How Dreamdata.io Reached $3M ARR and 120 Paying Customers in 2024 (Interview with CEO Lars Grønnegaard)

Introduction and Company Snapshot

Nathan Latka

00:00Dreamdata.io.com launched many years ago, broke $3,000,000 run rate today up from 1,500,000 just a year ago. They also beginning of last year closed a 7,000,000 series a round. Company and employees still own about 50% of the company. They're burning about $30 a month right now, but plenty of runway. They've hired a team of 45. They're hiring ahead of revenue, obviously trying to grow into that revenue figure and their cost structure over the next twelve to eighteen

00:23months, hoping to double a 3,000,000 run rate today, up to 6,000,000 by the end of the year as they compete in the B2B marketing SaaS. And most importantly, we're just organizing your data in the marketing org space with a complete and very clear pricing plan. ARPUs today in the 2,000 per month range, dollars $25 per year across 120 paying customers. Hey folks, if we haven't met yet, my name is Nathan Latka. I launched and sold my

00:46first 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 b to b software founders. So far, we've invested in over 400 software founders totaling a $150,000,000. Here in 2024, we're

01:16doing 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 get your offer. Alright. Let's jump into the interview. Hey, folks. My guest today is Lars Gadigal. He is a UX pioneer turned product person turned entrepreneur. He's now building a company called dreamdata.com, which is b two b customer data activation. Lars, you ready to take us to the top?

Lars Grønnegaard

01:39>> Hey, Nathan. Great. Great I'm to be excited for you

What Makes Dreamdata Different in a Crowded MarTech Market

Nathan Latka

01:42to be here. So look, one of the things when I was preparing for this, I look at your website and it says quote, b to b marketing connected to pipeline and revenue. There are so many companies in the space. They say they use AI and machine learning and they're gonna beat ZoomInfo and then you never know who's real and who's legit and they all buy each other's data. How are you different?

Lars Grønnegaard

01:58>> Yeah. I think that's a very good question. So I think fundamentally, there is a lot of, MarTech companies out there and SaaS companies out there in in in the SaaS space for sure. Like, everybody probably knows the 10,000 logo graphic from Scott Brinker. I think fundamentally, like, all those products exist for good reasons. Like, we all wanna serve our customers well. We all want to automate our go to market. We all want to deliver on self-service,

02:25>> enable people to buy without talking too much to sales. And each of these products are purchased to run those efficient processes and to be data driven. But fundamentally, what happens is every time you add a new product, you add a new data silo. So every time you add a product, you create a new space for your customer data to live. And our goal to solve that. So not just create another data silo but actually get all

02:50>> the data out of the different products, build one unified idea about what the customer journey looks like, and then with that you can start seeing things like what's the impact of marketing on revenue or this campaign, how did that impact my revenue or I wanna target my top customers. Now you have all the data in one space.

Founding Story, Equity Split, and Seed Round

Nathan Latka

03:10Now you built a great product at Trustpilot. We use that company. We're very happy with Trustpilot. You were VP of product there. You kick this off this company off in 2018. And I remember you told me in our episode from 2021, you split equity, there's three co founders, you kept 40, Oleg kept 40, and a third co founder had another 20. So that adds up to 80. And then you sold, I think, you raised a $4,000,000

03:33seed round out of 20,000,000 valuation. So you sold another 20% there to investors. Is that all accurate?

Lars Grønnegaard

03:38>> Yeah, more or less. Think we've raised some money since then. And sort of on equity, we are roughly like the founder and and and founder and and staff is is at about 50% now.

Update Since 2021: Product Evolution and Pricing

Nathan Latka

03:52That's great. Well, so so give me an update because when we last spoke in 2021, know, COVID times, etcetera, you were at about 30 you were at 30 customers. You had broken, I think, 500,000 of ARR of revenue. Where how has the product changed since then? And and are you charging more or less than you were back then?

Lars Grønnegaard

04:09>> I think we're charging both more and less. So product is more scalable now, so we have a free product. We had a free product back then as well. Free product is now bigger and more useful for for for our free customers. We have a cheap version of the product, which is reasonably priced, although we we also have, like, startup program.

Startup Plan, Free Tier, and Largest Customer ACV

Nathan Latka

04:31What's that what's that price?

Lars Grønnegaard

04:33>> That so the startup price would start at, like, 5 k. The free is is 0. 5 k 5 k per year? Yeah. And then what's your

Nathan Latka

04:42largest customer paying today total ACV on that customer account?

