How Springbig CEO Jeffrey Harris grew Springbig to $17.4M revenue and 12K customers in 2024.

hello everyone my guest today is jeffrey harris he's the founder and ceo of spring big a leading provider in cannabis crm and loyalty marketing technology with over 25 million users across the united states and canada he's got over 15 years of marketing sales and management experience uh with an incentive marketing and loyalty marketing field jeffrey you're ready to take to the top let's do it all right cannabis crm i mean why can't crm or why can't cannabis companies just use hubspot sure and actually they do but what we created is a unique sas platform that helps our retail clients in cannabis manage their loyalty program which is something hubspot doesn't offer and then through that loyalty program we create a lot of different segmentation for them that they can leverage for text message marketing which is kind of something else that hubspot doesn't offer interesting okay and when did you launch the business what year so we launched it in 2012 but when we launched it it was originally for small business like pizza shops yogurt shops nail salons hair salons and we decided to pivot to cannabis in early 17. so we're kind of like on spring break 2.0 which kicked off in january of 17. when why the pivot we thought that there would be much better opportunity honestly in cannabis for two reasons one the owner of the yogurt shop is hardly ever in the store so it's hard to get him on the phone to uh him or her on the phone to get a decision and we just saw such great opportunity in cannabis and the competition was a lot lighter so we thought it would be a good vertical so 2015 was the big pivot now what do these candidates companies pay you on average to use the technology so they pay us on average about eighteen thousand dollars a year uh oh wow so this is not cheap this is like an enterprise motion yeah it's enterprise we have some guys that are actually paying 20 30 even 60 thousand dollars a month and we have some paying as low as 450 a month the average is somewhere yes the average is somewhere around 1500 a month across the board that's wild wait can i ask you what don't name them but what's your largest customer pay you per year currently so we just had a client pay up 120 000 for the month and why is that so so you have an incredible ability to have expansion revenue right what are you upselling against so we're upset so what's really upselling is the volume of the text messages that they send out so the larger their database and the more frequent that they send out messages so we charge them a platform a subscription fee for the platform they get x amount of text messages included in that subscription and then when they go over that allotment they pay on an ala carte basis so this particular retailer sent out over 16 million messages in the month of january it was insane holy mackerel when you look at your total mrr today like you did last month what percent is pure sas versus overage fees so about 70 percent of sas and about 30 percent of overage which we actually like that mix well because what it allows us to do is when we see a client of ours going over their subscription fee we could actually use it as a driver to get them to move up to the next subscription and when they do that we also get them to sign for a new 12-month package so it allows us to kind of get them re-upped at the same time that's really smart what and so uh how many customers are you serving today that 850 850 interesting and how many customers we had a year ago 500 interesting where'd the growth come from uh so it comes from you know more and more states are opening up for cannabis so it comes from new markets that are coming in and it also comes from the existing more mature markets like california where you know we continue to just grab more and more share as you know as our brand continues to get more awareness now i mean can i take 850 times 1500 a month right as your average i mean you're doing like what is that 1.3 million a month something like that a little bit more right so um because yeah so a bunch form i wait a little more or a bunch more a bunch more i want to give you credit where credit's due i mean can you run right but a bunch more but you know some clients are just spending so much higher than the average so um we you know we basically have two businesses in one we have an enterprise business for some of these larger clients and then we have what i'll call our bread and butter customer that is anywhere from one to five locations uh so we have actually two businesses in one so it's uh it's kind of interesting to be serving two totally different groups of clients yep yep i mean basically the same technology it's just usage that they use it way more yeah and some of the larger clients will do some custom implementation work for them so it helps them from an operational flow and a compliance flow from that standpoint so we will do some custom work for them uh primarily because we integrate with most of the industry's point of sale so there may be some custom workflow that we do with the point of sale but for the most part the technology so bigger are you doing more than two million a month no not can you hit that this year yeah we will hit that this year we love that now i'll be really impressed if you've done this bootstrapped um no we did actually raise about 20 million there we go i wish we would have bridge strategy i love our partners so any of the investors that are listening today i love you but uh yeah we actually raised three rounds we raised a c an a and then either you can call it an a1 or a b so we raised about 20 million dollars since the end of 17. so we bootstrapped until the end of 17 and then we said you know what let's get some partners in here so break that down for me when was the last round and how much 11 and a half million in august of this past year august 20. 11 and a half okay and uh what was prior to that 5 million in november of 18 and then 2.7 million in november of 17. interesting okay and so and so and this was your baby right you didn't come in as like a fr like a cfo or ceo from a okay got it yeah might be i love that now so i have to ask like the cannabis thread here like now are you just a business guy and you're like cannabis is where i want to go or did you start sort of using this and seeing you know personal improvement performance no i'm i'm a business guy and thought there was a great opportunity in cannabis so um yeah so i mean i am really pro canada i've become very much pro cannabis over the last few years because i see the benefits that cannabis offers a lot of people but at the end of the day when we got into it we got into it from a market opportunity more so than from the social cost for sure yeah yeah i was gonna say the benefit is a 20 million dollar error company uh yeah that's for sure that definitely that's part of the event part of the benefit okay round out your team for me how many folks on the team so we have about 110 people on the team right now how many engineers about 40. so that's a that's a big part of the team um our client success team has about 30. our sales team has about 15. our marketing team has about 10. um then obviously we have some finance and hr people and we have a new business that we launched in the summer of 2020. it's a br it's a business focused on brands versus retailers and we have about 15 people in the brands team as well so is that a business is that an agency model or sas play no so that's actually it's a it's a martech model where brands have the ability to serve up content to retailers that are selling their product and when the retailer grabs that content and includes it in their text message the retailer gets their message at no cost and the brand pays a cpm so it's a way for brands with our 20 now 27 28 million consumers brands have a real need to get directly into the consumer's smartphone to get to the consumer they have a difficult time doing it so we basically have created kind of like a partnership opportunity where the brands where they are sold and the retailers they could serve up content to those retailers retailers grab the content and the quid pro quo is retailers get that message gratis and the brand pays for access to those consumers that they really don't have access to otherwise so what margin do you build in there your cost of the text versus the cpm you're charging the brand that wants to get rex to the retailer so it's about 85 margin that's great so the margin is really good because right now the brands don't have the ability today to get to that consumer there's very few avenues for them to do it and the retailer in our industry owns the consumer so giving brand the ability to really create the content make sure that the messaging of their brand is exactly as they want it retailers like it because they get nicer looking content to serve up to their customers retailers get a little bit of a break brands get you know access to these customers but then the big deal is it drives customers into the retailer so the retailer's really happy because it's leveraging their database to drive purchase activity and store traffic into their store that's fascinating okay this is great really interesting story here so got the team size...