Founder Interview
How Signal Signal Reached 70 Customers on €4,000 Average Annual Contract Value in 2019 (Interview with Co-Founder Tor Rauden Källstigen)
- Interview Date
- January 30, 2019
- Interviewee
- Tor Rauden KällstigenCo-Founder
Company Metrics at Interview Time
Customers (2019)
70
Avg Contract Value (2019)
€4,000 per year
Team Size (2019)
12
Monthly Burn (2019)
About 20K per month
Historical Snapshot
These numbers were reported by Tor Rauden Källstigen during the interview recorded in January 2019 and are a historical snapshot, not current figures. See Signal Signal’s current numbers.
Key Takeaways
- 01Signal Signal launched in 2016 as a subscription-based media monitoring service for spoken channels
- 02The company had 70 customers as of January 2019, almost all large brands
- 03Average annual contract value was €4,000 per year
- 04Churn was somewhere between 15% and 20% a year, which he considered low for that early stage
- 05The team had grown to 12 people based in Stockholm
- 06Total funding raised was around €600K to €700K, including a small STING accelerator investment and an angel round
- 07The company was burning approximately 20K per month at the time of the interview
- 08Signal Signal had changed its name to All Ears by January 1, 2019
- 09Growth came primarily from new customers rather than upselling existing ones
- 10The founder's background in PR agency work gave him direct insight into buyer needs and pricing
Company Metrics at Time of Interview
| Metric | Value | Source |
|---|---|---|
| Year Founded | 2016 | Founder interview, Jan 2019 |
| Customers (2019) | 70 | Founder interview, Jan 2019 |
| Avg Contract Value (2019) | €4,000 per year | Founder interview, Jan 2019 |
| Annual Churn (2019) | Between 15% and 20% | Founder interview, Jan 2019 |
| Team Size (2019) | 12 | Founder interview, Jan 2019 |
| Monthly Burn (2019) | About 20K per month | Founder interview, Jan 2019 |
| Total Funding Raised | Around €600K to €700K | Founder interview, Jan 2019 |
| Funding Round (2016) | Small accelerator investment (STING) | Founder interview, Jan 2019 |
| Funding Round | Angel round | Founder interview, Jan 2019 |
Growth Breakdown
Customers
Signal Signal had grown to 70 customers by January 2019, almost all of them big, famous brands and their communications directors. Tor put monthly recurring revenue at about €29,000 ("It's I think €29,000") and said that in January 2018 it was "about half that". The growth came from signing new customers rather than upselling existing accounts.
Pricing and Contract Value
The company charged an average of around €4,000 per year per customer on a pure SaaS subscription model. Many accounts sat in that 4K area, with a few two to two and a half times larger. Asked whether any single customer made up more than 5% of ARR, Tor said no.
Team
The team grew from just the two co-founders at launch in 2016 to 12 people based in Stockholm by January 2019. Tor's co-founder was also the company's CTO.
Funding and Burn
Signal Signal raised a total of around €600K to €700K, starting with a small investment from the STING accelerator in 2016, followed by an angel round. At the time of the interview the company was burning approximately 20K per month after hiring additional staff, having been close to breakeven a few months earlier.
Growth Strategy
Founder's Industry Network and Background
Tor's background was in PR and communications agencies, where he got to understand what kind of services buyers in that field want. He had also used text-based media monitoring services himself and built a big network, and he said that is how the team understood how to price the product.
Partnerships with Established Media Monitoring Companies
From a very early stage, Signal Signal had partnerships with some other big media monitoring companies, and learned from them how they charged their customers and how they did their packaging.
Enterprise Sales Motion
The company relied on a direct enterprise sales approach, with salesperson salaries making up the largest component of customer acquisition cost. The founder noted they were working toward a lower-touch model but had not yet reached it at the time of the interview.
Best Quotes
“It's pure SaaS, and it's subscription based media monitoring service for spoken channels.”
“We launched the company back in 2016. And back then, we were just me and my co founder ... And since then, we've grown the team to now 12 people, and we're based out of Stockholm.”
“So we joined an accelerator called STING, which is called, like, the Y Combinator of Northern Europe, and we got a small, small investment from them back in 2016.”
“Total around 600 or 700k euros.”
