Letter from
the Chairman
In a world where founders crave the vanity techcrunch headline announcing
their next funding round, we tend to lose sight of the remarkable founders
doing more with less.
This issue features founders who have created companies with no outside
funding. iCIMS Colin Day leads the rankings with over $200M in ARR. You'll
also enjoy stories from founders who bootstrapped to $100k, $1M, $10M+ in
ARR.
Each founder leveraged different tactics at each ARR level however the theme
is simple: Creativity.
Funded companies lose their creative muscle and answer every issue with,
"Throw money at it!".
Bootstrapped founders ask the reverse, "How do we grow 50%+ yoy without
spending any money?".
Investors reading this will think, "Bootstrapped CEO's grow way too slow to be
interesting". I'd argue the opposite.
Ringlead took 2 years to hit $6M in ARR. Clickfunnels took 3 years to hit $70M
in ARR. Sharpspring took 4 years to hit $14M in ARR.
These CEO's constantly ask themselves: "How can we pull cash forward?".
They do the obvious - selling annual contracts. They push further though. In
the pages ahead, you'll see non-common ways these CEO's have creatively
pulled cash forward to continue fueling growth without raising.
Have you considered upselling a $397 user conference ticket after a new
Nathan Latka, Chairman - GetLatka.com
For the love of data,
Nathan Latka
Nathan@nathanlatka.com
October 2018
customer picks which monthly
plan to pay you for? Have you
thought about upselling a $997
course that teaches how power
users of your software are growing
their business?
The bootstrapped founders that
make up our inaugural "LATKA
Bootstrapped 100" have built a
cumulative empire of $862M in
ARR, and created jobs for 4962
people.
and the founders are making
themselves rich off cash flow
instead of selling equity. Not a bad
deal.
CONTENT
OCTOBER 2018 ISSUE
04 The Latka
100 Bootstrapped
List
How these founders
bootstrapped their
companies to millions in ARR
19 The Most
Anti-VC CEO
We've Spoken to
All Year!
Jane.app at $4.7M in ARR
With $0 Raised
20 Super
Successful CEO's
Share How They
Reduced Churn
Leaders from nine
companies, across various
price points, dive into how
they solved their churn
issues once and for all
27 The Right
Way to Think
About Driving
Expansion
Revenue
Why CloudCheckr's unique
model has driven 145% net
revenue retention
28 Why
Monitoring Social
Media Got Crisp
Thinking to North
of $10M in ARR
How their software uses AI
to protect large enterprises
from marketing risks
29 What
to Do When a
Management
Shakeup Is
Inevitable?
Sococo now growing
revenue 66% YoY after
bringing in new CEO
30 How to Hit
$1.4M in MRR
with Less than 1%
Churn
Why ForceManager's focus
on creating a sticky product
has paid off
31 How to Price
Your SaaS Product
Why this one simple shift
can help you 8x your price
without dropping conversion
rates
37 How Any.do
Has Driven 150%
Growth in the Last
6 Months
Why they are owning the
task management space
38 The Key
to Gracefully
Organizing a
Management
Buyout
How Rant & Rave CEO
orchestrated VC buyout and
scaled to north of $28M in
ARR
29
27
20
39 Is Latin
America the Next
Big Market for
SaaS?
Rock Content CEO, north of
$12M in ARR, sees significant
promise in emerging LATAM
market
40 Can't Find
a Technical Co-
Founder? No
Worries!
How Talkpush, now north of
$100k in MRR, landed their
first customers on a product
built entirely by freelancers
41 7 Growth
Channels That Will
Take Your Business
to the Next Level
Fast
How these CEO's got used
innovative methods and
channels to drive growth
47 Why This
Hubspot Executive
Left and Never
Looked Back
Peter Caputa now running
$91k in MRR Databox
48 Sick of the
Tediousness of
Content Editing?
They've Got You
Covered!
How Filestage scaled to
$40k in MRR with content
collaboration tool
49 Onboarding
SaaS Tool
with 6-Month
Runway . . . Will
AcademyOcean
Make It?
Why this Ukrainian startup
refuses to give up
50 Should you
be rethinking how
much you pay your
accountant?
How Botkeeper uses AI to
streamline bookkeeping and
hit $140k in MRR
52 Why 500k
Paid Users Are
Turning to GitLab
for DevOps Support
How this code management
software has crossed $2.5M
in MRR with a $19 ARPU
54 Do Browser
Notifications Work?
iZooto's $98k in
MRR Says So!
Why this startup has been
winning early on
40
48
52
4 LATKA OCTOBER 2018
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Latka 100 Bootstrapped List:
How these founders
bootstrapped their companies
to millions in ARR
If you know anything about Nathan Latka, you know he loves
nothing more than a company who has grown to scale without
exchanging equity for capital. Nothing brings a bigger smile to his
face.
This month, we decided to rank our top 100 bootstrapped B2B
SaaS companies and dig into how some of these incredibly lean
companies achieved such monumental success without the help
of outside investors.
Let's get started...
How iCIMS Scaled to
North of $105M in ARR
with Just One Small Loan
Recruiting will forever be a struggle for companies of all sizes.
Finding the right talent, at the right price can catapult you into
success and set you up for long-term growth.
Yet, with more and more ERPs coming with an out-of-the-box HR
software included, companies seem to be placing less importance
on optimizing their talent acquisition. iCIMS, the largest stand-
alone provider base of talent acquisition software in the industry,
has the ideal solution for businesses looking to take a contrarian
approach and double down on hiring the world's best people.
iCIMS currently offers the best of breed talent acquisition suite to
help businesses with recruiting operations. Their products allow
companies to track applicants throughout the hiring process,
automate marketing efforts to create passive talent pools, and on-
board new hires efficient.
Colin Day, Founder of iCIMS
OCTOBER 2018 LATKA 5
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The company is built on a pure-play SaaS model and dates back to
its founding in 1999. CEO Colin Day, a young professional working
in recruiting at the time, was an early believer in HR software upon
experimenting with his employer's proprietary tracking product.
After a conversation with the company's CEO, Day bought out
the rights to the proprietary software and spun it out into what is
now iCIMS. Day funded the buyout using a loan from the parent
company and a negotiated a portion of equity.
Today, the company serves more than 3,500 total customers, with
an average first-year ACV of $30k.
iCIMS is north of
$105M in ARR right
now and has reached
this monumental
scale solely by
bootstrapping.
Aside from the small original loan which was paid back in full
with interest and estimated at approximately $2.5M over two
years iCIMS has grown with no outside operational capital. The
company has brought in Susquehanna Growth Equity as a partner
for multiple investments however, this capital came in the form of a
liquidity event and no cash was used as operating capital.
Against all odds, iCIMS survived the dot-com bubble and is
still thriving, even as more and more companies are turning to
ERPs to meet their HR needs. Their team has scaled to 650 full-
time employees with a large majority sitting in their New Jersey
headquarters.
How Rant & Rave
Orchestrated a VC Buyout
and Never Looked Back
Surveys are one of the oldest tools companies have used to collect
information on their customers. But, as the world has evolved, their
utility has continually decreased over time: things have changed
and customers are providing less and less useful information at a
rapidly declining rate.
This thesis is exactly what Rant & Rave was born to address.
Their customer engagement platform helps brands proactively
communicate with and gather fast feedback from their customers.
Their real-time feedback uses sentiment analysis to monitor
customer emotion and drive retention.
Rant & Rave is built on a pure-play SaaS model and currently
charges their customers $100k annually. They are focused solely
on serving enterprise customers and have landed large players
such as Barclays, Manchester United, DPD, and more.
