How Teamsnap CEO Dave DuPont grew to $35.6M revenue and 270K customers in 2020.

hello everyone my guest this morning is dave dupont he's the co-founder and ceo of team snap the household name in integrated sports management dave wears many hats from being the boss to sweeping the floors and everything in between since forming the company has managed three successful investment rounds secured strategic partnerships and overseeing impressive growth nearly 20 million administrators coaches players and parents now rely on team snap to manage their sports lives he continues to focus on both day-to-day and long-term initiatives dave you're ready to take us to the top i am nathan let's do it well we can we can't bury the lead if people heard that bio they're going wait a second what's team snap doing today if sports teams are not meeting well surprisingly we're doing better than expected so team snap you would expect us given the fact that we are right in the middle we provide communication and coordination services to sports organizations so we're right in the middle of sports activity and when activity goes to zero you kind of expect us to to suffer and we did to a limited extent we saw a quick decrease in activity in mid-march and it flattened out and has climbed ever since so i we think part of the reason is that our member organizations are still using team snap to communicate with their members even if practices and games aren't taking place and they are starting to come back but that's been the secret to us actually retaining it retaining a pretty healthy uh activity uh set and also uh revenue stream can you give us an example i mean can you name a sports team you know in boulder or new york or anywhere that's sort of using and explain sort of how they use you just to really paint the picture yeah um so i mean there are literally tens of thousands of these organizations and what they're doing is they're using team snap to for instance coordinate online workouts to just stay in touch with people and the return to sports is in in motion we have a return to sports uh we call it interactive heat map on our website which shows how quickly sports are returning in various parts of north america and in certain parts it's actually over 100 percent more canada than the us because they they manage the the crisis more effectively but uh we've been surprised by how by how quickly sports has come back as well now you launched this tool back in 2009 i assume you've done a lot of pricing tests since then how were you priced today so uh we've we've had lots of changes since we introduced team snap in may of 2009 we started off as just a team communication and coordination solution so our pricing was focused on on that feature set a freemium model and a kind of classic freemium internet model and we've tested that for more than a decade now but increasingly we have expanded our business into larger organizations so when we got started you as a coach or manager would find out about team snap somehow often just through friends and sign up for it and invite it invite everyone on your team and we had a freemium model so if you hadn't used team snap before we still have it by the way you can use our premium version for 21 days and then afterwards you decide which version you want and one of the versions is free so that still exists so you have a free trial and a freemium there's not a hard stop at 21 days there's not a hard stop we don't force you off and say you know pay us or you're done it's pay us if you want to continue to use the premium features and that's worked well for us our conversion to paid from the free trial is about and this has been consistent for a decade 30 percent oh wow okay so so if a thousand people in a given month start using that free trial by the end of that 21 day period about 300 will convert to paid or something like that yes that's amazing and who is so who are you selling so let's say the bravo's little league baseball team in boulder is using you with 30 players you know 49 parents and and three coaches is the coach paying is the parent paying is the player who's paying yeah it's typically the coach or many teams have a manager an assistant coach so one of those two individuals sets up team snap and typically pays sometimes they're reimbursed by the participants or parents sometimes not and our pricing is between we have annual and monthly plans but just for simplicity i'll say our pricing is between 10 and 20 bucks a month for the entire team so the great majority of folks on team snap the players and the parents you were referring to just a second ago they don't pay directly team snap now that's the original model for us and it's still a significant portion of our revenue but it's not the main part of our revenue increasingly we're selling team snap to the club or league they adopt it for all the teams the bravos the astros et cetera and your example uh of a local sports league and uh the coaches the managers and players and pams don't pay at all the organization pays for all of those organizations to be using team snap and we provide a whole range of services in addition to the ones we originally provided for teams for clubs leagues and associations i see you know like registration for the upcoming season or scheduling games teams don't schedule games clubs and leagues do i see okay so the pricing then is between 10 and 20 per team and sometimes the organization will pay for 20 teams which is the league in sort of their geographical area sometimes the team will pay directly but very rarely do that are the parents playing or the players paying directly correct okay and so how many teams today are using platform both free and then i assume we can just do 30 are paid oh well daily active users i'll answer this in a couple ways it's about five million at this point uh wait a minute monthly active users is five million uh daily active users is 1.5 million and you can do the math but the average team has about 40 people on it so that gives you a good feel for the number of teams that are active on teamstown yep interesting okay and so i mean one thing people always have to look at especially if you're building like a sas company is your ability to drive expansion revenue especially to have it overcome any any churn you you've sort of made the decision and said you know we're gonna give our customers a great deal we're not gonna upsell based off like number of players or things like that really your your closest thing says upselling a league based off the number of teams in the league do you would you do would you repeat that or would you would you give yourself the ability to upsell based off number of players if you redid this we actually do upsell based on the number of players because we have several layers of our premium plan and one of them is for teams with more than 30 players for instance we have teams with a thousand players so it's only right to charge them a little bit more but that's um but the uh expanded player roster feature what is what we call it that's in the um you don't pay more than the 20 bucks that i referred to even no matter how many players you you've got i see i