How Beamer Hit $10M ARR by Acquiring Userflow and Serving 2,000 SaaS Companies (Interview with CEO Satya Ganni)

Event context and introduction

Nathan Latka

00:00Quick context. This was recorded March twenty eighth and twenty ninth. So a couple weeks ago at my live event, saasopen.com. We had a thousand software CEOs there. If you missed it, we hope to see at the next one, September fifth and sixth in New York City, saasopen.com. But for now, let's jump into the recording.

Acquisition motivations and team dynamics

Satya Ganni

00:21>> I think over the next twenty minutes, I'm going to talk about, you know, what are the drivers for this acquisition to happen? How did it come through? You know what went well? What did not go well? What mattered to the team both in terms of emotions egos? Now you have founders on one side you have the investors on the other side and then you have operators like me on the other side right? So obviously it's a

Satya Ganni's background and Camber Partners

Satya Ganni

00:46>> very interesting dynamic that has happened over the last few months. A background about me. So I've been in SaaS for maybe fifteen-twenty years mostly as an operator self financing and selling for companies. So I started off as an executive at growth equity fund called Camber Partners. You might have seen some of those teammates like Justin or Will around. So we had a thesis and we started to look out for a bunch of companies. I think personally

Why Beamer stood out among 150 companies

Satya Ganni

01:18>> I looked at 150 companies over the last six months and I think Beamer was a company that kind of really stood out in its own definitions. One, it was led by two founders. It was bootstrapped. It has grown itself to being a few million dollars of revenue without any external financing led by a very international team between Spain and States. And we decided to make an offer and acquire them. So we made an acquisition of Beamer.

Beamer's history and inflection point

Satya Ganni

01:50>> But that came with its own challenges, right? Beamer has been a tool predominantly serving a lot of SaaS product teams and marketers. That was around August 2023. Beamer is a very successful product but it has has come to a point of its own inflection right as you know in tech markets things change very very dynamically. So what was a successful product at some point started to get featurized in the landscape. So a couple of things one

02:21>> there was a call for higher growth so historically Beamer has been growing around twenty-twenty 5% works well in a fantastic bootstrap setup but doesn't work for venture investors or even growth equity investors. So there was definitely a call for higher growth. Hey how do we grow the business at a higher rate? So that's definitely one inflection moment. I think the second thing is as I kept during the due diligence process of Beamer, I kept speaking to

Customer due diligence and demand for Guides

Satya Ganni

02:50>> almost 120 customers of Beamer and there was a lot of common synergies. It's like hey you know you guys offer release communications or launch communications but do you also offer onboarding? Do you also offer guides as a capability versus just know ability to release products or update users? So there were at least 70% of the customers came back and said hey can we have a better Guides product? There was also the need from the customer side.

Acquisition criteria: ICP, profitability, PLG, and culture

Satya Ganni

03:22>> Think most importantly when we start thinking about M and A or something we wanted to have a clear checklist in terms of what matters to us and what matters to others. The most important thing is hey is this a complementary product? What do I mean a complementary product? Right? Complimentary product means we want to keep the same ICP like we don't want to change the ideal customer but we want to offer him an additional SKU. Right?

03:47>> That's where I think during this customer conversations guides was a very common feature. So complementary product definitely it has to check mark. Second thing is the audience wise as I said Beamer historically has been selling to about 2,000 plus SaaS companies predominantly focused on product teams and product marketing teams. So we didn't want to shift away from that audience. We don't want to build a tool for sales teams or the HR teams. So we want to

04:11>> stay focused on that audience. Third is the business has to be profitable. So Beamer historically has been profitable since day one as a company although it was strongly held by the founders. So we definitely wanted the business to be more profitable as well. Finally Bootstrap it mattered to us because if the cultures were very similar, if the growth evolutions were similar, not a lot of venture investors at the table, it would be much easier for us

04:40>> to even finance and make the transaction happen. And I think Bimmer historically from day one had a product led growth model. We didn't want to acquire a company which has sales as the primary driver and also the go to market was also a big focus area. Last it was about customer centricity. Know, does the customers truly love the product? Do they have a strong retention? And is there a strong word-of-mouth among? I think we wanted a

05:10>> target that check all the boxes. And I think we found a couple of companies in the guide space, not just in The States but internationally, which checked all these boxes targeting the ICP, Bootstrap, Go to Market. Sometimes we had to be flexible enough to extend that bootstrap to say, hey, if they're relatively less venture backed, haven't raised a lot of money, but if they've raised probably a million, dollars 2,000,000, that still is an acceptable option. So

