How Salesseek CEO Tim Hampson grew Salesseek to $1.7M revenue and 150 customers in 2024.

hello everyone my guest today is tim hampson his background in software has spanned technical sales marketing and general management in the us uk and japan tim started ibm and went on to a number of successful startups including illustra interwoven and board vantage other experience includes sybase stockholm and genesis telecommunications tim are you ready to take us to the top i am indeed all the way through the bottom so there we go good so any of these those companies i just mentioned all those you are a part of or were you ceo or founder of one of these guys so i was um uh very much uh uh founder of uh saccam and currently celseek and uh boardvantage i was part of the uh the first sort of uh management team that was brought in with the first institutional uh funding uh there and then the other sort of startups i was um essentially an early employee of those well then you've seen it you've been watching and you said okay i'm going to jump in and do sales seek now so tell us what the company does and how you make money well very simple terms we're a combined crm and marketing automation tool so if you think of tools like salesforce and tools like aliquot we kind of like both together um but we sort of optimized for maybe uh small smaller to medium-sized companies perhaps more so uh than those uh those tools are so the reasonable way we make money is like many sas vendors it's a sas subscription model so we're fully in the cloud uh very easy sort of per user per month uh pricing and we've got customers all around the world including the us and australia new zealand europe and of course the uk as well where we're based and tim what is i don't know about every customer cohort but on average which is your user pay for a seat for a month so we do have a couple of bands the the very lowest level would be um about 20 and uh that would go up to for the enterprise levels up to sort of 80 to 100 uh depending on the sort of the functionality that people were making this is interesting i want to call something out here because i'm seeing this pattern with a lot of these interviews i'm doing uh there's a lot of people that you know a lot of people think well when you go enterprise you're selling larger uh per seat or sorry larger seat deals so you're selling you know a thousand plans instead of the one-off user that's paying 20 bucks a month usually when you're selling you know a thousand seats there's a discount on the 20 price but what i'm hearing a lot of people doing or testing is actually they're adding on additional features and they're actually quadrupling the price point even at volume uh is that accurate is that what you guys are doing yeah i think that's accurate and you're right it's uh it's not just us it is actually a general theme and i think the reality is that there's a lot of functionality um that um only enterprises use and so you know it kind of doesn't make sense to to bundle that in for smaller organizations and indeed if you were trying to do that and price for it you'd be out competed by companies who basically didn't bother with that and just focused on that low end so i i think it's it's it's a function of the fact that enterprises do have more sophisticated requirements that yeah they they do have to pay more for it put this on a timeline for us when did you launch uh we launched we started very very late in 2012 and we spent the first sort of two or three years pretty much heads down in product development and it's really been the last couple of years that we've been uh sort of in in sales mode so so tim talked to me three years in product development you have to cover salary somehow how did you cover costs did you raise immediately uh we we self-funded for a lot of that we were got ourselves to be as i say sort of ramen profitable um and we also did how did you do that sorry tim if you were heads down building for three years there were three years there where you had no money right coming in so we self-funded so the founders themselves we basically kicked in um our own uh sort of money and uh were able to survive and sort of essentially non-existent salaries ourselves um and then after a few years once we actually got the product uh launched and started to get the first few customers we did take our first institutional funding from a uk uh vc called sussex place ventures okay and how much total capital have you raised to date total capital has been about uh uh just under i think four and a half four and a half five million okay and why not it sounds like i mean you guys had some success self-funding for three years um why not just keep self-funding why give in and say okay we're going to do institutional now after three years well it's um i mean it's a good question to ask because the answer is is not always um definitively one way uh for anybody and certainly not only look at different organizations so so for us we took the view that you know if we have this access to capital it means we can accelerate um scaling out and scaling up in a way that we couldn't do without that so you know the good thing about self-funding is that you kind of keep control you reduce the the amount of activity you need to do in fundraising the disadvantage is that you you probably are going to be growing at a slower rate because you just don't have access to the volumes of capital that you might do do otherwise so it's kind of a trade-off and to say i don't think there's a right answer i think it very much depends on both the company and the founders and what they want to do and everything else and and walk me through kind of where you've gone over the past you call it six years right so how many customers have you scaled to now today so we've now got about about 150 customers our largest customers are over 100 users and i think one of the biggest differences has been um not so much expanding the number of customers but how we've expanded the size of our customers so when we started out sort of three years ago most of our customers were sort of you know ones and twos then that moved to sort of fives and fives to tens and now we sort of at the sort of hundred uh hundred plus user uh mark there so for us is that an average tim sorry so of 150 logos you have it you have about an average of about 100 seats per team no it would be less than that now but but that's like a historical sort of average but sort of moving forward we are looking more like it's sort of like 100 uh users there and um i think the the advantage for us as a vendor is that the the cost of sale is is is essentially the same and in fact you could argue it's even less perhaps what can you actually quantify that for us what is the cost of sale today um i mean it depends on how much you put in there obviously you've got lead acquisition costs um sales costs um but what i would say is that um we can basically typically close a deal in in maybe somewhere between four four to eight um sort of calls and and majority of those calls are are through the web which means they're very very productive uh for clients who are locally based we often sort of see people in person we like to do that but you know as i said we've got clients all around the world and so for those it is all through through remote process so um it's just a question going through things like skype webex etc yeah well let's say you're pursuing you know a a customer right now that you know is going to be worth 80 seats for you on day one and let's assume your minimum at 20 bucks a pop right so that's going to be a 1600 a month kind of customer let's just use that customer as an example how much as a ceo would you be willing to pay for that six months of revenue 12 months of revenue what's your upfront tack on that on that kind of account uh i would say something like about nine months okay of revenue and uh you know you can look at the lifetime value of customers as being you know maybe something like three years on average or something like that how do you get to that uh how do you mean how did you get how did you calculate lifetime value of three years um well it's just on the um it's hard when you're starting out and of course you know after you've been selling for a year no one's had a lifetime value in more than one year but but generally speaking uh that that seems to be tending to what uh our lifetime value is although having said that i mean you know we've been selling for just over three years so you know uh i mean do you take your churn do you do one divided by your turn your logo churn rate typically to get that 36 month yeah i mean the other thing about churn is that uh and again i think it's true of a lot of vendors is that our churn is is very much dependent on user size and so um amongst you know we we even get some sort of singleton users um their their churn rate is very high so you know often if you look to them they'd be more like um sort of nine months or 12 months as a value whereas larger companies are you know predominantly longer than that so to some degree we can't necessarily measure the lifetime value of our largest customers because we've...