How Signal-AI CEO David Benigson grew to $3M revenue and 150 customers in 2017.

hello everybody my guest today is David Bennington he founded single media in 2012 with the belief that artificial intelligence would fundamentally change the way businesses worked as CEO he's led signal through multiple funding rounds tolling 8.2 million euros most recently a 5.8 million dollar Series A in December of 2016 he was named the Forbes 30 under 30 Europe list in January 2017 David are you ready to take it to the top sure absolutely all right so very good so tell us more about kind of what single media does and what's your business model how do you make money sure so I mean we founded the company four and a half years ago and ready we founded it under the premise of two big problems and challenges that most businesses face today one being the explosion of information accessible to large organizations the fact that companies have just never had greater access to information and yet never found it harder to transform that information into actionable insights and the second kind of major challenge at most businesses face if you walk into them is the fact that you know knowledge is siloed that's trapped in the heads of people who work with these organizations so we build signal and we apply machine learning and AI to solve those two problems we aggregated a lot of the world's information and apply machine learning to transform that information into insight and then we enable our clients to train up our systems with their domain expertise so that they can unlock all of that expertise and ultimately get the machine learning and the algorithms to deliver them better insights and better results and more relevant results in fact a nice model yeah it's a SAS model so a business model is ultimately to sell a software product and application that our clients license from us on an annual basis and typically they pay for the number of seats the number of logins and therefore the kind of breadth of access that they would have within their organization and what would you say kind of the average customers paying per year so it's um it's kind of starts at anywhere north of kind of 20,000 dollars a year and then it can scale into kind of high six figures and even in some cases seven figures so we kind of have a breadth of of customers across that across that broad spectrum and yet a reading determines on kind of the number of use cases and the kind of number of scenes with the organization ones web access and how have you scaled this thing over the past four years I mean tell me the story of how you got that first class yes I mean we started the company in a carrot which I guess is we're all good technology businesses are founded of course even here in is our garage a garage garage I like carriage for enter in the heart two years building out that kind of underlying platform and obviously we are taking pretty cutting edge embryonic technologies with an AI machine learning and so a lot of it was about proving out and could actually do this in scale that we can aggregate the world's information and use machine learning to transform that information into insight um winning our first few customers is always kind of ready challenging and probably one of the most kind of exciting memories that you have within the company our first client was in the financial services space and I remember seeing in our garage and trying to figure out what was the best way to surprise the product with my two co-founders and I think my chief data scientist said one number and my CTO I said another slightly a higher number and I decided to go to gonna go ten times that number and when the client then confirmed that they were happy with that price we thought god we should have gone even twenty times higher so they were happy with the ten times price how much how much was it do you remember that's our money so we could have maybe charged in twenty or thirty that just kind of demonstrates we were just starting out value pricing and understanding where your product can fit into an organization is really really difficult and so I guess it's a journey of iteration and kind of experimentation wasn't and so from customer one to where you are today how many customers are you at what have you grown to yeah so weird about 150 corporate clients now and so yeah we've scaled I think it's been a very very exciting journey in particular over the last 12 months it's taking on that Series A funding that you mentioned before you know we've tripled the number of customers and almost quadrupled revenue in the last 12 months and so that kind of experience of scale and really seeing that business starting to take off has been very very exciting for us that's impressive yeah I mean look you've mentioned earlier you're a CV is about 20 grand first your minimum just minimum you know if I multiply that times 150 that puts you I mean what does that put you at 250 250 grand a month that minimum or about maybe what is that 3 million annually yeah and you you 4x that you over a year so if I go back to December 2016 you were doing what around 62 grand something like that yeah so I mean we've yeah we've literally gone from about 40 50 customers and more than triple the customer base in the last 12 months so that's been really an exciting journey of scale for us and you know not only we kind of selling to more customers we're also demonstrating we can kind of upsell and expand those customers so that's been been really exciting for us as well then we started in a beachhead of applying our technology into corporate communications and enabling those teams to use us for kind of reputation monitoring and analysis and over the last kind of year and a half and really start broadening out selling into other departments across the organization sending into compliance selling into what we call horizon scanning which is funding investment opportunities earlier and so ready we've not known being able to kind of scale the number of customers and the ultimate kind of top-line revenue but also kind of deepen the relationships that we have with with with enterprises and I want to make sure I give you the credit that you deserve I mean is that about right you're doing about 250 grand a month right now or way more yeah I mean we don't we don't typically share the kind of top-line revenue number but but ultimately yeah that scale from 50 customers to 150 customers is really kind of key metric that we're very proud of okay but I'm just just to be clear that I'm just multiplying your numbers the minimum you told me was 20 grand a year times 150 it's fair to say you're doing north of 250 grand a month right yeah yeah yeah you just don't I totally understand you wouldn't wanna put a top on that because you don't people know but you could be significantly bigger if you have 600 your contracts yeah very cool why raise money you mean yeah yes I think venture funding is all about trying to go faster and scale more quickly and I think you know there's something starting to be said for organic growth and you know taking a profits and your revenue and reinvesting them into the company but I think ultimately if you think about the markets we're trying to sell into and the scale of ambition that the organization has you know we're going up against some you know ready relatively big large incumbents who have been around for 10 20 30 years with you know hundreds if not in some cases thousands of sales reps on the ground and already deeply penetrated into multiple geographic markets and so we have this ambition that this company could