The failed first acquisition and $200K in legal costs

Satya Ganni

05:37>> we started off with an option. We met a company. We dated. We went all the nine miles and the day we were able to sign the term sheet, you know, the marriage broke. So just the very day, you know, when we were able to sign. So we spent like three months going through the diligence, talking to their customer, flew internationally and met their team, met their investors. Their investors were also convinced everything was coming together and

06:06>> it's almost a four month effort from my side and their side. Again, they also have spent a lot of time, etc. Unfortunately, the marriage did not happen. Right. That was a big shock for us because we spent so much time and most importantly I think the legal bills weren't cheap. As you know that itself ran up to 200 ks. But then I think as folks say there success in failure. Think then at close heels of losing

06:38>> someone I think we were resilient enough to bounce back and find someone who is a better ideal match. So I think the hope is that you know M and A is always a probability game so in case if you don't find someone it doesn't mean that's the end of the world. You quickly bounce back and find someone else and we found an ideal match but I think that was the interesting piece. When we reached out to

Reaching out to Userflow and initial rejection

Satya Ganni

07:05>> this company called Userflow

07:08>> was Isben, one of the founders and a very respectable name in the PLG space. So he said if you look at the subject line, you know the subject line is need an onboarding solution, right? It probably sounds very desperate from saying that hey we lost a deal, We need a deal right now. Right? So this was one of our investors, Scott. And I think in five minutes the founder replied, Hey, thanks for your email. We are

07:36>> 100% bootstrapped and we plan to stay so. So they're like, Hey, yes, it's a great ideal match, but they didn't want to get into this marriage. And then there's a couple of events. I think what I would ideally see is if you're driving M and A, the best thing that can happen is an operator talking to another operator like a founder talking to a founder or a CEO talking to a CEO. I think that's the best

CEO-to-CEO conversation and closing the Userflow deal

Satya Ganni

08:04>> momentum. So I've told my investors maybe you should stay in the back seat. Let me see how this conversation go. Right? So I reached out to Hisman. Again his answer was pretty much no. I said that's fine. Let's go and meet. So I had to fly down to San Francisco the very next day and I said I'm going to wait in this bar until we meet. Right? So I think the first half of the day he

08:26>> didn't turn up. But in the second half of the day he did turn up, at least for a coffee. Right? So I thought what is there to lose? So we sat, we kept talking, we kept talking. I think around 08:30 or nine ish, I think we had a deal on the table. So I think the point I was trying to make is it's always best if this CEO to CEO conversation can happen or a founder to

08:47>> founder conversation can happen. It's very different when an investor is in the mode. So yeah, I think second time we could have hit a roadblock but thankfully this time around we were able to turn around the ship. And just a very quick summary about user flow. And I think my first conversation with S. Ben he's a very direct person. He was a very successful founder with a company he built in the past called Cobalt. He was

Userflow's metrics: $4.5M ARR, 50% profit, 3-person team

Satya Ganni

09:16>> very clear: We have no reason to sell. Why? They were at $4,500,000 ARR, 50% profit, growing 50% year on year, 100% PLG, three member team. And they had no reason to sell. I think that was his direct answer. I have no reason to sell. I don't want to waste your time. I don't want to waste my time. You can fly back where you came from. Right? I said, That's fine. That's fine. So we kept talking, kept

09:42>> talking. Finally, I think we were able to convince him. And

09:47>> know, see, I think the piece I told Esben is, Hey, Esben, it's great that you guys build a business. What are your vision for the business? Right? And he articulated me the vision for the business. And I felt there are clear gaps in his vision. Right? Because he was trying to take the product either in the support direction or other direction. So I felt there are gaps in the vision. That means that at some point you're

10:09>> going to falter and at some points you're going to sell. So if you're going to sell two years later why not sell now? Right? So I think there was a lot of interesting conversations and I think I was able to drive a couple of these conversations well because I was on the sell side four times before as a founder myself. This time I was on the buy side. So the mental model was very interesting for me

10:30>> because I was on the sell side multiple times before. This is the first time I was on the buy side. Anyway, I think it's great that we are able to partner with it. But it's an incredible business. I think through our discovery, found out that they had the best onboarding and the Guides product in the marketplace which was phenomenal. That was very consistent across all the customers that I have spoken to in terms of due diligence.

