over it was six figures um and i remember going we're going to set i wanted to set the mindset of our whole team that hey this is worth six figures so um that was uh that was fun to do we do deals that are much smaller than that as well but that was our first deal well it's interesting that you lead with because there's so many companies in this space let's look at matamar for example right they had a lot of data but ultimately it just failed i mean flash shell for 500 grand so you're probably your friend i don't know if you know barb you probably do at full contact and uh and i mean that that model where you try and sell a million sales people at 50 bucks a month just didn't work with data but i doubt they tried anything like what you're doing which is just sell the hedge funds for a million bucks a year right right um yeah no i remember matter mark at the time um because i think it was danielle was the ceo i can't remember i found it she was really good at getting pr i mean she got you know she was great about that i remember there was a few people on our team and i had a board member that in particular was worried about mata mark and i i remember going mm-hmm this one's not going to work why would you know so clearly um because they were all over the map on their business model um you know i could tell i don't know you just start getting a smell about these companies now where you know to me what it's all about is how do you get market separation right i get up on stage all the time and preach there's no new ideas it's just new execution and i think i was reading some of the bullet points on your book yeah i was gonna say jim that's exactly i say the exact same thing exactly i saw like something about how to copy without being and my main point is is it's all copy i mean it really is i mean leonardo da vinci thought of the helicopter right he just couldn't didn't have the ability to execute on it right and so my main point is is that um to me you know business information companies have taken lots and lots of funding some have been very successful i just knew that the way that their model it was they just didn't have a clear concept they were kept jumping around and you have to kind of stick to it and really figure out that repeatable sales model yep no i mean you're exactly right they pivoted all over the place okay good so that's good to understand uh you again 2011 was your date uh fast 2014 first dollar revenue how many customers now serving today boy well as you well know uh or we haven't talked about yet i'm now executive chairman i um one of the things that's really fun is when you step aside and say stay super engaged in the business from a strategic perspective and no longer carry that heavy operational burden um i don't know the exact number but we have um certainly over a hundred customers um not sure the exact number 100 and and what was the day when did you walk away from ceo role and switch to chairman uh two two summers ago exactly but it had really been in the works for a year before that um in fact i've been grooming my you know our current ceo tim har she's awesome and hopefully one day i'll be on this podcast with you uh and uh running a much larger company than i ever did i.e owler becomes much bigger than jigsaw ever was um but uh um you know i had kind of groomed him from the beginning he was uh funny enough he started um um just out of dartmouth he was my super intern we had a whole string of dartmouth interns at jigsaw because one of my investors jeff crowe from northwest ventures you know went to dartmouth and he would always funnel us these awesome you know college kids who were interns tim was the best of them all and i told him after he was an intern at jigsaw the good news is you're the best intern i've ever had the bad news is if you don't come work for me i'm gonna tell everyone you suck so he ended up coming and working working for owler as our you know first employee and uh i was grooming him from the beginning because i knew he had the skills you know to become ceo one day and there no no family connection there right jim harsh no no no no for some reason my my research team had said that to ask you about it was our family connection with the with the pass off to the to the current ceo so no no family relations there oh no no not at all not at all i mean if you look at tim tim's tim's super handsome guy he looks like a ken doll you know that's the perfect kind of guy to potentially run this kind of company right here oh yeah he's got that perfect view the mad men the bad men kind of deal things going down oh for sure for sure jim all right there's some other questions here okay especially because you learned all this at jigsaw i would i have to ask about these because we're going to learn a bunch expansion revenue is critical in a sas company right so what mechanisms are you are using to drive contract values in year one you know to doubling in year two and three um so you know from a sas perspective you know i'm sure your readers have all read byron dieter's 10 laws of being sassy that i think he wrote back in 06 and then just re redid 10 years later um or 12 years later byron i know byron he's a close personal friend and i think you know i'll just stand on the shoulders of giants here when it comes to how to do this kind of stuff in sas but for us it's really about um you've gotta year one is all about making sure they understand the value there's a big upfront um investment for most sas or das data as a service customers which is what we are and that it