“So we have now 70 customers, and almost all of them are big famous brands and their communications directors.”
“The churn is quite low. It's somewhere in between 15, 20%, which I believe is low for this early stage.”
“So my background is from the PR agency industry. So I used to work for a couple of big agencies and the communications agencies. And so I got to understand how these buyers in that field, what kind of services they want.”
“We've been planning to raise more money during this spring. So we have this confidence that that will go very well, and we have some really nice indications in that as well.”
What Happened Next
This interview captured Signal Signal in January 2019. Tor said the company had changed its name to All Ears by January 1 of that year. At the time, the team of 12 sold mostly through enterprise sales while moving towards a low-touch model, and planned to raise more money in the spring. Visit the company profile for any available current information.
View Signal Signal’s current profile and metricsFull Transcript
Chapters
- 0:01Introduction and Company Overview
- 0:30Name Change to All Ears
- 0:43Product and Business Model
- 1:08Company Timeline and Team Growth
- 1:28Funding History
- 1:59Customer Count and Profile
- 3:07Growth Channels: Agency Background and Partnerships
- 3:54Churn, CAC and Enterprise Sales
- 6:45Burn Rate and Hiring Decisions
- 7:24Fundraising Plans and Confidence
- 8:07Famous Five: Favorite Business Book
- 8:37Famous Five: CEO to Follow and Favorite Tool
- 9:20Famous Five: Sleep, Personal Life and Age
- 9:57Famous Five: Advice to Younger Self
Introduction and Company Overview
Nathan Latka
00:01Hello, everyone. My guest today is Tor Rauden Källstigen. He is the co founder of Signal Signal, which is the world's first spoken influencer media monitoring service. Dubbed the Google Voice by Tech Media, they analyze millions of sources every day thanks to AI driven voice and text analysis. The company is offered as a yearly subscription attracting clients such as Toyota, Sony Music, and Volkswagen, and helping them to understand why and when they're mentioned. Alright. Tor, you ready
00:26to take us to the top?
Tor Rauden Källstigen
00:28Sure. Great to be here.
Name Change to All Ears
Nathan Latka
00:30Yeah, you bet. So you've made a change first off to the name. So what's the new name?
Tor Rauden Källstigen
00:35The new name is All Ears.
Nathan Latka
00:35All Ears. Very good.
Tor Rauden Källstigen
00:35So we changed the name from Signal Signal to All Ears by January first this year.
Product and Business Model
Nathan Latka
00:43That's great. So walk me through what the platform does. Is it all pure play SaaS or is there any other revenue mixed in?
Tor Rauden Källstigen
00:52It's pure SaaS, and it's subscription based media monitoring service for spoken channels.
Nathan Latka
01:00Okay. And so what do people pay on average per month for this?
Tor Rauden Källstigen
01:03Pay on average around €4,000.
Nathan Latka
01:06Per month?
Tor Rauden Källstigen
01:07Per year. Per year. Sorry.
Company Timeline and Team Growth
Nathan Latka
01:08Okay. Got it. Per year. That's great. And then put this on a timeline for us. So when did you launch the company? What year?
Tor Rauden Källstigen
01:15We launched the company back in 2016. And back then, we were just me and my co founder, Håkan Waara, who's the CTO as well. And since then, we've grown the team to now 12 people, and we're based out of Stockholm.
Funding History
Nathan Latka
01:28Okay. So 12 people Stockholm launched in 2016? Right. And what about capitalization? Do you guys bootstrap or raise capital?
Tor Rauden Källstigen
01:37So we joined an accelerator called STING, which is called, like, the Y Combinator of Northern Europe, and we got a small, small investment from them back in 2016. And then we raised an angel round in 2006, two thousand seven, eighteen.
Nathan Latka
01:54So how much total have you raised?
Tor Rauden Källstigen
01:57Total around 600 or 700k euros.
Customer Count and Profile
Nathan Latka
01:59Okay. So 7... So that'd be about $750,000, something like that. And and obviously that's funding on to your growth. Now over the past two years, how many customers have you grown to?
Tor Rauden Källstigen
02:10So we have now 70 customers, and almost all of them are big famous brands and their communications directors.
Nathan Latka
02:1970 brands at seven zero paying 4,500 USD per year. That's $375 a month would put you at his current MRR at about $26,250 Is that right?
