Wunderkindrevenue, valuation & funding

you're gonna love this interview just got done editing it i'm glad i got it live for you i'll be in the comments for the next 30 minutes hanging out answering any questions you have in fact leave a comment below about data points or what you think is going to happen to the company and i will respond to every comment additionally if you're just loving the content click the thumbs up and i will go and check out your profile as well and give your videos some love as well in the meantime enjoy the interview hello everyone my guest today is ryan urban he's the co-founder and ceo of bouncex a marketing technology solution that brings a logged in experience to logged out website visitors across devices under the company bouncex has been ranked number one from play retention and career development by computer world and named the best place to work by cranes and fortune ryan you ready to take us to the top yes all right you so maybe too yeah right we'll see so so first off thanks for letting us host the ceo format your spot you had a nice you had a nice big move so where are you now you're in the trade center correct gotta show people to view real quick turn turn the computer let them check it out you're gonna come with me there you go walk us around look at this view guys if you're not watching on youtube flick over to youtube i'm a hell of a view right good stuff so okay ryan so when you you know you've pivoted in terms of messaging i don't know if the product actually pivoted over over the past couple of years i mean how do you describe it today in kind of a sentence is that right a logged in experience to logged out visitors uh we we have all the messaging so we've been around about six and a half years and and we've we've always been focused on two simple things so i had an e-commerce background some of the other uh co-founders of bounce x i'm always focused on just driving revenue and improving experience so it's over time that the product mix kind of evolved so we started out we started doing uh email capturing being really good at that and everyone knows like our exit intense stuff uh then we're like hey we're clicking those emails let's uh let's do some triggers so we we rolled out like the product abandonment and we started doing some some uh some triggered email and doing that at scale and uh to scale triggers you need identification because less on ecommerce websites less than five percent of people logged in no one creates accounts anymore so it's like okay let's uh let's scale all the triggers with uh identification and um so yeah over time as as uh kind of the business of we uh our messaging has updated so it's basically we've always been doing the same thing we're uh we're on the side of commerce companies drive a lot of revenue and uh we improve experience so what's a lot of revenue ryan typically we're um any business we work with we're able to increase their revenue by say five to twenty percent um within within 90 days and it's usually more in the the 10 to 15 range and that that includes multi-billion dollar companies and the small company our savior company doing say 10 million dollars we're usually more if we have approved business 15 to 25 pretty quickly and uh normally we're uh we're typically a top three channel in some school analytics and oftentimes number one do your sales people have to fight for that attribution or is it crystal clear that's because they installed bouncex well it's uh the attribution is uh based on our client's analytics so it's and also when you you find over attribution when your product doesn't work when your product works it's like you feel it's like hey i'm growing wow yeah what's happening oh yeah so no it's like hey your analytics last click like we'll take last click is not the best way to measure things but you should be running control groups but we're okay cool just whatever is in your analytics you take a percent of the increase or you flat kind of sas model only we're we're uh we're a flat sas kind of shop uh but we we we'll typically do uh three or four month initial terms of pilots which is very unlike most of the market companies who require one or two year initial terms and based on um there'll be a price a monthly price there but we'll have a tiered pricing approach where based on how much increase in revenue it will roll it will automatically go into another 12-month agreement at a certain flat rate sas so i see based on basically our identification rate how we perform during that power period it could lock into a higher rate um so that's uh that's how it goes but it's flat rate tests so when you look at the cohort right now of all the customers you're surveying i mean help me understand like sweet spot an average customer is going to pay about what per month to use the tech or per year yeah there's a there's a median customer um i don't average is like a funky kind of thing so the cohorts i'd say there's there's three three chords so chord number one is the the the big ones the the megalodons as we call it here and those are the seven figure ones so those are the ones that are uh they used to pay us between one and one half million dollars a year now we're getting some that in the two to five million dollar range yeah so that's where we're moving on market but that cohort you call them your megadons they're all paying more than a million a year that's right okay um and then you have uh the bottom coal work which is our minimum is uh 72k here yeah so 6k a month is the company that we do in 5 mil 5 to 10 mil online um and uh so the cohort between paying us between 6k a month and i'd say like like 15k a month that's like that mid market cohort and then um then we have the enterprise core which is basically the 20k to like that 560k so you kind of have four mega lines and then enterprise middle small um i i say three there's like there's strategic and there's like the mega dogs the big strategic ones so yeah and those those really do move a business yeah now dude if you just add up the revenue from just your megalodons that does that make up more than caught 