Founder Interview
How Whatagraph Surpassed $600K ARR with 2,500 Customers in 2019 (Interview with Justas Malinauskas)
- Interview Date
- March 18, 2019
- Interviewee
- Justas MalinauskasCo-Founder and CEO
Company Metrics at Interview Time
ARR (2019)
More than $600K
Customers (2019)
2,500
Year-over-Year Growth (2019)
At least 100%
Team Size (2019)
32
CAC Payback (2019)
3 months
Historical Snapshot
These numbers were reported by Justas Malinauskas during the interview recorded in March 2019 and are a historical snapshot, not current figures. See Whatagraph’s current numbers.
Key Takeaways
- 01Whatagraph surpassed $600K ARR in early 2019, up from roughly $300K ARR a year prior
- 02The company grew at least 100% year over year and was targeting 5x growth starting in 2019
- 032,500 customers were on the platform as of the interview date
- 04The team had grown to 32 employees across Vilnius, Lithuania and Amsterdam, Netherlands
- 05Whatagraph raised 600K euros in a Pre-Series A priced equity round in February 2019 from two European VC funds
- 06CAC payback period was approximately 3 months across customer segments
- 07The company was burning close to $100,000 per month and expected to reach breakeven by late Q3 2019
- 08Cold calls to agencies found on LinkedIn Sales Navigator won the first customers; by the interview, acquisition spend went to paid marketing, SEO and content writing
- 09White-label reporting was the most powerful feature-based upsell, especially for marketing agencies
- 10Whatagraph launched in early 2014 by Justas's own estimate and bootstrapped until the February 2019 raise
Company Metrics at Time of Interview
| Metric | Value | Source |
|---|---|---|
| ARR (2019) | More than $600K | Interview, Mar 2019 |
| ARR (2018) | $300K | Interview, Mar 2019 |
| Year-over-Year Growth (2019) | At least 100% | Interview, Mar 2019 |
| Customers (2019) | 2,500 | Interview, Mar 2019 |
| Team Size (2019) | 32 | Interview, Mar 2019 |
| Engineers (2019) | 7 | Interview, Mar 2019 |
| Funding Round (2019) | 600K euros Pre-Series A | Interview, Mar 2019 |
| CAC Payback (2019) | 3 months | Interview, Mar 2019 |
| Monthly Burn (2019) | Close to $100,000 | Interview, Mar 2019 |
| Annual Revenue Churn (2019) | Not more than 40% | Interview, Mar 2019 |
| Year Founded | Early 2014 (his estimate) | Interview, Mar 2019 |
Growth Breakdown
Revenue
Whatagraph crossed $600K ARR in early 2019, at least doubling from about $300K ARR a year earlier. The company was growing at least 100% year over year and was targeting 5x growth starting in 2019.
Customers
The platform had more than 2,500 customers at the time of the interview. The customer base included small private businesses paying as little as $5 to $10 per month and marketing agencies paying over $100 per month, with agencies being the primary focus.
Team
Whatagraph had 32 employees split across two offices in Vilnius, Lithuania and Amsterdam, Netherlands. Seven of those employees were engineers, with the remainder covering sales, marketing, UX, and design.
Funding and Profitability
The company bootstrapped from its launch, which Justas put at early 2014, until February 2019, when it closed a 600K euro Pre-Series A priced equity round from two European VC funds. At the time of the interview the company was burning close to $100,000 per month and expected to reach breakeven by late Q3 2019.
Growth Strategy
Cold Outreach via LinkedIn Sales Navigator
Justas used LinkedIn Sales Navigator to identify social media and marketing agencies with 10 or more employees in English-speaking North American markets. He would find the name of the relevant specialist at the company, then call the main number and ask to be connected directly to that person, bypassing gatekeepers by demonstrating knowledge of the agency's clients and reporting needs.
Organic SEO and Content
Alongside paid marketing, the team worked on SEO and some content writing. The lower-priced accounts came in only through inbound and served themselves, while the sales team worked the leads willing to pay more.
Paid Marketing Focused on Higher-Value Accounts
Paid marketing went mainly toward leads willing to pay more, such as marketing agencies, and the sales team worked those leads. Justas said the company got its return on that acquisition spend in three months.
