Interview
How YCharts Reached $8M ARR and 4,000 Customers While Cutting Annual Churn to 15% (Interview with CEO Sean Brown)
- Interview Date
- February 13, 2019
- Interviewee
- Sean BrownCEO
Company Metrics at Interview Time
ARR (2018)
$8M
Customers (2019)
4,000
MRR (January 2019)
north of $700K
Annual MRR Churn (2019)
15%
Team Size (2019)
46
Historical Snapshot
These numbers were reported by Sean Brown during the interview recorded in February 2019 and are a historical snapshot, not current figures. See Ycharts’s current numbers.
Key Takeaways
- 01YCharts finished 2018 with a little north of $8M in ARR
- 02The company had 4,000 customers in early 2019, with more than half being professionals
- 03MRR in January 2019 was north of $700K; a year earlier it had been 35% lower
- 04Annual MRR churn was 15%, down from the high thirties a few years earlier
- 05CAC payback period was approximately eight months
- 06Average customer lifecycle was approximately 58 months
- 07The company raised $14.5M total across three rounds, with the last raise in 2015
- 08YCharts had 46 employees, with two thirds based in Chicago and most of the rest in New York City
- 09Pricing ran from $1,200 per year for students and retail investors to $4,800 per year for institutional users
- 1075% of growth came from new logos and 25% from expanding existing accounts
Company Metrics at Time of Interview
| Metric | Value | Source |
|---|---|---|
| ARR (2018) | $8M | Interview, Feb 2019 |
| MRR (January 2019) | north of $700K | Interview, Feb 2019 |
| MRR a Year Earlier (vs. January 2019) | 35% lower | Interview, Feb 2019 |
| Customers (2019) | 4,000 | Interview, Feb 2019 |
| Annual MRR Churn (2019) | 15% | Interview, Feb 2019 |
| CAC Payback Period (2019) | 8 months | Interview, Feb 2019 |
| Average Customer Lifecycle (2019) | 58 months | Interview, Feb 2019 |
| Team Size (2019) | 46 | Interview, Feb 2019 |
| Total Funding Raised | $14.5M | Interview, Feb 2019 |
| Year Founded | 2009 | Interview, Feb 2019 |
| Entry-Tier Pricing (2019) | $1,200 per year | Interview, Feb 2019 |
| New Logo Share of Growth (2019) | 75% | Interview, Feb 2019 |
| Expansion Share of Growth (2019) | 25% | Interview, Feb 2019 |
Growth Breakdown
Revenue
YCharts finished 2018 with a little north of $8M in ARR and was tracking north of $700K in MRR in January 2019. Sean Brown described the company as self-funded and cash flow positive, targeting the $10M ARR threshold.
Customers
The company had 4,000 customers in early 2019, with more than half being professionals such as wealth advisors. The remaining customers were retail investors or other types. Seventy-five percent of growth came from new logos and 25% from expanding existing accounts through higher tiers or additional seats.
Team
YCharts had 46 employees at the time of the interview. Two thirds were based in Chicago, most of the rest were in New York City, and a small number worked from home offices or other locations.
Profitability and Funding
The company raised $14.5M across three rounds, with the last raise completed in 2015. By early 2019 YCharts was cash flow positive and had not raised money since.
Growth Strategy
Cold Outreach and Inside Sales
YCharts ran an inside sales model combining outbound and inbound efforts. SDRs qualified prospects and passed them to account executives who ran demos and worked toward a close.
Focus on a Defined User Persona
Sean Brown credited staying focused on a specific user persona as the key to reducing churn. By deeply understanding the workflows of wealth advisors and retail investors, the team built features and services that kept customers engaged and loyal.
Competing on Value Against Premium Terminals
YCharts positioned itself as delivering roughly 90% of the functionality of Bloomberg or FactSet at approximately one fifth of the price. Its top pricing tier was aimed at professionals who might otherwise be using a Bloomberg terminal, offering almost all the same capabilities through an easy mobile and web interface.
Expanding Existing Accounts
Twenty-five percent of growth came from expanding the footprint within existing customers, either by moving them into higher pricing tiers or by selling additional seats across an institution after initial adoption by a few users.
Product-Led Onboarding with Appcues
YCharts used Appcues to digitize the customer onboarding experience, allowing new users to learn the platform without requiring a human guide. Sean Brown named it as his favorite online tool for building the company.
Best Quotes
“We're cash flow positive and quickly moving to the $10,000,000 ARR threshold. Just crossed about, we finished 2018 a little bit north of 8,000,000 in ARR, so we are self funded.”