30 of your total revenue it's probably about that it's it's not heavily weighted which is good we we sign a high volume deals we're signing um almost 40 40 deals a quarter so and maybe we're doing two of the big ones a okay it's pretty pretty diverse okay good now two of those two of those big ones a quarter means you're you know new bookings per quarter then as well north of two million dollars at this point our new books in quarter is approaching 20 million yeah yeah way bigger uh okay very good now what's when you look at um when you look at this with something that's growing the fastest are you generally focusing on that that's er yeah yeah yeah when you're looking at what segments growing the fastest revenue the fastest is it that top tier or no are you seeing a lot of movement in the bottom tier and end so uh we should move to named accounts much quicker so we we mapped out our tam and after four thousand named accounts we we used to have uh sdrs and now we kind of have an elevated version that we're all we call it a bda bus development associate so they're prepared on a one-to-one basis with a with a new business rep and well they'll maybe eighty-five eighty percent of the time one rep and twenty percent of their time with another to spread it out a bit uh and they have they'll have like between 40 and 100 named accounts depending mid market will be more towards 100 uh strategically more towards 40 or 50. and whether those are clients or not their goal is to one like use all the resources we have amounts which is themselves the rep our marketing team our alliance team to break into the account at the appropriate level so there's something called we don't do leads we have something called a sales accepted opportunity okay it's the right company we will map out the org and we'll have like a group like three or four people that if the meeting is with that person and the meeting went a certain way then that's that's an approved kind of uh opportunity so we have very high standards on that so it's up to that that business associate to uh to to to get in there and also like post getting in there then it's when we're an active opportunity it's it's their their job to move on the org uh be on calls and meetings kind of take notes help facilitate the process so it's it's like a farming system for our sales team as opposed to like here's some sdrs our cold emailing and called the email email templates and hands over sales it's not that it's a very cohesive unit so as we do that move to name accounts we are just it's not andor it's an end-to-end situation of mid-market's growing enterprise is growing strategies growing mega down's growing um and we're not at the point where we're a default setting there's there's a point in like a sas company where like say salesforce is your crm there there's the default and for email and for ecommerce company exact target was default for a while demandware which both these are salesforce is kind of default if you're a mid-market e-commerce company shop advisor defaults so um so for us uh we are for identifying default but we need to make kind of once one at energy resolution a and a really established channel and that once that channel is a default thing then we're gonna really start to see some some some uh special growth you were serving 250 paid customers back in 2016. what do you know today um we're probably on about a thousand websites so uh is that paid customers though yes it is so okay yeah we don't do anything yeah so okay so thousand paid so i like this approach you've taken right so you essentially said okay i'm gonna go look at all the e-commerce brands with more than x amount of gmv based off some you probably scraped got data from somewhere obviously legally but scraped it whatever paid for it and then you map out the four thousand accounts and you say we want to get all these four thousand accounts you're out a thousand of them right now is that actually reps and bdas to all those accounts and then our marketing and we just have there's there's incentives everywhere to break into those accounts at the right levels so and then we we have some other vertical so we do a little bit of travel system vertical and we have a separate publishing which we we've completely broke out his own business unit and have have had that team completely focused on its own thing and the uk is also it gets treated as own complete business those are that's been really effective for us so it's on sales orders on accounts or it's on marketing so it's and um our our publisher business is growing three actually every year that'll probably do 25 million itself this year so yeah publisher business is like is like forbes what's up yeah we help publish a lot of ways so help them grow their email us help them drive descriptions we'll help them with uh with creating new ad real estate so uh kind of redefining what uh what an ad should be so it's we just take the approach of like hey if we're going to be in the e-commerce world we're just going to be a true partner and be on their side and understand where their business needs and it turns out it's really simple they just need revenue growth and they want to improve customer experience so everything there's just really focuses on that and that only so that then you don't want it doing cool stuff you don't want to rolling out different features it has to hit a certain increase in revenue for us press the ship a product or feature it has to drive increase revenue at least two or three percent depending on which product it is and for example like say retargeting critero's whole business um which they're a multi-millionaire company they only increase for about a half percent so for us even to have a product extension which basically feature it has to be forex better in korea's whole business for us to show something and it has to improve experience too it's not just hey let's go run more sales or send more emails you talk about cri teo correct curtail yeah yeah now you head back i i know you chose not to go the boots dropped right on this thing how much total capital have you raised to date no i