Founder Interview
How Sellercloud Reached $5.1M in Revenue and 610 Customers While Bootstrapped (Interview with Founder Jeremy Greenberg)
- Interview Date
- October 8, 2018
- Interviewee
- Jeremy GreenbergFounder and CEO
Company Metrics at Interview Time
Revenue (2017)
$5.1M
Customers (2018)
610
Growth Rate (2017)
40%
Avg Revenue per Customer (2018)
About $1,000 per month
Minimum Monthly Price (2018)
$500 per month
Historical Snapshot
These numbers were reported by Jeremy Greenberg during the interview recorded in October 2018 and are a historical snapshot, not current figures. See Sellercloud’s current numbers.
Key Takeaways
- 01Sellercloud launched in 2010 and broke even, earning its first profit, in 2012
- 022017 revenue was $5.1M, growing at approximately 40% year over year
- 03The platform had 610 customers at the time of the interview in 2018
- 04Average customer paid about $1,000 per month, with a minimum tier of $500 per month
- 05The company was fully bootstrapped with no outside investment
- 06About 20 people were dedicated to customer success and onboarding
- 07Sales and marketing were five people in total: four in sales and one in marketing
- 08Sellercloud had offices in New Jersey (about 35 people) and Europe (about the same number)
- 09Paid professional services and Skustack, a warehouse management product, were sold to existing customers on top of the per-order fee
- 10Trade shows such as eBay Open cost $20,000 to $25,000 per event and were a primary customer acquisition channel
Company Metrics at Time of Interview
| Metric | Value | Source |
|---|---|---|
| Revenue (2017) | $5.1M | Founder interview, Oct 2018 |
| Customers (2018) | 610 | Founder interview, Oct 2018 |
| Year-over-Year Growth Rate (2017) | 40% | Founder interview, Oct 2018 |
| Average Revenue per Customer (2018) | About $1,000 per month | Founder interview, Oct 2018 |
| Minimum Monthly Price (2018) | $500 per month | Founder interview, Oct 2018 |
| Team Size (2018) | About 70 | Founder interview, Oct 2018 |
| Logo Retention (2018) | About 88% | Founder interview, Oct 2018 |
| Sales Team Headcount (2018) | 4 | Founder interview, Oct 2018 |
| Marketing Headcount (2018) | 1 | Founder interview, Oct 2018 |
| Customer Success Headcount (2018) | About 20 | Founder interview, Oct 2018 |
| Year Launched | 2010 | Founder interview, Oct 2018 |
| Trade Show Spend per Event (2018) | $20,000 to $25,000 | Founder interview, Oct 2018 |
| Transaction Fee Starting Price (2018) | 25 cents per order | Founder interview, Oct 2018 |
Growth Breakdown
Revenue
Sellercloud reported $5.1M in revenue for 2017, growing at approximately 40% year over year. Revenue was generated primarily through per-order transactional fees, which accounted for about 90% of total revenue, with the remainder coming from add-on services and professional services.
Customers
The platform had 610 customers at the time of the interview. Customers ranged from small operations with just a few employees to larger businesses with over 100 employees using the account.
Team
The team totaled approximately 70 people split between a New Jersey office of about 35 and a European office of roughly the same size. About 20 people focused on customer success and onboarding, 4 were in sales, 1 in marketing, and the remainder were developers and project managers.
Profitability and Funding
Sellercloud was fully bootstrapped, breaking even in 2012 and growing profitably from that point. Jeremy Greenberg confirmed the company was cash flow positive at the time of the interview. He was not in talks to raise capital and said he would rather let the company mature further, so that it could take a minority investor without giving up too much equity.
Growth Strategy
Referrals from Existing Clients
The primary early growth driver was organic word-of-mouth referrals from existing customers. Jeremy credited this as the foundation of customer acquisition before any formal sales or marketing investment.
Live Events and Trade Shows
Sellercloud attended trade shows such as eBay Open and Internet Retailer, spending $20,000 to $25,000 per event. These events allowed the team to meet roughly 100 potential clients at a time, though sales cycles were sometimes long because prospects did not want to switch platforms in the middle of the year.
Product Expansion and Upsells
The company introduced add-on products such as Skustack, a warehouse management solution, and paid professional services such as white-glove on-site work and customization. Both were sold to existing customers on top of the per-order fee, and Jeremy said Sellercloud charged extra for Skustack each month.
