How Socedo CEO Aseem Badshah grew Socedo to $2.4M revenue and 200 customers in 2017.

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 top 5 and6 million he is help on global domination we just broke our 100,000 unit sold Mark and I'm your host Nathan lka okay top tribe this week's winner of The 100 bucks is Rhett Gillan he's in the restaurant industry and he feels stuck he wants to start his own software business so congratulations Rett for your guys' chance to win 100 bucks every Monday morning simply subscribe to the podcast on iTunes now in order to enter and then text the word Nathan to 33444 to prove that you subscribed Nathan lka here this episode 583 and coming up tomorrow morning you're going to hear a YC founder y commentator founder the founder of flight Fox Say the following Nathan we talk about when to quit all the time well that's strange cuz it did 700 granding Revenue last year so what is Lauren Sullivan the CEO of flight Fox talking about tune in tomorrow to find out good morning folks Nathan ly here our guest today is aim Bajan he is the founder and CEO of a company called Soo now before that he had built his own marketing agency full service marketing agency called Uptown Treehouse they helped Brands meet their goals by leveraging social media and digital channels to reach current and potential customers he's now upping that with his new company Soo we're going to jump into it today as see are you ready to take us to the top I am thank you for having me thanks for coming on so okay tell us what Soo does and what's your business model how do you make money absolutely absolutely so here's the thing that we noticed in the agency is that there is so much data out there on prospects for B2B marketers uh and truly around activities right what's the behavioral data that that prospects Target audiences are taking out there on the Social Web our goal is to bring that in and actually make use of that in B2B marketing uh to acquire more customers and so there's really kind of two ways that we do that one is lead generation it's you know hey who out there in the world is is talking about your topic doing research going to the events that you bb marketer would be sponsoring and we give you a way to actually pull those people into your marketing automation to reach out to them to nurture them but then we also do that on your existing database if you're a B2B marketer and you've got 100,000 people in your CRM in your marketing automation there probably a good chance that a good portion of them are maybe not engaged anymore they're not active well we provide the behavioral data on top of those contacts so you can reactivate them you can get them in the right campaigns get the right messaging to them and get them to your sales team at the right time and we basically make money off of a software license so you know we uh we charge Based on data consumption on volumes and our clients basically sign up for you know six month a year long licenses to really power their demand generation and what is the let's just talk about in terms of averages so we don't have to get individual customers on average what is the company paying you per year average is around 12,000 to $15,000 a year okay so call it like a thousand doish monthly arpo something like that that's correct and then take us back when when did you start this thing so we started back in 2013 it was a bit of an evolution from the agency so we actually started this as kind of an R&D research project in the agency you know because essentially what we noticed is that when it came to social media marketing everything was really set up for B Toc marketers right it was all set up around brand awareness and broadcast I'm going to build a really big audience on Twitter or Facebook and then push my messages out and it looks a lot like traditional marketing right what you would do with a TV ad or a billboard uh which is great for B Toc marketers who are trying to build a brand Community engagement uh and and really do that with a large audience for B2B marketers where you're very focused you're talking about a long sales cycle you're looking to nurture specific people you know social media marketing in the traditional sense wasn't really set up for them and so we kind of wondered why right like you know social media is essentially one big CRM system why is there not a tool set to actually leverage it in that way and that's what we set out to do and so in at the end of 20 2012 we started building out as an R&D project in 2013 we spun out Soo we joined Tech Stars up here in Seattle and have kind of been Off to the Races since then and where are you today January 2017 how much uh or sorry how many customers are actively paying you per month we've got about 200 paying customers today okay and then in terms of capital raise you mentioned Tech Stars how much total Capital have you raised so we've raised about 1.5 million to date and have you know kind of been extremely Capital efficient right so 200 customers we grew Revenue about three X in 2016 and and are growing quickly into 2017 as well yeah is it fair to say can I take 200 customers times an average of 1,000 bucks per month and assume you're doing somewhere around 200 Grand per month but you're pulling a lot of that forward with six and 12 month contracts exactly exactly you know we've got some big customers as well right and some customers are paying all the way up to half a million you know a year and then smaller customers as well but our our kind of you know real March has been Upstream right we kind of started a little bit more in the small business segment and have have really kind of been working with much larger and larger clients as we get connected into their CRM and marketing automation systems to really kind of provide that core uh Advantage across their entire demand generation platform and what is you mentioned you grew 3x in terms of Revenue in 2016 what was total revenue in 2016 so you know we don't we don't kind of publicly give those numbers but you're kind of calculating it correctly you know based on uh on you know kind of average number of customers and arpo um and so you know kind of quickly growing into a you know a pretty mature company over here we've got about 25 people in Seattle at this point fair to say I'm just I'm just literally taking Mr and kind of guessing last year fair to say you did somewhere between 1.5 and 2.5 million right yeah and then uh what's your goal