According to CEO Nigel Shanahan, the company has grown
revenue 35% year over year and are up from $1.7M in MRR 12
months ago.
iCIMS
CEO/FOUNDER
Colin Day
ARPU
$2.5K
MRR
$8.8M+
ARR
$105M+
INDUSTRY
Software
2016 REVENUE
$70M
TOTAL CUSTOMERS
3.5K+
6 LATKA OCTOBER 2018
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ARR
COMPANY
COMPANY AGE
REV / EMPLOYEE
FOUNDED
TEAM
RANK
0208predictiveindex.com
rantandrave.com
THE PREDICTIVE INDEX
RANTANDRAVE
$73.2M
$28.5M
63
12
$915K
$271K
1955
2006
80
105
0410getresponse.com
https://pixelandtonic.com/
GETRESPONSE
PIXELANDTONIC
$60M
$18.72M
20
8
$200K
$1.87M
1998
2010
300
10
061214maropost.com
calltrackingmetrics.com
http://winmo.com/
MAROPOST
CALLTRACKINGMETRICS
WINMO
$36.48M
$14.4M
$14M
7
6
23
$231K
$626K
$165K
2011
2012
1995
158
23
85
0107icims.com
http://salecycle.com/
ICIMS
SALECYCLE
$160M
$30M
19
8
$213K
$167K
1999
2010
750
180
0309Clickfunnels
https://kentico.com/
CLICKFUNNELS
KENTICO
$70M
$20M
3
14
$538K
$80K
2015
2004
130
250
051113jotform.com
teamwork.com
sharpspring.com
JOTFORM
TEAMWORK
SHARPSPRING
$54M
$18M
$14M
12
11
4
$720K
$132K
$97K
2006
2007
2014
75
136
145
OCTOBER 2018 LATKA 7
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ARR
COMPANY
COMPANY AGE
REV / EMPLOYEE
FOUNDED
TEAM
RANK
1622assembla.com
webinarninja.com
ASSEMBLA
WEBINARNINJA
$10.8M
$7.7M
13
5
$240K
$257K
2005
2013
45
30
1824processmaker.com
Globalvision
PROCESSMAKER
GLOBALVISION
$10.5M
$7M
10
28
$75K
$117K
2008
1990
140
60
202628vutu.re
brandverity.com
fotoware.com
VUTU.RE
BRANDVERITY
FOTOWARE
$10M
$6M
$6M
11
10
21
$143K
$171K
$214K
2007
2008
1997
70
35
28
1521convertkit.com
priceintelligently.com
CONVERTKIT
PRICEINTELLIGENTLY
$12M
$8M
5
6
$324K
$211K
2013
2012
37
38
1723quantumworkplace.com
https://neoncrm.com/
QUANTUMWORKPLACE
NEONCRM
$10.8M
$7.2M
16
13
$204K
$72K
2002
2005
53
100
192527addaptive.com
Salesfuel
shopperapproved.com
ADDAPTIVE
SALESFUEL
SHOPPERAPPROVED
$10M
$7M
$6M
8
29
8
$286K
$200K
$200K
2010
1989
2010
35
35
30
8 LATKA OCTOBER 2018
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The company has scaled to 285
total customers today and is
currently north of $2.3M in MRR.
On both a logo and revenue basis, Rant & Rave is currently retaining
95% of its customers annually. While they haven't reached net
negative revenue churn yet, Shanahan is confident they will in the
near future.
Their team has grown to 105 full-time employees today, with 18
allocated towards sales and marketing. The company is landing
4-5 new customers per month with an approximate CAC of $18k
and a payback period of under 3 months.
Rant & Rave was originally founded in 2000 and raised $2M at
that time. However, Shanahan architected a management buyout
in 2006 and has bootstrapped ever since.
Clearly, the gamble to take the company over and pivot has paid off
for Rant & Rave. Their team of 105 is headquartered in Coventry,
UK.
Bootstrapping in India?
Wingify North of $1.5M in
MRR with Zero Funding
Web optimization and analytics are a necessity in today's
marketplace. Understanding where your customers drop off and
why they do so is a critical component to long-term scalability.
Wingify, a holding company for a host of web optimization products,
has pioneered a website analytics solution for businesses of all
sizes.
Visual Website Optimizer (VWO), Wingify's flagship SaaS product,
helps midsize eCommerce stores and enterprises increase
conversion rates by making A/B testing easy. Their tool can be
used across various stages of conversion funnels to give valuable
insights into customer behavior.
Launched in 2010, VWO now serves approximately 5k paying
customers. Their solution helps companies analyze user behavior,
create hypotheses around optimization, and plan and prioritize
critical tests for their websites.
Today, customers pay them anywhere from $300 to $500 per
month for a subscription to VWO. Between VWO and Wingify's
other products,
the company is
currently north of
$1.5M in MRR overall
and exhibiting revenue
growth between 20-
40% YoY.
The website optimization industry, while growing, is extremely
competitive. Wingify's CEO, Paras Chopra, was not shy to admit
this and noted churn as a significant area of improvement for
his company. Chopra notes that, because optimization is still
an emerging field, companies typically don't have the proper
resources in place to focus the ample attention required to get
optimal benefit.
Wingify currently spends around $720 to acquire a new customer
with an average payback period of less than 3 months. They
assume a customer lifetime of around 12 months, on average.
According to Chopra,
Wingify is a completely
bootstrapped company
with their team of 200
full-time employees base
entirely in Delhi, India.
Going forward, the company has its sights set on building out
additional complimentary products to VWO and has already grown
a tangential offering, PushCrew, to 1,000 users. Expect continued
success from this impressively lean organization.
OCTOBER 2018 LATKA 9
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Could Shopper
Approved's Reinvestment
Strategy Pay Off Big?
Scott Brandley is a life-long entrepreneur and has been building
software for over 20 years. Of the 30+ software companies he has
started to date, Shopper Approved has been his most successful
venture to date and earned spots on the INC 500 list two years
running.
Shopper Approved, launched in 2010, helps businesses display
product, merchant, and local reviews everywhere their customers
are looking. Their Shopper syndication network gives their
customers reviews maximum visibility and ensure they show up
in all the right places.
Shopper Approved has scaled to 7,000 customers in eight years
and currently charges an average fee of $100-150 per month.
Due to grandfathered rates, they operate with an ARPU of $70 for
around $500k in MRR.
Shopper Approved
made the INC 500 list of
fastest growing private
companies in 2016 with
$3.7M in annual revenue
and again in 2017 with
annual revenues of $4.7M.
Today, Brandley estimates they are on track to top $6M in
revenue in 2018.
Brandley is a firm believer in using call centers to acquire customers
and Shopper Approved currently operates with a CAC of $400,
solely from cost center spend. Due to low monthly revenue
churn of 0.8%, they are able to invest heavily in CAC and still feel
confident that they will be paid back in a healthy time frame.
In 2014, Shopper Approved's healthy economics drew acquisition
interests from others in the ratings and reviews industry. With an
ARR of around $2.5M, they received a valuation of $12M from
Goldman Sachs, a 5x multiple. Hindsight is always 20/20, but
Brandley is extremely thankful the deal fell through at the eleventh
hour. "Right afterwards we took off and it's been a lot of fun,"
Brandley explained.
Shopper Approved
has bootstrapped the
entire way since 2010.
Today, they are neck-in-neck with large, venture backed
competitors with a team size of less than 30 and no capital raised.
Shopper Approved is very profitable at this point, with net profits
north of 20%. Brandley's strategy revolves around investing
this profit into his many other companies. He feels confident in
his process to validate and build out ideas from his plethora of
experience in the software world and is currently investing in 5
separate companies.