Engineering-Heavy Team Structure
With only 4 sales reps and 1 marketer out of roughly 70 employees, Sellercloud invested heavily in product and customer success. About 20 people worked in support and onboarding, and Jeremy said the rest were developers or project managers, so the company was weighted toward the technology side.
Best Quotes
“So we help e commerce companies manage their orders, their inventory, pretty much all their business processes across everything from how they manage their suppliers to actually shipping out products to the customer.”
“Growth rate last year, the growth rate's been around 40% each year.”
“Probably around $1,000 a month. The bottom, the lowest tier is $500 a month. We have like a minimum of 500 but some clients are paying us several thousands, you know, depending on how big they are.”
“No, it's all bootstrapped.”
“We earned our first profit in 2012, broke even in 2012 and started to make a profit and then gradually grew the business from that point till now, you know, gradually adding employees”
“So last year in 2017, we did around $5,100,000 in revenue. So, you know, it's gradually increased between then and now. And, you know, we're we're hoping to, you know, continue to grow at that rate.”
“So we only have four people in sales.”
“So there are around 20 people who are involved in support, onboarding.”
“So there's a lot of referrals, you know, from existing clients. And then we do go to some trade shows”
“I think LinkedIn is a very powerful tool that from a business standpoint, networking and, you know, it seems to be, probably the the most powerful free tool out there as far as business growth, especially when you're dealing with organic growth.”
What Happened Next
At the time of this October 2018 interview, Sellercloud was a bootstrapped, cash-flow-positive business with 610 customers and $5.1M in 2017 revenue, growing at roughly 40% per year. Jeremy Greenberg was not in talks to raise outside capital; he said a minority investor might make sense once the company was more mature. He was expanding the product line and trying to maintain the growth rate, with new customers coming from referrals and trade shows. Visit the Sellercloud company profile for current information.
View Sellercloud’s current profile and metricsFull Transcript
Chapters
- 0:01Introduction
- 0:17What Sellercloud Does and How It Makes Money
- 1:15Revenue Predictability and Seasonality
- 2:12Growth Rate and Revenue Trajectory
- 2:36Customer Pricing and Average Revenue
- 2:49Company Timeline and Bootstrapping
- 3:42Customer Count and Platform Scale
- 4:55Churn, Retention and Expansion Revenue
- 7:57Customer Acquisition: Referrals and Trade Shows
- 9:37Team Structure: Sales, Marketing and Engineering
- 10:15Fundraising Plans and Equity Considerations
- 11:06Famous Five: Books, Tools and Habits
Introduction
Nathan Latka
00:01Hello everyone. My guest today is Jeremy Greenberg. He's the Founder and CEO of SellerCloud. His vision has guided SellerCloud to the forefront of the competitive e commerce management playing field. Jeremy, are you ready to take us to the top?
Jeremy Greenberg
00:12Sure.
Nathan Latka
00:13All right, tell us about the company. What do you guys do and how do you make money?
What Sellercloud Does and How It Makes Money
Jeremy Greenberg
00:17So we help e commerce companies manage their orders, their inventory, pretty much all their business processes across everything from how they manage their suppliers to actually shipping out products to the customer. And, that includes also listing products and various things like integrating with Amazon, eBay, their own website to really be the operating system of that business. So we make money basically charging per order. You know, we basically have a transactional fee, we charge... Starts at 25¢
00:55an order, but basically every month we tally up how many orders went through our system, and that's how we bill for all of our services. We do have some secondary upgrade options and things like that. But primarily our 90% of our revenue is from per transactional type charges.
Revenue Predictability and Seasonality
Nathan Latka
01:15Jeremy, is this predictable revenue? I mean, you consider it SaaS revenue or no?
01:18It's too seasonal and choppy to be predictable.
Jeremy Greenberg
01:21No, it's very predictable. There is a seasonal aspect to it. You know, obviously in December, there are more orders going through our system than, March or something like that, but there's a predictable pattern. Been... Know, we have a trend that we could see. December is usually a certain percentage higher than November, and then January is a certain percentage higher than that because we bill after the fact. So basically, in January, we're billing for December, which is
01:52usually the biggest month, and then there's a typical percentage that it dips. And basically, because we're a growing business, every year the baseline goes up, but basically there's a similar pattern that goes from one year to the next.
