How Userful CEO John Marshall grew Userful to $11.5M revenue and 500 customers in 2024.

hey folks my guest it is john marshall he's a ceo and board member at user full leading provider of av over ip solutions for enhanced video communication he focuses on developing and implementing strategic growth initiatives for the business launching the company to new markets and expansion through new technology and channel partnerships he's got over 25 years of experience in the space john you're ready to take it to the top i certainly am so what is av over ip av over ip is this transition that's occurring where you used to develop av solutions in a siloed way so if you had like a video application in a given room you only saw it there you couldn't transport it to elsewhere in the corporation aviovip lets you move it around give me an example of that for people listening right now that might have their own offices sure so for example if you have a desire to have a video wall that's showing entertainment content you know or a better example in your lobby of your building of your corporation you walk in the lobby you've got all kinds of entertainment playing welcoming your guests to the corporation that content probably comes from a server that's in an i.t closet historically you'd have had to put the server right next to that video wall oh i see i see okay so now you can have one central location in your office and put it out to seven different screens on eight different floors and six different venues across your building absolutely right we used to have an av department everything's moving to i.t so it's that evolution and that ability to distribute very interesting okay and so what are companies paying you on average per month to use this technology um it varies by application right now our platform supports uh three different applications one for control room usage one for digital signage and one for meeting rooms uh screen casting uh different price points for each uh but overall you know we typically see around thirty thousand dollars of ar per customer yeah that's interesting okay so and and if someone paying thirty thousand bucks per year how many screens are they managing like what's that package probably again it varies because like you can do many more screens for digital signage that's not real time if you're doing a control room that's mission critical operations and you're trying to stream high definition high resolution to that uh that very large video wall like you might imagine for like nasa's command and control center um that's a lot more uh that's all a lot fewer screens because it's higher resolution i see okay interesting so it's a combination of number and screens resolution and product-based upselling absolutely a number of source devices that you're you're you're muxing together number of store okay that's what i'm interested in are there any other like utility-based upsells so number of source devices um resolution uh so there's a number of other things that you that you can upsell for but the model that we typically go for is someone will come to us we're looking for one application or one solution need and then we'll sell them the platform with the promise of them being able to expand to those many others those five six other use cases uh and so that's usually our expansion model okay based off use case got it very cool okay put this on a timeline for me when you guys launch uh so we launched this whole offering in uh april of 2020 great timing eh but when did you launch it because i have in my notes that you guys were launched in 2003. so the company was founded in 2003 and sought product market fit for technology it had created for a very very long time i joined the company in 2018 and said we need to create an enterprise av over ip platform redirecting from lost you know product market fit to actually finding product market fit and so we developed a brand new product from 2018 to 2020 relaunched in 2020 on a sas model instead of a perpetual license model and the company took off interesting okay so how many customers are you now serving today 500 enterprise customers and we're we're at around 5 million arr around 6 million uh contract at arr oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 interviews i've done manually saves you a lot of time well we've done this we've built it into the beautiful interface inside of founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're going to see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're going to get a different valuation a vc is going to pay a different valuation private equity firm is different if you're going to do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when i hover over here right so the teal is what a vc would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on youtube all these datas are built from real-time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raised they sold 22 to their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of sas valuations than what you can get now inside of founder path and we're thrilled to bring it to you all right we're gonna go back to the youtube video here in a second but if you wanna check this tool out if you wanna jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your evaluation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform i hope to see you there all right let's jump back into the interview that's amazing okay so 5 million bucks of ar today uh where were you exactly a year ago do you remember in terms of arr i actually don't remember or mri do you remember mrr middle of last year oh no we focused on arr and uh our it would have been some about a year ago it probably would have been around 3 million okay so you're almost doubling year over year and have you guys decided to bootstrap the business or raise capital uh we've raised capital uh but we've raised a modest amount we've raised 10 million uh series b financing prior to that we raised about three million in uh and c money okay and that series b was this year that was okay ten million and then three the three million was pre or post you joining in 2018 uh that was post uh the company had no arr before i joined so no funding either correct no funding either how did they last 15 years with like no product no revenue i mean how did the founders pay for food um i like to differentiate between selling a license a product solution and a platform right so they were selling licenses they had a good technology that could throw stuff up on a screen but they didn't have an application specified so they weren't good at knowing the needs of a control room operator or what the needs of a retail chain that wanted to have digital signage for menu boards or for whatever it may be and so they didn't optimize so they were just selling licenses and doing it on a perpetual model and they had bootstrapped their way for 20 years wow very interesting um okay that makes a lot of sense so what i mean there might be companies right now that are stuck like this company was in 2018 and they went out and found you but why is a guy like you going to join a company that's been stuck for 20 years well i came into the company with this xav av over ipv vision i mean i i've been working in av uh networks but why not launch it from scratch yourself and 100 because the amount of technical technological depth that's required to have a complete platform play is challenging um there's a lot of protocol work there's a lot of a lot of technology that needs to be integrated and this company had already brought all that technology together you know and and i was able to leverage like the 10 plus years of relevant technology into a product market fit in just a span of two years i see okay but when you're joining obviously you need upside in this right if you're going to be ceo how much equity did you ask for i asked for a certain percentage which is which has been as i've proved out the model as i've converted it to a sas model and gotten the product launched and gotten 500 plus customers my equity position has increased so you said something like i'm making these numbers up okay guys i really want to get you know see a path to me owning 10 percent of the business i'm happy to split that up...