How Versium CEO Chris Matty grew Versium to $59.5M revenue and 500 customers in 2024.

hello everyone my guest today is Chris Maddie he is leading a company called versum which delivered which delivers automated predictive analytic Solutions which provide actionable data intelligence faster more accurately and at a fraction of the cost of hiring expensive data science teams or Professional Services organizations Chris are you ready to take us to the top I'm ready all right we're gonna talk everything versum today tell me about the company what do you guys do and what's your Revenue model how do you make money yeah so we are we're a data technology company we help marketing organizations become highly data driven what that means is we help them use data more effectively to drive all their marketing initiatives uh ultimately to drive significant improvements in marketing RI okay and how do you so there's a lot of tools out there that will do the Predictive Analytics the biggest challenge is churn goes through the roof because you can't get them to actually take the data you give them and make actionable insights on it that improves their bot you know their top or bottom line so what what do you have to do in the first month to make your your new users sticky yeah you know the first step is and there's really three blocks to what we do but the very first thing any organization has to do is fix the existing data they have for example 40 to 50% of data in a CRM is not usable it's old it's outdated it's not formatted properly there's errors there's missions so there's a data is a mess lots of times data resides in Silo so the first step is you got to get in and fix the data that makes it more actionable it allows you to reach your existing customers and Prospects better and it's the first step before you can do anything that has to do with Predictive Analytics machine learning or or arf intelligence because if you got garbage going in you get garbage coming out so the first step is fix the data the next step we do is we enrich the data so we own over 1.5 trillion data attributes and we're able to Overlay that onto the existing data the organization has that helps the company understand who their customers are better makes that it helps them understand their behaviors their characteristics we use clustering to create new segments that were previously not uh known or identified that have common characteristics this then allows you to personalize your messaging and then the last thing is we take those combined data sets and we train our artificial predictive models so that we can determine uh or build a predictive model to predict who's most likely to buy the products and services of our customers in the future and we use those models to guide the marketing effort so first we fix it and clean it then we enrich it and then we model it great and give me the backstory here so so actually before I go to that in terms of when you launch the company customers that are paying for this are you talking kind of no touch high volume sales model or very much Enterprise based what's the average customer paying per month we've got two different tiers right but small medium well three different small medium and large we've got a self-service tool with the average price point is a thousand then we go to sort of mider per month yeah per month mid-tier Market which where it's five to seven and then the big Enterprise grade which is you know 20 to 30 grand based upon volume of exercising our platform which would generally ties to volume of customer records okay got it so so I mean if I was if I was to just because I don't we don't have time to go on every customer cohort but if I forced you into an average is it closer to a grand a month or two grand a month 10 grand 10 grand a month 10 grand a month okay so this that's very much that's a price point where you can afford to have an inside sales team you can afford to have them spend six to 12 months closing the deal it's a very different model than a you know thousand a month no touch sale that's right done we've productized this so we've automated the ability to do all of these things automation is a key theme here so we're not doing Professional Services we run a high gross margin and so we've we've set out to productize uh all of these different data Technologies which allows us to operate at scale very effectively and cost effectively to our customer yeah sorry what I meant in terms of putting touch on each sale was was before they've purchased right so what the sales organization looks like what is your team size today and how many of those folks are focused on sales we got a pretty small team uh on the sales side right and so primarily because we're using a channel strategy to go to market we're working with marketing agencies and helping them to help their clients become more data driven so that they Ure their spend goes through the so we are the data technology partner to agencies so we launch a business development effort to work with agencies as well as consulting services companies to help take our solutions to Market we do have a small direct sales team but uh we're seeing substantial growth using Channel strategies and partners to get to Market and so Chris what is the team size today uh six people six people okay great and then when was year one year one was 2012 2012 okay very good and then have you bootstrapped this or have you raised Capital we've raised two seed rounds so a very capital icient uh $4.2 million over two years the last round was two years ago and we've just notched our seventh consecutive quarter of being profitable so we pretty much bootstrapped it we didn't take big institutional money hey Chris congratulations I'm I wish more people celebrated folks like yourself you need your own Tech crunch headline you know we turn down a billion dollars of VC money because we're profitable right that's that would be much better well you know you control your destiny when you're not burning so that's right okay good so bootstrapped you raised how many customers are you working with today oh gosh we've got hundreds of customers we got 300 companies using our apis directly we've got 250 to 300 on a monthly basis that are the small mid-tier folks and then we got about 50 Enterprise clients that are paying us the bigger bigger money okay so so if you just add it up just because I adding all those together in my head I can't do quickly if you have just total customers you sounds like about 400 500 something like that 500 per month roughly yeah 500ish okay and I mean can I take that 500 times the $10,000 month number you just gave me and kind of back into a revenue figure of about five million a month or no no you'd have to go lower than that so when you think about the volume of numbers uh the the the lower end skews that considerably so when I said 10,000 that's probably not accurate average on on a per per customer basis okay got it well if we go back down even to your minimum right of a grand per month it sounds like that was what you got to spend to get started that's still about 500 Grand in revenue is that more accurate in terms of your monthly it's pretty pry pretty accurate we're 7even million run rate right now oh great targeting about n million 8 to n million this year that's great and take me back give me a sense of growth so you're at 7even million right now where were you in July of 2017 in terms of run rate so we pretty much we've grown about 50 to 60% year-over-year so if we go back about a year ago we were probably I don't know four or five million run rate got it so call it maybe 280 something like 280 Grand a month yeah maybe 300 yeah yeah that's good and where do most that most that growth come from is it coming from expansion revenue on accounts you already had or brand new accounts coming in it's coming from working with agencies and the reason being is that the agencies are getting beaten up by the Consulting Services Company right centure is the fastest growing digital agency now the reason for that is that they're going in and solving these data problems and using data to guide the marketing effort we see two three 400% Improvement in marketing Roi when we start helping organizations become datadriven and so what's happening is that these you know cognizant Whi Ros entur cap Geminis are going in solving data problems but all those organizations that created digital agencies now so the traditional digital agency is getting beat up pretty bad we come in and we say we will be your data technology part we will solve data problems solve data silos and use our engine to drive your marketing targeting and uh it's a great winning strategy and they're embracing us quite quite rapid Chris what I was trying to get up there though is are you driving more growth over the past year from expanding customer accounts you already had upselling them or bringing on brand new accounts from Channel Partners brand new accounts abut brand new from Channel okay and what's the kickback you give the channels why do they do it oh they make couple of reasons right in the casee of the the consulting services company they make avilable hours wrapping Professional Services around around our capabilities but we also provide a revenue share on an annuity basis for everything that comes through the pipe right so when you hit the versan platform for data data cleansing or for data enrichment or for prot targeting you know it's it's ongoing SAS based recurring Revenue model and we're able to share in that Revenue ongoing with those Partners so what is that like 30% what's the percentage 30 to 50% yeah 30 to 50 okay so if I back into your CAC right if you're acquiring a 12 Grand a your customer or a grand...