Nathan Latka
02:06So over the past twelve months, Jeremy, how has that baseline increased? What's been your growth rate year over year?
Growth Rate and Revenue Trajectory
Jeremy Greenberg
02:12Growth rate last year, the growth rate's been around 40% each year.
Nathan Latka
02:17Okay.
Jeremy Greenberg
02:17So consecutively, so...
Nathan Latka
02:19And that's in terms of actual revenue, correct?
Jeremy Greenberg
02:22Yeah, actual revenue. Some of that is really from new clients. Some of it's because our existing clients are actually growing.
Nathan Latka
02:28Yep. And what are those clients? I mean, know you have many different kinds of clients, but give me an average. On average, what's a customer pay you per month or per year?
Customer Pricing and Average Revenue
Jeremy Greenberg
02:36Probably around $1,000 a month. The bottom, the lowest tier is $500 a month. We have like a minimum of 500 but some clients are paying us several thousands, you know, depending on how big they are.
Company Timeline and Bootstrapping
Nathan Latka
02:49Okay. And put this on a timeline for me. When'd you launch?
Jeremy Greenberg
02:532010.
Nathan Latka
02:542010. Okay, very good. And have you bootstrapped the company or have you decided to raise?
Jeremy Greenberg
02:58No, it's all bootstrapped.
Nathan Latka
03:00I love that.
Jeremy Greenberg
03:01You know, we earned our first profit in 2012, broke even in 2012 and started to make a profit and then gradually grew the business from that point till now, you know, gradually adding employees and
Nathan Latka
03:15So you're cash flow positive today?
Jeremy Greenberg
03:18Correct.
Nathan Latka
03:19And how many folks are on the team?
Jeremy Greenberg
03:22There are, so there are 35 in my office here in New Jersey. And then about two years ago, I added an office in Europe. So we have around an equal amount in the European office.
Nathan Latka
03:32Okay, so 70 folks total all full time?
Jeremy Greenberg
03:33Correct. That's right.
Nathan Latka
03:35So New Jersey and Europe, very good. And what have you scaled to over the past eight years in terms of total customers on the platform?
Customer Count and Platform Scale
Jeremy Greenberg
03:42So we have over 600 clients. Now, some of those clients vary in size, like I said, some of them have over a 100 employees using their account. And some of them are small, like just a few people in the company. But we have over, I think something like six ten or something like that was our last count.
Nathan Latka
04:03Okay. Jeremy, can I multiply that? So can I take six ten times that thousand dollar a month average you just gave me? Mean, are you guys doing somewhere around $600,000 a month right now?
Jeremy Greenberg
04:13Yeah, a little bit more, but yeah, somewhere in that range.
Nathan Latka
04:18With 40%
Jeremy Greenberg
04:18Last year we did around
Nathan Latka
04:20Yeah, go ahead.
Jeremy Greenberg
04:22Yeah. So last year in 2017, we did around $5,100,000 in revenue. So, you know, it's gradually increased between then and now. And, you know, we're we're hoping to, you know, continue to grow at that rate. It's sort of hard to, you know, we're trying our best to maintain the rate, you know, the growth rate.
Nathan Latka
04:42But Jeremy, just to be clear, mean, you did 5,100,000 last year and you're already doing north of $600,000 a month today, that's a $7,200,000 run rate up from a $5,100,000 run rate just a year ago. So you already have healthy growth even if the year ended today.
Jeremy Greenberg
04:54Correct.
Churn, Retention and Expansion Revenue
Nathan Latka
04:55Yeah, that's great. Churn is critical in any kind of SaaS business, especially in kind of marketing and sales tech space. What's your churn today and how do you measure
05:03that?
Jeremy Greenberg
05:05So we have all kinds of reporting. We can report on logo churn and revenue churn, and we do that on a monthly basis. So basically, you know, if you have your... You know, we still use QuickBooks to manage our finances, but what we've done is we have our own internal system that we, we can reference, you know, by by the client ID that we have. And, we'd run a bunch of reports and we could basically run
05:31a twelve month churn and a eighteen month churn, both on revenue and logo churn.
Nathan Latka
05:36So Jeremy, what is the revenue churn per month per year today?
Jeremy Greenberg
05:39So I think it's around 88%.