i funded it myself at the beginning and then the first year and a half it was funded by the co-founders so yeah and if you were going to join as a co-founder i made you put in even 40k like you had to put in 40k if you're gonna so all the co-founders put in 40k no some put a lot more one put in 190. how many of you are there i'll probably put in 350 to 500 depending how i look at it and um there's how many are you are there there was four four okay four co-founders so all together how much total did you guys all put in like a million two million no that's like um six hundred ago six hundred grand okay now then we took then after we got to about um 70k and mrr so when we got to about the uh a million dollar ar point then we and we had good pipeline then we raised a bit we only raised this is 2013 uh mid-2013 we only raised a million half bucks when we could easily raise like four or five then and so uh i know we basically went the first almost four years on that million half venture money raised we did take a little venture that too uh like some mezda from wti that was great now we were silicon valley bank what year was that the wpi deal um i thought it was probably the next w4 2014 and we just used that to we've we've acquired four companies so some that's used to fund some acquisitions uh we how much leverage can you put to that i mean can you go buy a company if the deal price is 10 million in cash can you get away with putting up a million in equity in the rest in debt you could leverage about uh depending on the strength of your business somewhere between point eight and and one point two times your your error and where you can flex up a little more oh wait of your personal are the company you're buying your cup your personal ar um and then you they're gonna look at the company buying how much money you're losing et cetera so um you don't want to be too lovered but it's uh it's it's really under underrated and you give up min it's the terms are the market's really good for terms you can like right now are you talking like two to six percent kind of interest rate somewhere in that range um when you're there there's gonna be some that are six percent some that are going to be more in the the 10 range if it's if it's uh if you're looking at like no interest for a certain period of time or very low warrant coverage so you might give up like a point about creativity so but if you so um the ones that are taking a little equity they might um or they're say there's no covenants or there's minimal covenants uh so very very very uh kind of friendly term you might be paying more than 10 range but that's still super cheap so then you can raise your paid off or you can keep like rolling if you like if you're doing well so yep you mentioned another venture around in 2017 what was that round for um i i i don't think the the veteran questions aren't really the right questions it's it's when it's when you feel like you that product market fit or you have some marketing channels you can really explode on that's the right time to do it well no i mean by the way ryan i asked because there i mean there are two very different models some people bootstrap the whole time sometimes you get on a vc track and a vc track is just very different right so didn't you raise in 2018 didn't you raise 37 million from battery uh so a good good amount of that one in the balance sheet but not all of that so something some that you use to like buy out some like early investors so uh we we put we put less than 30 on that but we'll end the year with what do you mean you put less than 30 on that well we'll put less we put less than 30 into the business some went out to buy some have bought out some um or just there's some liquidity for some earlier earlier initial yeah so eight million eight million went to secondary early founders early investors and about less than 30 went to the balance sheet that's right and and we're um our cash balance is going up now so we're we're close to probability but we're cash flow positive so we'll bond a year with a good amount of cash so not 30 million but a lot of cash so now we're in a position where we don't need to raise money but like we'll like we're we're coming off our two best quarters ever and now now we uh we we found some places we could really hit the gas and yeah now you did you did another 30 million dollar on a silicon valley bank a year prior correct that was equity um that was a that was a different deadline it was a little less um so someone said silicon valley someone was with someone else then we that's something that we have the option to pull pull some we want so so that wasn't actual dilutive that was essentially like a term like revolver or something um some of those terms some some was based on some space in there are so uh altogether we probably uh have about 60 into uh into the biz and we and then you minus your the cash from balance sheet and we've we've probably deployed somewhere in the 30s got it so you still have like basically 30 cash in the bank you've raised 16 equity and 30 has been spent to grow the business um uh some some within within 20 of that stuff and let's assume that we'll we'll end the year well north of 100 million um are you past that right now or you still need a three months to break that it depends how your counter publisher business so how do you measure it um if you're just looking at clean e-commerce sas we're basically there but um if you count our publisher business and uh then we're we will be well that's them why would you not count the publisher business it's uh it's you could it's just it's if you look at the net revenue that it's it's a it's a nuanced thing so uh depends how how the way gap looks at the revenue from that it changes all the time so um yeah i i look at it how's it say i would say i would be i would be counting every dollar if it's cash coming in the bank i'm counting it but we're this is what we're looking at uh we're looking to basically to have a strong ipo some companies wait till like they're doing 3 400 million some companies go at like 100 million um what we'll probably do