Shopper Approved
CEO/FOUNDER
Scott Brandley
ARPU
$100-$150
MRR
$500K
ARR
$6M
INDUSTRY
Software
2016 REVENUE
$3.7M
TOTAL CUSTOMERS
7K
10 LATKA OCTOBER 2018
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ARR
COMPANY
COMPANY AGE
REV / EMPLOYEE
FOUNDED
TEAM
RANK
3036memsource.com
janeapp.com
MEMSOURCE
JANEAPP
$5.28M
$4.7M
8
7
$66K
$131K
2010
2011
80
36
3238agorapulse.com
relahq.com
AGORAPULSE
RELAHQ
$5M
$4M
18
2
$125K
$800K
2000
2016
40
5
344042https://targetrecruit.net/
VenturePact
linktrust.com
TARGETRECRUIT
VENTUREPACT
LINKTRUST
$4.8M
$3.6M
$3.5M
10
6
16
$96K
$116K
$250K
2008
2012
2002
50
31
14
2935ringlead.com
Vainu
RINGLEAD
VAINU
$6M
$4.8M
2
4
$150K
$60K
2016
2014
40
80
3137Corporate360
brightlocal.com
CORPORATE360
BRIGHTLOCAL
$5.1M
$4.2M
5
9
$73K
$35K
2013
2009
70
120
333941Delivra.com
hubstaff.com
http://vtiger.com/
DELIVRA
HUBSTAFF
VTIGER
$5M
$3.8M
$3.6M
19
5
14
$104K
$95K
$35K
1999
2013
2004
48
40
102
OCTOBER 2018 LATKA 11
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ARR
COMPANY
COMPANY AGE
REV / EMPLOYEE
FOUNDED
TEAM
RANK
4450msights.com
http://getsigneasy.com/
MSIGHTS
GETSIGNEASY
$3.17M
$2.4M
15
8
$91K
$96K
2003
2010
35
25
4652https://tradablebits.com/
hiremojo.com
TRADABLEBITS
HIREMOJO
$3M
$2.16M
7
3
$176K
$216K
2011
2015
17
10
485456luckyorange.com
lbaware.com
https://moosend.com/
LUCKYORANGE
LBAWARE
MOOSEND
$2.4M
$2M
$1.68M
4
10
5
$267K
$80K
$67K
2014
2008
2013
9
25
25
4349https://prezly.com/
coredna.com
PREZLY
COREDNA
$3.24M
$2.4M
4
2
$216K
$60K
2014
2016
15
40
4551http://webhose.io/
rankwatch.com
WEBHOSE
RANKWATCH
$3.12M
$2.25M
3
5
$156K
$75K
2015
2013
20
30
475355WebinarNinja
visme.co
sendlane.com
WEBINARNINJA
VISME
SENDLANE
$2.62M
$2.07M
$1.79M
4
6
5
$187K
$138K
$100K
2014
2012
2013
14
15
18
12 LATKA OCTOBER 2018
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From the Winter Olympics
to $3M in ARR: The Tradable
Bits Success Story
In today's world, experiences are more valuable than ever. Whether
it's travel, sporting events, concerts, or some other fun past-time,
consumers are constantly opening their wallets for experiences.
Tradable Bits, a Vancouver based startup, has created a platform
to help the promoters behind theses experiences take their
businesses to the next level.
Tradable Bits' main purpose is to better understand why fans
attend specific events and use that information to deliver the
optimal fan experience. They strive to connect social media
profiles to behaviors in order to collect, analyze and activate their
fan data at scale. Their platform addresses the industries' biggest
pain points and increases ROI with automated personalization.
Today, Tradable Bits has scaled to 20M engaged audiences
annually across 250 customers.
Tradable Bits also manages audience targeting for some of their
customers, taking a percentage of total spend each month.
Since the company's inception in 2011, they have consistently
grown revenues 50% YoY. Currently, Tradable Bits has focused
in on concerts and sporting events within North America, but
is considering expansion into South America and Europe going
forward.
CEO and Founder Darshan Kaler has grown Tradable Bits to over
$3M in ARR by entirely bootstrapping.
A former business operations team member for the Olympics,
Kaler came up with the idea for Tradable Bits during the 2010
On average, each customer pays
them $15k per year ($300k in MRR)
for access to their SaaS platform.
winter Olympics in Vancouver.
Today, their growing team of 17 all resides in Vancouver and are
focused on expanding revenue within their current customer base
while weighing expansion into other geographical areas.
While most of their customers are acquired through word of
mouth, Tradable Bits focuses a majority of their marketing efforts
on strategic events. They currently spend between $3k and $5k in
CAC, with a payback period of around 6 months. Current models
show an LTV of $50-60k over a 3-4 year time period.
Overall, churn is very low for Tradable Bits. Kaler estimates annual
revenue churn to be around 5%, with that figure squeezing down
to around 1% within the sports and music verticals. With solid
expansion revenue figures to existing customers, Tradable Bits
exhibits positive net revenue retention each month.
Going forward, Kaler and the entire Tradable Bits team faces a
pivotal decision: expand internationally or double-down on the
North American market. Only time will tell, but expect interesting
things from this bootstrapped success story.
Go From Working in
Funded Startups to
Bootstrapping Your Own
In the world of marketing automation, there is a wide of information
being left uncollected and acted upon when an autoresponder is
received. Out-of-office responses, change in positions and titles,
as well as updated email address notifications contain valuable
data companies can use to bolster their marketing and sales
efforts.
LeadGnome was developed to solve this problem for email
marketers and sales teams alike. Their software provides
actionable intelligence for these teams based solely on information
gathered from autoresponders.
The company was launched by CEO Matt Benati in 2014 and
rolled out their first product in 2015. LeadGnome was built as a
pure-play SaaS company that prices on a per seat basis, with the
average customer paying them $10 per month today.
OCTOBER 2018 LATKA 13
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LeadGnome is
currently north of
$200k in annual
revenue and is on track
to pass $750k in ARR
by the end of 2018
according to Benati. With annual revenue churn south 5% today
and 2.5x YoY revenue growth, the company seems poised to
meet this ambitious goal.
Perhaps the most interesting piece of LeadGnome's early success
is their ability to grow as an incredibly lean organization. Aside from
Benati and his co-founder, the company has no other full-time
employees and leans on a team of ten part-time virtual contractors
to get projects completed.
While Benati was a member of three startups prior to founding
LeadGnome, this is his first venture as a founder, as well as the
first entirely bootstrapped company he's worked for.
"I recommend to people that they go build an MVP first," Benati
explained on episode 1072 of The Top Entrepreneurs Podcast.
"Then, if you want to accelerate, there a lot of options. In fact, you
have more options at that point than if you went directly to VC."
Bootstrapping is never easy. But, if you learn anything from these
founder's stories, know it is possible. And today, with more free
and affordable tools than ever before, it's becoming more and
more feasible to grow a viable business without raising additional
capital.
If you were starting over today what would you do? Raise or
bootstrap?