Tor Rauden Källstigen
02:32It's actually a little bit above that, but in in that sort of landscape, yes.
Nathan Latka
02:38Okay. So so what's the actual number?
Tor Rauden Källstigen
02:41It's I think €29,000.
Nathan Latka
02:46€29,000.
Tor Rauden Källstigen
02:46That's At the moment.
Nathan Latka
02:46And where were you... So we can understand growth rate. Where were you back in January 2018 in terms of monthly revenue?
Tor Rauden Källstigen
02:55So I think it was about half that.
Nathan Latka
02:59And where did most of the growth come from? Was it new customers or upselling old customers?
Tor Rauden Källstigen
03:05Absolutely from new customers.
Growth Channels: Agency Background and Partnerships
Nathan Latka
03:07And so break down that for me. Mean, getting new customers paying four or five grand per year is not easy. Where are you getting new customers? What's the growth channel look like?
Tor Rauden Källstigen
03:17So my background is from the PR agency industry. So I used to work for a couple of big agencies and the communications agencies. And so I got to understand how these buyers in that field, what kind of services they want. And I also used these media monitoring services myself, text based media monitoring services. And we learned a lot from that, and I had this big network. So we understood how to price the product. And also we
03:44got some partnerships with some other big media monitoring companies from a very early stage and learning from them how they are charging their customers and how they are doing their packaging.
Churn, CAC and Enterprise Sales
Nathan Latka
03:54And has this been effective? Are these customers that you sign up, are they staying sticky? What's your churn today?
Tor Rauden Källstigen
04:00The churn is quite low. It's somewhere in between 15, 20%, which I believe is low for this early stage.
Nathan Latka
04:08That's monthly or annually?
Tor Rauden Källstigen
04:11Annually.
Nathan Latka
04:11Annual revenue churn or logo churn?
Tor Rauden Källstigen
04:17Pass. I'm not sure about that.
Nathan Latka
04:19Okay. You mean you don't know what those mean or you don't measure them?
Tor Rauden Källstigen
04:25I'm not familiar with the terms.
Nathan Latka
04:27Yeah, that's okay. So 15%, is that representative of the amount of money you've lost or the number of customers, the logo count of customers?
Tor Rauden Källstigen
04:38That should be the logo count.
Nathan Latka
04:39Okay. Yeah. So annual logo churn is about 15%.
04:45That's great. And obviously that's not a problem as long as one of those churned customers, you know, didn't make up some big chunk of your revenue. Do you have any... You didn't lose any, like, big, huge enterprise accounts, did you?
Tor Rauden Källstigen
04:58Not really. I mean, we've been growing from from
05:04medium sized accounts, and we have a few accounts that are maybe two times or 2.5 times larger, but many of them are in in the four k area.
Nathan Latka
05:13But... So no customer makes up more than, say, 5% of your ARR?
Tor Rauden Källstigen
05:19No.
Nathan Latka
05:20Got it. And then walk me through CAC. So to get a new customer that pays you 4 or $5,000 a year, what are you spending on fully weighted customer acquisition?
Tor Rauden Källstigen
05:30So the CAC is around $23.04 k. It depends on how you are counting. And also the the Swedish market is quite special. We have this industry holiday between July and August, so almost none of the customers are are buying during those months, which makes all of this a bit more complex than than if you have a market which is buying the same amount for for every month.
Nathan Latka
05:58Why would that impact what your CAC is?
Tor Rauden Källstigen
06:02Because the CAC is, of course, rising a lot when we have those months when when nobody's in the office.
Nathan Latka
06:09Wait. But that's just one Independent on the month of the year, which was back in June. We're recording this in January. So your CAC outside of that one month, you're saying is about $3,000 to get a new $4,000 a year account.
Tor Rauden Källstigen
06:23Yeah. Likely.
Nathan Latka
06:25Okay. And where are you spending that $3,000?
Tor Rauden Källstigen
06:31It's... I mean, the big the big cost pool is from salaries from our salespeople. So we do enterprise sales mostly, and we are moving towards a low touch model, but we aren't really there yet.
Burn Rate and Hiring Decisions
Nathan Latka
06:45Yep. And then you've raised capital, obviously. You're growing revenue nicely. Are you guys breakeven today? Are you burning money?