for 2017 you want a 3X 1X 2x what do you think you'll do so you know it's it's an interesting kind of Topic in conversation um right now we're actually looking at it and saying hey we're going to slow down growth little bit in 2017 and and really kind of Target to do a 2X in 2017 while we focus on taking the customers that we have today and really becoming more and more core with them and so the the the concept here is hey we don't need to grow a ton in terms of customers but we want to make sure that we're really sticky and core with our current customers get those average deal sizes up provide more volumes and really get kind of the product the customer success the onboarding the implementation all to a place where then in 2018 we're ready to really grow fast start to 3x again and and really press on the gas pedals so that's kind of how we look at 2017 is that and and you're kind of seeing this in the market all up right is that it's it's not necessarily about growth at all costs we want to focus on the fundamentals focus on our relationship with customers really get core really get sticky and then press on the gas when we're when we're ready what's what's your current team size team size yeah 25 25 here in Seattle all in Seattle that's correct very cool okay so 25 in Seattle and when did you uh I assume with 1.5 million raised I mean I don't know was that just a seed round or did was it also a series a that was just a seed round that was just the seed round so a little bit of convertible notes that kind of converted into that round and then our our Venture Capital partners with the Divergent and Vulcan capital Did they did they value the company was it an eoy round or no it wasn't Equity around yep it was okay good so you had what some amount of seed before and then you raised what a one 1 million something series you know you know series aish with and it was Equity an equity round exactly so it was a seed round it was a 500K that converted off the convertible notes and then a million in New Capital uh last uh last December last dece so that would have been what like a month ago or 13 months ago about a year ago about a year okay so right now you're you're either uh you're either raising more capital or you're in acquisition talks which one is it so you know the nice thing is that Revenue growth for us has gotten us to a point where we're almost cash flow positive um and so that's kind of the the game plan right is get cash flow positive really focus on getting core with our customers here in 2017 and then take on some new capital when we're ready to really step on the gas and and scale right I mean there's no point in going and doing a $5 million series a if we can't make use of that Capital very quickly um so the nice thing is that we've got the revenue growth you know we're kind of getting to that point where we're cash flow positive and uh and that's going to give us a lot of optionality this year so with Top Line around 200 Grand per month what you're saying is your expenses are somewhere just just a little bit above that you're almost break even exactly exactly very very cool and you talked about kind of using money right and knowing how to use money when you raise it or when you reinvest Revenue where are you putting money right now to drive new customers so you know one of the nice things about what we do is that we are a demand generation system so we don't actually spend a lot of money on marketing we really kind of drink our own champagne and all of the leads that are coming in are really kind of coming from our own system and then we process them through maretto to our SDR team and over to our AES so we've got about you know five AES on the team two sdrs and account Executives guys in sales development reps yep yep exactly exactly and then uh and then three on the marketing team that's basically kind of we need on the sales and marketing side uh and then we'll invest a little bit more on the product side on the engineering side uh and in our customer success team is is really kind of where the focus will be this year a lot of folks kind of in this space it seems like a very ancestral space to me there's usually a Dev team is some combination of your own kind of web scrapers and your own data sources and then to check your own data sources typically folks buy API access to full contact clear bit a bunch of other ones uh which which ones do you think are the most accurate in terms of the data they provide you know it's it's funny because we use a lot of different providers and everybody is kind of accurate in their own right right and like for us it's like it's just totally about match rates it's like hey can we can we combine different pipes to get to higher match rates to get to higher accuracy um I think you know what's accurate what what's matching what do you mean by that so so you know so so let's say going from a Twitter profile to a LinkedIn profile to an email address to a phone number to company Revenue to technology behind that company all of those different data points might come from a different provider yeah our goal is to get those match rates as high as possible and make sure that we when we are getting a a piece of data that it's accurate uh so it to us it's a little bit of hey how do we combine these different data providers to then get to a as high match rate and accuracy rate for the you know the data that we're providing to our clientele do you guarantee an accuracy rate we don't guarantee an accuracy rate but our accuracy rates are pretty high so we normally see accuracy of about 90% when we're going from a Twitter account to a LinkedIn account match and then from email address you kind of get to accuracy rates around 80% which is kind of industry standard so it's literally like if I pay you and you give me a list of a thousand leads and I email them all I'm going to get 800 of them that don't bounce exactly exactly exactly very cool um who do you so so name a few of those real quick did I I mean mean full contact clear bit what other ones are are you are you you know connected to their apis exactly so full contact is one of them clearbit is one that we use uh and then we look at you know providers like cell hack and others and then we connect right into the social media feeds as well so right into the Twitter apis and really where our differentiation is is taking all of that kind of huge amount of Behavioral data that comes in from these social networks