Matt Benati, CEO of LeadGnome
14 LATKA OCTOBER 2018
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ARR
COMPANY
COMPANY AGE
REV / EMPLOYEE
FOUNDED
TEAM
RANK
5864ethn.io
konnectinsights.com
ETHN
KONNECTINSIGHTS
$1.5M
$1.2M
4
5
$250K
$46K
2014
2013
6
26
6066qebot.com
http://buzzbuilderpro.com/
QEBOT
BUZZBUILDERPRO
$1.49M
$1.2M
3
5
$165K
$120K
2015
2013
9
10
626870Simplero
DocHub.com
Support Ninja
SIMPLERO
DOCHUB
SUPPORT NINJA
$1.26M
$1.14M
$1.06M
9
4
3
$210K
$228K
$10K
2009
2014
2015
6
5
105
5763postalytics.com
lumen5.com
POSTALYTICS
LUMEN5
$1.62M
$1.2M
0
1
$405K
$109K
2018
2017
4
11
5965blueriver.com
Shufflrr.com
BLUERIVER
SHUFFLRR
$1.5M
$1.2M
17
5
$75K
$100K
2001
2013
20
12
616769http://swooptalent.com/
paymoapp.com
realcontentnetwork.com
SWOOPTALENT
PAYMOAPP
REALCONTENTNETWORK
$1.34M
$1.2M
$1.08M
6
10
3
$67K
$92K
$180K
2012
2008
2015
20
13
6
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ARR
COMPANY
COMPANY AGE
REV / EMPLOYEE
FOUNDED
TEAM
RANK
7278https://siftrock.com/
https://gopbn.com/
SIFTROCK
GOPBN
$1.05M
$840K
4
1
$175K
$34K
2014
2017
6
25
7480http://socialrep.com/
https://paykickstart.com/
SOCIALREP
PAYKICKSTART
$1M
$600K
10
1
$83K
$40K
2008
2017
12
15
768284contify.com
brax.io
Appointlet
CONTIFY
BRAX
APPOINTLET
$900K
$480K
$444K
9
3
4
$9K
$160K
$148K
2009
2015
2014
95
3
3
7177leaddyno.com
conveyour.com
LEADDYNO
CONVEYOUR
$1.06M
$840K
6
2
$106K
$168K
2012
2016
10
5
7379genoo.com
datability.co
GENOO
DATABILITY
$1.02M
$648K
10
2
$146K
$20K
2008
2016
7
32
758183pulseinsights.com
tryinteract.com
bant.io
PULSEINSIGHTS
TRYINTERACT
BANT
$1M
$576K
$446K
5
5
3
$83K
$96K
$37K
2013
2013
2015
12
6
12
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ARR
COMPANY
COMPANY AGE
REV / EMPLOYEE
FOUNDED
TEAM
RANK
8692https://weblium.com/
elafris.com
WEBLIUM
ELAFRIS
$390K
$240K
1
2
$8K
$17K
2017
2016
51
14
8894https://aeroleads.com
Toofr
AEROLEADS
TOOFR
$360K
$216K
3
8
$36K
$216K
2015
2010
10
1
909698leadgnome.com
standuply.com
rewango.com
LEADGNOME
STANDUPLY
REWANGO
$250K
$180K
$180K
4
2
4
$125K
$26K
$26K
2014
2016
2014
2
7
7
8591kvsocial.com
hellotars.com
KVSOCIAL
HELLOTARS
$420K
$240K
5
2
$20K
$60K
2013
2016
21
4
8793https://theseventhsense.com/
https://foxy.io
THESEVENTHSENSE
FOXY
$367K
$240K
3
12
$122K
$24K
2015
2006
3
10
899597getcredo.com
funnelenvy.com
easyredir.com
GETCREDO
FUNNELENVY
EASYREDIR
$276K
$210K
$180K
5
5
3
$69K
$14K
$60K
2013
2013
2015
4
15
3
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ARR
COMPANY
COMPANY AGE
REV / EMPLOYEE
FOUNDED
TEAM
RANK
100106https://notablist.com/index.html
upcontent.com
NOTABLIST
UPCONTENT
$150K
$108K
4
1
$50K
$54K
2014
2017
$3.00
2
102108Mailinator
missinglettr.com
MAILINATOR
MISSINGLETTR
$126K
$96K
15
1
$42K
$16K
2003
2017
3
6
104110112vidalytics.com
clappia.com
propeller CRM
VIDALYTICS
CLAPPIA
PROPELLER CRM
$120K
$84K
$30K
1
1
2
$24K
$17K
$6K
2017
2017
2016
5
5
5
99105https://chatmatic.com/
linkody.com
CHATMATIC
LINKODY
$175K
$115K
2
6
$22K
$115K
2016
2012
8
1
101107http://tribeboost.com/
https://around.io/
TRIBEBOOST
AROUND
$144K
$101K
6
4
$36K
$17K
2012
2014
4
6
103109111adjusti.co
sitecake.com
netzei.com
ADJUSTI
SITECAKE
NETZEI
$120K
$96K
$60K
0
5
1
$60K
$16K
$12K
2018
2013
2017
2
6
5
18 LATKA OCTOBER 2018
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ARR
COMPANY
COMPANY AGE
REV / EMPLOYEE
FOUNDED
TEAM
RANK
114poptin.com
POPTIN
$27K
1
$13K
2017
2
116outseta.com
OUTSETA
$6K
2
$1K
2016
4
113PRE.DO
PRE.DO
$27K
1
$13K
2017
2
115itsease.com
EASE
$8K
2
$2K
2016
5
117https://cloudkpi.com/
CLOUDKPI
$3K
0
$1K
2018
3
Jane.app application
OCTOBER 2018 LATKA 19
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Many great businesses originated as a solution to a founder's
problem. Companies like AirBnB, Basecamp, and Buffer were all
created in order to "scratch their own itch" and address a pain
point specific to them.
Add Jane.app to that list. This Canadian company was founded
in 2011 when co-founder Alison Taylor convinced her marketing
manager to develop an in-house application to track online
booking and charting in her occupational therapy clinic. His
custom solution was a resounding success.
Soon, other clinics and Applied Health practices in the area got
word and agreed to sign on as their initial customers. Today, the
company is thriving by addressing a market often overlooked by
software companies and delivering them am unrivaled product.
How much is Jane.app
doing in ARR?
Jane.app is a pure-play SaaS business with customers
paying them, on average, $95 per month. Their plans begin at
approximately $70/month and scale up based on usage.
Today, the company serves more than 18k total customers and is
at $4.7M in ARR, according to Taylor. Jane.app has been able to
double revenue year over year in consecutive years, most recently
growing at 105% YoY. Going forward, Taylor is confident that the
team will continue this trend is aiming to double revenues yet
again in 2018.
VC? Who Needs 'Em? Jane.app
at $4.7M in ARR With $0 Raised
What is Jane.app's churn?
Despite being in the SMB space, Jane.app has exhibited
impressive customer retention thus far. At present, they have
less than 5% gross revenue churn annually. Taylor attributes
their superb product and impeccable product-market fit for their
stickiness.
Trade shows are the main channel of customer acquisition for
Jane.app right now and the company pays about $40 to land a
new customer.
With an ARPU of $22,
they are receiving
payback within 2
months.
How much has Jane.app
raised?
Jane.app is proudly bootstrapped today. The company was
founded in Canada and is currently on pace to grow their total
addressable market by ramping up expansion into the U.S.
Their team has scaled to 36 full-time employees and will grow to
50 employees by the end of 2018.
$ $4.7M in ARR
20 LATKA OCTOBER 2018
GETLATKA.COM - THOUSANDS OF DATA POINTS ON PRIVATE SAAS COMPANIES
Super
Successful
CEO's
Share How
They Reduced
Churn
How to Turn a SaaS
Company Around in 90
Days
A shift from an acquisition-first mindset to a retention-first mindset
can have rippling effects on the growth of your SaaS business.
There are only 3 ways to grow a business
Most businesses could be growing faster if they were focusing
on the right things. You want to make sure you're pouring your
company's time, money, and energy into efforts that are going to
have tangible results to show CEOs, VPs, and investors.
What resonates at Teamwork.com is marketer Jay Abraham's idea
that there are three ways to tangibly grow a business, which all in
some form require a focus on customer retention:
1. Reducing customer churn
2. Increasing Average Revenue Per User
3. Increasing the total number of customers
These three growth levers are powerful because the results multiply.
For instance, Drew found at Teamwork.com that decreasing churn
by 30%, increasing ARPU by 30%, and increasing the total number
of customers by 30% increases customer LTV by over 100%.
Patrick Campbell, ProfitWell
OCTOBER 2018 LATKA 21
GETLATKA.COM - THOUSANDS OF DATA POINTS ON PRIVATE SAAS COMPANIES
At Teamwork.com, a 30% increase in customer lifetime (churn
reduction), total number of customers, and ARPU resulted in an
aggregate increase of LTV from just below $30 million to $65
million.
Reducing customer churn
Reducing churn should be at the forefront of your growth strategy.
If you can't hold on to a solid customer base, you can forget about
rapid growthyou'll never even reach stability.
Replacing customers who churn is expensive and unsustainable.
To nip that problem in the bud, work on reducing your user churn
by:
Identifying the red flags
before churn
Increase your customer's time with your company by pinpointing
when a customer is going to leave and then preventing the churn.
SaaS companies should look for patterns in behavior before
customers churn, and then monitor current customers for these
"red flag" metrics. This could mean recency of last sign-in,
frequency of usage, and length of onboarding timethey'll be
different for every company and every product.