you know really be a game changer and a disruptor into these incumbent industries and so I think for us venture funding is a way to you know maximize our potential and move at the speed and we didn't level of aggression that we really want to did you already have a big enough cohort of customers come through like you're tracking back in to understand pretty predictably what CAC was and that's why you had confidence raising the capital yeah I mean I think those metrics super super important you know your top-line growth is important your cost of acquisition is important you know renewal is absolutely important as you'll know in a in your software as a service company as well as what do you say that right now in terms of churn annually or retain the opposite retention annually yeah so I mean typically we don't share those that day to either but you know we're very very proud that we've been able to retain the majority of our customers and where we have in some few examples churned customers I think is typically being out of our control so businesses in the merging or in some cases unfortunate and bankrupt but you know kind of an underlying health of our revenues is is perhaps even more impressive than that top-line growth number and so for us that's something that we you know we're very very proud of and also you know think a lot about and take a lot of care with and so you know we've invested just as much now customer support and customer service side of the businesses as we've tended to our new business which is very very important for us I mean is it generally fair to say you're doing more that you're pertaining more than 90 percent of your customers annually that would be good and I yeah absolutely okay how do you hit the Holyland kind of a negative net revenue Turner no yeah now we have and that's that's already exciting thing for us to have achieved you know that net positive expansion is was again really really important in terms of the long term sustainability because what trick what levers are you pulling to drive expansion revenue from year one to year two is it more leads more seats more API cause more data pool what is it yeah so I mean it's a it's a combination of some of those things that you just mentioned obviously you see expansion is really important for us so getting more users on throughout all and delivering more value across the organization we have a kind of two sides to our pricing matrix one is obviously the number of seats and the other is kind of modules and modules can be data sets or can be more product functionality and so ultimately if we've sold the client into a kind of a lower combination of those two things then we have an opportunity either midterm or at the end of the first year to be able to try and expand those and span those contracts as well and what do you trying to optimize payback period for how quickly do you like to get your money back well I mean I think there's a lot of great benchmarking in in the sales market that kind of shows you best for you know best-in-class what CAC should be and I think anything under 12 months is good and anything under six months is fantastic so are you are you good or fantastic you know I mean again these are not these are not numbers that we publicly share but again we you know we're always striving to be fantastic obviously that's a that's a cool goal of ours across so is it fair to say you're between six and twelve months in terms of payback well I mean as I said we're always striving to kind of really match those kind of best-in-class sized metrics and so you know we are you know typically benchmarking ourselves against against organizations that really need the back in that regard and those are this is the reason I'm trying to understand like maybe not your numbers specifically but when you say like best impact my audience doesn't always know what that means so when you look at other companies and you say best impact you're talking six months or less or twelve months or less ya know six months unless I mean I think there's a lot of regulated good data the audience open view partners in Boston just released a really interesting data set with a benchmark I think 300 plus companies and looked at a whole bunch of size metrics and matrix partners as well another venture firm in the u.s. also released already interesting benchmarking dataset so these are very useful tools to be able to kind of measure yourself not just on CAC which is only one metric kind of a sweet but everything from your top-line growth your payback periods your retention rates all of those things I think is very useful as an organization you have a benchmarks are you generally getting more aggressive with acquiring customers or less aggressive in terms of spend you know sometimes people are willing to pay more because it's a hot time in the market you want to get as much market share as possible otherwise others are trying to go towards profitability so they want to decrease that no I think I think I think you know we're being relatively aggressive I don't think kind of unnaturally aggressive but I think certainly we are looking in the market we're very excited about the potential we're very excited about the validation our customers have given us and so I think you know our intention is to continue doubling down into into the market and trying to be aggressive okay and can you considering the economics you've just shared us do you do pretty confidently assume lifetime value is always greater than kind of 50 60 grand on any account coming in to you or is it higher or lower again I don't have the thickest in my hand but but I think it has to be ready if you if you want to make the long-term mats of the business work yeah interesting and what are you today in terms of team size so we are today at about 65 70 people and it's broadly split between product engineering those science and then the other half the business the commercial side in location wise very based we are located in London collocates it all together everyone everyone's know it's great okay very good all right let's wrap up here with the famous five Dave at number one what's your favorite business book good to great of course number two is there a CEO you're following or studying right now right now I watch Sean with with a lot of interest in Lomas for various reasons number three besides your own with your favorite online tool I would have to say slack number four how many hours of sleep to get every night at least seven will get very grumpy that's pretty good and what's your situation it's married single you have kids single my kids good you know signal babies sick babies that's good and how old are you I'm 29 alright last question take us back nine years what he was your 20 year old self new oh wow just have fun and take life too seriously there you guys have from David have fun don't take life too seriously he launched single back in 2013 2013 now 265 folks really playing in the artificial intelligence machine learning space his first he under sold his first customer thinking it would be a lot it actually closed really quickly 10 grand there he's now got over 150 customers actively using the platform paying a minimum of 20 grand per year so they're over 200 grand and mor and they have 4x that over the past 12 months so really great growth raised significant amount of capital I believe over what 8 million dot nine million dollars or nine you a nine million euros pardon me super healthy unit economics and growing with his team they are in London David thank you for taking us to the top there's a thank you