How Sumologic CEO Joseph Kim grew Sumologic to $301.6M revenue and 2.1K customers in 2023.

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 hent on global domination we just broke our 100,000 unit soul Mark and I'm your host Nathan Latka when I do webinar interviews or I give big Spees to thousands of people all over the world I usually will talk about data and sometimes show my dashboards like my SAS dashboard as I'm growing my SAS company the top inbox or my website dashboard which shows how I take Impressions to convert them into email leads and convert them into customers for Nathan la.com the funny thing is guys I build these dashboards with myself no developer and it's basically free and I use one tool to do it you can see the tool at Nathan la.com analytics I'll tell you more later in the show this is a episode 674 coming up tomorrow morning Andrew Yates comes on his company artisian has passed $700,000 a month de carrying revenue and has raised $40 million and I asked him a question I said Andrew would you ever acquire mattermark or any other company listen to how he thinks about Acquisitions bright and early tomorrow morning and every morning remember there's a new episode that comes out live at 6: a.m. eastern [Music] a [Music] good morning everybody my guest this morning is Ramin Seer he's currently the president and CEO of a company called Sumo logic an industry leading SAS based Cloud analytics company backed by really some great VCS and has an impressive list of customers and partners we'll jump into that now previously he was a senior vice president and GM at VMware where he developed the product and business strategy and led the fastest growing aspect of that business previously he held multiple executive roles with leading companies such as HP software Mercury software tibco software I Planet software AOL and Netscape ramine are you ready to take us to the top let's do it dude your history is like a who's who of like the SAS industry you've been around a while huh yeah I've had a pretty fortunate career um and obviously that's helped put me in the position here of the wonderful company Sumo so tell us what Sumo does and for those not familiar and what's your business model how do you make money sure so simply put uh we are trying to take advantage of the massive disruption that's taking place with respect to digital transformation and so in a nutshell whatso helps our customers do is build run and secure modern apps and a simple secure and easy to consume Service uh possibility right and we do that through variety of technology means but also uh taking a lot of complexity out of how they're really building and running these securing these modern apps today and what's your business model so obviously we're software as a service company and so therefore it's subscription based and we price and license based on how much data you're ingesting how long you want to retain it and we have a couple different versions of our products depending on your capabilities requir and so give us just obviously we could probably jump into every different customer cohort that's going to be different but if you just average across your customer base we can get a sense of customer size what's the average customer paying you per month what's your arpo the average varies right because we have uh quite a different segments and therefore cohorts across the 20 plus quarters that we've been selling I can tell you that um we track all the net dollar retention uh statistics from every firm that's out there and obviously you're probably very familiar with that and the median or sorry the mean tends to be about 103 to 105 uh the best-in-class companies tend to be 110 to 115 averaged you're talking about you're talking about annual net revenue expansion correct net dollar retention for each cohort yeah so if you look at our mean across 20 cohorts we've been well nor through 150 got it year-over year correct and lifetime not your here and what is Lifetime okay and what is the Ramin what is the just give us a sense of average customer size like I know it varies but are we talking $100,000 annual contracts on average or 25,000 or less or what so uh I guess the best way to answer that first is you know we have a massive service that's available to our customers and you know so the small Mom Pop shops the startups uh we provide them with a mechanism to use our service for free but we have quite a bit of community users that aren't paying us anything frankly and they're using the free service then we have the 0er to 250 employee segment or 1 to 250 employee segment you know they're anywhere from a $3,000 ARR to $8,000 ARR um and typically what we see the buying pattern there is pretty consistent we'll start off with um one use case and one data set and usually within a quarter and a half to two quarters after the initial uh purchase there's already an expansion of that original use case and then into another use case as you tend to move up Market we segment everything by employees um when you're in the mid Market or mid Enterprise for us that is all the way up to roughly about a thousand employees um you know the asps tend to obviously increase they're anywhere around 50 to 150k um that's annual average selling price yeah that's the annual contract value ACB um and so that usually means that there's more than one constituent also involved in that process whereas the the SMB Market tends to be the same decision maker user is also the economic buyer whereas when you move midmarket or Enterprise it stands out to usually three to five people involved in that buying process who do we typically Target then is probably the next question you're asking right or thinking yeah well what is the I'm curious what for each of those cohorts and I imagine you have subcohorts in both of those but the SMB and then the mid market up to a th000 employees in each of those segments what's I mean how many customers customers do you have are we talking thousands or hundreds in each of those segments yeah so we have well over 1,300 paying customers um and typically what we see is about 51 52% of them are Enterprise the other 50% are mid-market SMB it's a good split um obviously at ACV bases or ar bases it's a little bit more tilted towards the Enterprise than it is obviously the midmarket S&B the amount of spend they they typically would do with a public Cloud let alone a SAS company providing services for public out usage y good that makes good sense now we've kind of teased a little bit about where you are today and I want to talk about where you see this industry going tell me real quick though before we go back and kind of get the launch story where are you guys at right now in terms of capital raised or have you bootstrapped well um you mentioned earlier we have the who's who of the investor Syndicate right so we're pretty well capitalized we've done about uh five rounds so far we've raised just over about 160 million in capital um and it runs a gamut of grock stter Hill Sequoia Excel dfj and IP and a few others Y and guys uh I the reason I came across sum logic is because we actually had a uh ramine just mentioned dfj we had uh Tim Draper on the show back in episode 129 at Nathan la.com thop1 129 uh and Tim is obviously the guy behind dfj or one of the many people behind dfj so good so youve raised about 150 160 million bucks in capital Now take us back to launch date ramine when did you launch yeah so the company is just about seven years old and the vision when the company was initially founded and that was the seed investment from Greylock back in 2010 was and Still Remains The democratized Machine data and so you might wonder what that means well our founding Roots came from really the security world where only a subset of users get access to all this data that's being generated and that time inside the Enterprise and inside the data center and our Founders fundamentally believe that there has to be a simpler way to be able to expose more than just a subset of users there this massive amount of data and there's got to be a simpler way to be able to deliver this as a service versus requiring everything to be run and managed with traditional hardware and software and people the third premise was had to be an easier way to allow for analyzing this data in real time versus you know presupposing rules and correlations and looking the rearview mirror for this massive amount of data that was typically warranted around security analytics so what what was the point here the team initially felt that you know there's got to be a competitive advantage and a Technology Innovation an Innovative way to deliver machine data analytics as a service to not only the Security Professionals therefore the security Ops Team or ceso and the analyst but also a pleth of users that don't get access to that information most notably developers and devops so you fast forward all the way to today we have well over 30,000 users in our system on an average day we're analyzing well over 100 pedabytes of information and every few days I'm adding another petabyte to storage so you can only imagine how much I'm doing with AWS right and so what purpose here is our vision was always and remains to democratize machine data so we're constantly looking at innovative ways to reduce the complexity reduce the cost and improve the way and access to a plethora of users across our customers organizations to be able to share collaborate and communicate more effectively with all this machine data running these modern apps and reman so can you tell a real story like I know...