For instance, the team at Groove found that the length of the first
session with their app and the frequency of logins were red flag
metrics for churn.
Cohort 1, which consisted of customers that were retained
after 30 days, had on average longer first sessions and a higher
frequency of logins than Cohort 2, which consisted of customers
that churned before 30 days. By targeting customers who weren't
spending a long time in their first session or logging in frequently,
Groove was able to reduce churn from 4.5% to 1.6%.
Drew found in his experiences at other companies that identifying
red flags and making efforts to re-engage customers can prevent
churn and have around 500% ROI.
Improving your product
A product that solves customers' problems well is going to be
absolutely necessary to them. These are customers that will not
churn. Teamwork.com uses feedback surveys to reach out to
churned customers to find out what they are dissatisfied with.
Companies like Qualaroo provide templates for surveys and
aggregate responses so you can turn the feedback into action to
better meet customers' needs.
Once you get feedback and make changes, be sure to communicate
them with your current customers, your former customers, and the
untapped market.
Running a reactivation
campaign
Reach out to your customers that have already churned and try to
win them back. Restate your value proposition, explain your new
features, or offer them a call with a customer service team member
to alleviate any of their frustrations.
You can use behavioral email marketing to do this by setting up a
reactivation email campaign triggered by recency of last visit. For
example, at Teamwork.com, Drew runs email campaigns to reach
out to customers that have not signed in after x number of days.
Small improvements in each of these areas will stack and amount
to large improvements in churn reduction. Churn reductions from
red flagging and reengagement tactics, product improvements,
and reactivation campaigns by just 10% each will amount to a 30%
reduction in churn.
With these three strategies in mind, we analyzed
eight companies across varying price points to
understand how they applied these concepts
and others to significant solve their churn
problem:
How Agorapulse Reduced
Net Monthly Revenue
Churn from 12% to Under
4% in 3 Years
Agorapulse, a social media management software, struggled early
on with retention. Back in 2015, they were exhibiting an abismal
12% net monthly revenue churn and showed no signs slowing
down.
Yet, according to CEO Emeric Ernoult, the company made
progress each year.
22 LATKA OCTOBER 2018
GETLATKA.COM - THOUSANDS OF DATA POINTS ON PRIVATE SAAS COMPANIES
Agorapulse was able
to decrease churn
from 12% to 8% in
year one, then 6%
the following year.
Today, the Hootsuite
competitor has gotten
net MRR churn down to
under 4% and is aiming
to land below 2% by
the end of 2018.
Their secret to this insane improvement? Pivoting, moving
upmarket, and improving their product.
Agorapulse originally featured a $29 per month plan, in addition
to their premium, more expensive options. By completing shutting
down this product and focusing solely on their $99 to $199
monthly offering, the company has slowly been able to reduce
churn.
While they still carry some legacy clients at this smaller price point,
they've been able to significantly improve their product and client
acquisition by moving upmarket, all while minimizing churn over
time.
Two Tips EmbedSocial
Implemented to Reduce
Churn by 36%
EmbedSocial, a social media embedding tool starting at $29
per month, knew the value of retention. Seeing the ROI of even
marginal decreases in churn, the company decided to dive deep
into how they could address this constant struggle during a guest
post on GetLatka.com.
Instead of getting caught in the infinite, fruitless process of
reengineering their customer cancellation flows, EmbedSocial
took a different approach: understand why customers didn't hook
and why they ultimately canceled.
By analyzing customer behavior, the team was able to understand
the core moment when customers implemented EmbedSocial
code on their websites and saw it in action where customers
became sticky and design their onboarding flow to make it easy
possible for them to get there fast. Additionally, EmbedSocial
used personalized drip campaigns to help nudge new users in this
direction.
Agorapulse Team
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Through this process, the company was better able to comprehend
the barriers new customers faced towards getting to this sticking
point and improve their UX even more.
EmbedSocial implemented another simple, subtle shift that
helped gather significantly more data around why customers were
churning. Instead of sending a personalized email after someone
churned, the company embedded a pop-up window that collected
feedback and their reason for leaving.
As a result of adding this pop-up, responses from churned
customers increased 71% and their win back rate went up 3X as
they became able to follow-up with the customers based on their
reason for canceling.
Overall, by implementing both of these strategies and collecting
more useful data from their customers,
EmbedSocial was able
to reduce their churn by
36% over ten months.
"Never assume what
your customers
want, can or need to
do. Talking with the
customers is the most
important activity!"
Jane Uzunovskii, EmbedSocial's head of growth and customer
success.
24 LATKA OCTOBER 2018
GETLATKA.COM - THOUSANDS OF DATA POINTS ON PRIVATE SAAS COMPANIES
Want to Master SMB Retention? Try These
Two Tactics WebinarNinja CEO Used.
WebinarNinja, a leading webinar service with $7.7M in revenue
as of February 2018, plays in a competitive space. Churning
customers in the SMB self-service space is a not a matter of if, but
when and CEO Omar Zenhom found the company falling victim
early on at his $50/mo pricepoint.
With monthly logo churn around 7% in 2016, Zenhom knew finding
a solution to retention was the key to taking the business to the
next level.
Today, after much
experimentation,
WebinarNinja has
reduced monthly logo
churn to just 4.1% due
in large part to two
factors: live webinars
and solid onboarding
campaigns.
Zenhom hosts free weekly webinars for both paying and free users
while also cranking out another Q&A style webinar exclusively
for paid users every two weeks. These webinars dive deep into
features and best practices for users and helps them better extract
value out of the product while saving time.
Also, upon registration, new customers are delivered a tactical
onboarding email drip sequence complete with their best content
on quick tips, features, and where to start. These guides help them
hit the ground running and quickly launch their first successful
webinar.
These two steps have helped WebinarNinja educate their
customers in a convenient manner and achieve monumental
reduction in churn.
Getting Very Specific With
Your Target Customer
LiquidPlanner, a predictive project management technology with a
$10k ACV (annual contract value), prides itself on finding valuable
customer insights from data. By analyzing usage behavior among
their hundreds of customers, the company was able to see similar
patterns among different customer types and better predict
conversion, retention, and expansion rates.
Interestingly enough, they used this data to find their highest
leverage customer segment and double down.
WebinarNinja
CEO/FOUNDER
Omar Zenhom
ARPU
$115
MRR
$218.5K
ARR
$2.6M
INDUSTRY
Advertising, Marketing, Sales
2016 REVENUE
$2.6M
TOTAL CUSTOMERS
1.9K
OCTOBER 2018 LATKA 25
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Consequently, the company has invested significantly in customer
success in this target market in order to address their specific
pain points around complexity, regulation, and innovation. In fact,
LiquidPlanner has employees specifically staffed to ensure these
companies hit their first sticking point and drive retention.
By allowing their customers at their lower price points to churn,
they've been able to allocate more resources to the customers
they ultimately can provide the most value to and expansion in
the enterprise cohort. While logo churn has certainly spiked in
the short term, LiquidPlanner CEO Todd Humphrey is banking
on increased retention among construction firms that they've
doubled down on.
How Hubspot Used
a Custom Metric to
Keep 33% of Unhappy
Customers
Churn is never black and white. When a customer ultimately
chooses to leave your product behind, any number of reasons
could have driven the decision.
As ConversionXL details in their SaaS Churn article, HubSpot was
well aware of this. In an attempt to better holistically understand
customer success over the entire lifecycle, their team created a
brand new metric: the Customer Happiness Index (CHI).
CHI is takes into account numerous factors ranging from frequency
of activity to specific feature utilization to engagement levels on
social media, among others. By weighting these factors based on
years of data from thousands of users,
HubSpot was able to objectively quantify their customer's
happiness.
Using CHI, in conjunction with churn, HubSpot was better able to
capture the reasons customers churned and helped them become
more proactive towards preventing it going forward. These new
insights allowed them to assign Inbound Marketing Consultants
to help customers through implementation early on, offer targeted
educational resources, and provide personalized monthly account
reviews.
