How Sumall CEO Dane Atkinson grew to $13.4M revenue and 350K customers in 2023.

hello everybody my guest this morning is Dane Atkinson he's a serial entrepreneur with a focus on technology data and small business he's been CEO of a dozen companies like samal and Squarespace mentors are far too many others and had the pleasure of building the careers of thousands will creating while creating billions in equity value and sometimes losing millions Dane are you ready to take it to the top yeah actually I am alright what felt better making billions or losing millions actually there it's pretty interesting it's the middle that's most boring when you're not really cooking or another certainly the making is better than losing all right let's start off with I think the name probably people are more familiar with Squarespace what did you do at Squarespace and then complete the story how'd that turns us into some all so I joined Squarespace it was basically just Anthony who's the current CEO I joined up as a CEO I guess now almost 10 years ago and spent five years building the company up to its first chapters we raised a whole hunk of money and that made a pretty interesting product that has still sort of the market leader for the design side of websites today and what years were that but some brackets on that for us as 2007 to 11 now did he bring you in at the beginning there are you guys were cofounders together and you were CEO nope he was he started off at the University of Maryland it was working out of a dorm room literally and I got a small office I tried to find a way to buy him but he's way too smart tell us more of that story so what did that sound like and how did you find him why'd you want to buy them mutual friend of ours identified him at the time I'd known carpets of other people who are looking at publishing about publishing was interesting space and I think of our bright yeah who were in in the same kind of industry I don't a company called for your imagination which was a video podcasting company and we're gonna come to ability which is a competitive YouTube the time so a big belief in this idea of content creation and I got introduced to him and thought his product even back then was just light years ahead as an engineer and a founder he was exceptional his exception is a sense of design and technology that's really rare and what he was really young and I've been through this so many times is like oh well this would be really easy so we sort of danced around for a while eventually we had lunch with his dad which final ask for proving that showing up and we quickly grew from there so I think you know the months after I joined we built the tech team we had a Palmer to support and started a Dean when was the kicking moment when did you realize okay there's no way this guy's gonna sell to me so I should join him if I can't buy them I'm pretty early on like he had developed enough a revenue stream and he was enjoying a lifestyle what size I was a back then can you can you share that we're pretty quite about the figures but it was it was definitely more than one person that way got it okay when it's actually a one-person company that's what I was gonna ask it was basically him you know what can we say north of 500 grand I mean he was making plenty cash flow eyes oh yeah in the course of the years yeah interesting it's very very impressive at early age to accomplish did you get an actual offer on the table did you ever say okay here's my you know final thing and no I just tried and realize that it was a fruitless ground and thought that um it would be better just to pair up you know I saw in him something that was interesting he had you know a lot of the same ambitions and oil that I had made when I lost by my runs or made runs the very early part of my career so I figured I could help guide it around some the pitfalls which worked out I think the rate is so 2007 to then what was the final year 2011 they got gorilla and so tell me about that what would happen there why'd you why'd you leave well we've sort of conquered the market so we've raised 40 million bucks we persisted the fair share of acquisition offers and we had a large obviously large team I think that we'd identified ourselves as sort of category winner even then for the design side of things you know I'm addicted to his idea of creating companies done as my my I would say way too many times so I felt at that time that it was probably the right thing for him to sort of blossom out as he'd learned all of us like it's truly pass on me take another swing in it so then back to the start what was I mean but there had to have been some more leverage besides you kind of just being in that mindset I mean was there a round that was happening and that the lead on that round wanted to put in a CEO or you just felt like you couldn't out any more value no neither actually I think that uh you know we've been between rounds a couple always profitable it's a very strong business model I think that we just felt that we sort of found our DNA and mean Anthony felt that it was kind of the time for him to do it without mhm Daniel the quick question on profitability how can you be profitable when you raised 40 million bucks unless that 40 million just sits in the banking don't spend it high you can actually be proper you raise that kind of money and there are some case stories as is Squarespace where you build a proper booths all the way through obviously we raise that kind of money we would spend it aggressively but the return was really quick so John I see your income for sure as you started put that money to work in marketing but Squarespace has always been a machine it's just generated ahead of itself so the money velocity was really tight you'd get payback periods under six months and then reinvest and keep churning yeah actually it's got harder at being a SAS - but I'm