Tor Rauden Källstigen
06:54So we could go breakeven and we did for a couple of months ago. But right now we've hired more people we're right now burning money.
Nathan Latka
07:05Okay. So when you say burning, like how aggressive are you being? You're burning, like, $10,000 a month or a $100,000 a month?
Tor Rauden Källstigen
07:13So we're burning, like, 20 k a month, I believe, now. But it's been, as I mentioned, almost breakeven for a couple of months ago.
Fundraising Plans and Confidence
Nathan Latka
07:24Yeah. So so what gave you the the confidence? Because a lot of people go through this thought process. What gave you the confidence to go out and add fixed expenses, right, to your to your monthly cash flows in the form of salaries? Like, what... How do you know you can handle $20,000 of burn for a couple months?
Tor Rauden Källstigen
07:41Right. So we we raised pretty much money a while ago, and we've been planning to raise more money during this spring. So we have this confidence that that will go very well, and we have some really nice indications in that as well. So we've been adding on more costs as we are seeing more and more progress in the sales. And, yeah, of course, that makes you more confident.
Famous Five: Favorite Business Book
Nathan Latka
08:07Yep. Okay. It makes good sense. Let's wrap up your tour with the famous five. Number one, what is your favorite business book?
Tor Rauden Källstigen
08:17I believe it's still actually the Walter Isaacson book about mister Jobs and then particularly the chapters when things are not going that well, when mister Jobs is between the two big Apple parts of his life. I think that's very interesting and to to see how how he's coping with that.
Famous Five: CEO to Follow and Favorite Tool
Nathan Latka
08:37Number two, name a CEO you're following or studying.
Tor Rauden Källstigen
08:42So when I ran my previous startup, I had another founder as an adviser who's called Henrik Berggrin, and he was then running a company called Readmill. He's now running a company called Steady Health. So he's called Henrik Berggrin, same on Twitter.
Nathan Latka
09:01Great. Number two, what's your favorite online tool for building the company?
Tor Rauden Källstigen
09:05So, I mean, of course, we are using HubSpot, and we're using Trello and all of that. But recently, I've been using a tool called YouCanBook.me for scheduling meetings and, yeah, reminding people that you have meetings. And I think that's really, really efficient.
Famous Five: Sleep, Personal Life and Age
Nathan Latka
09:20Number four. How many hours of sleep are you getting every night?
Tor Rauden Källstigen
09:25Around eight.
Nathan Latka
09:26Eight. Okay. Good. And what's your situation? Married, single, kids?
Tor Rauden Källstigen
09:32So I have a girlfriend and soon kids as well.
Nathan Latka
09:35Oh, great. Okay. Now you have a kid on the way?
Tor Rauden Källstigen
09:38Yeah.
Nathan Latka
09:39Oh, congratulations. When... How many months?
Tor Rauden Källstigen
09:42So it's scheduled for mid May.
Nathan Latka
09:45Oh, that's very...
09:46Are you excited? That's exciting.
Tor Rauden Källstigen
09:50Absolutely.
Nathan Latka
09:51Alright, Tor. How old are you?
Tor Rauden Källstigen
09:54I'm 33 right now.
Nathan Latka
09:5633. Last question.
Famous Five: Advice to Younger Self
Nathan Latka
09:57What do you wish your 20 year old self knew?
Tor Rauden Källstigen
10:01I just wish that I would know that things were going as well as they did and to keep on on doing what I love. And I think I did that to quite large extent. So... Yeah. I would just push on for the same values.
Nathan Latka
10:16Guys, keep doing what you love. Tor launched this company back in 2016 after coming out of an agency. It's essentially a text monitoring tool or text listening tool that allows brands to understand what's being said about them and why. They've got 70 customers paying $375 a month. So $33,000 a month in revenue, up from $15,000 a month just a year ago. They raised $750,000 burning $20,000 per month with a team of 12 in Sweden. 15% annual
10:40logo churn right now, spending $3,000 to get a new $4,500 a year customer. So nine month payback period as he looks to continue to scale. Tor, thanks for taking us to the top.
Tor Rauden Källstigen
10:51Thank you very much. And just a reminder to All Ears. To visit allairsoft.ai, yeah, and try out our Google for audio search.