By tracking CHI and implementing these strategies,
HubSpot was able to retain approximately 33% of their
previously unhappy customers,
as well as improve customer success among their already
successful clients. This metric not only provided granular insights
and tactics, but also helped shape their broader company-wide
changes that have had lasting impact on retention.
Should You Purposely
Stall Your Growth to
Improve Retention?
It's Working for
StructuredWeb!
StructuredWeb,
the market
leader
in channel marketing
automation software with an ARPU (average revenue per user per
month) of $20k, is obsessed with customer success.
"We are dramatically, fanatically focused on customer success,"
exclaimed CEO Daniel Nissan on an interview with Nathan Latka
on the Top Entrepreneurs podcast. "We spend lots of attention and
time on it."
Instead of creating a solution
for companies of all sizes,
LiquidPlanner has focused
their go-to-market strategy on
highly complex engineering and
manufacturing firms.
Brian Halligan, CEO Hubspot
26 LATKA OCTOBER 2018
GETLATKA.COM - THOUSANDS OF DATA POINTS ON PRIVATE SAAS COMPANIES
This probably comes as no surprise, especially from a company
playing in the enterprise space. What does come as a surprise
however, is their unique growth strategy.
StructuredWeb, a nearly 20-year-old company, has intentionally
grown slower some years in order to focus on retention. When they
see churn creeping up, their leadership team purposely reallocates
resources from "get new customers" towards ensuring customer
adoption, happiness, retention, and expansion.
"Retention is the holy grail of any SaaS business," explained
Nissan.
Their strategy is clearly working:
the company only lost one customer in all
of 2017 and exhibited less than 5% gross
revenue churn annually.
Most Investors Hate "Low
Margin" Professional
Services.BloomReach is
Using Service to Crush
Churn and you Should
Too!
BloomReach, a platform built to power digital experiences with a
$250k ACV (annual contract value), has raised $100M and has
grown to north of $50M in ARR (annual recurring revenue) today
with 40-50% YoY growth. Clearly, they are doing something right.
But what's their secret? Perhaps the answer lies in their ability to
pair their software with professional services.
Each time a new customer joins BloomReach, they charge an
additional fee to implement their platform and on-boarding the
new customers. Additionally, the company offers consulting and
analytical services, coupled with premium support services, to
help their clients get the most possible value out of their software.
By setting their customers up for success and requiring them
to invest more capital, BloomReach has been able to use these
services as retention and expansion tool.
Today, the company has hit roughly 10% annual gross
revenue churn with 100%+ net revenue retention due to
these healthy upsells.
There's no limit to the impacts churn reduction can have on a
business. How different would your board meetings be if you could
retain even 1-2% more of your customers each month? Think of
all of the areas you could redirect these resources to grow your
business even faster.
The possibilities are endless.
Reducing churn is an art, not a science. If these stories are any
indication, there is not a single magic pill for improving retention,
but many.
by Patrick Campbell, PriceIntelligently.com
StructuredWeb
CEO/FOUNDER
Daniel Nissan
ARPU
$20K
MRR
$720K
ARR
$8.6M
INDUSTRY
Content Marketing
2016 REVENUE
$7.2M
TOTAL CUSTOMERS
36
OCTOBER 2018 LATKA 27
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Why CloudCheckr's Unique
Pricing Model Has Driven 145%
Net Revenue Retention
Moving to the cloud is no longer just
a trendy phrase companies throw
around in strategy sessions: it's a
reality for most businesses. In Right
Scale's survey of nearly 1,000 IT
professionals, 96% of respondents
are currently using some form of
cloud in their business today.
Aaron Newman, CEO of CloudCheckr,
was an early believer in this platform-
as-a-service trend and founded the
company in 2011 after a successful
exit at a social media company he
led. Today, CloudCheckr is built as a management platform for
companies transitioning to and currently operating on the cloud.
Their tools provide insights into inventory management, cost
optimization, and overall security for their customer's cloud fleet.
How much is CloudCheckr
doing in MRR?
CloudCheckr structures their pricing to match cloud offerings
and is designed to scale along side their customers. They use
their cost optimization tool to determine their customer's monthly
cloud spend and then charge based on a certain percentage of
total managed spend. Their average customer pays them around
$2-3k per month today.
Right now, CloudCheckr is serving 600 total customers and
grew revenue 85% year over year from 2016 to 2017 after
tripling revenue from 2015 to 2016.
They are well north of $1.2M in MRR currently and are aiming to
break $40M in ARR by early 2020, according to Newman.
What is CloudCheckr's
churn?
CloudCheckr sits at 96% gross annual revenue retention right
now. With a scalable pricing model, expansion revenue comes
naturally as their customers grow their allocation. They have 145%
net annual revenue retention today.
CloudCheckr bootstrapped initially, before raising $50M from
Level Equity last year. Consequently, the company has become
more aggressive with their customer acquisition efforts
and are now spending around $18k in CAC with an 8 to 9
month payback period.
CloudCheckr's team of 150 is headquartered in Rochester, New
York with their overall team distributed across 4 continents. This
fast-growing SaaS company certainly has a bright future as they
look to cross $40M in ARR and eventually go public in the next
few years.
CloudCheckr Demonstration at SUMMIT
28 LATKA OCTOBER 2018
GETLATKA.COM - THOUSANDS OF DATA POINTS ON PRIVATE SAAS COMPANIES
Why Monitoring Social Media
Got Crisp Thinking to North of
$10M in ARR
Social media is a blessing for companies looking to customize their
marketing efforts and interact more directly with their customers.
Yet, with communication channels wide open, how do you manage
the inherent risks of user generated content?
Crisp Thinking has been on top of this problem for over a decade.
Their software uses artificial intelligence to monitor offensive
content posted on company's social media pages, mitigate social
media PR crises, and keep tabs on threats to staff members.
Over the years Crisp Thinking has provided marketing risk
protection for large enterprises such as Coca-Cola and Disney,
filtering all of their user generated content through their platform.
Their automated software, combined with human touch, removes
inappropriate content and alerts marketing teams.
How much is Crisp
Thinking doing in ARR?
Crisp Thinking's customer base is composed entirely of large,
global enterprises that pay them thousands for dollars per month.
According to CEO Adam Hildreth, the vast majority of their first-
year ACVs are north of six-figures.
The company serves approximately 100 customers and tens of
thousands of brands today.
They have crossed
$10M in ARR this year
and are growing at a
rate of 70% YoY.
Hildreth noted that the company will cross $17M in ARR by the end
of 2018.
What is Crisp Thinking's
churn?
According to Hildreth, churn is "tiny" for Crisp Thinking. While
gross revenue and logo churn was not specified, he did mention
that net revenue retention was currently at 110% annually. In terms
of customer acquisition, the company aims for payback within 12
months and is hitting that mark right now.
Crisp Thinking has raised 7M to date from angel investors and
has grown their team to 80 full-time employees. Their team is
distributed throughout the U.S. and U.K. with their headquarters
based in Leeds.
%Net Revenue Reten-
tion at 110% annually
Developers at Crisp Thinking using the latest technologies
OCTOBER 2018 LATKA 29
GETLATKA.COM - THOUSANDS OF DATA POINTS ON PRIVATE SAAS COMPANIES
Sococo Growing 66% YoY
After Hiring New CEO
Maintaining team cohesion and bonding while being a distributed
team is inherently difficult. Even with tools like Slack helping to
make communication as efficient as possible, a gap still remains in
creating an open, collaborating culture within remote companies.
Sococo, the online workplace where distributed teams come to
work, has the core product to solve this issue once and for all. Their
virtual office has finally created a solution that helps company
foster unity and positive culture across multiple time zones,
remotely.
How much is Sococo
doing in MRR?
Sococo is built on a pure-play SaaS model and charges companies
on a per seat basis. Companies currently pay them $15 per user
monthly with that figure being discounted based on volume and
annual plans.
