How Showell Reached $3M ARR and 300 Customers with 40 People (Interview with CEO and Founder Sami Suni)

Introduction and competitive landscape

Nathan Latka

00:00Hey, folks. My guest today is Sami Suni. He's the CEO and Founder of a company called Showell. He's been an entrepreneur for fifteen years, started a web development agency while studying at the university and now is building the firm focused on sales enablement. Alright, Sami, you ready to take us to the top?

Sami Suni

00:15>> Hey, Nathan. Thanks for having me here.

Nathan Latka

00:18Bet. You're in a hot space. Gong, Outreach, SalesLoft. It's very competitive. How are you differentiating?

How Showell differentiates from Showpad and Highspot

Sami Suni

00:25>> Actually, we are not competing against Gong and SalesLoft, for example. So it's more about against Showpad and Highspot.

Nathan Latka

00:35Great. Highspot also a big company.

Sami Suni

00:37>> What was the other one you mentioned? Showpad.

Nathan Latka

00:40Showpad and Highspot?

Sami Suni

00:42>> Yeah.

Nathan Latka

00:43Okay, so how are you differentiating? What's different?

Sami Suni

00:46>> Well, they are mostly targeting, you know, larger enterprises while we are maybe targeting more small and medium sized enterprises.

Contract pricing and product overview

Nathan Latka

00:53Okay, so what's average customer paying you, would you say, per month?

Sami Suni

00:58>> $15,000 to $50,000 annually.

Nathan Latka

01:02$15,000 annually to $5,000 annually?

Sami Suni

01:06>> Yeah.

Nathan Latka

01:06Yeah. Okay. So about, call it, dollars 1,000 to $2,000 per month?

Sami Suni

01:10>> Yeah, exactly.

Nathan Latka

01:11And tell me a little bit about the product. What are they paying for? What do they get?

Sami Suni

01:14>> So Showell is a sales enablement tool. So what it means is that it provides the relevant and right content for sales teams at every step along the buying journey so that they are able to present and share the content with their prospects and clients.

Customer count and company history since 2012

Nathan Latka

01:29And where are you today in terms of customers? How many total?

Sami Suni

01:33>> We have about 300 customers right now.

Nathan Latka

01:35300? When was the first one? When launch? Did

Sami Suni

01:39>> So we launched back in 2012. So we have been around for a while. Although we kind of did a reset a couple of years ago when we raised our seed round.

Seed round details and valuation in 2019

Nathan Latka

01:49How much was the seed?

Sami Suni

01:51>> 1,000,000.

Nathan Latka

01:531,000,000. And what year was that?

Sami Suni

01:56>> '19. 2000 '19. Why

Nathan Latka

01:58was 1,000,000 the right amount to raise in 2019?

Sami Suni

02:03>> Well, it felt like the right amount. We didn't want to raise more. We didn't want to raise less. Okay, then the COVID hit and things changed a little bit. So we were planning to open offices, a couple of offices. We still do those still do have those offices, but now things have, of course, changed a lot.

Nathan Latka

02:25What valuation did you raise a million on?

Sami Suni

02:28>> About 6,000,000.

Nathan Latka

02:30Okay. Was it high or low at the time? Did you like that?

Sami Suni

02:33>> I thought it was okay at the time.

Nathan Latka

02:37Do you remember how much revenue you were doing at that time?

Origin story: from web agency to SaaS spin-off

Sami Suni

02:41>> A little less than 1,000,000.

Nathan Latka

02:431,000,000. Okay. Wow. That's great. So how did you get your first customer back in 2012? Let's get the journey to a million.

Sami Suni

02:49>> Yeah, well basically, as you said, we had a web development agency, so we did have some customers. So customers came to us asking for a way how they could get their sales collateral into the iPads. So basically, we kind of just started building up beta versions and testing would it work. It seemed to work. That leads us here.

Nathan Latka

03:14Yep. Okay. So how big was the agency in like 2011? Remember how much revenue the agency did just by itself?

Sami Suni

03:21>> The agency back in 'twelve was maybe about 1,000,000, 1,500,000.

Nathan Latka

03:27Okay. So not a small agency. Now, that shut down the agency today?

Sami Suni

03:32>> No, no, it still exists, but we kind of this was a spin off, but we completely separated those two companies a couple of years ago.

Nathan Latka

03:41And when you say spin off, what does that mean for the cap table? How much do you own?

Sami Suni

03:46>> Well, I personally own about one third of Showell. And

Nathan Latka

03:51how much does the agency own?

Sami Suni

03:53>> Nothing.

Nathan Latka

03:54Okay. Who owns the other 66%?

Cap table and employee ownership

Sami Suni

03:58>> Yeah. I said, we raised seed round, so we have, of course, going to venture capital in the background. And then we have private owners who are also employees of the company.

