How Troops CEO Dan Reich grew Troops to $1.1M revenue and 200 customers in 2018.

hello everyone my guest today is dan reich he's the co-founder and ceo of troops a venture back technology company that is building artificial intelligence for work troops is working with hundreds of companies and has raised about 17 million of venture capital he's also co-founder and president of tula or tula a health and beauty business that has created the world's first probiotic based line of skin care products he's been involved with companies that have raised over 100 million of venture capital and have exited for over 1 billion in mergers and acquisitions before troops he started a software company called spin back while he's which he sold to buddy media and then to salesforce.com for about 850 million bucks he was a bs in electoral and computer engineering from the university of wisconsin-madison is a contributing writer for forbes and has been named silicon alley top 100 by business insider dan are you ready to take us to the top i am what's up nathan all right nice to have you man so quick clarifications on the history here so um spin back you sold that to michael the guys at buddy media did you stay with the company through the salesforce acquisition or no i did not i actually left the same day we closed the deal with salesforce i knew the deal was gonna happen and i knew that i wasn't gonna go work for salesforce so i actually sat down with mike and i'm like look i'm an entrepreneur i want to go start another company i'm too young to go work for a big company and i basically uh you know worked it out so i could leave the day we closed okay and i want to get a sense of i always like to get in the brains of where my my folks are when they actually launch the next company so i mean was that was your exit the 850 million was obviously the exit buddy media to salesforce you know not i don't think your exit to buddy media but what i want to know is your exit tubebuddy media was that to that point your life your most significant financial event yeah i would say so okay um and without obviously you don't want to disclose the exact number but give me a sense of kind of in your head was that like comfortable money was it like i can do whatever i want the rest of my life money was it like jet money generally where were you yeah look it's uh let's put it this way for the time of my life i was 25 26 it was you know the most amount of money i had ever made and uh but certainly not i can go retire on a beach money right so you know let's get a good little bump for that moment in my life it was go travel the world for a month and then get back to work jump back into a new company yeah all right so for me yeah that's right and did troops come right after spinback or did you focus some of your time on this health and beauty brand no it's funny when i left when i left bloody media salesforce i didn't really know what i was going to do i just i had a few ideas for a few different businesses but really had no clue but knew that if i were in that routine sort of my brain would have probably got a little bit numb just clocking in and out every day and so didn't know what i was going to do decided to leave my parents thought i was insane because it was financially in my interest to stick around for at least another year but i saw i hit eject and what ended up happening was had a few different ideas and actually a venture capital firm called me up and said hey dan we're looking at a few different businesses that we want to invest in seems like you would have an incredible perspective on these businesses would you mind taking a look at them with us i mean so what happened that's code for we secretly want to get you addicted to make you the ceo of one of them well so i think i think from their perspective they wanted to win these deals and they figure that if i got involved i might be able to help them invest or get into the deal and so what happened was we looked at a few different deals together and a lot of you the companies i actually loved and so we ended up coming up with a relationship where i would leverage their balance sheet they would leverage my experience operating background to do deals together we would both invest uh and a few of those worked out quite well to the point where they're like hey look why don't you just work out of our office and sort of you can continue to invest with us as you think about what's next and so i did that for about a year and what year was that that was uh that was man 2012 13 i think um you know i did that for about a year five blocks from my apartment which was incredible and uh yeah look begin to think about what you know what i want to do next do i want to do this venture capital thing do i want to start another company and so i remember having a ton of meetings with entrepreneurs trying to raise money and i remember you know i remember really conversations going one of two ways either i'd have an amazing conversation with an entrepreneur and just be really jealous that i wasn't doing that or i'd have just a horrible conversation with an entrepreneur and say man where did that hour of my life go and i'll never get that back and so you know realize the vc route at that time wasn't for me wanted to start another company again um and so ruminated on a bunch of ideas and stumbled into the health and beauty company which i can unpack and then realize i needed to get back into software which which became troops so let's fast forward yeah we'll skip health and moody let's go directly to troops so what year was the company founded we started troops in the middle of 2015. okay 2015. and for those of you that for the folks that are not familiar with it describe quickly kind of what you do so troops yeah so you know at troops we believe that every company on earth needs a way to manage information on their revenue their customers their pipeline we know that category crm we know salesforce to be the leader a problem with it and many like it is it's incredibly painful to use right like you log into an interface that looks like it's from the 90s with a bunch of fields forms buttons and boxes um we just felt there had to be a better way and so the way we think about the world is you know man what's the easiest most delightful way of interacting with software today we felt like and still feel like it's uh messaging you know at the time we started the company six the top 10 apps in the world were messaging apps and so we're like man what if you could chat with your crm like what if you have almost like you're an like whatsapp telegram you know maybe intercom now these kinds of things yeah that's exactly right and this is you know before slack was even really a thing we just felt like man these things were so pervasive in our personal lives that it was inevitable that uh consumer software would be as good and as delightful in the work environment you know we spent over a third if not more of our lives working that was just an inevitability in our mind we felt though like no one had ever thought about work software in this new consumer-ish way um and so at troops our mission and thesis and question was like what if you could interact with your business systems and serum much like you would with a human in a messaging interface and so that was really like the question grand experiment um or contrarian point of view that we had and uh yeah we just set out to try to to try to prove that so fast forward to today what is troops in a more literal sense we are the leading uh the leading application most specific application on slack that connects mission critical systems like salesforce your calendar your email uh with slack which in our minds is like the new operating system for teams um so that's what we're doing today interesting um i don't want to go down every customer cohort but on average what's the customer pay you per month for this product so on average our customers pay us you know many thousand uh per per year they'll pay us many thousands of dollars per year okay and is that do you price like per seat do you have a per seat cost that's pretty average or no we do have a per seat cost but it ranges depending on the size and scale of the company okay so for example we have customers that have several hundred to a thousand users using us and we have companies that have you know five to ten users yep yep so if we call it kind of 3 000 a year that might come out to call it 250 bucks a month and a typical team might be 5 10 20 people something like that yeah on average it's it's more than that okay i'm trying to get a sense if you're more enterprise or you're more kind of mid-market smb well so yeah let's unpack that so for example some of our customers include guys like wework looker slack envision flexport square um so are they enterprise or the smb you know it depends on how you define it yep yep okay it makes good sense and then you said kind of leading application on slack i have to kind of hit you on that and say well how do you know what are you measuring that by is is it number of api calls per day you're the slack app that has the most or how do you measure that yeah so...