Lars Grønnegaard

04:46>> Our largest customer is sort of on on the other side of six digits now.

Nathan Latka

04:52Okay. So over 100 k a year?

Lars Grønnegaard

04:53>> Yeah. Yeah. Yeah.

Upsell Mechanics: MTUs, Seats, and Feature Packages

Nathan Latka

04:54And how do you get them to expand from free to 5 k per year to 100 k per year? What's the upsell mechanism? Is it number of contacts Yeah. Or something

Lars Grønnegaard

05:02>> So that's not the same customer. So I think the free customers would tip, like most often would be smaller businesses, whereas a large customer paying north of a 100 k would would be like an enterprise customer.

Nathan Latka

05:13And I understand that. What I'm asking so look, one of the things I think Trustpilot did very well because it worked on me, right, is you guys would carve out like every single thing extra I wanted was always more money. Like if I wanted a certain widget, more money. Premium version of the widget, more money. And before you know what, I'm paying $600 a month for a review tool plugin. So I assume you took some of

05:33this over here. I mean, when I look at your pricing page, you've got like nine bullets under every single one of these things. And then you also give yourself and your AEs the ability to upsell based off numerical values, like number of years, user activity history, seats included and MTUs. Those three, which are the most powerful upsell mechanism for you?

Lars Grønnegaard

05:51>> I would say it's the packages themselves. So it's the feature sets. The feature sets are more or less aligned with different sizes of businesses. So we have add ons and typically we package it so that we have an add on from a larger package and a smaller package in case somebody needs it, but usually like an enterprise customer would fit into the enterprise plan. Mhmm.

Nathan Latka

06:11I guess, let me let me ask this differently. Someone paying you $600 a month on your team plan, which which usage limit are they most likely to hit the quickest? 10 seats or 30,000 MTUs? Oh, the MTUs. Got it. Definitely. Yeah.

Lars Grønnegaard

06:24>> Yeah. So the seat metric makes sense in some very specific use cases, which is why we price on it. But the major driver there is the MTUs, like monthly tracked users, which is basically the data sort of proxy.

Nathan Latka

06:39Did you make decisions on things like putting the avoid ad blockers feature in the business plan versus keeping the B2B web analytics in the free plan? I mean, do you decide on all these things?

Lars Grønnegaard

06:51>> So I think that like in a free plan you need a reasonable unit economics. So you need sort of a you need to be super careful about cost, of course, if you're giving the product away for free. So there's a lot of thinking around like how do we maintain a reasonable cost on that product. So that's a key thing, right? And then of course, we wanna keep each product package needs to have a meaningful feature set

07:15>> that's useful so that people love using it. But especially on a free plan, you want to make sure that there is something to buy, like there are things that you would like to know, like, okay, what happened? I can look two months back in time. B2B sales cycles are often significantly longer than two months, so you want to look further back, right? So there's always, like you say, there's always an upsell.

Customer Count: 120 Paid and 600 Free Users

Nathan Latka

07:37Yep. And so how many, you remember you had 30 back in 2021, how many customers are on the platform today, paid only?

Lars Grønnegaard

07:42>> So yeah, we have 120 paid and roughly like 600 free customers.

Nathan Latka

07:48That's great. So I guess the next question I have for you, because you have one of the more sophisticated pricing pages I've seen, whenever I see a pricing page this sophisticated, I go, okay, they really understand where they're adding value because you also not only decide what utility based metrics to upsell against MTUs, monthly tracked users, you also make decisions around which product features are in each bucket, but you also then have to decide what do

08:09you want to actually keep out of all of the plans and sell them as a separate add on altogether, like content performance or return on investment report. How do you make that decision? Why is content analytics and add on and not included in one of the packages?

Add-On Strategy and Pricing Philosophy

Lars Grønnegaard

08:21>> I think one of the key things that, like, if you wanna have something as an add on, you need to make sure that the base package makes sense. And often we'll see like that the add on feature is something that is not relevant for everybody. I think this is a way of avoiding a situation where you sort of be charging, let's say, 5 ks for the product and people go like, but oh, I don't use this

08:43>> thing. I want a discount. So you avoid that by saying, okay, look, we'll keep that out of the package. We don't have to discuss that. So there's a lot about I think pricing is a lot about, of course, like extracting value from a customer, super important. Creating something that's experienced as fair from both sides. Everybody can understand the pricing. And, yeah. Yeah. So so that's definitely there.

