How Streamdata CEO Eric Horesnyi grew to $600K revenue and 17 customers in 2018.

hello everyone my guest today is eric corsny he's the ceo of streamdata.io he's also a founding the founding team member at internet way which was a french b2b isp sold the uu net then radians a global finance cloud which was sold to bt he's a high frequency trading infrastructure expert passionate about fintech iot and cleantech he looks after three at home and has worked in san francisco new york city mexico and now paris all right eric are you ready to take us to the top ready to yeah ready to go all right what so so what is stream data i mean is this tied back into your you know high frequency trading routes what's the company do well actually um when i was a hyper concentrating uh engineer i was helping my customer make money by being faster than others so people would buy solutions for 1 million a year and when i would catch up with them six months later to check whether everything was okay they would say yes i made it up with a trade so that was surprising and then after after that i realized that what we were doing was not necessarily good for the ecosystem and i became repentant and started to focus on like he went to church or what uh pretty much not church but uh let's say i would regret the fact that i had helped people make money um in the backup others and uh i wanted to try helping retail consumers so that they could get access to data and transparency of data so the focus of stream data is about transparency and and real-time data sharing okay and so who who's your customer what's your pricing model is it a sas company so it is mostly a sas company customers are typically banks and brokerage firms they consume data through us and we also distribute our technology through partners including exigning okay and give me a general sense i'm sure you have a lot of different kinds of customers but on average what's the customer going to pay you per year to get access to this technology um this it's around a hundred thousand dollars a year and what will they get for that and for that they would get access to data for let's say a million devices receiving data in real time what kind of devices um any any mobile device any apple android anything like like of their own team of all the bankers that work at the bank or that's that's cp consumer data they're buying that's uh that's data for the consumers so typically they buy the technology so that they can stream uh data from the market to mobile devices and so my next question is so where are you getting your data uh we're getting data either from the from the customers themselves some of them generate the data or uh from partners like ex-ignite sorry you're saying you're saying from toddlers either from uh banks themselves that generate data themselves or uh through a partner oh partners right got it got it got it now do you pay these partners though um we made it simple so that our technology is included in their technology and they typically are the ones contracting with those customers i see okay very good uh put this on a timeline for me when did you launch the company what year 10 years ago 10 years ago okay so 2008 is a heck of a time to launch a new banking tool did you get late did you get laid off no no the truth not at all and actually in europe at that time the situation was not as bad as in the u.s but uh the there was already a need for mobile applications in trading to uh to leverage whatever apple was bringing to the mark so 2007 is is the launch of the iphone so yeah a year later we started to focus on the subject of uh real-time data for mobile devices so over the past 10 years how many customers have you scaled to so we're we're focused on very large companies and uh we have 17 customers one seller yeah very very i mean at 100 000 acvs you can afford to only focus on a very tight niche and still build a big business right that's uh that's the subject yeah that's great and i mean can i take can i take that 17 number times you know 100 000 acv you guys are doing 1.7 million run run rate right now no okay and why are those numbers wrong because uh some of those uh numbers are actually based on uh contracts that were signed early on so not necessarily in terms of uh recovering revenue oh got it so some of them maybe were early pilots people you maybe you you brought on at a lower price point because they were early customers and you needed them early things like that exactly okay so let me let me ask a different question when do you think you break 100 a month um next year like early in the year or later in the year you think later and and how how are you getting these new customers uh mainly through partners and uh yeah mainly two partners but we're being uh distributed right now by uh all the major uh cloud vendors and the we're also distributed as a compliment to uh some uh solutions from isv vendors okay so so since you're it sounds like you're under 100 grand today obviously you're hoping to get you go towards that towards the end of 2019 i mean is it fair to say your closer maybe kind of 40 50 grand per month right now today is that accurate i cannot disclose that okay well i mean we already know it's less than 100 so we're not getting that much more specific here's the reason i'm asking maybe you can help me here i'm trying to figure out growth rate uh gross rate we doubled our revenue uh this year and we plan to quadruple next year okay well if you're going to quadruple next year and your plan is to break 100 grand by the end of next year that means if i take 100 divided by four that's 25 grand a month that's right so if you triple if in order to get to 25 grand you you trip you doubled then not in sas the calculations in sas are different i i don't understand if you're going to quadruple year over year and your target for the end of next year when you quadruple is 100 grand you divide 100 grand by four you go down to 25 grand today if you quadruple that you get up to 100 grand well it depends on the cards of revenue you're getting uh during the year so it is not because if you get if you quadruple your revenue on on your mr at the end of next year uh then your uh revenue for the year may not be quadrupled no i'm not asking for revenue for me i'm talking about run rate okay all right yeah sorry i'm not talking about like cash accounting or i'm talking specifically about like run rate right so today 17 customers you know paying you know if you're doing less than 100 grand a year obviously they're paying you know less than you know 100 000 acvs and what you're trying to say is you're going to scale up over the next 