Nathan Latka

04:09Oh, very cool. So you let your employees buy or is it a stock option pool basically you give out equity?

Sami Suni

04:13>> We don't have actually currently a stock option plan. We have, you know, kind of given the stock for some of the employees I see. Yeah.

Nathan Latka

04:25I see. Very cool. And it sounds like at 300 customers today and a $1,500 a month average price point, what is it? You're doing about $450,000 a month in revenue today?

Sami Suni

04:35>> Not actually

04:37>> that much, but we are getting there.

Nathan Latka

04:40Okay. When do think you'll

Sami Suni

04:41>> get I

ARR, annual contracts, and cash position

Sami Suni

04:43>> would say that by the end of this fiscal year. So right now we are at about 3,000,000 ARR. We don't calculate MRR that much. So it's not that relevant for us because customers pay us, you know, twelve months ahead and there are always annual contracts.

Nathan Latka

04:59Well, sure. But for financing, you just divide by 12 to back into your So, sort of run about $252.60 per month in revenue or about a $3,200,000 run rate. But again, most of that cash is upfront. So you should you've been able to be then pretty cash efficient if it's always annual upfront payments.

Sami Suni

05:14>> Yeah, it's a really good situation at the moment. You know, the cash plus is good. We don't have that.

Nathan Latka

05:22And you've grown three x since your million dollar raise at a $6,000,000 valuation. What do you think you're worth today valuation wise?

Sami Suni

05:30>> 30 to 50,000,000.

Nathan Latka

05:31And why that?

Sami Suni

05:32>> Well, just

05:34>> by looking at our customer base, we have really good logos, well known brands from all over the world. We have a really good growth rate at the moment. We also launched the world's first kind of a product led growth model, freemium model, sales enablement tool just recently.

Team size, engineers, and sales reps

Nathan Latka

05:59And Sami, what's the team size look like today? How many folks?

Sami Suni

06:03>> It's not a huge team. It's about 40 people.

Nathan Latka

06:06Four zero? Yep. How many engineers? Are you an engineer?

Sami Suni

06:11>> No, I'm not. I do kind of a talk tech tech and I know some coding. We have about one fourth of the people are engineers.

Nathan Latka

06:21Okay. Got it. So call it 10 of them are engineers. How many sales reps?

Sami Suni

06:25>> At the moment, we do have well, we have SDRs and account executives. So it's The total team size is about 10 to 12 at the moment.

Nathan Latka

06:37How many of them are like actual AEs that carry a quota?

Sami Suni

06:42>> Six.

Nathan Latka

06:43Six. So you have one SDR for one AE, that's the ratio?

Sami Suni

06:47>> Yep.

AE quotas and sales team structure

Nathan Latka

06:48And you're the guy to ask this because your sales enablement software, what quota do you set these six people at?

Sami Suni

06:54>> I'm sorry, could you repeat?

Nathan Latka

06:55What quota do you give these six salespeople with?

Sami Suni

06:59>> Yeah, depends on, of course, if the AE is a junior or senior and when AE started. But I would say the average is about

07:13>> 150,000 to 200,000 annual.

Nathan Latka

07:17That's what they have to sell or that's what their on target earnings are?

Sami Suni

07:21>> That's kind of the minimum target.

Nathan Latka

07:24So they need to sell $150,000 of new ARR each year?

Sami Suni

07:28>> Yeah, depending on, of course, if they are junior or senior. And if you are senior, it's about 300.

Nathan Latka

07:34Okay, but let's just do senior at 300. That, you know, a lot of AEs are paid, like, $100,000 basis. And then when they hit their million dollar quota for the year, they get another $100 on top of us. They make 200 k all in OTE. You usually wanna find one ratio there. So if you hold your 300 k quota divided by five, that means their full on target earning salary base plus commission is like around $70,000

07:57I bet you paid people more than that.

Sami Suni

07:59>> Yeah.

08:02>> Have to remember that Showell is a Finnish company, so we are based in Finland. And because of the COVID, we did a big change in our strategy. So we kind of concentrated all our people in Finland. So the salary is not that high as it would be, for example, in the West Coast USA.

Nathan Latka

08:20Mhmm. But now we're in a remote world. It also doesn't matter where you live. If you're a good AE, someone in San Francisco can hire you and pay you 200k Exactly. Per year, you Yeah. So how do retain your best people when you're competing in a global marketplace now? How do they not get picked off?

Sami Suni

08:37>> Well, we do have most of the people, you know, placed in Finland right now. So it's about more about also the location where the office is. So, you know, we have the world's best healthcare, world's best education system. Okay, the tax rate is quite high, but then again, get good services, nature, clean air, everything. So for us, it's more about the location.