Nathan Latka
05:42That's retention, not churn.
Jeremy Greenberg
05:44Sorry. That's the logo churn. The revenue churn is somewhere around 90%
Nathan Latka
05:50the Jeremy, just to clear, you're not talking about churn, you're talking about retention.
Jeremy Greenberg
05:55Yeah, so revenue churn.
Nathan Latka
06:00If you have 90% revenue churn, what that would mean is if you're doing 5,000,000 last year, would go down to like 1,000,000.
Jeremy Greenberg
06:07Sorry, sorry. Yeah, so we have net negative churn. So we're not only retaining our clients, but we're adding clients every month.
Nathan Latka
06:16Yeah, so what I'm trying to figure out, gross revenue churn per year is what? 12%? Because you said you retained 88. So if you retained 88, that means you churn 12.
Jeremy Greenberg
06:26Yeah. Is that right?
06:28That was the logo churn I was referring to.
Nathan Latka
06:30What's revenue?
Jeremy Greenberg
06:32So the revenue, I honestly don't have the number offhand.
Nathan Latka
06:35That's okay. That's okay. So 12% logo churn per year and you have net negative revenue churn each year.
Jeremy Greenberg
06:40Correct.
Nathan Latka
06:41What are you driving? The only way to have net negative revenue churn is to obviously be driving expansion revenue. What kinds of additional things are you selling into your customer base that drives the upsells?
Jeremy Greenberg
06:52So we've been expanding on our product line. So it used to be that we just had the sellercloud service that people would pay per transaction. Now we have some add on services, both in professional services that we're charging for, like, white glove type services where we're help going down to people's offices or giving them... Working on projects with them, customizing things for them. And then we also have some additional products, like we introduced a product called
07:19Skustack, which is a warehouse management solution, which sort of is in tune with the type of customer that we have, but going deeper into the operations, deeper into the warehouse. And, you know, originally, we just sort of managed inventory on a simple level, you know, what's in the warehouse. Now we actually... With Skustack, you can actually track where stuff is in the warehouse, scan everything to... You know, in and out of bins in the
07:47warehouse and track serial numbers and, all kinds of more advanced type stuff. So we actually charge extra for that per month.
Nathan Latka
07:55Okay, interesting.
Customer Acquisition: Referrals and Trade Shows
Nathan Latka
07:57And when you're signing up one of these a thousand dollar a month accounts, what are you willing to spend to acquire that customer fully weighted?
Jeremy Greenberg
08:06To be honest, we really don't know what our cost of acquisition is because until the last few months, it's been pretty much organically grown, but we do spend, it's very hard to actually crunch those numbers.
Nathan Latka
08:22Are you getting, let's instead of focusing on the number then let's focus on how you're getting new customers. So how are you signing up new customers?
Jeremy Greenberg
08:27So there's a lot of referrals, you know, from existing clients. And then we do go to some trade shows, but
Nathan Latka
08:34What would you pay for a trade show? What was the last one you went to?
Jeremy Greenberg
08:37So we would go to, let's say, eBay Open. You know, we were, you know, a silver sponsor or something like that. And, you know, might spend $15,000 to $20,000, you know, attending a trade show like that or the Internet Retailer event.
08:52So those are... You know, depending, you know, depending on travel and setting up the booth, it could cost $20,000 to $25,000 to to get involved in one of those conferences. But, you know, we maybe meet a 100, you know, potential clients and, sometimes the sales cycle's kind of long because they, you know, they don't necessarily wanna transition to another platform in the middle of the year. They wanna, you know, plan it and negotiate and whatever it may
09:20be. But, that's been the primary way we've gotten to know new people. But, initially it was all through organic, recommendations and referrals.
Nathan Latka
09:32Jeremy, break your team down today. What percent are like sales marketing versus engineering?
Team Structure: Sales, Marketing and Engineering
Jeremy Greenberg
09:37So we only have four people in sales.
Nathan Latka
09:40Okay, what about marketing?
Jeremy Greenberg
09:42Marketing, we have one person.
Nathan Latka
09:43And what about kind of like content, things like that, SEO, SEM?
Jeremy Greenberg
09:43Just one person.
Nathan Latka
09:43Okay. So five people kind of total on that side?
Jeremy Greenberg
09:43Correct.
Nathan Latka
09:43And then the rest are all engineers?