White-Label Upsell for Agencies
White-label reporting was the most powerful feature-based upsell. Marketing agencies wanted to present reports under their own brand to clients. White label came with the enterprise-level tier, while the professional tier carried a different set of features.
Moving Upmarket to Enterprise Agencies
Whatagraph started with small businesses and small marketing agencies and was moving toward enterprise-level marketing agencies, building different features for them. Justas said that shift was the main reason customers churned: the small accounts did not want to pay what an enterprise customer would. He put revenue churn at about 4% a month, net of expansion, and annual churn at no more than 40%.
Best Quotes
“So it's more than 600 already.”
“So a year ago, we were basically half of that, so we're growing at least twice a year, so... And we're expecting to grow five times a year starting from this year.”
“So we're working with more than two and a half thousand customers for now.”
“So we bootstrapped till the year 2019, and so we just raised some funding, so it was 600 k euros at the beginning of February.”
“So now we have 32 employees in the company. So we have a developers, numbers of the developers is like seven, and the rest is like sales team marketing, UX UI, designers.”
“So we're getting return on investment in three months.”
“So we're burning now nearly a 100,000 a month.”
“So I think we're going to be breakeven at the late q three. So all the forecasts shows that everything is okay for now. And and I hope that we'll overcome the forecast also.”
What Happened Next
At the time of this interview in March 2019, Whatagraph had just closed a 600K euro Pre-Series A round and was planning to pursue a Series A of at least 4,000,000 euros in early 2020. Justas described the company as burning close to $100,000 per month while investing aggressively in growth, with a breakeven target of late Q3 2019. This page reflects the company as it stood at that moment. Visit the Whatagraph company profile for current figures.
View Whatagraph’s current profile and metricsFull Transcript
Chapters
- 0:01Host Introduction and ARR Overview
- 0:24Confirming Revenue and Growth Rate
- 0:58What Whatagraph Does
- 1:58Customer Count and Pricing Model
- 3:39Pricing Tiers and White-Label Upsell
- 4:17Founding Story and Agency Origins
- 6:04Getting the First Customers via Cold Outreach
- 9:51Fundraising: Pre-Series A Round
- 11:29Team Size and Office Locations
- 11:58Churn and Retention
- 13:25Customer Acquisition Cost and Payback
- 14:20Burn Rate and Path to Breakeven
- 15:15Famous Five Rapid Fire
Host Introduction and ARR Overview
Nathan Latka
00:01Hello, everyone. My guest today is Justas Malinauskas. He founded a company called Whatagraph. He's a serial entrepreneur with more than eight years of experience in business development and sales. He loves data driven sales strategies and SaaS as it is. They've managed to grow Whatagraph from scratch to 30 employees and $500,000 in annual recurring revenue. Justas, you ready to take us to the top?
Justas Malinauskas
00:22Yes. Hello. Hello, Nathan.
Confirming Revenue and Growth Rate
Nathan Latka
00:24Okay. So just to be clear, 30 plus employees today, $500,000 in ARR?
Justas Malinauskas
00:29So it's more than 600 already.
Nathan Latka
00:31600.
Justas Malinauskas
00:31So it's changing quite quite fast.
Nathan Latka
00:33And where... So if you're doing $600,000 in ARR today, where were you about a year ago?
Justas Malinauskas
00:39So a year ago, we were basically half of that, so we're growing at least twice a year, so... And we're expecting to grow five times a year starting from this year.
Nathan Latka
00:50Just to be clear, today you're today you're doing about $50,000 a month or $600,000 a year. A year ago you were doing about $25,000 a month.
Justas Malinauskas
00:57Yes, correct, correct.
What Whatagraph Does
Nathan Latka
00:58This is great, okay, let's take a step back, what does the company do?
Justas Malinauskas
01:02So yeah, so in short what we are doing, so we're visualizing and automating the process for marketing analytics reporting. So for example, marketing agencies have their own clients, and they want to report for them, so they automate all the process, so the data collection visualization part, and sending of the reports to their clients. So actually, they save up to four hours per client per week on the reporting.
Nathan Latka
01:27Just to clear, you're selling
Justas Malinauskas
01:28focus on the performance, yeah.
Nathan Latka
01:29You're selling to marketing agencies exclusively?