crunching that associating it to the right contacts and providing the information in a usable way to our customer so really where our unique advantage and our unique data set comes in which provides kind of the the inputs and the training data for our machine learning algorithms is social data behavioral and intent data combined with kind of B2B conversion data so which of these leads are actually clicking actually engaging actually converting on the website making it to a form fill and mql stage an opportunity stage what's an mql stage most qualified lead a marketing qualified lead uh so you know so that would be kind of a defined score that is being calculated automatically to say that this lead is actually qualified and is ready to go off to sales um sense and then we'll also look at closed Revenue closed deals right and so that's where that's where our unique data is really coming in is combining those two data sets so as a B2B marketer you know that hey if my prospects are showing this sort of behavior this sort of intent we've got a much better chance at converting them on a shorter sales cycle with higher engagement rates and that's where we should put our time and energy by by you know putting them through kind of a unique content flow what data source has the most what data source has the most accurate uh Revenue information or Revenue guesses per per leader per customer per business no so the revenue that we get the revenue numbers are actual Revenue numbers coming from a syst like maretto or Salesforce so that's coming directly from our clients when they close the revenue we know about that we can close the loop no no no I meant I meant I meant sorry I meant like if I'm a customer of you of so and and you're giving me a list of leads will you tell me the the you know the marketing budget of each lead like do do you have that kind of data or no no so we don't have the marketing budget of each lead what we'll tell you is you know hey this person is going to this event they're researching this topic they're much more likely to convert spend your time and energy on these prospects got it so you don't you don't you don't have the revenue numbers of of businesses that you're giving to your customers as leads correct I mean we have we have things like company size which is a pretty good reflection of a of Revenue um but again you know for us we it's not necessarily about hey what's this company's revenue or budget right our customers kind of are already know what those numbers are for their target accounts it's more about when is the right time to reach out to prospects within those accounts that we would be going after got it makes good sense uh real quick a few other questions before we wrap up uh gross customer turn monthly what is it so our gross customer turn monthly is around 2% not bad and what about net net negative net negative Revenue turn is that have you guys hit that spot yet we are yes exactly so we see G upgrades than insur on a monthly basis that's great congratulations um CAC what do you pay to acquire a new customer we pay around $6,000 to acquire a customer okay and and this is obviously probably extrapolating data in Excel sheets but what do you assume lifetime value is of a customer look at lifetime value today is around 20K okay got it and that's you're just multiplying churn times RPO and going from there right exactly awesome very cool okay good so that was super super helpful folks will link to uh this data in a show notes at Nathan la.com thetop 583 aim let's wrap up with the famous five number one what's your favorite Business book oo that's a tough one uh let's go with the classic crossing the chasm hundreds of them per month how do you do just a fantastic guy you know young guy in the enter doing great things and the reason I use is very coming and also very easy toet want learn more from.com way said I want a great deal for my I said [Music] noom.com schedu 28 all right last question take us back years what do you wish your 20-year-old self knew that's a good question yeah I think I think it's all about hey can you prioritize relationships more than you do right I think as a 20-year-old as an entrepreneur a lot of us go right to build build build build right sit in the office research get stuff done uh and I think what you learn as you get older is that man relationships and spending your time there that's going to get you most of the way so spend more time out of the office meet people have drinks have lunch I think that's the advice I'd give top tribe there you have it from Aim founder of Soo founded or Soo founded back in 2013 team of about 25 people based out there in Seattle helping you get more accurate contact data from a variety of sources combined with their own Dev team uh and their own kind of web scrapers and systems they use to qualify and match that data serving over 200 customers uh did about one somewhere between 1.5 and 2.5 million bucks in Revenue in 2016 doing monthly recurring Revenue around 200 Grand today 2% gross customer churn monthly they are in the net negative churn range meaning meaning they are getting more upsells than uh churn total CA what they're willing to spend on a new customer about six grand that customer's worth about 20 grand total again raised about 1.5 million bucks in Venture Capital uh the last 1 million coming about 13 months ago they are on a tear a seim thanks for making time and taking us to the top absolutely love it Nathan thank you so much if you enjoyed today's episode go back and listen to Calvin yesterday he's the CEO of simpo it's a SAS company with two people they're doing over a million bucks per year in it's bootstrapped he's totally happy and he's printing money top tribe I love giving away free money I feel like o we're giving away cars and I have something special for you today how many of you have heard our super sharp guests talk about success they've had with Facebook and Google ads well all of you listening right now yes if you're listening you get $100 in free AdWords here's how you get it okay again thanks for listening get the free $100 from Google right when you sign up with my website host provider HostGator go sign up now to get your free money hostgator.com Nathan again that's hostgator.com Nathan okay Top Drive I'll see you bright and early tomorrow morning and don't forget before you listen to any other episodes subscribe on iTunes right now for your chance to win a 100 bucks every Monday