Saleswise Revenue, Valuation & Funding (2017)

this is the top where I interview entrepreneurs who are number one or number two in their industry in terms of Revenue or customer base you'll learn how much revenue they're making what their marketing funnel looks like and how many customers they have I'm now at $20,000 per talk 5 and6 million he is held bent on global domination we just broke our 100,000 unit soul Mark and I'm your host Nathan lka I just finished traveling south East Asia for 41 days and I usually always get sick when I travel and quite frankly eating is difficult for me it's hard to find a restaurant and I'm spoiled in Austin with my personal chef well I took these little packets with me this time 30 of them in my carryon suitcase they kept me totally healthy with 11 different secret ingredients you can see them at Nathan la.com juu I'll tell you more later on in the show that's Nathan la.com slj this is episode 631 coming up tomorrow morning you'll want to tune in to learn from Christopher Gibson with recursion they run a Santa Fage enzyme it's a 40% upstart launched in 2013 they raised $23 million in equity and have received $5 million in Grants good morning everybody Nathan lka here our guest this morning is Greg frat and he is the technology executive with over 20 years of experience leading Innovative and transformative companies he founded four Venture back startups all of which had successful exits and is now building a company called sales wise he's deeply rooted in venture capital and the management of internet technology companies having LED several through acquisition is and has had a hand in developing disruptive Technologies and convergence of Telecom plus Internet personal finance and online banking webbased analytics and digital mediaonline marketing and currently relationship intelligence Greg are you ready to take us to the top I am ready all right tell us what sales wise does and what's your business model how do you make money uh the sales wise is the business relationship intelligence platform so what we do is we help sales leaders uh client success leaders get a real truly granular visibility into the most important relationships they have whether that be prospects customers vendors or Partners uh we are a SAS company but we do not charge byc uh rather we believe in what we call democratizing data meaning that our customers should provide uh our relationship intelligence to every single employee that can use it productively so we price based upon the total size of the company okay and what's the and then we pass through the Google Cloud store go ahead I was gonna say Greg so what's the on average because I know you have a bunch of different customer cohorts but on average what's the customer paying you per month uh somewhere just short of ,000 a month uh the entry level is $500 for under 100 employees uh we go up to 500 employe for $2,500 a month okay and and take us back to kind of more of the story here so what year did you launch this business in um the business was founded about two and a half years ago the product that we are currently in Market with was launched about four months ago okay so 2015 is really kind of founding of the business and then the current product you said was about two months ago four months four months ago great and what is the so so 2015 is when you found the business now what were I mean what got you into this what were you doing before 2015 so I sold my last company to a company called outbrain and um I was running I started and ran their strategic initiatives and channel so my customer was really our 65 US salespeople and the frustration of trying to use Salesforce and email and weekly meetings to understand what those sales guys needed to sell better so I could do my job striking Partnerships was intensely frustrating and led me to the conclusion that the alleged uh revolution of sales and marketing uh on the internet is really a revolution in marketing and that sales Sales Management sales teams uh really haven't seen the type of innovation and access to data to transform how they do their jobs so that's what we set out to AV with sales now did you use capital from your exit to outbrain to fund sales-wise and and you kind of bootstrapped it or did you raise kind of outside Capital um I funded the first 6 to8 months I think I've raised about 20 rounds of venture capital over the last 20 years I I've participated in every round and will continue to participate in anytime I ask Outsiders for money I I I tend to think I should be putting my own money alongside how much did you bet up front before you raised outside Capital how much of your own money did you put in about a half million bucks okay and how much have you raised total to date uh total to date we've raised a little over three million with a good chunk of that still in the bank okay and was that mostly convertible notes or did you priced rounds uh all priced rounds all priced great that's great I mean my initial Capital was a convert uh but but everything since has been price rounds got it and then where are you at now in terms of Team size uh we are about 10 11 guys we are just hiring our first sales and marketing people so you know the the infrastructure required to do what we're doing is enormous so my co-founder was five years Mountain View Google and to give you some sense you know we're sinking over 800 million Salesforce records today and have over 5 terab of data so it was a full two years year and a half to actually build the infrastructure required to service the type of Enterprises and the magnitude of data uh that's required for the platform to perform I mean that's a lot of data how how many customers are you serving now January 2017 we're we don't disclose exact numbers but we're we're over a dozen customers and adding one or two a week right now so we're really just ramping up sales and marketing got it so so it's fair to say again you're in the fairly early stages because you just launch lach the product but it's fair to say you're doing call it at least 12 Grand per month and monthly occurring Revenue yeah it's about right yep okay and then you mentioned 11 people are you guys all based down there in the Atlanta Tech Village we are oh good good um and then what is the talk to me about some of the other stuff you look at maybe speak from experience too because I know this one's kind of just getting off the ground in terms of Revenue and cohorts and an analyzation but when you look at your gross kind of churn or or what you think churn will be for this kind of arpon and this kind of Co you're going after what do you anticipate that being you know it's too early to tell we haven't lost a customer yet and we're having customers just now ask about uh subscribing annually for some typ of discount so given the the nature of our data integration we we we extract and synchronize the entire Salesforce database and the entire exchange or Gmail stack day one so once this data is integrated with our platform and people start using it it's very difficult to replace until we see some competitors in the market y so I think we'll enjoy uh very very low turn maybe even negative turn and expansion for some period of time until the market category gets established and we see some competitors which I would imagine would be the cause of a churn who do you who do you see as maybe you don't have direct competitors now but who is closest to you in this spacee just name two or three