it takes a long time to actually implement it even though you say hey you know it's out in the cloud you have to install anything it's you know the dirty little secret of sas is that it's much more difficult to install and use especially when you're trying to figure out the data side of it so for us it's really about making sure they understand the value of the data and having a uh customer success or renewals person on from the beginning that's critical and so a couple questions around that so first off if you look at gross revenue churn so before expansion over the past 12 months or the last 12 months that you were there the last 12 months that you remember what was gross revenue churn oh boy again because i it's been two years these are the details what i know is is that you know if your churn is anywhere above you know ten percent you're a host so you're you're below you're below ten percent annually oh for sure i'm guessing and again tim would have to ask it's below five yeah yeah and of course that's just well that's okay it depends on how you look at churn is that new or old right because you know then you have growth of your one deal ignore the growth for a second yeah just gross revenue churn on the historical core that signed up a year ago it sounds like less than five percent the next question is how much have you guys ex do you expand that same cohort over the first 12 months i assume it's gonna be more than five percent oh for sure if not again you're you're dead meat yeah and it's sass model are you above 140 net dizzier expansion more than 40 or 50 percent year every year on those historical cohorts oh good question i don't know the exact answer but i'm guessing that we are not that high but um i'd say we're probably more than 30 you know growth yeah i'm not guessing 100 so if it's 30 and five turn you're talking like 125 net um i'd say it's probably more like 130 net 130 or above that's that's what what sticks to me from last year but again remember you know we're still relatively early in uh on this and you know these first couple years it's kind of yeah right well you've got your average contract size though obviously obviously you have some that are a million but but i mean would you say your average is more like a hundred thousand dollars across all your customers is that a fair enough average fair average yeah sure i think directly correct yeah yeah yeah and then look look um i mean that's helpful to understand like expansion and churn metrics there now the second question i have for you there is obviously you raised a bunch of capital up front right how aggressive were you willing to be with user acquisition were you happy with the 12-month payback on 100 000 year one acv oh for sure i mean you know the good news is is that sas model is now well understood i mean it's been you know over a decade or you know two getting on if you will i mean obviously you know we don't sas is still used but you know mark benioff the the positioning genius out there i've had many conversations with him personally and no one positions better than mark i mean he is the animal of it you know really kind of taking the whole conversation more about cloud right but we still you know use this term sas as you well um so you know the the metrics for this are all now well known i mean everyone understands if you're not getting there but customer acquisition is always very expensive in sas because you're not getting that huge up front that's why sas models usually have to raise a lot of capital so where are you so let's say you spend 100 grand to get it for a hundred thousand dollars and you know contract value year one where are you spending that hundred grand typically is it sales commissions direct paid spend yeah for us because um we're very specific about how we go you know we we aren't big enough yet to go do a lot of the advertising and do like a big huge dream force um obviously you know salesforce is kind of a one of a kind i mean mark just went go big go home from the very beginning and you know gotta tip the cap to the guy he's just created an amazing company um although i'm not gonna lie i've been predicting ever since they bought us that this thing's gotta slow down at some point you know and it just keeps rolling keeps going so where are you where are you where are you spending that money though then if it's not on direct paid we uh we spend our money mostly on sales um a bit on marketing we're very specific and targeted on marketing and of course for us luckily we use our own database i mean we have three million over three million growing quickly uh i think we're gonna we'll certainly be over four by the end of the year maybe even five um but uh we use our own database a lot yeah what's growing what's growing so many new of these free sign ups so quickly because there's not really like a invite your team member mod i mean i obviously use a tool i can't spot any kind of viral coefficient flywheel or anything yeah no it it just it is what we just believe from the very beginning is create a great product and people talk about it and what's driving us surprisingly as news and really i think the number one use case on this thing is it's just a really great replacement for google alerts and google alerts is just really messy and this just gives you a really clean interface and there's a lot more data input on it and so i really think it's the news that drives it people just need that news and i was surprised because i really felt like when we founded the company that news was such a commodity