How Zinc CEO Xiang Li grew Zinc to $1.1M revenue and 70 customers in 2018.

however one my guest today is Stacey Epstein she's extensive experience in generating demand fueling growth and building brand name global recognition for technology companies she brings two decades of cloud social and mobile enterprise technology experience to a role and as CEO of zinc before zinc she was chief marketing officer at service Mac's where she helped fuel five consecutive years of triple digit growth leading to a 1.5 billion dollar acquisition by GE in 2017 Stacey are you ready to take us to the top I am but yes I am what what did I scream what did I screw up in the bio well success factors was required by ASAP for three and a half billion service Mac's was acquired by GE for a billion probably not all that relevant okay got it very good well it's helped I understand that yeah I cut off a bunch of your bio because I just did the first 50 words we have a level it's fair to say you have a ton of experience in b2b cess I've been around a long time yeah tell us how tell us about Zink what is Inc doing how do you make money yeah so zinc helps field base or what we called Aeschylus workers get access to real-time knowledge from the rest of the organization and from the systems and the organization so that probably sounds like a lot of jargon to you so let me explain that a little bit more fully if you think of field service technicians like a dish technician who's coming to put a satellite on the top of your house and you can get cable TV or you walk into a hotel and you're talking to a hotel worker or construction worker those are what we call desolace workers there are people that don't sit in an office they don't sit staring at a computer screen like most of at least you and I probably do a good chunk of our day and because of that they're away from their peers their way from the people and the information that they could use to help them do a better job so again think about the dish guy technology probably helps him to get scheduled and and get to the right door at the right time but once he once that door gets opened he could face all kinds of different situations the wirings different how he gets on the roof is different the the the problem that he's fixing is different and without zinc he doesn't have a great way to ask questions or get information from the rest of his company with zinc he can jump on zinc it is an all mode communication app meaning he can do a text a voice a video call he can share his location he can get content he can get alerts from the company in real time he can get access to information that will help him solve the question that he's trying to solve fix the problem faster install the dish faster get the customer up and running faster which is great for him great for the customer and great for the vendor and Stacy what's your guys's revenue model is it a peer play SAS model totally hundred percent SAS we charge by per user per month okay annual contracts that's great and I'm sure again I'm sure you work with a large cohort of customers and you're doing incredible cohort analysis but for the sake of our limited time today what would you say like the average customer is paying you per month oh it really does I mean it can literally vary from 10,000 per month I'll give you annual so anywhere from ten thousand dollars a year annually to close to seven figures per year it just depends yeah customers big and small okay and maybe let's then go away from the per logo basis what do you charge on average per seat I'm sure you probably do volume discounts but are we talking like 10 bucks to see 200 bucks to see 10 to 20 depending on what they want per user per month and depending on probably volume of what they're signing up with right yeah right of course well you know 5,000 technicians it's gonna be a little lower than that if you're doing 50 it's you're playing closer to list price yep now giving a back story here is if ik in the bio saying you're CEO but I didn't see the word founder did you help create the company or were you brought in as CEO well a little bit of both we were born out of another company that was just focused on a work texting app so sort of like what's up for work that was founded by some of the product leads at Yammer and it had been it was a freemium model that had been in business for a couple of years and great product but wasn't really going anywhere on that go to marketing side so together with the board I came in and we basically yeah my Brian no no the board of that company which was called Co tap so we came in and we basically took the assets of that of that company which was co tap and and the great core product built out the product and relaunched it as zinc so I I am the founder of zinc but there was a little bit more story there our products been around a few years longer than I have okay was so win-win did that kind of 2016 okay 2016 is when the co table board have approved the deal to take it private or those assets out well it was never public yeah I mean they were a little startups so we relaunched as zinc in the middle of 2016 okay I shouldn't use take private I should use the word spun out but that was when you spun out those assets pretty much okay okay good and and do those early folks they like the how to sorry how does the Emer connect with coach app because you mentioned the developers came were at Yammer yeah well they they were no longer at Yammer they I mean their backgrounds interesting because they focused on communication they left Yammer after Microsoft acquired Yammer and they founded Cote ah I see make sense it does yeah it does Noah's coat app did you have to deal with a big like a complicated cap table to negotiate this thing do they raise a bunch of capital or no yeah I mean we we recap the company like autos Inc is a brand new company got it okay so 26 the heritage of Co top is just the core product okay very good so 2016 founded you're in San Francisco so I'm gonna assume that you raised capital although I'd love for you to tell me you're doing millions per year bootstrap but what what have you raised we've raised 16 million today okay and why was that important I mean I what point you say we have to raise capital grow this faster I mean we we we kicked off the company with a five million dollar seed round and and you know the the products again we had a core shell of a product which went then we spent a lot of engineering hours to build it into what it is today but we really wanted to pour fuel on the sales and marketing and and you know the co tap was doing a little tiny bit of revenue with a couple of customers but not enough to really fuel the business and get us going so that original 5 million which was emergence capital and CRV and that was really you know what it took to get the company off the ground and hire more employees and and get a bunch of new customers and then in April of last year we raised an official around led by GE Ventures also with participation from her sponsors you can imagine GE has a lot of desk lists field based workers so they were very interested what happen emergency I'm a big fan of Santi and he came on and told me the story about the spin-out from from from TechCrunch of crunchbase did they not do they not follow on in the series a oh yeah they've they've invested in every single ok there so with so j-jason Green is the chairman of our board so emergence is an emergence was also on the board at service max and on the board at success factors so I have a very long history with those guys and I mean they're in my opinion you can't do much better than than having emergence involved with your company including Santi as I say I don't know Jason but I know Santi well and I've been nothing but impressed with him he's a great guy to work with awesome so yeah in the series that you added on G and Hearst and emergence was there as well correct that's great emergence in cr-v were the first round and then they also participated in the second round which was led by GE got it ok let's go away from funding here for a second you have experimented with literally millions of dollars in terms of customer acquisitions across your history yet part of the 5 million was obviously put towards that as well so let's go backwards first what yet today in terms of total customers and I want then I want to go backwards and talk about growth yeah we have about 70 enterprise customers today ok and generally speaking that represents how many employees under those guys are we talking like 10 ok fair to say between but more than a hundred thousand or know between 10k 100k between 10 and 100 ok fair enough good walk me through acquisition again you've done a lot of experiments here so your first 10 customers how did you get them well our first 10 customers were kind of roll ups from that legacy freemium model but I was pretty dead set that nobody's looking for another messaging or communique to put on their phone from a user perspective right like even okay but this one's work based who cares you know I just want to text my buddy I'm not I'm not incentive to put a new app on my phone just for work messaging right so I was pretty convinced out of the gate that freemium wasn't going to be our...