How Signal-AI CEO David Benigson grew Signal-AI 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...