Justas Malinauskas
01:32So we're selling to marketing agencies, brands also as it is. So usually it's bigger brands because they have a bigger corporate level on their company, so they need to report to heads or they need to report to their departments. So actually it needs to be a bigger company, but also we're used by private businesses who wants to more, let's say, in a simple way to understand the marketing performance of their marketing channel.
Customer Count and Pricing Model
Nathan Latka
01:58How many customers are you working with today?
Justas Malinauskas
02:00So we're working with more than two and a half thousand customers for now.
Nathan Latka
02:032,500?
Justas Malinauskas
02:05Yeah.
Nathan Latka
02:05Okay. And then what do they pay on average per month?
Justas Malinauskas
02:09So on average, our account deal size, derives because you know we have private accounts and we have business accounts on which we're focusing most, as you mentioned, the marketing agencies. So marketing agencies are paying more than 100 per month, and on average, and the small deals, I mean, the private businesses are paying, it depends because it can be $5 or $10 per month. It depends how much sources they're using, so you know.
Nathan Latka
02:35Okay. Just to be clear though, if do an average, you're doing $50,000 a month right now in revenue divided by 2,500 customers, each one pays about $20 a month.
Justas Malinauskas
02:42Yeah. So if we collect them altogether, but...
Nathan Latka
02:45Yeah. That's what an average is. Right? So we put them all together, it's $20. I totally understand that there's a wide range. Let's let's dive into that. So someone paying you $5 a month versus a $100 a month, what are you upselling them typically? The number of seats or what?
Justas Malinauskas
02:58Actually, the the smallest clients are like only about 5% of our client base, you know.
Nathan Latka
03:05My question is what you upselling against? Why are people Actually paying
Justas Malinauskas
03:11clients are paying for us depending on how much data sources they have. For example, if they have five Facebook accounts on their their business side, so they're paying for those five accounts. If marketing agency has 100 clients with five data sources each, they're paying for 500 data sources.
Nathan Latka
03:27Okay. It's like very simple pricing. So number of data sources, anything else?
Justas Malinauskas
03:31Yep. And also seats sometimes but usually they're quite covered with the five seats which we are bringing for them at the beginning of the deal.
Pricing Tiers and White-Label Upsell
Nathan Latka
03:39Okay and what about due to any feature based upselling?
Justas Malinauskas
03:42Yeah, so feature based upselling it varies on the tiered subscription based so actually if you're buying for example our professional tier, so you're getting one type of features and if you're buying for example you know enterprise level solution, so you're getting white label and etc. So actually where you can buy sort of like feature by feature, but you can buy a different tier which includes, for example, white label.
Nathan Latka
04:10Okay. Interesting. So like white label is your most powerful kind of feature based upselling thing?
Justas Malinauskas
04:14Yeah. Of course. Because marketing agencies want to white label their reporting.
Founding Story and Agency Origins
Nathan Latka
04:17Yep. Very good. Okay. Take me back to the beginning of this thing. When did you launch? What year?
Justas Malinauskas
04:21So we launched five years ago. So it was early twenty fourteen, I guess.
Nathan Latka
04:27Okay, 2014. And tell me more about you, man. I mean, what were you doing in 2014? You said, know what, I'm gonna go launch a company.
Justas Malinauskas
04:32So yeah, so I was doing marketing. I had a marketing agency back in Europe, so we were focusing mainly on big clients who needs full spectrum of the services, so for example doing the marketing of the performance, I mean performance marketing plus also branding and you know web development, but our main core was of course performance marketing, so I saw that we're spending too much time on the reporting and the clients still don't understand what we're
05:03presenting to them, so I saw the niche that we could provide reports with infographics, so actually people, they were able to understand the data more, let's say, friendly way, and of course in a faster time. So it was win win from both sides. So we don't need to spend any time preparing reports, we can only spend time for explaining them the So
Nathan Latka
05:33just to be clear, you launched an agency and then you basically built software on top of the agency?
Justas Malinauskas
05:40Yeah, actually it was a tool for ourselves, but then our clients started recommending us
Nathan Latka
05:45Got it. How big did you how big did you build the agency to in terms of revenue before you went all in on the software?
Justas Malinauskas
05:52So actually it was quite small agency, so it was like not more than 200 k a year on the revenue side.
Nathan Latka
05:59Okay.
Justas Malinauskas
06:00So and I exited that company, so...
Getting the First Customers via Cold Outreach
Nathan Latka
06:04How did you get the first 10 customers on Whatagraph?