certainly back then we would be able to churn money three months from pepper dicing that's a strong pot that's great okay tell us about some all what does it do and what's the model is its ass so it's freemium actually it's almost entirely free I'm a purposeful standpoint so we've done this enough that we felt we could give back yes at me yes music places but way too much of my career so it's an analytics platform that lets small businesses kind of compete against the giants they put their data into our environment it does things for them automatically and gets them a sense of what's actually happening we were about the same size from a customer footprint as a square space but obviously we don't have the kind of income but we definitely shift people's lives which is very doing well so when you say when you see said you had free users and then you said cut yeah they're same size customizes Squarespace so is it is it is it all free right now and you're still just growing the base or you okay so then you say customers what do you mean by that so we defined a customer or someone who's actively using the platform but he just being know okay go what come on Dane my audience is gonna listen and go wait what do you mean that you can't call a non-paying use our customer it's true as fare well how are you supporting this if it's all free is it yours using I mean how do you decide when Dec turn on an income or do you just not want to do that you're just a good person and philanthropic and a bit of both right so we we've been lucky enough to build enough companies that B C's give us my to burn the furnace so we've got a you know a roaring or furnace at the corner of our operations I think I don't be raised we raised about 25 million bucks and our belief is that if we were able to consolidate this category and as we are so we're a half million business on the platform I will be able to do things that are really meaningful for the community and also generate a lot of capital for us it doesn't really work in the small scale so we don't want to preclude people from getting the advantage other data and we don't want to slow down the platform growth at this stage I think down the road we'll be in a very good position to collectively defend and offer things to our customers so our hope is that next couple years we'll start to add that value that will turn a few of those knobs so tell us more about I mean because this podcast obviously has an opportunity to drive a lot of people to the website but I want them to really understand what it does can you tell us a story of how a business is using a unit or have that on the website is your personal data scientist but what does it actually do yeah so I think that the sad part about the way this was changing as small businesses are to have a PhD in analytics and marketing and all these other things which they simply don't write so for us the advantages if you're a small business you connection your data you put in your social services you put in your Shopify account your Etsy account or your PayPal you put in your ads accounts and you see everything in one place we'll give you a sort of a rundown each day of what's happening so for best practices you can sort of see yourself evolve and understand what the market looks around you and then we sort of automate a waste of the basic stress so we help create content you know take products out of Shopify and we'll help list them inside of your social accounts so we'll find the best trending product so we have a park at that so lowerings are the workflow to be plugged into the future where we see ourselves going is hasn't even accelerate enough data to do these things smartly is there's a lot of pain and work that the small business shouldn't have to do that you know AI machines can this do for them so we started to look at more and more automations that are intelligent let's take away that work so let me ask you a very weird question what and this is a problem that it would be a very good problem for you to have um if your platform is perfectly efficient and you get a hundred percent market share of SMBs you can't optimize everyone's Shopify products because you'll have the same competitors using your platform you know you know a thousand different people selling a shoe that you know is trending you can only you know pick one of them do you understand I'm saying so how do you you know people have an advantage if they use you but what if everyone's using you do you lose that advantage no so I think that the way like Amazon works is they're they have thousands of you know similar items that are all sort of related to each other in the way they sell the way we work is slightly different we're working one to one with each vendor so in the theory if we actually were to penetrate the entire recipe every single company pick the same automation they said it's my number one trending product and let let's talk about it witness succeeding that would definitely crowd the communications a bit but it's a very one-to-one communication between that brand and their customers so if that Shopify store is talking about their high-heeled shoes and the next high five starts talking other high-heeled shoes they're really targeting their audience they were talking about what's they're seeing in the shoe sales like two sales are up I change the price on at these kind of things so I don't think they would be competitive some of the aggregate roll-up stuff maybe and you can't get around products that just aren't strong like you know as part of the process of developing your business it's finding out when things work but we want to get away from is having to be a marketing expert so actually go into small business or happen to be eaten a data scientist actually make sense of what you want to do it used to be you could hang a shingle outside your door now it doesn't work anymore