How TestBox CEO Sam Senior grew to $5.7M revenue and 1 customers in 2024.

hey folks my guest today is sam senior he's the co-founder and ceo of test box originally from regional australia he studied software engineering and economics university where he met his co-founder peter he left bain after six years as a senior manager in san francisco to build the future of software buying he now lives in boulder colorado sam you ready to take us to the top yeah thanks so much for having me nathan you batman so what does this mean the future of software buying well i think previously everyone's talked about having an enterprise sales letter approach now people are talking about a product-led approach to growth and selling software i think the future is actually customer-led so meeting the customer and how they want to buy software the process they want to take and giving them a true hands-on experience and so we've basically built an app that allows people to test and compare enterprise software before they buy without needing to talk to a sales person with a hands-on experience with real data in there and all the use case configures they can do a side-by-side comparison within within minutes instead of doing a month-long sales process sam how does that work it sounds too good to be true someone listening right now that wants to try salesforce salesforce is not going to let you try it unless you're on a sales call and all this stuff have you like pirated their software something and give everyone access like how do you do this so we we've been very intentionally starting with just one software category to prove our value so we started in the customer support help desk space we've actually gone out and built uh partnerships with each of the major vendors so we've got about six on the platform at the moment three more in discussion but we've got more than 50 percent of the market share of the top platforms already partnered in and integrated with us and how do you define market share so otherwise you wouldn't know how in terms of revenue or users really either is fine um i think if you take revenue for example like zendesk and help desk space has 20 plus percent of the market share they're actually one of our partners that's integrated into test box okay and what about like freshworks yep integrated okay and so hubspot service hub and a few others as well so what do you give zendesk and freshworks let them do this they want people going through their funnel obviously so yes and no i think they understand that people don't always want to go direct and go through an aebdr process and said they want to go self-serve and hands-on we're basically taking that self-serve approach and supercharging it in a way that no one else has been able to do by getting it more real life like it's already been implemented for that end user um so we're actually a new lead generation source for them interesting yeah well it's actually funny dixa's interview is next week uh girish came on before their ipo with freshdesk and brian hogan came on free ipo from hubspot so i've got you also have help scout trango uh and that crew as well so this is cool so you're gonna i love how you're you're gonna sort of focus on a niche here and dominate the niche why customer support software though why start there so my co-founder and i actually about 10 or 11 years ago worked as it help desk agents so we just understood this space really well having used these types of software before and and understand the use cases that really matter but it all got kind of coalesced around this experience actually where someone close to me had previously bought help their software and i watched how painful that experience was and i basically interviewed her the entire time to understand what the major pain points were and how we could make it better so those two experiences together said let's start there plus it's a hugely growing market that's like 10 and a half billion today growing at 10 plus percent and it's getting more and more important so it's also a good niche for that reason tell me more about growth so you got going you just raised some capital we'll come back to that in a second but you're on boarding this is three-step process first is introduce yourself what are people mainly picking in the industry drop down are you seeing concentration around like b2c tech or b2b technology or something yeah so that that's primarily where we focused is be tech and then e-commerce then fintech um sign ups sign ups what market are they in those three yes oh okay okay okay got it cool and then um and then so i'm going through it now i love asking these questions like right so you're basically saying what what products do you want to test i'm going to click hubspot and zendesk looking for another solution so you're basically doing user generated content here people start typing in something and it's like a new customer support tool that's taking off you should be aware of it because people start typing it right exactly right and so we're basically trying to collate all that information so that we can say great we've had this many more people asking for this platform let me go build that partnership and get them integrated all right talk money to me when you give hubspot a new customer right it's a hot probably the hottestly they impossibly get you must have some economic upside here yeah exactly so with hubspot uh it's about it's 20 of total contract value so not just first year but actually the entire contract value that we get paid what if you help the customer sign up on hubspot for 100 bucks a month hubspot customer success managers work with them for 12 months and expand them to a thousand dollars a month do you get the expansion revenue to 20 on that okay so you have to trust on hubspot and zendesk and freshworks reporting back to you accurate expansion revenue on accounts that you helped them land yeah exactly but that's and that's part of the partnership terms in terms of terms and conditions legal or that sort of goodness super interesting okay so you're effectively a sales rep for them but running a different motion but yes but it's fully productized yeah yeah yeah interesting okay so when do you guys launch the business when you write the first line of code uh the first line of code was written just over a year ago but we launched in sort of a public beta in middle of june so only a few months ago now and what numbers do you care about right now like waitlist size like tell me what you care about i think there's two major things for us because we're essentially building a marketplace we need to be building both sides of that so the big one of just like continuing to build partnerships really matters so i'm trying to pick up a new partnership every month at the moment so we have that supply side of the market and then on demand side it really is just like how many