Jeremy Greenberg
09:55No, so there are around 20 people who are involved in support, onboarding.
Nathan Latka
10:00Okay. That's like customer success.
Jeremy Greenberg
10:02Customer success. So aside from them, the rest are all either developers or project managers and things like that. So it's mostly... We're pretty much heavy weighted on the technology side development wise.
Fundraising Plans and Equity Considerations
Nathan Latka
10:15That's great. Now you've bootstrapped the company. Would you ever raise capital? Are you in talks today to raise any capital or no?
Jeremy Greenberg
10:22I'm not in talks right now. It's at the right time, maybe it would make sense. One of the challenges, a company my size is that, you know, it's... You don't wanna really give up equity at this stage unless you really need it. Sort of...
10:41You know, it's really hard to know what what it'll be, but I think I probably want the company to grow a little bit more mature so that it's a little bit more easy to get like a
10:55minority investor or something like that, you know, without giving up too much equity percentage wise.
11:02But we sort of got through a lot of the hard stages already.
Famous Five: Books, Tools and Habits
Nathan Latka
11:06Yeah, know you're building a great company. I love it. It's great that you're doing it bootstraps. Let's wrap up here with the famous five. Number one, what's your favorite business book?
Jeremy Greenberg
11:17I haven't really read too many business books to be honest.
Nathan Latka
11:19And the last book you read?
Jeremy Greenberg
11:24I read a book about emotional intelligence by
Nathan Latka
11:30Cialdini.
Jeremy Greenberg
11:33Sounds familiar. Right. It's okay. Don't have a good answer for now.
11:38It's fine, emotional intelligence.
Nathan Latka
11:40Number two, is there an under the radar CEO that you follow or study?
Jeremy Greenberg
11:46Not really. I'm pretty much, I don't really follow any type of model. It's pretty much just,
11:54I think there's CEO in New Jersey when you're having a bad day or you want to brainstorm, you go out to lunch with.
Nathan Latka
12:01No. Okay, number three. What's your favorite online tool for building your business?
Jeremy Greenberg
12:07Online tool.
12:11I think LinkedIn is a very powerful tool that from a business standpoint, networking and, you know, it seems to be, probably the the most powerful free tool out there as far as business growth, especially when you're dealing with organic growth.
Nathan Latka
12:29Great. Four, how many hours of sleep are you getting every night?
Jeremy Greenberg
12:34I think about five hours of sleep.
Nathan Latka
12:36Jeremy, that's not healthy.
12:39Why aren't you sleeping more?
Jeremy Greenberg
12:43I'm not working hard enough, right?
Nathan Latka
12:45I would not say just because you sleep less means you're working harder. I do not think those things are correlated at all. Why don't you sleep more though? Seriously, do you have little small kids at home or?
Jeremy Greenberg
12:54Yeah, got some small kids at home, but you know, it's challenging balancing all of the responsibilities at home and at work, but
Nathan Latka
13:04So how many, how is it, first off, are you married?
Jeremy Greenberg
13:08I'm married.
Nathan Latka
13:08Okay, married and how many kiddos?
Jeremy Greenberg
13:11I've got eight kids.
Nathan Latka
13:12Oh my God, Jeremy.
13:13Okay, that's the reason you just say, Nathan, leave me alone. I have eight kids. That's why I only sleep five hours.
13:19All right, and how old are you Jeremy?
Jeremy Greenberg
13:22I'm 40.
Nathan Latka
13:2340, last question. What do you wish your 20 year old self knew?
Jeremy Greenberg
13:36I knew earlier that, you know, people really needed software like this. I could have had a head start.
Nathan Latka
13:43Guys, earlier start on software. There you have it from sellercloud launched a couple of years ago, call it 2010. Now 70 people between New Jersey and Europe, again, 600 customers paying an average a thousand bucks per month. So north of $600,000 per month in revenue. That's up about 40% year over year. They finished 2017 with about 5,100,000 in revenue. In terms of economics, 12% logo churn per year, and they've got net negative revenue churn annually, which
14:08is great. Too early to measure CAC and LTV, things like that, as most of their 70 person organizations actually focus on engineering and customer success versus sales marketing or any inbound strategy. So Jeremy, thank you so much for taking us to the top.
Jeremy Greenberg
14:20Okay, thank you. Enjoy.