you need to get a whole team to be successful now are you I mean you'd use to yourself as basically giving SMBs the power of kind of Amazon and how Amazon does data on the back end to recommend things that what you're doing yeah we sort of see yourselves ultimately trying to defend them against those kind of marketplaces you know the problem is that Amazon is using a huge amount of data it has aggregation across so many products that it's very hard in isolation to compete but in isolations we're all innovation happens so these small manufacturers and crafters and creators are actually making better products that are experiences because they're trying to innovate we're they're getting a loss against Assisi Amazon's changing dominance to continue so the advantage of we can hopefully give and hopefully tools like us is start to provide the technology underpinning that will lets them actually get people that customers understand the marketplace that customers move between places let them communicate out same way that Amazon would okay but you're not built just to be clear you're not building a marketplace you're not also signing up okay got it they've got to upload their own customer list and then you'll help them decide what recommendation to make that to the customer that just purchased to increase cart value by 2x exact so they actually don't upload anything to us because we think that data shouldn't be worked they just connect their account so they built the store in API stuff right they'll connect Etsy to us through an old wat process we'll pull in all this new data from Etsy and then we'll start talking about it inside of the social services to let them know what will help them create the ad campaign to help them you know get disability so they're not actually having to I mean if you look at the small business the average small business has 14 integrations right now they're using 14 Sasa's just to survive it's just lunacy when we started with Squarespace like the average company had two or three SAS they're using they found us they were like oh my god this is an amazing thing I can give you my credit card of a website like wow now it's the poor operators like yeah I've got a Zen des it kind of got a Shopify account I've got a PayPal account like I don't know where all my passwords are right so the stress for them is they have this huge collaboration of information it's not helping them at all right they they're collecting information inside of one service side of Etsy but it's not actually getting the mail chip they're not getting out into Facebook or anywhere else so consolidating that data in one place it helps them I think is a interesting new category and to the reason that I sort of moved on is I've always loved the idea of stretching out to new categories so I think that there is a coming wave of this sort of automation support that will be its own space actually when it's data backed yeah I mean there are indicators that this is hot I mean as SAS grows obviously this becomes hotter but we've had wait on at zapier and they're crushing it we had the segment guys on they're crushing it they're basically the pipeline's connecting all these things and what you're saying is yeah you have some pipeline dynamics on your side but you make connecting all the pipeline's much easier and then also it sounds like you're also taking a step further and not just connecting the things we're also making recommendations on what you should do now that all the data is collected in one spot yeah we so we're in the same thing we've been growing over a hundred percent pretty much quarter of a quarter in terms of user signups in terms of not customers user sign up but we the thing we discovered which was a very hard one unless it was but we first started is we try to provide insights and guidance we found that the SMEs just didn't have the bandwidth for it so we would promote like stop advertising and Twitter it's not working for you your products better and Instagram you see the results move your budget and they would with the budget so we've evolved into is this sense that they actually wanted just to be automated they would rather us bounce the ad budget that rather asked creative content and just saying you need to talk to these five customers because they're really important they'd rather us just talk with my customs mm-hmm that makes good sense so how are you acquiring customers right now you've raised a bunch of capital as most that going towards team size or customer or user acquisition cost what is it yes that's again part of the model is that we don't actually use records because we don't do any marketing to get our customers it's all word of mouth its visibility from our partners that push us it's sort of being able to say with confidence how the different you systems looks or get a lot of you know bought awareness and the product itself sort of is viral so when people see automations coming from us you see the pizza shop down the corner talking about their new hours you tend to want to come to us because why when you want to do that for your business how will the bread shop know that the pizza shop is using some all I didn't follow that so the bread shop you know admire is this great pizza shop they spend time looking at them they follow them on social and then they'll see on social the pizza shop saying hey I've got a $5 discount or anyone who comes in tonight because it's gonna be cold outside underneath it it says it's brought to you by some all they think oh I didn't I had that same automation or it won't but they'll say this shop is doing these things every single day how are they creating content that seems to tie into their data I mean we're the place you go to figure that out I see okay interesting and then last few questions here before we wrap up team size today what do you guys at we're a little under oak a little