sign-ups can we be generating on a weekly monthly basis and then once they're in how quickly can we get them to a decision is it gonna take three months like it does today or is it gonna be like uh like a recent uh converted customer it took them two weeks and that's a significantly better process than they go through at the moment so we're not with october yet so i can't ask you for october numbers but in september how many total news signups so it's it's less than 10 um i think we're like sort of eight that sort of number so it's still small but it's continuing to grow every single month got it and how many customers have you actually there are now paying on one of your six you know or nine partners yep so we've closed we've been closed one deal so far but that's how does that that feel been amazing how'd that feel yeah it felt pretty incredible there's a lot of jumping up and down um but i think importantly at the moment it's not just a we've had 100 company use that platform but we've also had a hundred thousand person company use our platform so at the moment this company that's a hundred thousand sort of ftes using test box to make a decision on a new platform so we're in this interesting phase where we've just been trying to build awareness and like we're just starting to see real elevation on size of company how could and a number of people coming into sas box what prevents you from arbitraging or basically you know taking up like hubspot like top keyword tools like you start basically paying for ad space or running seo to get those leads before hubspot does i imagine there's something in the pressure agreement that prevents that no there isn't actually it's just incredibly expensive yeah i think if you look at the cost for these sorts of ads you're talking at least 120 150 for some of these ads on those keywords and then that just conversion on that when you think about the percentage that we're taking um it doesn't really work out economics wise what about like a project seo play though right hubspot versus zendesk hubspot's number one g2's number second stack shares number three i mean you could write a book there and and yeah that's exactly what we're doing so does hubspot like that if you start out ranking them are they cool with that yeah that isn't a competitive term in our agreements with them interesting do you give them like a row for the partnership agreement where if you ever want to sell or exit they have for like writer first refusal on exit price uh not at the moment well we'll see how that goes in the future but i think like right now that's our focus really is just like let's keep being that amazingly generation platform for them okay tell me more about economics you're just getting going here how much have you guys spent to date on getting the mvp live yeah so we've probably spent something like seven hundred thousand dollars to get the mvp live um and we raised 2.7 um and and that mvp live is so much is like really deep infrastructure and orchestration of all these different services and getting them to spin up really quickly that's like the more challenging piece we haven't really spent any money on marketing yet which is why the numbers are kind of on the lower side at the moment the 2.7 was raised this year uh yeah basically pre-seed okay and it's two of you guys right do you split equity 50-50 uh it's okay that's a tough conversation tell me about that how did you guys how did you guys sort of work that out yeah i think um so my friend peter and i have known each other for 11 years now uh it was actually a relatively easy conversation for the two of us to go through we we realized that look a lot of the the drive behind test box was driven by me when it comes to like the idea and the plan is sort of we talked about like is this the 10 15 20 year company for me yeah it probably is um for him he's like obviously committed for the next five years at least but he's like i don't know if i want to do this for 20 years but and and he's like i don't think i'm going to be the one leading all of our really in-depth engineering stuff long-term i want to be more of the people management piece so like as we thought about our roles in the company over time we saw that um they're going to change and develop and realize that actually there's there was initially anyway um we thought like my level commitment and the the inputs that i was having into the business at the time were at that higher value all right come on you gotta translate this in the numbers you're talking like you own sixty percent eighty percent how big is the difference uh it's sort of two thirds one time okay fair got it so caught 66 to you 33 am but now you're both diluted a little bit because you raised some precede i imagine you did a safe yes got it how did you obviously at your stage it's not like a valuation multiple you're raising it's really what story can you tell and do people believe that you can execute on the story so you tell a great story it makes clear sense to me here and just you know 13 minutes in what cap were you able to raise at uh it's a post of 12. okay does that feel fair to you yeah it's not reasonable like we could have probably pushed to get to 13 but um i think at the time we had a very limited prototype and really great story and a few partnerships basically built out and we were honestly we'd spent two months working on the product at that point or the company so it was so early in our journey that we're like okay that's fine this is what we need just to move forward to the next stage um is there a gp23 component of this yes tell me about that so all of the data that we actually create for our end users we customize for them so if you say you're a b2b company or you're an e-commerce or whatever we'll put different data into the platform based on what you tell us about you and so we use the gbt3 engine to be able to customize that data interesting okay uh single file on first minute capital were the main folks putting up the 2.7 million how do you make sure they like work their butt off for you i'm sure you had a bunch of term sheets you want to make sure they're value add vcs how do you make sure you activate them to really help you build the business yeah i have been incredibly impressed by signalfire actually and i would i would say 10 out of 10 recommend to anyone who's interested in raising capital um they turn up whenever we ask them to on absolutely anything i could text elaine our board member and she'll respond to me in minutes jump on the phone whenever and they have every time we've had a hurdle they've gone and helped us figure it out so i lean on them pretty aggressively i think a big thing is that we're very transparent with them and that has allowed us to build a really strong relationship which i think has been phenomenal um and when it comes to first minute i reach out to them at least