Nathan Latka

09:08And so when you look at the monthly plans, the upsells, the add ons, what's the average customer paying per year these days?

Lars Grønnegaard

09:16>> So the grand total is sort of in the mid twenties, but that's like you say like, okay, you got some people paying nothing, and you got some people paying plus a 100. So so there's a there's a big spread.

Nathan Latka

09:31If we just take mid twenties, $25 a year times 120 customers, it puts you about a 3,000,000 run rate today.

Lars Grønnegaard

09:37>> Yeah, that's roughly there.

Nathan Latka

09:39And where were you exactly a year ago, we can calculate run rate?

Lars Grønnegaard

09:42>> So we did roughly a 100% year on year growth.

Nathan Latka

09:45Okay, well, so what you finished last year, you know, middle last year, you're at like a 1,500,000 run rate, something like that. That's great. And what would you attribute most of that growth to expansion into historical accounts or adding brand new accounts together, altogether?

Lars Grønnegaard

09:58>> It's a mix, definitely, but we are growing a lot of them on the new biz side for sure.

Nathan Latka

10:03That's great. So what's the plan this year? What do hope to grow this year?

Average Contract Value and $3M Run Rate

Lars Grønnegaard

10:07>> So we're hoping to keep that growth pace of around 100% year on year growth, so that's the target for us. We have sort of significant goals around sort of expanding upwards in the market. I think we started with a scalable product, which is like one philosophy. So you start with something that's super scalable and then you go enterprise later. Some people start an enterprise, makes it kind of hard to go super scalable, we feel. So now

10:34>> we are putting a lot of effort into enterprise. You see the feature set, have added a lot of what you would call like enterprise readiness features to be able to serve those customers.

Growth Attribution: New Business vs. Expansion

Nathan Latka

10:43Yeah. Mean, was one of my comments coming into this, right? Is if I didn't know what your revenue was and I only looked to your pricing page, I mean, the complexity on your pricing pace suggests to me and looks a lot more like a 30 or $40,000,000 ARR company. So like you're way How sort of ahead of the curve do you manage your org chart in terms of complexity around all these pricing options relative to sort

11:04of your stage day, 120 customers, 3,000,000?

Lars Grønnegaard

11:08>> I think we, on the pricing side, we made a conscious decision when we founded the company that we would care a lot about pricing because it is one of the big underutilized levers in a SaaS company. One of the things we decided from the get go was, hey, we'll be structured around it and we want to be a company that changes price. We want to be able to repackage and that means that we, from the get

11:32>> go, have had structured pricing. So you want to avoid the situation where you look at your customer base and basically you've got 120 customers and there are 120 different price plans because that creates a lot of low predictability in terms of what happens when I change pricing. So we've always been super structured.

11:55>> I would say our price model is sort of semi public, but underneath it, we have a price calculator. We don't publish it, but everybody is priced with the same mechanics, so we know exactly how people are priced. And that creates transparency. But yeah, I mean, pricing is complex, but, you know, we're we're engineering types, I guess.

Team Size, Cash Burn, and Profitability

Nathan Latka

12:15Yep. Yep. How many folks are full time on the team today?

Lars Grønnegaard

12:18>> Total team is 45 people. 45.

Nathan Latka

12:20And are you guys still burning cash today each month? Are you profitable?

Lars Grønnegaard

12:24>> No, I think like the math there is like not profitable.

Nathan Latka

12:27Okay, what are you comfortable with burning? Are you comfortable burning $30 a month, a $100 a month more?

Lars Grønnegaard

12:33>> Yeah, so 30 is fine at the moment. I think we came out of, so 2023 was a rough year in SaaS for everybody. We still grew really well.

12:46>> But it was sort of for us, apart from it being maybe we grew well, we would have liked to grow more. But it was also a year of sort of scaling the org, and now the next, like this year and first half of next year is sort of about making revenue catch up with the org size. Yep. Double double the next two years and we'll be at roughly yeah.

Nathan Latka

13:06We're about out of time, but just but just to summarize, you're burning right now about $30 a month. You burned maybe more last year, but you're work you're hiring ahead of growth and you hope to get closer profitability end of this year into next.

Lars Grønnegaard

13:17>> Yeah. Yeah.