10:54>> Because how could a product with just three people in a very short timeframe of four years could get to this level of ARR without financing? I think the product speaks for itself.

Combined customer base of 4,000 SaaS companies

Satya Ganni

11:06>> Yeah, I think we spoke about some of this trajectory. Started off in late twenty nineteen. They launched the product in early twenty twenty. Since then I think their trajectory has been pretty fantastic for them. Some very, very credible logos.

11:24>> I think these are three member team that I was talking about. They are the founders. One of them based in States. The rest of the team is based out of Denmark which is where some of the successful companies like Gendersk has come. So finally we are able to get the Beamer and Userflow marriage together.

11:45>> It's a So happy ending I would say. I think in our next step of the journey right I think the post integration probably the business drivers drive a lot of these things. How do you scale? How do you integrate the team? How do you scale the product? How do you scale the go to market? Those are some of the challenges that we are going through but pretty interesting stuff so far I would say. I think what

12:10>> we have learned through the process. Right.

12:14>> Beamer has been a very different product serving its own audience. The common synergies are both companies have a SaaS, majority SaaS customer base. So we have about 4,000 SaaS companies that we serve globally between both the products. Historically very product led, very customer focused teams and run by a very, very small teams. Right. I think M and A is a game of probability. You know, as I mentioned about the first time, we almost came close and

Lessons learned: product vision, culture, and go-to-market

Satya Ganni

12:43>> we were in a room the day of signing when the other founders decided to walk away. Right. All due respect to them. They have their own reasons but it was also an emotional turmoil for you know for us for the investors having spent so much time. It's a game of probability so you got to live with it. I think the main thing that kind of worked in our favor for the second time is when you keep

13:07>> asking these questions to the operators themselves. Hey what's your vision for the product? Where do you see it Three four years. Usually when the investors come in the room their first focus is on financials. They are like hey give me your P and L statement. Give me your balance sheet. Give me your does your net retention look. All of those are important but I think when the operators talk to other operators I think the emphasis should

13:32>> be more on hey what's your product vision together? Are we serving the same customers or a different customer base? How do you see the market landscape changing? Is there a synergy for us to come or not come? I think that debate that healthy debate should happen between both teams and how do our customers benefit from this. So one of the things we did during the diligence is we looked at the combined customers. Funny part is we

13:54>> had almost 15% of customers that were overlapping both the SKUs so we went to all of them and had very detailed conversations. Hey what do you use Beamer for? What do you see? Do you feel good about this marriage? Or how would you feel? So we did a lot of that due diligence which really helped shape our thinking as well so that's a good exercise so I would say lead with product vision and focus. I think

14:16>> culture plays a very important role especially if we have distributed teams working in different time zones and how they have started. We had team teammates in Spain, Denmark, Canada and Argentina etc. So the question is culturally are we aligned? Have they grown the same way? Have they been financially disciplined enough to operate in business? I think in that way there was a lot of synergy. Had we been a massive venture backed business that acquired a bootstrapped

14:48>> business, culturally, I think it would have been a bit more challenging to have the founders stick around. Right. And the other thing is

Post-acquisition integration and next steps

Satya Ganni

14:57>> go to market motion. Right. I think the key question is for us, hey, post close, are we able to continue on the same go to market motion or should we have to start a new go to market motion? Right. Thankfully both companies have historically been majority on the PLG side with only one of the founders doing some level of founder led sales. So we didn't have

15:22>> sales led motion. We had something like a basic Sales Assist that the founders were themselves able to do as well. In that way the marriage came together. So these were some of the lessons learned from the process. Sorry for that crude graphic but yeah, that's that's pretty much it. Yeah. Thank you so much. Yeah.

Closing remarks

Nathan Latka

15:45Hey, folks. If we haven't met yet, my name is Nathan Latkov. I launched and sold my first software company back in 2015 and went on to write a book about it, which you guys made a Wall Street Journal bestseller purchasing over 30,000 copies. Thank you so much for that. After the book, I launched this show and one went on to create founderpath.com. I raised a large fund to do non dilutive deals with B2B software founders. So

16:12far, we've invested in over 400 software founders totaling $150,000,000 Here in 2024, we're doing three to four new deals per week. So if you're looking for capital and don't wanna give up equity, go sign up at founderpath.com for free to

Satya Ganni

16:27>> get

Nathan Latka

16:28your offer.