How Smartsheet CEO Mark Mader grew Smartsheet to $943M revenue and 1.7K customers in 2024.

this is the top where I interview entrepreneurs who are number one or number two in their industry in terms of Revenue or customer base you'll learn how much revenue they're making what their marketing funnel looks like and how many customers they have I'm now at $20,000 per talk 5 and6 million he is held bent on global domination we just broke our 100,000 unit sold Mark and I'm your host Nathan lka I just finished traveling south East Asia for 41 days and I usually always get sick when I travel and quite frankly eating is difficult for me it's hard to find a restaurant and I'm spoiled in Austin with my personal chef well I took these little packets with me this time 30 of them in my carryon suitcase they kept me totally healthy with 11 different secret ingredients you can see them at Nathan la.com juu I'll tell you more later on in the show that's Nathan la.com slj folks many of you reach out to me and you say Nathan so many guests on your show talk about the importance of batching but whenever I try and batch you tell me this you go Nathan they don't book back to back times so you or they don't show up after they book it's frustrating the answer is guys you have to use Smart Tools I use a tool called AE scheduling at Nathan lat.com schedu I'll tell you specifically how I use it later on in the episode Nathan L here this episode 627 and coming up tomorrow morning all you young folks out there listening and are in for a treat 19-year-old CEO Ido Gino joins me he just raised 3.5 million for his company Rapid API which helps you connect with apis faster but how does he make money tune in to find out good morning everybody Our Guest this morning is Mark Mater he is the Chief Executive Officer of smart sheet he's passionate about delivering Superior customer experiences and organizational excellent Mark strives to find innovative ways for customers to collaborate more intelligently using the smart sheet platform and its partner ecosystem prior to Smart sheet Mark served as senior vice president of Global Services for Onyx software leading the cons Consulting and consumer operations team in the Americas Europe and Asia in 2015 he was recognized as Earnest and young entrepreneur of the urine technology for the Pacific Northwest Mark are you ready to take us to the top I am very cool okay so tell us what smart sheet does and what's your business model how do you make money so we're a software SAS company so we make money by helping clients obviously but we're subscription service and the people who subscribe to us are teams and Enterprise team who have a need to manage and automate collaborative work so that's taking it beyond the conversation and taking it into the realm of tracking reporting automating and scaling very often in the context of projects and processes so is this I mean are you playing kind of in the Trello Maven link is space yeah in in a sense uh but sort of Enterprise class so think of it less about like a structured task or very specific time capture and more handling everything from tracking space launches to events like this Super Bowl things that are very diverse in nature and require data that goes well beyond just a task definition interesting so I could probably get like Gant chart functionality inside a smart sheet yeah that's one of the things we do but uh definitely not not the sole purpose of the of the offering interesting um to kind of quantify that maybe the easiest way to quantify kind of the target you're going after you said more Enterprise on average what are these customers paying you per month yeah on average we serve about 65,000 distinct Brands today on a paid basis okay on average each one of those Nathan provide about a th000 bucks a year ARR but the the diversity is huge it goes all the way from 200 bucks a year to 1.65 million a year so the the reach is quite dramatic largest customer in the tens of thousands of users the smallest uh sole proprietorship who collaborates with a few customers got it but you said 65,000 paid Folks at an average annual R proof about a th000 bucks per year right yeah that's just on our domains and then we have obviously a ton of just ISP uh subscribers as well so I mean I can Mark since you give me the numbers I'll do the math 65,000 time 83 bucks a month on average that's 1,000 divided by 12 means you're doing well north of 5.4 million bucks in Mr is that accurate yeah we're about a $80 million annual annual business today you cut out there sorry I say that again we're about we're about an $80 million business today on an annual basis and we're a super grower in the last our kagar over the last five years is north of well north of 60% a year yeah so call that what about 6.6 million per month right that puts you on the 80 million run rate yeah yeah what when you say super grower sorry you said 10 to 20% year-over-year over the last four years uh no no no the super grow is over 60% a year growth that's imp Mark that's tough that's not easy no it isn't and as as you know Nathan as you get bigger that growth rate is more challenging so you need to have it's not only getting new customers but helping those customers grow and see new value uh you know a big part of our growth is obviously getting new brands on the platform a huge part of the growth is also taking the existing Brands and having them really expand their usage that's right I always thought I was so clever when I was launching my first SAS business and I went from like $1 of Revenue in one month to $2 and I would put in the subject line 100% month-over-month growth you learn quickly investors look all on that fast that's awesome so okay your 80 million run rate right now you're growing 60% on average year over year so what' you do like 40 million last year 50 million yeah and as you know Nathan in a Fasto business the Gap income you show uh last fiscal will will actually recognize about 66 million in Revenue while our run rate is in the mid 70s y we're growing pretty healthy every every month so we're going to hit Triple digit ARR here come mid year in 2017 that's a big number Mark that's exciting yeah it is exciting it's you know we've worked hard at it we sold our first C customer in the fall of 2006 and I would say the spet kind of turned on as we kicked into 2011 and then we've had very very healthy Revenue growth since then what did so so take me give us more context here because people are going to be f fated by you 2006 was that the launch date or did you start in 2005 with no revenue and then your first customer was 06 yeah it was and I think one of the questions people often ask is do you remember your Revenue in year one yeah that'd be zero Bob uh so it was 2015 or 20 2005 2005 company was formed first customer subscrib fall of 2006 and the revenue for a number of years as we thought we had the Magic Bullet but didn't was under a million dollars in ARR for a number of years up to what year rework the product the promise of what we wanted to do which was helping people track report automating and scaling their work in a collaborative way the promise didn't really change but how we brought the product to Market change dramatically uh making it more consumable really de enterprising ourselves from what we had done in our prior lives and that's all about having people be able to find the product use the product buy the product without a human engagement and even today Nathan as we start dealing with much larger customers 60% of our new AR that comes in is unassisted in nature that means a human being is not speaking with the Prospect and then where we put the sales energy on the inside is once they land helping them understand the possibilities and so what take me up what year how many years did it take you to break that million dollar AR Mark uh we broke it in 2010 okay got it so there was a good five years there where you sub one million in AR before it really turned on and you're saying the reason it turned on is you went down Market you lowered arpus and you made no touch sales a priority uh I wouldn't say we went down Market we went into a market got it we we were able to crack the code on what people wanted right sizing the capability the ease of use and the price point and uh it was a team of nine or 10 people there for the first uh first number of years we did friends and family rounds we took our first round of institutional in Fall of 2007 and that partner maor eventure group out of Seattle stood by us as we cracked the code and then in 2012 inside Venture Partners uh doing around and then 2014 stter Hill out of Palo Alto so we've raised a total of 70 million so far it's one of the more efficient if not one of the most efficient SAS companies out there where we've raised 70 we still have a lot on the balance sheet and we have ARR that exceeds the total amount raised that's pretty uncommon in SAS uh so you know we feel we have a very good platform on which to to grow and build what's your team size right now we're 480 people we're grow to about 730 this year adding a lot of folks in the customer success and sales realm so really coupling that self-directed motion with a very curated expansion flow yeah one of the things I do I've interviewed over over 300 B2B SAS entrepreneurs and I always love measuring uh new dollars of Mr of ARR per dollar raised it's a great measure of efficiency another one is...