Nathan Latka

13:18Exactly. How how much of the 4,000,000 seed round from 2020 do you sell in the bank?

Lars Grønnegaard

13:23>> Nothing. Okay. No. No. We raised since then.

Nathan Latka

13:26Oh, you did? How much have you raised since then?

Series A Details and Remaining Runway

Lars Grønnegaard

13:28>> So we raised 7,000,000 series a in, what, early, like, late twenty two, early twenty three.

Nathan Latka

13:35Oh, okay. Great. What can I ask what valuation that was? That that was the heyday. Those were the big rounds.

Lars Grønnegaard

13:39>> Yeah. I think we were no. It wasn't that great. It was kind of a little bit of when things were slowing down a bit. Okay. Yeah. So we were

13:49>> I'm not I'm not I can't see

Nathan Latka

13:52$30.30 30,000,000 ish, 40,000,000?

Lars Grønnegaard

13:54>> Yeah. That range there.

Nathan Latka

13:55Yep. Yep. Okay. So I mean, you sold something like 16% of the company.

Lars Grønnegaard

14:00>> Yeah. So I think in in total, we're at that, like, roughly 50% of of the ship for the founding team and

Nathan Latka

14:07That's great.

14:08>> Working in.

14:08Well, that means you have some of that 7,000,000 left, so you've got plenty of runway.

14:12>> Yeah. Yeah.

14:12Alright. Let's wrap up here, Lars, with The Famous Five. Number one, your favorite book?

Lars Grønnegaard

14:16>> Oh, my favorite book? Yeah. I haven't read it yet, but Marty Cagan came out with a new book, but before that, it would be love to like, I'm a big fan of Marty Cagan, who's like product management guru. That's probably the most influential book for me in in SaaS.

Nathan Latka

14:30Number two, is there a CEO you're following or studying? CEO I'm following

Lars Grønnegaard

14:36>> oh, shit.

Nathan Latka

14:38You can say none.

Lars Grønnegaard

14:39>> None. Yeah, no.

Nathan Latka

14:40Number three, what's your favorite online tool for building the business?

Lars Grønnegaard

14:44>> My favorite online tool for building the business? I think like, okay, I'm gonna be a bit selfish here. I love our own product.

Nathan Latka

14:50Your own. Besides your own.

Famous Five: Books, Tools, and Personal Life

Lars Grønnegaard

14:52>> Besides our own, I'm a big HubSpot fan. Think it's just a marvelous tool. I'll be super happy with that.

Nathan Latka

14:58Number four, how many hours of sleep do get every night?

Lars Grønnegaard

15:00>> What hours of sleep? Sleep? Yeah, six to six to eight.

Nathan Latka

15:05Okay. And situation, married, single kids?

Lars Grønnegaard

15:08>> Married, lots of kids.

15:10Two kids still or

15:10>> you got another one? Three.

Nathan Latka

15:12Three kids now. Congratulations. That's exciting. And how old are you? What? Four? Do you have

Lars Grønnegaard

15:17>> a birthday? 40 years old? 41? Me? 53.

Nathan Latka

15:21Oh, you're 53.

15:24Is that right? You're 53 today? Yeah. Yeah. Okay. Take me back to when you were 20. What's something you wish you knew back then?

Lars Grønnegaard

15:32>> When I was 20 what sorry, what was the question?

Nathan Latka

15:35Something you wish you knew.

Lars Grønnegaard

15:37>> I wish I knew. Yeah, it's fun doing a startup. I would have done it earlier.

Nathan Latka

15:43Guys, there you have it. Dreamdata.io.com launched many years ago, broke $3,000,000 run rate today up from 1,500,000 just a year ago. They also beginning of last year closed a 7,000,000 series A round. Company and employees still own about 50% of the company. They're burning about $30 a month right now, but plenty of runway. They've hired a team of 45. They're hiring ahead of revenue, obviously trying to grow into that revenue figure and their cost structure over

16:06the next twelve to eighteen months, hoping to double a 3,000,000 run rate today, up to 6,000,000 by the end of the year as they compete in the B2B marketing SaaS and most importantly, we're just organizing your data in the marketing org space with a complete and very clear pricing plan ARPUs today in the $2,000 per month range $25 per year across 120 paying customers. Lars, thanks for taking us to the

Lars Grønnegaard

16:27>> top. Thanks, Nathan.