is we want to get our net revenue retention which i hate the word i don't use the retention years or client growth but all right our net client growth uh i want that overall to be above one 125. what's it now 130. um it's um it's one of one of the issues we had is we've ran out of stuff to sell our clients we sold through all the things seriously so and ship special products takes like good teams so we're we're uh we're in alphas with two really really special products and uh we're gonna we're gonna acquire something great we could put our id tech on top of it but what's it now so you wanna get 125 what do you get now um it's it's it's not that i think we can we're we we want to we want to improve by 20 i'll put it out okay so you're above 100 you're above 100 though right now um the some cohorts were were much higher than that and some calls were lower so it's um as you move down market your those the numbers are the numbers are lower so that's and also depends on if like we're say if we're partnering with a marketing cloud and we're sending our stuff through uh if we're if we have our product suites all through so depending on the goal works we know the course where we're right now 130 140 and one you want to get more of those cohorts and two like ship more products for those sports so we're just in a course strategy perspective you can just the way that i look at it and this is kind of important to say so you could take your same product move on market you could take your same product with down market you could take the same product with other verticals you could take your your same product and move to other geos right you can do new products to the same to the same market that you're selling right now or you can do new products to new markets anyone those new products new markets is a complete idiot so the route that we've taken and and all these all these things are quite productive actually the most product work is moving down market and it's the worst so we've just taken approach that hey we're going to keep it simple we're going to take our same product move up market we express a little more api approach you always do that you always move on market and you focus your product movement and then we're shipping new products to the same market so our our sweet spot is e-commerce companies doing between five million and a billion dollars in your revenue so the stuff we're shipping now is really focused on companies doing a billion to to 40 billion in revenue online and new products to the same work so and super super narrowly focused on that stuff and when we ship a product it needs to be oh we typically do things that are new to market um but it has to be so bummed up best in class like just so what other metrics do you want to hit besides 125 net revenue retention before you've started an ipa well um we want to have you unpredictable growth so there's this magic number stuff i the difference between growing 40 and 70 is a huge huge there's a could be a huge difference multiple right now growth is looked at as everything um but uh i want and your growth needs to be predictable so that we're flat rate sas flat rates has kind of lowest predictability the network retention will help with predictability because then we know hey if we're say had 200 in an aor and our network session 125 like boom we're going to be at um 240 the next year with no new customers well no new customers depends what's up renewal so yes with with no no new customers here so uh you want to have that and then the other i would recommend only doing usage-based pricing or having shipping products that support usage-based pricing so for us that's going to be some apis service platform as a service stuff some stuff that's maybe an active contact here so a little more of a more kettle approach you can't just make that up and your entry has to support that so make sure when you're shipping products or you're going you're going to acquire a product that it's it's something that supports usage-based pricing that like shopify is at almost a 40 billion on market app they charge a platform fee but transaction fees so as businesses grow they get the benefit of that where where our core business our customers get the benefit of locking it at a rate the rate is really high and it's bagging into a great return on spend number but if their business is double they're just getting much more roi so and that's was helpful in the early days for us to grow but we need other stuff that like hey as our clients grow that there's going to be a step up as well and what's your overall i mean so if you break 100 million in error this year where were you a year ago um well let's talk about where where we want to be i i weaken ipo at like 40 growth um which we're it's that's it growth is something that you do have a lot of control dictating so that's like we're we're cash flow positive so um at the point where i feel really comfortable with product market fit on some of the new stuff we have an acquisition we're gonna make we're probably gonna make our first like maybe not a nine-figure acquisition but an acquisition in the mid-eights uh probably somewhere a company that companies we're looking at that have between 75 and 150 people we're still rolling up a lot of more tech so you're talking like 10 and 30 million an ar-ish kind of range between 10 and 40. yep yeah yeah and it's it's it's going to be it's going to be strategic attack not opportunistic stuff so stuff where we put our id tech on top of and just almost use it as a marketing channel too where we can then go in and like go to all their customers and upsell our stuff in acquisition is a hell of a marketing channel yeah you know you didn't did you do any acquisitions last year uh we did one it wasn't announced okay it was yes i mean were you less than you said you wanted 40 years or your growth i mean were you less than 40 years over your growth the past 12 months um it depends where you look at it we're probably we'll probably finish here more than that um you know i guess but we're it's you have quarters you you have different goals q4 q1 it's that