“4,000, little bit more of half of them are professionals. The rest are either retail or a smattering of other types of customers.”
“Exactly a year ago, we were 35% below that.”
“Churn right now is about 15% annually coming down from a few years ago. Were in the high thirties.”
“My secret to sticky is be focused. Don't try to be all things to all people. If you really know that user persona and you understand their workflows really well, you can put great features and great services in your offering and compel them to stay with you.”
“Payback period is about eight months.”
“Our retention, for our average customer life cycle is about fifty eight months. So long and short is once we have engaged with a customer, there's a real good chance they're going to stick around with us and a real good chance they're going stick around a long time.”
“We are inside sales. We are a mix between outbound and inbound where your typical SDR capability which is assess the prospects and then pass it on to an account executive who will work through a demo, a free trial, and then potentially a close.”
What Happened Next
This interview captured YCharts at a specific moment in February 2019, when the company had just crossed $8M in ARR and was targeting $10M. The figures here reflect what Sean Brown reported at that time and should be read as a historical snapshot. Visit the YCharts company profile on GetLatka for the most current available metrics and funding information.
View Ycharts’s current profile and metricsFull Transcript
Chapters
- 0:00Introduction and Background
- 0:34Who YCharts Customers Are
- 0:56How Customers Use YCharts
- 1:47Pricing and Tiers
- 2:32Company Timeline and CEO Transition
- 3:12Funding History and ARR
- 3:41MRR and Year-Over-Year Growth
- 4:01Customer Count and Growth Mix
- 4:38Churn, Expansion and Going Upmarket
- 6:48CAC Payback and Customer Lifetime
- 7:19Team Size and Locations
- 7:36Sales Model
- 8:00Competitive Landscape
- 8:37Famous Five
Introduction and Background
Nathan Latka
00:00Hello, everybody. My guest today is Sean Brown. He's building YCharts, which is a rapidly growing web based financial data platform that helps investors make smarter decisions. Customers gain affordable access to comprehensive data, powerful visualization, and advanced analytics. The company is the one stop shop for North American equity, mutual fund, ETF, and market data analysis. Alright. Sean, you're ready to take us to the top? I am. So are you ex trader or what? How'd you get into
00:23this?
Sean Brown
00:24>> A long history in the financial services space starting from being a software developer out of school for financial services and then continuing on through running a few startups in the space.
Who YCharts Customers Are
Nathan Latka
00:34Interesting. Okay. So walk me through who your customers are. Is it mainly kind of ETFs, mutual funds, or do you get into, the VC private equity kind of stuff too?
Sean Brown
00:43>> So think of us like a Swiss army knife for investment research. And that Swiss army knife is perfect for wealth advisors and retail investors. So me and you, and those who might manage the money of very wealthy me and use.
How Customers Use YCharts
Nathan Latka
00:56And how would they how would they use YCharts to do that?
Sean Brown
00:59>> Okay. So a lot of different tools. One of the ones is in our name charts. So great visualization to derive insights, communicate insights, great ways to screen securities down to a few that you're interested in. Awesome ways to quickly do deep dive research on whatever might be of interest to you. And you know, a lot of ways to keep you abreast on markets, dashboards, news, etcetera.
Nathan Latka
01:25All public, publicly traded companies?
Sean Brown
01:28>> Publicly traded mutual funds, ETFs, and stocks.
Nathan Latka
01:32Okay. So just to be clear, your dataset is all pulling from private, public companies.
Sean Brown
01:36>> Yeah. We are, we are a tools company. We take the best data in the market, give it a personality through some great tools, and then have some amazing customer support. But we are not a data company.
Pricing and Tiers
Nathan Latka
01:47I'm talking about like, there's a lot of companies that will do this kind of thing for private, especially private SaaS companies. You're not private. You're only doing public markets. We're doing public markets. Okay. Correct. Very good. Alright. And then help me understand when people pay for this thing. On average, what are they paying per month?
Sean Brown
02:00>> Anywhere between 1,200 per year to 4,800 per year.
Nathan Latka
02:05Okay. Between 1,200 and 4,800. And what are the difference in those price points?
Sean Brown
02:08>> Usually the the high end price point is for those that may currently be using a Bloomberg terminal, probably an institutional investor. It's all the bells and whistles available, all the data, every capability. At the low end is more tailored towards students or retail investors, and it has what we think is the perfect features for them, but it is short of what you'd get as a professional.