12 months to hopefully break 100 grand and the way you're the way you plan to do that is adding new logos or expanding customers you already have uh adding new logos brand new it's all in the banking sector still are you expanding your verticals most probably most probably uh in the banking sector we we just signed an agreement with the sales force they're going to distribute us in the app exchange so this is massive in terms of logos that we we should bring there and uh with any other uh distribution agreement right now why do you have so much confidence in the salesforce app exchange bringing you deals i mean you're a small player for them why are they gonna give you prime prime location uh they selected us as part of a program they created called salesforce accelerate for fintech and um we were one of 10 companies that selected to accelerate that's great well congrats on that have you have you bootstrapped the company or did you decide to raise capital would raise capital oh i was liking you i was liking you so much andrew and now you're on the dark side how much how much have you raised a date uh we've raised nearly 10 million dollars okay that by the way i mean that's that's it's not a ton i mean uh but but i mean mean obviously it's enough where did you did you raise that right at day one or did you recently operate that no there was a very gradual uh starting with a seed and then an a and then some bridges so it's been gradual as we're growing the business all equity or is there venture debt built into there all equity all equity okay and i mean are you working with the traditional vc firms or these are like wealthy banker friends you used to help operate in dark pools shave milliseconds off their trading time um traditional vcs you say with a very large smile all right so well you would expect that uh those friends actually put their money in those vcs that's the easiest way to do things efficiently yeah usually if the vc's competent yes what's the team size today how many people we're 15. it's all in uh all in paris no we are uh between france and the us east coast and west coast oh great okay so paris and remote and then you know turns critical in any sas business how do you think about your churn especially when you're dealing with kind of a very a small number of very large customers yeah um we're lucky to be let's say in the in the very large uh or in the fairly large opportunity um every night i think the sales cycle is really long it takes up to two years uh between the startup of a conversation and the start of a first payment uh but then customers tend to stay with you for more than seven years ten years so that's uh the journey is not the issue the the challenge is on the sales cycle anything we can do to reduce the cell cycle it's great so of all the people over the past you know cup you know since you launched over the past 10 years ago of all the people that have paid you over the past 12 months i mean what's revenue churn per year um weighted it's it should be around five percent okay so five percent revenue churn and then how much do you expect yeah okay so oh sorry five percent annual revenue churn in that same time frame how much do you expand those same accounts um it's a very good question each account is pretty stable okay so you're not it's okay it kind of stays flat yeah yeah okay the typically the first year is typically uh uh typically with a significant growth and then uh and then study flat year after year okay got it so interesting i would have thought because it's a lot of work to land these big accounts that one of your big growth drivers would be well you did the hard work you landed them now expand them add a million bucks on their contract the what we managed to do is to use them as advocates for them to recommend us to people they know have similar issues and in some instances we can extend the contract within the firm to uh other entities that would want to count on maybe we can do that yeah that's good when you're signing these customers up in the first place you met you mentioned a long sale cycle i mean what's your fully weighted cac um it's way too much how do you know that how do you know it's too much because it's too long two years is long two years is your payback period no no it's typically um let me let me let me think about numbers um let me make it an easy i would say um uh three months okay so so if someone signs up for a hundred thousand dollar your account what you're saying is you're willing to spend up to three months of that to acquire them pretty much okay actually include uh sales and marketing yeah yeah yeah that's great okay very good all right let's uh let's wrap up here with the famous five number one what's your favorite business book um wow that's a good question i think the [Music] okay let's say the biography of benioff benioff bio very good and eric what's uh who's an under the radar ceo you're following or studying um under the radar that's interesting would say the ceo of uh algolia num actually he was just on the show when was he on the show uh three weeks was there three weeks ago yep very good i didn't know that yeah number oh good yeah there was a great interview number three uh what billing tool do you use we use salesforce salesforce number four how many hours of sleep to get every night um seven and what's your situation married single kiddos married with three kids three kids wow and how old are you i'm 45. 45. last question eric what do you wish your 20 year old self knew um it's a very good one i think i would say that anything you believe in will happen so you have to be careful about what you dream or what you want because it's going to happen and the good news is that it's just a matter of wanting this to happen guys if you believe in it if you dream it it will happen be careful what you dream about launched stream data back in 2008 now serving out 17 enterprise accounts doing less than 100 grand per month in revenue but hoping to break that threshold sometime in 2019 uh next year they raised 10 million bucks to build this company a team of 15 based between paris and other remote locations in the states five percent annual revenue churn uh so net revenue retention obviously the opposite of that 95 percent spending about three months of the customers value on acquiring the customer in the first place but right now a fairly long sales cycle because they're hyper focused again stream data dot io banks using them to understand and basically get data flows to help them better understand their customers and their data sets eric thanks for taking us to the top thanks to you that was great