How Theseventhsense CEO Mike Donnelly grew Theseventhsense to $1.3M revenue and 136 customers in 2024.

hello everyone my guest today is Mike Donnelly he's the CEO and founder of 7th sense which is a system that optimizes the timing and frequency of email for sales marketing professionals the idea was conceived during Mike's 13-year career as an individual contributor and sales leader for merging enterprise technology companies Mike are you ready to take it to the top I am and appreciate having me on nation you bet so 7 cents it's email it's timing what inputs are you feeding how this algorithm to make sure it's smart yeah so we have strategic partnerships with both HubSpot and Marketo and so we take data feeds from both of those open data click data you know is it happening on a mobile device happening on the desktop and then we also have an integration with Google's so we can also listen in on corporate email systems and those are kind of the inputs that feed our funeral systems okay and what do you have to pay some of the Cubs spot fracks or google of fractious to those data streams nothing - first added value for them HubSpot Marketo etc are looking to build out their ecosystem so that's where our relationship comes in and then Google all the user has to do is authorize access to their Google accounts well what about what do you give back - like a hub spot that that makes it you know hub something more viable for their users good it's sensitive obviously to give you this kind of data so it's actually the customer so the customer gives us access to their data and so the customer comes to us pays us signs up for our surveys and then we analyze their data and then provide value to them we don't give anything to up spot or Marketo or Google I thought you just said you have a data relationship with HubSpot and HubSpot feeds you data so we do the data does it feed us all of their data like across all of their customers if their customer decides to opt into our service then that's the data feed that we get from HubSpot oh I see that customers do you're like an app in their app exchange or something exactly got it okay so and then how do you make money is it a peer play SAS model it is a pure police ask model that's correct okay and on average what are these folks paying you per month for the service so are our poos are around 220 bucks a month we 136 customers today so around 30k and annual recurring or sorry monthly recurring revenue yep 225 so are these I mean that small maybe it's small business maybe it starts pushing mid market but I mean who are these I mean what are they usually a small business or mid market so I would say probably 60% of our customers are SMBs and then 40% of them are more larger scale I wouldn't say total enterprise we do have one very large enterprise company they this past year they did about 4.4 billion in annual revenue did they make up more than 50 percent of your revenue they do not okay got it so you're able to you don't have a worry about yeah they make up about 10 percent over there okay got it and what's the company growing at so you're at 30,000 per month hundred reasons customers paying 225 per month where we had 13 months ago so 13 months ago we were around 10k and M are so healthy it means small numbers but still healthy growth yeah yeah really that's a small team I mean we're bootstrap company self-funded totally bootstrap no no no Rick jonquils writing a million dollar check so we did do it small I shouldn't say small but we did a friends-and-family round but I have invested a pretty significant chunk of change over the past few years and wetware had well what was the small round I mean are we talking sub 400 grand yes okay got it and then you've put in your own money what's the team size that today so it's three full-time okay three full-time folks everyone based in Arlington we're spread we've got one in California one in in Ashburn and then myself and although we do have a local office in Reston okay guys so some Loudoun County action going on which I like my hometown and when did you launch company what year so we launched the company in 2013 but we were doing it as a nights and weekends project for the better part of almost two years and that was really kind of a research and development phase and then we we landed our first customer we decided hey this is the time it's adding value what year was that so that was 2015 okay and then so what have you done I mean there's there's I guess there's enough Ammar to cover three full-time salaries but but where like where did you get money from in order to invest in this new thing what gave you the confidence to take the risk so where we got the money from was I was a very successful enterprise sales rep I also was part of a few IPOs a few exits and so made money there and that's really what I've been you know where the where the funding came from where I was willing to take the risk is you know just believing in the value that it's delivering to customers and I still see there's just a huge market opportunity with where we want to go with the with the technology and then so our thirty-six customers now let's say a bunch of sign up from the show so you 137 what what what actually happens right when I sign up and start paying you so what happens is you sign up sign up process takes about five minutes you connect up to your marketing automation system whether that be hub spot or Marketo which literally takes about a minute and then we start analyzing all of the historical data that you have within your marketing automation system or in your corporate email system we then go through an analysis phase depending on you know total number of email addresses that you have anywhere from I think our smallest customer PI has two thousand email addresses our largest has around ten million email addresses and if so depending on that it can take anywhere from 24 to 48 hours to complete that initial analysis but again so keep going down that story line what do I get when the analysis is done what what am i what so once the once the analysis is done rather than say you're using a marketing platform blasting out an email to 10,000 100,000 500,000 of your closest friends at 10:00 a.m. on Tuesday what happens is we empower you to automate personalizing the sent on to each individual contact when they are more likely to engage in that email right yeah I don't have to go in and type in a new time for every person manually right it's all automated it's at massive scale we have plenty of customers to do mailing sizes of between a million to two million contacts for a single mailing and they say send a pic of send time for this you know know anything is short as an hour although if you're going to do that you might as well blast it out all the way to seven days and anything in between interesting the other the other component that we look at on the marketing automation side is ru heating up are you cooling down as far as your level of engagement with us because send time takes you so far but then you really want to start thinking about the frequency at with them mailing Sarah because Sarah might want to engage in every email that you send where as Scott you would be much better well served sending him an email once a month so we've got a machine learning system in the background that's looking at what is your pattern of engagement this week versus last week versus last month versus last year and then we determine at what level of engagement are you sitting with it up so that's what we do on the marketing side on the sales side what we deliver to the sales rep is there's all kinds of send later functionality within Gmail there's boomerang tout app yes where HubSpot sales Pro I know you have one but the fundamental piece missing is you're still kind of part of the french pissing in the wind as far as what time you should send that email we give you concrete insight into when you should be sending that email to that specific individual mm-hmm yeah why are more people using this frankly we have been really bad at marketing you're the top sales guy yeah but sales Martin sales and marketing at a you know at a SAS startup doing 220 average revenue per customer per month is totally different than Whitey's like like a guy like you with your background if you were a top enterprise rep I mean I would have built this I would keep the product exactly the same but I would increase the price ten times and I'd spend like I'd have you go duel you were really good I was just selling $20,000 a month annual contracts so we have continued to move our way upstream but selling to an enterprise is totally different than to an SMB or even a small midsize enterprise and part of those challenges are hey I've got to have a sock to compliant you know I've got to be sock to compliant because I do have access to the crown jewels of a company it's their email list it's their customer data just you know this isn't like a MailChimp email list this is like you're in their Gmail and you just look at who they've emailed in the past twelve months that we look at the entire history of that gmail account or the entire history of the marketing automation side okay so I mean I guess you'd if someone's managing a list in Marketo warehouse file you'll see that list there is mark I mean there are I should think of this like JC I'm making this up j.crew is has a list of a million dudes they have a new hat they want to sell and you're...