um I think the guys at data hug are are pretty close I think that what relate IQ was doing prior to being acquired uh by Salesforce is is fairly close some of the CRM players that are looking at kind of the next generation of CRM uh when they merge with the bi players I I think that'll get close name someone in that CRM space um in the CRM space that's close um maybe spio uh who's kind of a mobile first uh data integrator um the guys that can tactually are getting close they're kind of in the uh in the CRM space there as well I think that the best cables would be to look at like what uh gainsight and tatango have done on the customer experience side and the way that they're looking at large data sets and simplifying them for knowledge workers to use every day yeah uh I think those are really good comparables I think eventually the PE the guys in the bi space like Domo and Tableau uh are are looking at the same data sources we are but they're rolling up for executive dashboards and Trends whereas we're providing you know absolute granularity you what's happening on a relationship by relationship basis and are you from a data source perspective I mean I know a lot of people you kind of mix and mingle data with other sources that people buy clear bid or full contact or some other access to apis are you doing any of that or is most of the stuff just web scraping you're doing uh we don't do any web scraping at all except for a little bit of social so clearbit is actually a vendor of our so we use clearbit okay uh one of one of the biggest innovations that we have is we're breaking the linear relationship you have with email so if you and five of your compat in your company are all working on a deal we look at all of the inboxes in aggregate we look at all of the messages documents contacts meetings that that pertain to a relationship and we recompile that into one place a single paint of glass to understand everything that's going on inside of your Enterprise as it pertains to a relationship so as we look at those contacts and who the people are we pin clear bit to get titles uh we do scrape I guess pictures from social media but for the most part we walk directly in through the apis of Salesforce Gmail and exchange we don't do any scraping so guys I'm so glad to be back in Austin I just got back from a major tour of Southeast Asia went to Sydney Bangkok Bali and Japan and you know I always get sick when I travel and this particular trip my gosh 15 different airports 20 different hotels I mean imagine flushing in airport bathrooms I was worried about germs and getting all the nutrition I need I mean finding a restaurant in Japan difficult because nothing's in English so it's hard enough to figure out the train system but my point is I had a guy named Drew canoli on the show who said Nathan if you're concerned about that take these little green packets with you you just mix them once per day with water they'll keep you super healthy you get all your nutrients and they'll keep you from getting sick so I took them and guys they worked unbelievably well I got no sickness just mix them with water once per day they didn't make my water bottles all sticky that's like nice a lot of these mixtures to make them sticky it was very clean and smooth took them once per day never got sick so theyve got got 11 superfoods and they're perfect if you're not traveling but you're just on the go from your office to work so you can check them out at Nathan lea.com juu that's Nathan lanka.com juu Greg let's wrap up here with the famous five number one what's your favorite Business book uh good to Great number two Jim Collins fan huh yeah number two is there a CEO you're following or studying right now um you I'm always following Mr Benny off to see if he can continue to to innovate beyond the scale of of of the amazing SAS business that he's built yeah I mean that's uh I mean when I hear your business I mean that would be like a perfect exit for you am I am I right um I don't know either that or somebody who wants to take some of that market share y yeah Microsoft number three number three Greg is there F besides your own is there favorite online tool you have like host skater uh favorite online to I think right now it's got to be mix pal I mean such or or full story one of those really kind of what are people doing with my product everyday platforms second one full story okay all right number four yeah how many hours of sleep do you get every night uh seven or eight okay that's pretty good and then what's your situation married single you have kids I am happily married with two kids who are off to college but uh we're all going to be buckled in and watching our F Wi on Sunday oh that's yeah that's a big game big game how old are you I am 50 years old all right all right Greg last question man bring it home for us take us back 30 years what do you wish your 20-year-old self knew oh my 20-year-old self uh don't sell your first company for 20 million when you can sell it for 50 you said don't sell what was your what was your first company company called tet uh internet company on unified messaging uh started in 1994 sold in 1996 the CE flew up said he wanted to buy the business I said you can't afford it he said how much I said 20 million he said sound fair I threw up in a trash can and become and then and then everything went up through the roof in the 1999 is R you should should have waited a year or two huh well I sold one in 99 for just under 200 million as well so I hit I hit that one as well and then I lost my degree in timing when I started one in the beginning of uh 01 all right guys there you have it from founder of sales LW an experienced entrepreneur he's been around the block he's seen it Greg again helping folks get build better and nonlinear relationships with their data so they're not so directly on email tied into many many different apis to get great data now serving over 12 customers doing RP wi about a grand per month too early on other unit economics they've raised about 3 million bucks he put in 500 grand for the first 6 to8 months to fund it their team of 11 is based down there at the Atlanta Tech Village Greg thank you for taking us to the top thank you sir have a great day if you enjoyed today's episode with Greg go back and listen to yesterday's episode with Matthew his company mention is helping 4,000 customers with Google alerts on steroids all paying a minimum of 60 bucks a month for 240 Grand in monthly recurring Revenue it would mean the world to me if you guys got any value from this episode if you would go leave a review on iTunes right now and then subscribe you know I hustle like heck to get these episodes out every freaking day for you guys and trust me I love it I would do it with no listeners but boy oh boy it makes my day and it makes my team's day when we see great reviews and get your feedback so thanks so much top drive I love giving away free money I feel like o we giving away cars and I have something special for you today how many of you have heard our super sharp guests talk about success they've had with Facebook and Google ads well all of you listening right now yes if you're listening you get $100 in free AdWords here's how you get it okay again thanks for listening get the free $100 from Google right when you sign up with my website host provider HostGator go sign up now to get your free money hostgator.com for SL Nathan again 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