Companies typically run a short pilot with Sococo and bring 50-
100 seats initially. Over time, these accounts have grown well
into the hundreds and even thousands of users and have driven
significant expansion revenue for Sococo.
Sococo has scaled to more than 10k total users across several
hundred companies today. According to their CEO, Marc
Kirshbaum, the company is north of $200k in MRR today and
growing 66% YoY.
What is Sococo's churn
today?
Customer retention and product stickiness has been a strong point
for Sococo thus far. Last year, they exhibited 92% annual customer
retention on both a logo and revenue basis.
The company has yet to invest in paid marketing channels thus far
due to strong inbound leads from organic channels.
They're currently spending less than $10k in fully-weighted CAC,
with a payback period of approximately 10 months.
How much has Sococo
raised to date?
Across various rounds, Sococo has raised between $10-15M
of venture capital. According to Kirshbaum, the company feels
confident about their current sales engine and is looking to raise
an additional $7M this year to further build out their sales and
marketing team.
Sococo's team of 30 full-time employees is distributed throughout
the world, with headquarters in Utah. Keep an eye on this fast-
growing SaaS company as they look to raise soon and cross $1M
in MRR by the end of 2019.
Across various rounds, Sococo
has raised between $10-15M of
venture capital.
30 LATKA OCTOBER 2018
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How to Hit $1.4M in MRR
with Less than 1% Churn:
ForceManager
In business, you live and die by your sales team. And, in B2B sales,
no team is more valuable than your boots on the ground, field sales
teams.
ForceManager, a Spanish SaaS startup, has broken onto the scene
to build a different CRM: one focused on leveraging contextual
information and artificial intelligence to help field representatives
optimize daily activities. They use locational and other existing
data to help these salespeople become more proactive and close
more deals.
How much is
ForceManager doing in
MRR?
ForceManager charges their clients on a per seat basis either
annually or monthly. Their average customer pays them around
$2k per month for 20-30 seats.
The company has
scaled to 700 paying
customers right now
and are well north of
$1.4M in MRR.
ForceManager more than doubled revenue YoY in 2017 and are
looking to cross a run rate of $20M in ARR in the near future.
What is ForceManager's
churn?
ForceManager spent a large portion of their initial days focused on
building a sticky and functional product.
This has clearly paid off as the company now has gross MRR churn
of 0.8% with net negative revenue churn of 0.5% monthly.
The company currently pays $3k to acquire a mid-market
customer and spends $8-10k on landing enterprises. According
to ForceManager CEO Oscar Macia, the company shoots for an
80% margin over the lifetime of their customers and optimizes for
an 8-12 month payback period.
How much has
ForceManager raised to
date?
Overall, ForceManager has raised $16M thus far across three
rounds. Initial capital was allocated towards developing their core
product while recent rounds have been invested in building out
their sales and marketing team.
ForceManager has grown to 95 total employees today with a
presence in Barcelona, London, Mexico, and Colombia.
ForceManager Conference
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How Repositioning Your SaaS
Product Allows You To
8x Your Price
Pricing is often more about positioning and perceived value than it
is about cost-analysis and unconvincing ROI calculators.
As a result, repositioning can allow you to charge many times more
than you think. Here's how.
You've created a marketing tool called DoubleDown that doubles
the cost-efficiency of AdWords campaigns. You heard that right
folks as a marketer, you can generate the same impact, the
same number of conversions, the same quality of sales leads, but
with half your current ad-spend. Wonderful! Who doesn't want
higher ROI.
What can you charge for this tool? Clearly you can't charge as
much as the money the customer is saving on AdWords, otherwise
the net result is no savings at all. Let's say you can charge 25% of
the savings and still find many willing customers.
Here's what your sales pitch looks like to a specific customer who
spends $40,000 per month on AdWords:
Great deal! The VP of Demand Gen will be able to boast to the CMO
that she saved the company $15,000/mo even after paying for
DoubleDown, and you're raking in a cool $5,000/mo. Everyone's
happy!
Now let's see why you can actually charge eight times as much
money for the same product.
Marketers have a single paramount goal: Growth. Even indirect
marketing like brand, events, and PR have the long-term goal of
supporting growth. In the case of DoubleDown's customers it's
direct: Growth through lead-generation through AdWords.
Growth is much more valuable than cost. To see why, consider the
following two scenarios:
1. CMO reports to the CEO: I was able to reduce costs 20% this
year. The CEO is happy. The CEO's follow-up question is:
How will we use those savings to grow faster?
2. CMO reports to the CEO: I was able to increase growth by
20% this year, but it also cost us 20% more to achieve. The
CEO pumps her fists amongst peels of joyous laughter. The
value of the company increases non-linearly. The additional
revenue growth more than pays for the additional marketing
cost that generated it. The CEO's follow-up question is: How
can we ensure this happens again next year?
It's always 10x more valuable for a business to grow faster than it is
for the business to save money.
This insight points us to an alternate pitch for DoubleDown. It's
not about spending less for the same amount of growth, it's about
spending more to create more growth.
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In particular, using our example of the customer who currently
spends $40,000/mo, suppose that customer is generating 200
quality sales leads per month from that spend. The sales pitch
changes as follows:
You're paying $200/lead right now, yielding 200 leads per month.
Using DoubleDown, you can double the number of leads you're
generating, still at a cost of $200/lead:
The key is this: The customer is willing to spend $40,000 to
generate 200 leads, and therefore is happy to spend $80,000 to
generate 400 leads. It doesn't matter how much of that $80,000
is going to AdWords versus going to DoubleDown. The key is not
to "save money on AdWords," but rather to "generate more growth
at a similar unit cost."
In the "saves money" pitch, the value was $20,000, and the
customer needed to keep 75% of that value-creation. Whereas
in the "generate growth" pitch, the value is $40,000, and the
customer is happy to pay 100% of that value-creation to a vendor.
Both the amount of value created, and the percentage of value
the customer is willing to pay, is a multiple higher for the "growth"
pitch versus the "save money" pitch.
So the next time you want to formulate your product as a way to
"save time" or "save money" or "be more efficient" . DON'T!
Instead, figure out how your product creates value in the way your
customer already measures value, and position your product as a
way to accomplish that.
Jason Cohen, CEO Smartbear
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Figuring this balance out can be tricky.
Let's take a look at how a few SaaS
company CEO's and CMO's have figured
this out:
Value-Based
Pricing in
Action:
Percolata
Percolata, the "Moneyball for physical retailers", is a scheduling
tool that uses in-store insights to build dream sales teams within
retail locations. The company is growing fast and on pace to break
$10M in revenue by the end of 2018...but economics weren't
always so favorable for this Silicon Valley based startup.
Prior to their current product offering, Percolata struggled for years
to sell retailers access to sensor data:
"We found that
retailers were already
drowning in data, they
didn't know what to
do with all of it. The
real challenge isn't
collecting this data,
it's finding out how to
use it and get utility
out of it."
Greg Tanaka, CEO of Percolata
Tanaka and his team used this and other insight for retailers to shift
their value proposition and build an application layer that analyzed
and packaged this data in a way their customers could get
significant, measurable value from. Thus, Percolata in its current
form was born.
Today, their product is set to schedule over 18 million hours for
more than 40 retail chains. The best part? The sell has never been
easier.
"Before, when we were selling sensor data, it was like pulling
teeth," Tanaka lamented. "Now, it's the exact opposite. We're not
even trying and getting tons of referrals and inbound leads."
With a value proposition that retailers can't ignore for every dollar
customers spend with Percolata, they get $20 to $40 back in
increased sales and a repositioned product, Percolata has never
looked back.
How to Ditch Half Your
Customers and 10x Your
Deal Size
Hiring is difficult. It always has been and probably always will be.
Especially in today's market where top talent has more optionality
than ever before, it has never been harder to lock down and retain
your industry's rockstars.
Enter SwoopTalent. This Oakland-based company connects talent
data silos inside large enterprises. Typical companies have around
7 different systems that contain talent data. SwoopTalent connects
this internal data with publicly available data, giving them a single
source of talent data and making it easier to consume.