Justas Malinauskas
06:08So it was like quite easy because I just called some random companies which I thought need our solution. So before I started building the platform, which we have now, so before I landed the client, so actually they said yes, and they are ready to transfer the money. So then I said, okay, sorry, but I don't have How did
Nathan Latka
06:28you how did you find them?
Justas Malinauskas
06:30So usually, we still do that, so we find companies on LinkedIn, but back in those days also I did the same. So I used LinkedIn for searching for the company.
Nathan Latka
06:39Okay, give very specific though. You go on LinkedIn, what do you search for?
Justas Malinauskas
06:43So actually I'm using Sales Navigator all the time, so you're able to build the search on your needs. So for example, you're searching for social media agency, which is more than let's say 10 or 20 employees, so that means they have more than 100 or 150 clients, so that means they need to do the reporting because they're big, and of course I was searching for English speaking countries of course, and of course, I was searching for
07:14North America more because they value the time more also.
Nathan Latka
07:18So you find one of these targets, a social media agency, English speaking 10 to 20 employees in North America, what do you then do to reach out?
Justas Malinauskas
07:26So actually, did just random phone phone call to the company.
Nathan Latka
07:30How'd you get the phone number?
Justas Malinauskas
07:31So you can find on the website.
Nathan Latka
07:34Okay. So you would just go to the website from LinkedIn, you'd look up you'd look up that and then you hit the secretary. How do you get by the secretary?
Justas Malinauskas
07:40Yes. So it's quite easy. I just got to the account manager and that's it. I actually don't remember because you know, when they do the calls, you don't remember your script because it was...
Nathan Latka
07:50Hold on. So you call me, you call me, I pick up and you say, I wanna sell you something and I say, oh, this is secretary, the we're not interested.
Justas Malinauskas
07:57Yeah. I'm not going with the with the selling topic.
Nathan Latka
08:00So again, me, just as we're trying to learn here, tell me what tell me what you said.
Justas Malinauskas
08:04Yeah. So actually, you know, before you do your homework, so first of all, you search for what kind of clients they're working with, you work, you review their portfolio first, and secondly, you need to research all your your target companies employees. So for example, I'm targeting for PPC specialists, so basically I called up like, I don't remember exactly the number but it was like more than 100 companies which I called up. Of course I didn't get
08:29through with all the secretaries, but sometimes I just got easily like bring me to for example Nathan because he's a specialist in PPC. So I'm just calling up. I want to speak with Nathan and she's...
Nathan Latka
08:42So hold on. You'd call the company, the secretary will pick up. You would know the name of the PPC specialist at the company. You'd ask the secretary to connect you to that person.
08:51Yeah. And why? She's gonna say, well, do you have a meeting scheduled?
Justas Malinauskas
08:55Yeah. So I'm not I'm not... I don't have a meeting scheduled, but, we were speaking earlier or something and, you know,
Nathan Latka
09:01So we just you you would you would push it a little.
Justas Malinauskas
09:05Yeah, I'm not like lying still, but you know, or also sometimes I use the line that you know, I'm able to save some time on the reporting, and usually there is like, if the agency is still like 10 or 20 employees, the secretary is not like a real secretary, she's more like you know also doing some stuff in the office, and sometimes it happens that she's doing the reporting also. So I said like okay, so I
09:31have a solution for reporting, and I think you do that, and you want to save the time. So because really, I prepared the homework, and of course, I knew the back doors and also in the in the agency, what's happening backstage when you need to prepare the reporting.
Nathan Latka
09:46Mhmm. Interesting. Okay. Talk to me about the company today. So have you bootstrapped or raised capital?
Fundraising: Pre-Series A Round
Justas Malinauskas
09:51So we bootstrapped till the year 2019, and so we just raised some funding, so it was 600 k euros at the beginning of February.
Nathan Latka
10:05So it's about $750,000 US dollars?
Justas Malinauskas
10:08Yeah. Yep.
Nathan Latka
10:08Did you do
10:09it on a convertible note or a priced equity round?
Justas Malinauskas
10:11It's priced equity round. It's pre series a. So we're now focusing on series a at the beginning of two thousand twenty.
Nathan Latka
10:21And how much do you hope to raise in the series a?