but it turns out really well curated news and we spent a lot of time on our engineering team and we have a team in india that actually hand curates parts of it for the really important companies how many engineers total um so we have data folks that i'm not going to leave in this right that those are just you know folks that actually look at the data from human perspective and then give data you know give feedback to the algorithm but uh our engineering team is now oh 12. okay and total team do you know uh total teams uh oh gosh 40 40 folks okay very good all right good before and then look growth i'm curious growth year over year revenue eyes you're at 100 hopefully 200 something like that or what's growth at oh for sure i mean but again it's easy to do 100 growth small numbers when you're small right but i mean and but the reality is any company in fact might you know jeff crowe is now rockstar bc who was on my board at jigsaw jigsaw was his first win as a vc back in the back in the day and you know now he's doing huge deals like he did lending club um anyway uh you know jeff said hey any company that is doubling its revenue year over year is doing great now granted it's much easier to do when the number's small but yeah for the last couple years we've doubled our our our revenue but uh you know that's it's going to be harder to do this year obviously it gets bigger numbers what i mean what is what's the big revenue target this year the uncomfortable one where if you hit it you're celebrating if you miss it it's like and we'll get it next year oh boy um oh boy i'm not sure you know this is one nathan i want to be careful about tim's the ceo and uh i think i'm just stepping on on his stuff a little bit it's not that i'm trying to avoid your question we actually we actually have tim on hold i'ma call him him right now give me one second no i'm told jim i'm totally i'm kidding no um no no jim the reason i ask is so you said 100 customers kind of average acv of 100 000 bucks right i mean if those numbers are directionally correct that would put you at about 830 000 a month right now in revenue or about a 10 million dollar run rate so without pushing you harder is it fair to say you're about a 10 million run rate today uh uh i'd say that um that might be a little bit uh higher can you can you you have a couple months left left in the year i mean do you think you can pass that this year or you're gonna need another couple quarters you are you need to be like an investigator on uh on uh you can solve a lot of crimes i'm asking i'm just asking the right questions only based off numbers the only numbers you gave me you said 100 customers 100 000 acv average yeah yeah um if we hit 10 million in revenue this year i would do cartwheels i'd be so thrilled good answer good that's a fine answer i'm good with that all right jim let's wrap up with a famous five number one what's your favorite business book uh you know i think it's changed from the last one i was looking at my answers from the last time which was uh which was good to great i'm gonna argue now there was just i the innovator's dilemma by clayton christensen i just read that and it's just like this work of art i think it both the innovator's dilemma and the follow on the innovator's solution which really in some ways is almost one book i just think it's so fascinating in the way that it talks about innovation so that's my number one now number two is there a c besides your own obviously there's is there a ceo you're following or studying uh yeah i've been uh obviously bezos since we've we've talked has really emerged i just find him so fascinating um so yes i'm really uh paying close attention to him but so is everyone that's boring i know i wish i had something more esoteric for you but he just fascinates me no problem all right number four number three what's your favorite online tool for building your company besides your own ew boy um hubspot is just crushing it for us um we're watching those guys just go bananas and we use them and they're fantastic number four how many hours of sleep begin uh more now than i'm executive chair i'm not gonna lie uh it was probably certainly six or or at best i'd say i'm more getting seven seven ish now maybe even a little tiny i'm enjoying it i'm not going to lie i'm not as much not as much that's good remind everyone situation married single kids uh i'm single no kiddos aren't around i do i have a my son's 18 and just graduated from high school he's got long blond hair by the way for any of you actually look at me like son that's good one kiddo and hot are you jim i'm 54. take us home last question what do you wish your 20 year old self knew oh boy um how to breathe just don't be in such a hurry take more time to breathe and it'll come a little easier for you guys jim fowler founded owler.com raised 19 million bucks to get it going after he sold his last company jigsaw to salesforce for well over a hundred million dollars now serving over a hundred customers paying caught between fifty and a hundred thousand dollars a year on average with eyes on that caught ten million dollar run right in the next couple quarters we'll see if they do it uh in the meantime again teams 40 people growing 12 engineers 5 gross revenue churn annually but 35 expansion puts them up in the 130-ish range in terms of net revenue retention totally comfortable economics-wise with his 12-month payback period as they chase additional million-dollar data deals with folks like hedge funds jim thanks for taking us to the top pleasure nathan