once a month say like here are the three things i need from you go make that happen and they they've also been delivering which have been pretty phenomenal tell me last thing that signalfire did for you if you can be specific yeah so we were um having some interesting challenges with um the security protocols that zendesk has on their platform basically like that it was creating some bot detection issues and so they actually went straight to the chief of security at zendesk and help us resolve that and work through their machine learning algorithm to basically approve everything we were doing unbelievable there you guys have a single fire and elaine doing a nice job here for sandwich we love hearing okay cool so now let me ask you a question have you did you have us like is this sort of your first foray into startups you came from bain or have you already sort of gone through the the mill already yeah this is the first like full-on go peter and i dabbled a little bit about 10 years ago or so together and made made a little bit of money to pay rent but nothing that was our serious full-time thing that we're tackling i see okay cool well you got your first customer landed and which company did they end up buying from out of your six partners uh so it was zendesk and it was a company called profitwell who i think you've spoken to before in your podcast yeah that's great okay so uh profitwell bought zendesk and so what are they now paying x per month and then and then break me down like economics yeah so um we got 15 to 20 of that deal and they bought something like 10 licenses so if you look at the zendesk pricing online that ranges somewhere between 50 to 80 dollars per seat per month okay so let's just assume it's on the low end so it's 500 per month you're making 10 20 of that so you get about 100 bucks per month as long as profit will stay active yeah something in that range will zendas pay you up front for the full year so 1200 they pay you as profit well-paid so they will pay us uh on zip with zendesk it is on annual contract value plus expansion um so we get the upfront annual contract value then anything that increases we get paid later on very cool okay so you're making you basically got to check from 12 around 1200 bucks from zendesk and now you can keep scaling very interesting okay cool um yeah big big big fans of uh of pc and profile and everything they're building over there so cool okay got it so you have your first 1200 bucks in arr uh you're gonna keep scaling here what's like the thing you're actually building towards right this is a trojan horse to what in 2024 uh 2024 is pretty close um i probably got 15 years of product in my head at the moment but if we take the next like three to four years basically to be able to say look if you're trying to buy enterprise software the first place you go to is testbox.com you say i'm looking for these three or four vendors let me get my hands on and it shouldn't just be in customer support but basically all of the sales ops tools all the marketing tools or whatever basically come to test box and then you can um make the best decision in a few weeks rather than many months sam you guys made your first hire yet are just still you and peter no no we're we're at 10 10 people already oh wow how many engineers uh it is five engineers okay got it so if i ask you like all in handcuff expenses right now how much are you spending just on head count per month uh about 100k does that make you nervous or you have plenty of runways not not worried plenty of runway not a problem yeah interesting anything else taking up a bunch of money that wouldn't be obvious in its ass business or no pretty standard pretty standard at the moment as i said we haven't really focused too much on the marketing piece we're really importantly we need to buy it by build the supply side of the market with the integrations because before we become valuable for people and so we've just been really focusing there with our dollars guys crazy store if you want to avoid all those marketing calls sales reps all that jazz go test out testbox.com sam before we wrap up here let's jump into the famous five number one what's your favorite business book oh um i really like radical candle number two is there a ceo you're following or studying um i think bill hubspot yep number three what's your favorite online tool for building test box besides gpt3 and besides any of the ones you're partnered with gt3 is the one that i wrote code for specifically so um i think the team is loving aws and writing um with chalice apps on aws number four how many hours of sleep to eat every night eight eight okay in situ situation married single kiddos uh partnered not married no no children yet and how old are you sam i'm 29 29 last question what's something you wishing you when you were 20. uh the value of therapy who are you using now how did you find your therapist uh i connected with so someone was close to had a phenomenal therapist and she basically helped me find like five or six people to go and interview um and then i went through that process and have a normal therapist called and andrea didn't dingo she's in san francisco phenomenal how do you like a lot of founders they they hear that this is like it's really valuable but they don't even know how to use a therapist like what can you without being like revealing personal stuff i mean what does a conversation with your therapist sound like what do you talk about yeah so we started really like checking in with where i am emotionally and ensuring i use emotional feeling words rather than just thinking words which i kind of do most of the time and then use that to say okay what are the things that are really affecting me in some way and go deep on that i think we try to get a balance between acute issues so what's happening in the moment and then also chronic issues like what's been the stuff that's i've been challenged on for the last 10 15 years how do we continue to work on those on ongoing basis i i think importantly a really good therapist will help guide you and create some structure around this rather than allowing you to sort of flounder your way through guys sam senior with test box if you want to test customer support software without sitting on sales calls test them out they just landed their first customer which means they help someone buy customer service software zendesk specifically they make 1200 bucks a year on that they're off to the races raised 2.7 million bucks at a 12 million cap as they get going here sam with owning caught two thirds of the equity because he sees really a long term play here into many other product lines team at 10 right now five engineers as he looks to scale the business sam thanks for taking us to the top thanks nathan 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 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