Justas Malinauskas
10:23So in series a, our focus is to reach at least 4,000,000 investment in euros.
Nathan Latka
10:31Okay. Sorry. So 4,000,000 is what you wanna raise in q one of twenty twenty?
Justas Malinauskas
10:35Yeah.
Nathan Latka
10:35And what valuation would you hope to raise that at?
Justas Malinauskas
10:38So it should be more than 20 mil.
Nathan Latka
10:41Okay. Got it. 20,000,000 pre.
10:4520,000,000 pre money?
Justas Malinauskas
10:47Yes.
Nathan Latka
10:47Okay. And then backtrack to where you were today. So when you just did the current raise, what was that at? Like a 5 or 10,000,000 pre?
Justas Malinauskas
10:56So you mean about pre-Series A?
Nathan Latka
10:59Yeah. So the money you just raised is $700,000.
11:01What valuation? So
Justas Malinauskas
11:03this valuation I can't disclose, sorry. That's according to our negotiation with the VC fund.
Nathan Latka
11:09Who the hell cares about the VC fund? You're the CEO. I mean, give me a range. Are you talking like a $5,000,000 ish, something in that range?
Justas Malinauskas
11:15Yes. It's in this range.
Nathan Latka
11:16Okay. Got it. Good. And then did you raise from folks overseas or did you raise from US investors?
Justas Malinauskas
11:22From European investors.
Nathan Latka
11:24Oh, very good. Okay. Great.
Justas Malinauskas
11:26Yeah. So it's two VC funds back here in Europe.
Team Size and Office Locations
Nathan Latka
11:29Okay, great. And then walk me through the team size today. How many people?
Justas Malinauskas
11:35So now we have 32 employees in the company. So we have a developers, numbers of the developers is like seven, and the rest is like sales team marketing, UX UI, designers.
Nathan Latka
11:48Okay, 32 people. Where is everyone based?
Justas Malinauskas
11:51So we have two locations. One is Lithuania, Vilnius, and another one is Amsterdam in The Netherlands.
Churn and Retention
Nathan Latka
11:58Okay, good. And then churn is critical in a SaaS company. What's your churn today?
Justas Malinauskas
12:03So our churn is quite still low. It's about 4% on the revenue side.
Nathan Latka
12:08Revenue churn per month?
Justas Malinauskas
12:10Yep.
Nathan Latka
12:10And is that gross or net?
Justas Malinauskas
12:13It's net.
Nathan Latka
12:14It's net, so that adds back expansion revenue?
Justas Malinauskas
12:17Yep.
Nathan Latka
12:17Okay, got it. So you're churning about 48% of your revenue every year?
Justas Malinauskas
12:25Actually, no, because we are able to retain the customers after some time also.
Nathan Latka
12:30Well, just said 4% revenue churn per month. You multiply by 12, it's 48. Yeah.
Justas Malinauskas
12:37So... Yeah. So I know I calculated actually the yearly churn, so it's like really fast number. But I have a monthly number on my on my on my head already.
Nathan Latka
12:47Okay. Oh, so you don't know what what annual churn is?
Justas Malinauskas
12:50Yeah. So the annual churn is not more than 40%.
Nathan Latka
12:54Okay. So 40% kind of annual revenue churn. And then why are people churning if they do churn? What are they... Why are they leaving?
Justas Malinauskas
13:00So actually the main reason why they're churning as we did some research, as we are focusing more on marketing agencies because we started with, like, more small businesses or small marketing agencies. We're now moving on more to enterprise level marketing agencies. So we are doing some of the different features for them, and small ones, you know, don't want to pay that much what enterprise is going to pay. Mhmm.
Customer Acquisition Cost and Payback
Nathan Latka
13:25Interesting. Talk to me about how you're getting new customers today. So what's your fully weighted CAC to get a new $20 a month customer?
Justas Malinauskas
13:32Yeah. So actually, we're with $20 customers but different. They're only inbound and self-service, but mainly we're focusing on the leads for coming in and willing to pay more than $152,100 a month. So we're working with the sales team on that, and also marketing is paid mainly for that.
Nathan Latka
13:50So what is what is fully weighted CAC though, even if it's a $100 a month account?
Justas Malinauskas
13:56Yeah. So we're getting return on investment in three months.
Nathan Latka
13:59In three months?
Justas Malinauskas
14:01Yeah.