that was the goal you got to get the ships you got to get the ships to for us it's like having a scalable sales team you gotta have the product market in your sales team now we have we we always had like some real strong athletes great performers but like getting that enterprise mid market team to a place where it's a machine where you got the right people in the right process and like we we got that down now so we know we can like hit the gas there in a marketing standpoint um for our top named accounts say our top even top 500 name accounts like we want to go into the ceo level so it's like how do you create these these experiences where co will come out so we just spent about 200k we we rented a private suite of the us open finals we uh we we choppered we choppered these cos in to our basically where sweet was and uh and we also had other ceos out and like so they got to kind of meet some other like ceos or or cmos of big companies they got to go to the dow final at a private suite chopper so like you do and and we only have the top people from our company there so it's an amazing experience and then that way you can get your clients out that's a good good idea to get some of your prospects who were in a in active pipeline out and then new prospects so it's so doing things like that it might cost 200k but it can really scale there's a 500k version of that we have john macron your booth review hanging out with you right so there's so we want to do stuff next year we call the bill clinton budget so have these like million dollar experiences if you want to get the co target out it's like hey like hey we're gonna go get brooklyn to hang out with us but he's gonna instead of like giving a talk he's gonna play the saxophone and he's gonna be in a band with like boys to men and then when mike tyson like literally rents a ring and you get punched in the face by mike tyson yeah yeah i think a child works alone dude and and you're gonna pay us for it that's good hey look yeah so it's like take what cameo does cameo a hundred dollars you get a celebrity to this you go like create a you we want to create a great experience for the celebrities and and presidents but to hang out with like ceos yeah so and that's that's that's where we're gonna do marketing next year ryan we're running out of time here team size today how many people um it's about 400 how many engineers uh we're we've what we've been doing as a business general is um it's been a lesson approach where we're doing smaller focused teams of much more senior teams so as the business evolved we've been hiring way more senior people and putting them in smaller teams so our end team is shipping fast and ever multiply 70 people 70. okay and how many reps are actually carrying a quota sales reps um that's on ramp quarter is much less um that's probably around 20. so it's not that much what about even even an unramped unwrapped um the 40 range 40 range interesting okay very cool man um let's uh let's wrap up here with the famous five number one favorite business book [Music] i it's not a business book the the book that's impacted me the most is uh recently is the the but besides uh andy grove andy grove's savage so andy grove that's easily the best book of all time and the robbers on the uh any danny ireland book is amazing it's like you really get some episode the book that uh has the most impact on me in the last year is the howard stern interviews so i'm sure everyone's watched howard stern reading a transcript of these interviews the one with madonna especially had some impact on me um it's it's like it just changed my mindset it's like people thought like not being a rebel like she was doing things to get a rise of people she was just doing what she thought was right she's always doing what was right and just reading you have the the most special people on the planet and getting read a transcript of an internet heart stern was like getting in the mindset of these special people like lady gaga madonna everybody it was it's it's a donald trump was on their sixth time so it's that was really cool so that was uh that was the best one number two is there a ceo you're following or studying um yeah i've been really following the adam newman stuff i i feel bad um he shouldn't he should not have stepped down yeah i would have thought number three is their favorite online tool you have for building your company beside your own yeah and look like it's it's a just give the right answer elon musk is the most special person uh to exist on a planet over the last 200 years so hands down and no one should ever talk about that guy um let's let's just let's just state the facts here he's no one's doing special things like that and i really appreciate larry allison's back in the helm and getting like trying to build a great product like he's larry ellison's special guy too so you're talking to oracle yeah would you by the way if someone offered you a billion dollars to take your company out before you ipo would you take it okay and when do you think you're an ipa i think it's next year you file when when we have those metrics when we have product market fit on some of the new things where we're usage-based testing so you think you can hit 40 percent of your growth next year and you want to hit that before you really next year i was going to smoke that um so i really want to be at i might go i i don't want to be at less than 50 growth at ibo and uh i also prefer my ebit to not be more than negative 10 yeah i would prefer to be a 65 70 growth i want to be an accelerating growth okay very good uh what's your situation married single kiddos awesome hold on um people read so many books so stop reading books um stop listening to podcasts people listen to much if you listen to something if you read something you got to take action immediately that's it but people read way too much yeah that's great it's stop stop reading books just go do so ryan situation married single kiddos um i'm i'm an independent so independent good no kids running around i i already have the best kids i have a lot of them working so and how old are you...