under 50 and everyone based up there in New York yep we have people across the country but most people are right here in New York okay and remind is he a founding year was which year 2012 2012 okay and then last question here again on pricing how do you I mean how do you what kind of internal signals are you listening very closely to to understand when it makes sense to potentially charge or decide what to charge for yeah so that's the conversation we often bandy about and I think it's really important to provide a solid value when we were looking at our engagement metrics previously we would see 20 times the engagement that folks would find in sort of Google Analytics or any other platform but we weren't actually changing the revenue for our customers so we're very focused right now in actually making sure that we can track results those automations shows there's actually revenue coming from it I took the ocean view right when we close attribution list and we feel real value then we can find a way to lightly charge also enemies hate taking out the credit cards now if they've done that point for those other 18 services so we're trying to find ways that we can improve and optimize their business and help them save costs and take advantage of that versus actually just directly charging yeah I mean but again we're very fortunate to be back in a manner that lets us learn and lets us build the customer base to start with because of your history you have the ability obviously to raise many would argue well the best way to grow a big company in this space is to not charge for as long as possible right so if you're good at fundraising and you can show growth ideally you never charge the SMEs are there other ways for you to make money I mean look I can imagine if you have this distribution channel and you can point two million SMBs to advertising on Facebook's new product Facebook is willing to pay you for that yeah for sure and I think that we are holistically trying to protect our customers so in an environment where we can collectively bargain against Facebook can get an advantage for all that data and make a cheaper price we would do that I think there is an interesting point though so I've done this way too many times and we try different models so Squarespace is awesome that is just a charge model so as all things like kind of swung the pendulum the other way it is fantastic for growing really fast business and we're really lucky that people supporters in my fashion I would advise for what you what do you mean what do you mean you swung the pendulum the other way so one of the things we sat around at Squarespace was we were buying our customers we're trying to build that base and we thought wow we had a free product we would just you know have a huge population so slowly crawling through it so as an operator often I find myself doing the opposite of what I did the last time so I did the off when purely free thing this would be a brilliant model and it worked as we expect it we built a huge population base and we started to get more and more love from our customers the thing that I didn't realize was the discipline of charging is a more honest reflection of creating value for your customers so we made I made and I make so many mistakes it's laughable but I certainly missed that in the sense of looking in metrics that were abstractions of real value by saying customers are really using this information but are not actually changing where if you charge you get a much more true interpretation of what they're getting practice or they're literally exchanging so I don't think that freemium is a bad model but as we sort of rethink things and as I advise other companies I think making sure to do really baked in their charge model and you're trying to prove that value earlier than just like you know go all port Dane let's wrap up here with the famous five quick answers here number one what's the last book you read like 3.0 bloody brilliant life 3.0 number two is their CEO you're following or studying right now besides Anthony all of them name kind of off the grid and off the grid one in New York that is really impressed you so I mean a bunch of CEO groups sitting is really helpful I'm spent a lot of time with CEOs I think pressure CEO Mike is really impressive fresh and freshly CEO Mike okay great number three what's your favorite besides your own get a favorite online tool oh [Music] crap I'm really impressed with intercom these days you know number four how many hours of sleep to get every night luckily I don't sleep much so work I know luckily I love how you phrase that all right and what's your situation married single you have kids uh technically single but I have to get and live with a baby mama for last fifteen years oh that's good okay so two kiddos and how old are you I am 44 44 last question Dane take us back 24 years what he was your 20 year old self knew but I was lucky when I was 20 I had a company about the same size this one and I would be spending months and Jimmy actually I think in the end of the day just make the mistakes just continue to going for it that's that has worked out there you guys have it from Dane he sensed opportunity at Squarespace watching Anthony grow tried to buy it didn't work past Anthony's dad test ended up being CEO in 2007 hoping really grow the company up until 2011 he ended up leaving there now really trying to go the opposite way business model wise at some mall which is basically you know helping SMBs and small businesses collect other data then make recommendations on that data and actually take action to help them improve revenue and delivering value to their customer so then use that leverage to potentially monetize in the future twenty five million dollars raised with the team of a little less than 50 up there in New York Dane thank you for taking us to the top thank you very much