Nathan Latka
14:01Okay. So so whether it's a $100 a month account or a $20 month account you're signing up, you're spending whether, you know, $60 or $300 to get them in.
Justas Malinauskas
14:08Yep.
Nathan Latka
14:09So... And where are you spending that money besides head count and salary?
Justas Malinauskas
14:13So only we're working with paid marketing and, of course, SEO and and some content writing.
Burn Rate and Path to Breakeven
Nathan Latka
14:20Okay. Good. Are you... I imagine you're burning capital today. Right? Because you just raised... You're investing in growth?
Justas Malinauskas
14:26Yep. However, we're investing only in growth. So actually, our company was able to finance itself. So we're using all the money for only marketing and upscaling the company.
Nathan Latka
14:36Well, you're not financing itself, though. You just raised $750,000 which I imagine you're reinvesting now, right?
Justas Malinauskas
14:41Yes.
Nathan Latka
14:41So how aggressive are you being? Are you burning like $10,000 a month or a $100,000 a month?
Justas Malinauskas
14:45So we're burning now nearly a 100,000 a month.
Nathan Latka
14:50Okay. But you're happy to do that because you have, you know, still have 500 in the bank, right?
Justas Malinauskas
14:54Yeah. Course.
Nathan Latka
14:55Yeah. Very good. When... And then you wanna try and hit breakeven before q one when you go look to do your next round?
Justas Malinauskas
15:00So I think we're going to be breakeven at the late q three. So all the forecasts shows that everything is okay for now. And and I hope that we'll overcome the forecast also.
Famous Five Rapid Fire
Nathan Latka
15:15Very good, Justas. Let's let's do. Yeah. We're out of time. Let's wrap up with the famous five. Number one, what's your favorite business book?
Justas Malinauskas
15:21Oh, so I think it's Scaling Up by Eric Ries.
Nathan Latka
15:26Number two, is there a CEO you're following or studying?
Justas Malinauskas
15:30I think
15:33it's really interesting question. The first person is definitely me because I'm always reviewing what I'm doing, but the next one, I don't want to be very, you know
Nathan Latka
15:45Name a CEO, Justas.
Justas Malinauskas
15:47Yeah, so Elon Musk.
Nathan Latka
15:48Okay, number four, number three, what's your favorite online tool for building the company?
Justas Malinauskas
15:55For now, definitely
15:58Baremetrics, it's one of the best tools to track the performance of the company.
Nathan Latka
16:02Number four, how many hours of sleep do get every night?
Justas Malinauskas
16:06Usually seven, eight hours. It's a must for me.
Nathan Latka
16:09And what's your situation? Married, single, kids?
Justas Malinauskas
16:12Single.
Nathan Latka
16:13Okay. No kiddos. And how old are you?
Justas Malinauskas
16:16I'm 28.
Nathan Latka
16:1720 or 28?
Justas Malinauskas
16:1828.
Nathan Latka
16:1928. Okay. Last question. What do wish your 20 year old self knew?
Justas Malinauskas
16:27Actually, don't know.
16:29Nothing. Nothing. You you mean what I what I knew when I was 20?
Nathan Latka
16:34No. What's something you wish you knew when you were 20?
Justas Malinauskas
16:37Oh, okay. So... Sorry. I missed the question then. So I wish I knew that you need to start earlier on the, you know, international SaaS business because I really love the SaaS, and I'm really following the... All the SaaS industry. So also shout out for SaaS community. So I think it's one of the best things which I found also.
Nathan Latka
17:00Guys, he just raised $750,000 on somewhere near a $5,000,000 pre money evaluation, helping companies and agencies understand their marketing and analytics with Dashboards. 2,500 customers paying $20 a month, doing $50,000 a month right now in revenue. That's $600,000 in ARR. Use LinkedIn Sales Navigator early on to target their first 10 customers to ultimately scale, doubling year over year. Now again, burning about a $100,000, that's net burn. A $100,000 net burn per month, but they have plenty
17:26of cash in the bank. Team of 32 in Lithuania and The Netherlands, 4% revenue churn per month, 40% annual revenue churn, getting paid back on their CAC in about three months as Justas looks to scale before doing his next round in q one of twenty twenty. Justas, thank you for taking us to the top.
Justas Malinauskas
17:42Thank you.