Company Timeline and CEO Transition
Nathan Latka
02:32Interesting. Okay. And then put this on a timeline for me. When did you launch it?
Sean Brown
02:36>> 2009, the company came into being. I've actually been on board for two and a half years.
Nathan Latka
02:41Okay. So what happened two years ago where you where they needed a CEO to come in?
02:47Sean, what happened two years ago when they needed a CEO to come in?
Sean Brown
02:52>> Was a stage where they needed somebody to take the company to the next level. The founder is still a board member, a good friend of mine, and helps in a great visionary capacity. So it was more of a blending perfect time, an inflection point for the company.
Nathan Latka
03:08Did you come in with a VC round like you and EIR somewhere or no?
Sean Brown
03:11>> I didn't.
Funding History and ARR
Nathan Latka
03:12Okay, so is the company bootstrapped today?
Sean Brown
03:14>> No, the company has raised 14,500,000 over three rounds. And the last time we took on any money was 2015.
Nathan Latka
03:22Okay, that means you're raising right now or you're selling. Which one is it?
Sean Brown
03:25>> Neither. We're cash flow positive and quickly moving to the $10,000,000 ARR threshold. Just crossed about, we finished 2018 a little bit north of 8,000,000 in ARR, so we are self funded.
MRR and Year-Over-Year Growth
Nathan Latka
03:41And what did do last month?
Sean Brown
03:43>> Last month, we'll do use somewhere north of 700 k in MRR.
Nathan Latka
03:48Okay. And what where were you exactly a year ago?
Sean Brown
03:52>> Exactly a year ago, we were 35% below that. And I Okay.
03:57>> So it's about call it five seventy, something like that.
Nathan Latka
03:59Yep.
Sean Brown
04:00>> Okay. Good. So healthy growth.
Customer Count and Growth Mix
Nathan Latka
04:01And then how many customers are you working with today?
Sean Brown
04:04>> 4,000, little bit more of half of them are professionals. The rest are either retail or a smattering of other types of customers.
Nathan Latka
04:11Interesting. Okay, so where's most growth coming from? Expanding old cohorts or adding new logos altogether?
Sean Brown
04:18>> Really good question. It's a balance of the two. Probably 75% of the growth is new logos, 25% is from expanding the footprint. And we either expand the footprint by selling them into higher tiers, or we've so tickled a few people in an institution that we're able to take on larger number of seats at an institution.
Churn, Expansion and Going Upmarket
Nathan Latka
04:38Interesting. And what's I mean, what's churn look like? Obviously, a SaaS company that's critical.
Sean Brown
04:43>> Churn right now is about 15% annually coming down from a few years ago. Were in the high thirties.
Nathan Latka
04:49How have you made up to, like, the sticky?
Sean Brown
04:53>> You know, my my secret to sticky is be focused. Don't try to be all things to all people. If you really know that user persona and you understand their workflows really well, you can put great features and great services in your offering and compel them to stay with you.
Nathan Latka
05:08Interesting. Okay. So 15% annual revenue churn or logo churn?
Sean Brown
05:13>> 15% annual MRR churn.
Nathan Latka
05:16Okay. Revenue churn. And then on that same cohort, what's expansion on that same base?
Sean Brown
05:21>> Expansion is, you know, I'll have to get back to on that. I don't have it off top of my head. I'd I'd say we're probably doing on average 10 to 12% Okay. Increase by cohort.
Nathan Latka
05:32So you're just below a 100% net revenue retention?
Sean Brown
05:36>> Yeah, in January we were probably at the equivalent of less than 1% net churn.
Nathan Latka
05:46Yeah, that's not bad at all. That's not bad. Very cool.
Sean Brown
05:49>> I'd like I'd like to I'd like to get better than that, but we're on a trajectory towards that.
Nathan Latka
05:53Yeah. How do you draw I mean, you so here's a nice thing. You're setting up a customer base that have plenty of budget. So it's just a question of like what products do you invent to then upsell against? Either price point you told me is actually fairly cheap. I thought you were gonna say something way higher like a $100,000 ACV averages. I mean, if you were gonna build a $100,000 product for this same cohort, what would
06:10you build?
Sean Brown
06:13>> The cohort we sell to wouldn't buy. Really? A thousand dollar product. The neat opportunity we'd have though, I presume you have heard of the Bloomberg terminal and FactSet, etcetera, they're going be charging you 20 to 25 ks per seat per year. We think we've got 90% of the functionality for a fifth of the price. What would I do if we went up market to people who had $100,000 budgets? A couple bells and whistles around fulfillment
06:42>> and ties into a couple of their ERP systems, but largely the same capabilities.