Profitability and burn rate

Nathan Latka

09:04Fair. Now, are you burning capital, or are you profitable?

Sami Suni

09:08>> We are slightly burning at the moment, we

Nathan Latka

09:12are What getting does slight burn mean? I am talking $5 a month, $30 a month?

Sami Suni

09:17>> Yeah, it is about $5 a month.

Nathan Latka

09:19Okay. So that's not horrible. Are you planning to raise right now or are you going to stay with just 1,000,000?

Planned fundraise and growth strategy

Sami Suni

09:23>> We are actually planning to raise the next round, which How much do you want to raise? 7 to 10,000,000.

Nathan Latka

09:31And why is 7 to 10,000,000 the right number?

Sami Suni

09:35>> The right number because we want to go full ahead with kind of two kind of arrows or heads. So first of all, we want to do the sales net growth and we also want to do the product net growth. So we do need to hire new salespeople, but we also have to hire new engineers and really get the product itself into shape where it can sell itself. What's churn? Churn is really low at the moment,

Churn, NRR, and customer acquisition cost

Sami Suni

10:05>> so it's about 3.5.

Nathan Latka

10:08Monthly or annual? That's very And do you have more expansion revenue than that?

Sami Suni

10:15>> No.

Nathan Latka

10:16Do you upsell customers more than the 3.5 so your

Sami Suni

10:19>> net Yeah, yeah, sure. Yeah, yeah. So it's NRR is about 112 at the moment.

Nathan Latka

10:25Wow, congrats. That means you're expanding accounts by 4% are turning, so net is 112. That's great. Do you know what you're paying fully weighted to get a new customer, your CAC?

Sami Suni

10:35>> Yeah, that's quite high. It's about one and a half times the annual income, so we're talking about thousand at the moment.

Nathan Latka

10:45Why is it so expensive?

Sami Suni

10:48>> Well, you know, we have been growing quite rapidly now. So I'm talking about, you know, the CAC since last six months. So we have hired new people, new tools, like we started to use Outreach, for example, and many other tools. So the expenses have also grown a lot.

Famous five rapid-fire questions

Nathan Latka

11:08Great story here, Sami. Let's wrap up with the famous five. Number one, what is your favorite book?

Sami Suni

11:14>> I have to say that it is not a kind of typical business book. It is the story of Steve Jobs.

11:24>> Yep.

Nathan Latka

11:25Number two, is there a CEO you are following or studying?

Sami Suni

11:29>> I am following quite many CEOs and I have to say that, you know, I am watching really closely, for example, the Showpad CEO Pieterjan Bouten, PJ.

11:42>> But I cannot say any particular CEO that I like the most or what's the most.

Nathan Latka

11:49Number three, what's your favorite online tool for building Showell?

Sami Suni

11:54>> I would say HubSpot is our, you know, number one tool.

Nathan Latka

11:59Number four, how many hours of sleep do get every night?

Sami Suni

12:03>> I try to get seven to eight.

Nathan Latka

12:06Okay. And

Sami Suni

12:06>> I think I get it.

Nathan Latka

12:09What's your situation? Married, single, kids?

Sami Suni

12:13>> Not single, not married. So between.

12:16>> Not married.

Nathan Latka

12:17And how old are you? And any kids or no?

Sami Suni

12:20>> Yeah, I have two kids.

Nathan Latka

12:21Two kids. How old are you?

Sami Suni

12:23>> How old?

Nathan Latka

12:24You. How old are you?

Sami Suni

12:27>> I'm 42.

Nathan Latka

12:2842. Last question. What's something you wish you knew when you were 20?

Sami Suni

12:38>> I kind of wish that I would have been maybe more bolder in my actions and moves. I was too cautious.

Closing summary

Nathan Latka

12:48Guys, they launched an agency back in 2011. They ended up running a million dollar agency before in 2012 launching a SaaS product. That SaaS product today passed a million dollar run rate in 2019 when they raised a million dollar round on a $6,000,000 valuation. Now today they're at $3,200,000 in ARR looking to raise 7 and $10,000,000 round on a 30 to $50,000,000 valuation. They have 300 customers basically breakeven right now, 40 people on the team,

13:1110 engineers. We will see what happens next.

Sami Suni

13:13>> Are competing in a very hot space.

Nathan Latka

13:15Showell's name of company sales enablement software.

Sami Suni

13:18>> Sami, thanks for taking us to top. Thanks

13:21>> for having me. Have a nice day.

Nathan Latka

13:26One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on three hungry buyers. They try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday 1PM

13:51Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM Central. To make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the world, whether it's an acquisition, a big fundraise,

14:14a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you want to take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign up

14:35for that at nathanlatka.com slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode and if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people.

14:54We got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments. See you.