see okay next question would i do that again um i think we we made the right call um in the sense of yes it was more difficult to build revenue using the model that we did but at the same time we built a customer trust an affinity and a large user base and we made a decent amount of money and now we are expanding on that large user base to into the much more lucrative club league and association market much more money changes hands at that level than at the team level and when you see a decent amount of money can you share maybe what runway you passed last year or a range um we don't usually talk about uh revenue um i will tell you we are yeah what's the closest i can we've grown steadily even since you and i talked um and around i think our average has been 45 per year since since we yeah growth since we last talked in users and revenue and i'll give you a little bit of a teaser we expect our revenue this year to be the same as last year so not 50 growth or 45 but the same as last year but given everything that's going on in the sports world i count that as a victory so how do you manage that because last time you came on back in 2017 you have raised capital uh you've been creative with it you haven't just gone and raised heaps and heaps of bc i think you've used some debt strategically but i think you'd raised what was it like 43 million as of two years ago how much have you raised today and how do you manage that story of sort of flat even during covet at the board meeting oh um so we've raised 48 million to date and our our uh investors are investors in other companies too and they see what's happening in the world around them and frankly they're delighted with uh our performance and you know many people many of our existing shareholders thought we were done you know to to your point uh at the beginning of this broadcast uh you know how are you managing to survive when sports activity has really decreased and the reality is we weren't as affected as we feared from a market standpoint and also we took action to make sure that we were financially prudent moving forward that part wasn't fun but we did cut expenses as soon as we realize that it's going to take a while for us to see the end of this crisis you only dave want to do that cut sort of once which means you want to sit down with your executive team and say listen when we make this cut how many months of runway do we want to have and every ceo is sort of taking a different approach some are planning for really long time 36 months sort of time frames others are planning for sort of 18 months so when you sit down with your team before you decide what to cut and announce it to the team how many months of runway did you want to have post cut we didn't think about it that way nathan we thought it more from the standpoint of what do we think is going to happen yeah with the crisis and uh what kind of position do we want to be in so in march the assumption we had was that our business would decrease on the order of let me just think of the numbers here on the order of 50 um through the summer we'd see a slight trickle in the summer and then we thought that we'd see a gradual return during the fall to uh to 70 percent participation so only 30 down in the fall and i'm not sure whether that forecast will hold out but we actually have exceeded it so far significantly very significantly so exceeded in the extent that the business didn't take as much as a fifty percent hit it was actually less of a hit than much less much less yeah round figures nathan was about 30 about a third initially and then we climbed up from there so even you know that relative to many companies and especially companies like ours was um was yeah was pretty good um and i'd like to touch on the furloughs that we went on yeah i mean that's not easy dave how'd you do that yeah so um it's not easy at all but you know i've as you can tell i've been in business for a while and as i told the team i said guys i've seen this movie before it's not going to get it's not going to get better right away you know we can hope it will but we have to count on things taking a while to recover so let's cut once and once only to your point earlier and that means it's going to be painful and i really salute the team because in other companies big companies like you the packard what i've seen is that functional leaders will often try to protect their people so you end up with um essentially turf war discussions yeah um and the team was not like that all it was extremely collaborative we decided i i remember that i think it was march 13th that it became clear we had to do something i grieved over the weekend and had the conversation i just described on monday and what was that the 16th and nine days later we furloughed uh a good portion of our company yeah and how many so can you quantify that for us how many people did you have to let go yeah so round figures uh we furthered about half the people in the company okay that was uh about 80 folks and oh that was one of the worst days of my life by the way man i can imagine these are people that were very dedicated to team snap that we were very close to and uh you know that's not fun and we knew we were tossing people out into a challenging economic environment um we furloughed folks because we wanted to bring some back and we have done that we've brought back about 15 of the folks we furloughed and we hope to bring back more over time but we're going to be extremely conservative so what's the team look like today how many full-time folks we're a little over 80 people at this point 80 folks and how many engineers uh about a third of that is our engineering team about half his product so product managers designers and engineers yep yep and do you have i mean do you have quota carrying sales reps so it's kind of premium sales motion or no yes we do not for the freemium part of our business but clubs leagues and associations that's not freemium that's a classic business to business sales model so yes we do have a sales force there we also as as our engagement with the overall market has grown we have um instituted advertising and commerce on our platform and we have sales people different kinds of sales people that call on brands direct advertising and commerce deals so yeah how many how many of those folks how many so how many quota carrying folks um i i could give you the exact numbers but i'm just thinking through the organization now all together about 15 15 okay pretty healthy group there and do you so so when you look at your sort of weighted cost to get a customer especially in the new environment we're in imagine it's a very different tack on your freemium versus going and selling a big league deal but let's just focus on getting you know one team paying 10 to 20 bucks a month what's your typical cac on that kind of sale yeah so our typical cac we look specifically at cacti to break even and our typical cac time to break even is six or seven months okay so you're paying like 60 to 80 bucks to get a customer exactly to get a paying customer one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you 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