CAC Payback and Customer Lifetime
Nathan Latka
06:48Interesting. Okay. And then how aggressive are you being in terms of fully weighted CAC to get a new, know, call it $4,000 per year account?
Sean Brown
06:55>> You know,
06:59>> payback period is about eight months.
Nathan Latka
07:01Okay, that's great.
Sean Brown
07:02>> And our retention, for our average customer life cycle is about fifty eight months. So long and short is once we have engaged with a customer, there's a real good chance they're going to stick around with us and a real good chance they're going stick around a long time.
Team Size and Locations
Nathan Latka
07:19Yep, no, that's great. Eight month payback period is obviously healthy. And then what's the flush out the team for me today. How many people?
Sean Brown
07:25>> 46.
Nathan Latka
07:25All based where in Chicago?
Sean Brown
07:28>> Two thirds in Chicago. Most of the rest are in New York City and then just a couple home office people and a few other locations.
Sales Model
Nathan Latka
07:36Very interesting. And do you have an inside sales team at this price point or is it too cheap to give a commission on the sales price point?
Sean Brown
07:42>> We are inside sales. We are a mix between outbound and inbound where your typical SDR capability which is assess the prospects and then pass it on to an account executive who will work through a demo, a free trial, and then potentially a close.
Competitive Landscape
Nathan Latka
08:00Yep. Who and who are you competing with most closely besides Bloomberg terminal?
Sean Brown
08:04>> You know, lot 800 pound gorillas at one end of the spectrum. Bloomberg, FactSet, S&P, Cap IQ, and a few others. At the low end of the range, there's Yahoo Finance, Google Finance, and some free solutions on the market. We try to bring the up market down by saying you can get almost all the capabilities on a mobile web easy GUI approach for a fraction of the price. Downmarket we're saying you get what you pay
08:29>> for. It's fun and easy to use but thin capabilities. How about you spend a few dollars and increase your investment returns?
Famous Five
Nathan Latka
08:37Very good, makes a lot of sense man. Let's wrap up here Sean with the famous five. Number one, what's your favorite business book?
Sean Brown
08:43>> Just got done reading a book that I love called Badass Yeah. By woman named Kathy Sierra. Don't know if you're familiar with it. It's awesome.
08:50>> Mhmm.
Nathan Latka
08:51Number two, is there a CEO you're following or studying right now?
Sean Brown
08:53>> Hate to be trite, but I love, Reed Hastings and and Jeff Bezos in terms of disrupting a market that, has been done one way and rethinking it. I I love the fact with Netflix that they're they're building a culture that's pretty unique too.
09:06>> Yep.
Nathan Latka
09:07Number three, what's your favorite online tool for building the company?
Sean Brown
09:10>> We've really loved Appcues for helping digitize the way our customers interact and learn while they're trying to get familiar with our software. So we don't need people to guide them through it.
Nathan Latka
09:20Number four, how many hours of sleep to get every night?
Sean Brown
09:23>> About six, six and a half.
Nathan Latka
09:25That's good. And what's your situation? Married, single, kids?
Sean Brown
09:28>> I'm married, wife of fourteen years, two kids and a dog.
Nathan Latka
09:32That's great. And how old are you Sean?
Sean Brown
09:34>> I am 50, just turned the other day.
Nathan Latka
09:36Congratulations. Last question. What do wish your 20 year old self knew?
Sean Brown
09:41>> I think what I wish I knew is I wish I had our software and I wish I could have seen that over a thirty year period. If I bought Home Depot's 10 into Home Depot and 10 k into Amgen, I'd have a little bit north of 10,000,000 in the bank right now. And I wish I told myself that.
Nathan Latka
09:57Guys, there you have it from Sean again. Building YCharts. 4,000 folks paying him about a $175 a month right now, doing $700K a month in revenue, up from $570K a month just a year ago. So healthy growth. Cash flow positive. $14,500,000 raised last round back in 2015. So, again, healthy today. 46 people between Chicago, New York and remote locations, 15% annual revenue churn. That's gross. Call it 13% expansion. So maybe 98% net revenue retention, eight month
10:21payback period. So healthy growth engine today and lifetime value over fifty eight months or 58 gram. Sean, thank you so much for taking us to the top.
Sean Brown
10:27>> Thanks, bud.