The company's first iteration was founded in 2012 with a sole
focus on the external component of talent data, but quickly found
the space becoming commoditized. In 2016, their founders were
faced with a difficult decision: turn the lights off entirely or find a
creative way to reposition.
In a brazen move, SwoopTalent pivoted entirely, shifting their
focus from providing external talent data to an internal focus for
enterprises. By changing their story and tripling their price point,
they've cut their customers in half, reduced support cost, and
increased stickiness, all while increasing their average deal size by
a factor of ten!
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According to Stacy Chapman, CEO of SwoopTalent, the company
more than doubled revenue in 2017 and is on track to do the same
in 2018. The company is approaching $2M in ARR today and
showing now signs of slowing down anytime soon.
While the move upmarket at the eleventh hour was certainly a bold
move, Chapman insists that more businesses should consider a
similar strategy:
"A lot companies don't get it," Chapman said. "The sales cycle for
a $10k per year contract and a $85k annual contract are exactly
the same."
I'm Moving Upmarket...
How Long Should I Give
My Existing Customers to
Switch?
Understanding and engaging your audience is of utmost
importance when attempting to increase conversion efficiency.
Loyaltics, a mobile engagement platform, is designed to help
businesses optimize in this arena and allows them to gain valuable
insights and use them to target their mobile users.
Their product provides two key services: analytics that help
mobile app owners collect data and gain insights on their users
and functionality that uses this data to create personalized and
targeted messaging across a variety of mobile channels.
The company originally launched as a solution for customers of
all sizes with a freemium model and paid plans beginning as low
as $99 per month. Over time though, leadership began to realize
that their strategy was attacking the market from too wide of a lens
and, upon investigating, Localytics realized 40% of their support
volume was coming from customers that drove just 10% of their
revenue. It was time for a change.
The company began executing a plan to disband their lower tiered
customers, giving them up to 12 months to make the decision to
transfer to their new enterprise plan. While Localytics ultimately
lost approximately 75% of their lower tier customers during the
transition, they were able to retain the remaining 25% at triple their
original price point.
Today, Localytics' annual plans start at $10k and the company is
serving 600 customers with an ACV between $50-100k. Their bet
to move upmarket appears to be paying off and the company is on
track to break $50M in ARR by the end of 2018.
Follow HubSpot When
Determining Your Value
Metrics
When it comes to uber-successful SaaS companies, HubSpot
deserves to be held in serious consideration. With more than
$375M in 2017 revenue at nearly a 40% YoY growth rate, few
companies are dominating the game like HubSpot.
So, what is this juggernaut's secret? Obviously, a stellar set of
features and great product-market fit are in play, but perhaps the
real secret lies in their obsessive focus on pricing.
According to CEO Brian Halligan on episode 962 of The Top
Entrepreneurs Podcast, the importance of pricing was made very
clear after the company received its first round of funding from
Sequoia in 2011. To date, HubSpot has spent thousands of hours
discussing their pricing model and Halligan still thinks they have
room to optimize.
At the core of HubSpot's pricing strategy is the idea of maximizing
the supply and demand curve. Halligan postulates that most
entrepreneurs and companies leave a significant amount on the
table by going upmarket without exploring the lower end of the
demand curve.
This concept is what drove HubSpot to address the SMB market
and create products they could cross-sell. And, while they
had difficulties convincing investors of the validity of moving
downstream, their move has proven to be profitable with lots of
room remaining to grow.
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So, what pricing model did thousands of hours of discussion yield?
The answer: one that is more complex than Halligan would prefer,
but one that is successful nonetheless.
For their flagship products, pricing is based on two markedly
different value metrics. For their Marketing Hub offering, they
directly link pricing to number of contacts, increasing in price
as their customers increase their performance. Their Sales Hub
software, on the other hand, is based on a per seat basis.
While these varying models have created some confusion, there is
no denying its efficacy. Since investing more time and resources in
pricing optimization, HubSpot has improved logo retention by 14%
and increased net revenue retention by more than 30%.
How Frequently Should I Be
Testing Pricing Changes?
Some companies change pricing every day. Others, hesitate to
adjust annually and can spend years with stagnant prices.
I think we all can agree that the optimal frequency lies somewhere
in the middle, but what is the most efficient interval to test pricing
changes?
The short answer is that every company is different and so is their
customer bases' volatility to pricing changes. The long answer
was explored by FrontApp, a workspace collaboration software, in
their How we de-risked our SaaS pricing strategy blog post.
In this post, the company dives into the plethora of experiments
they underwent in order to gather data on answering this difficult
question. With each iteration, they put hypotheses to the test and
gain insight around how their customers valued their product.
The ultimate conclusion? You should probably be testing price
changes more often. Despite the additional time and resources it
takes your development team to design efficient testing methods,
FrontApp suggest most companies are leaving non trivial amounts
of cash on the table by not exploring different prices.
As detailed in the post, FrontApp went from iterating prices once
per year to once every three weeks. They were able to design
systems that allowed them to easily compare old cohorts to new
cohorts and de-risked the entire process by testing only on small
sample sizes.
"People fear changing
pricing too often
because they think it
will scare away their
customers. And for
somethat might
be true. But *never
*experimenting with
your pricing means you
may never learn the
value of your product
and its potential for
growth."
Mathilde Collin, CEO & Co-Founder at FrontApp
Using Data and Tests to
Optimize Your Pricing
Page
Most SaaS startups live and die by their pricing pages. Finding the
right positioning, design, and copy that increases conversions can
be the difference between 6-figures in ARR and millions.
RJMetrics, a business intelligence platform for ecommerce,
understood the leverage of their pricing page and sought out
a way to take it to the next level. In their blog post on Crazy Egg,
they disclosed their process for using data and well-designed
experiments to impressively increase conversions.
From the get-go, they could tell customers weren't scrolling down
far enough to engage with their important elements. RJMetrics
quickly adjusted their page to include their most important
elements above the fold and increased conversions.
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The article, in its entirety, discusses their iteration process from
beginning to end. Their core takeaway: get good at making (and
testing) hypotheses. The only way to improve is to test.
Investing in tools like Hot Jar, Crazy Egg, Split, and Convert are
a necessity when optimizing these landing pages. By building
them into your workflow, you can create simple tests that yield
substantial results. Take it from RJMetrics, a few small tests
and design changes yielded a jaw-dropping 310% increase in
conversions.
Pricing will always be a work in progress. If brilliant companies
like HubSpot are spending countless hours attempting to master
their own models and still see room for improvement, perhaps you
should take a closer look at your current offering as well.
Remember the saying "Its easier to upsell current customers than
it is to get brand new ones". Imagine what would happen if you
repositioned to sell your current customers a plan that is 8x larger.
That's big growth without $1 of acquisition costs. How much could
you be missing out on?
Based off Jason Cohen Essay, ASmartBear.com
Bob Moore, Co-founder of RJMetrics
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How Any.do Has Driven 150%
Growth in the Last 6 Months
Task management is a hot space. As more and more people look
to improve their personal productivity, they are turning to various
applications to help them get the most output they possibly can
on a daily and weekly basis.
Any.do set out to help individuals get the most out of their work
day back in 2011 and created an elegantly designed platform to
do just that. Today, the company has evolved into the world's most
popular task management app, boasting 20M users globally.
How much is Any.do doing in ARR?
Any.do charges users on an annual basis, with the average
plan costing $35 per month. By marketing their software as an
investment into their customers' future productivity, they are able
to get full payment up front.
The company is north
of $3.5M in ARR today
and has grown revenue
150% in the last sixth
months alone.
Their customer base is currently north of 100k paying users.
What is Any.do's churn?
Churn in the B2C space is traditionally a difficult metric to optimize.
Any.do has experienced similar woes in this department and is at
40% gross logo churn annually. Despite this volatility, CEO Omer
Perchik notes that the company has 6-7x better
user retention after 30 days than their
competitors.
Any.do only recently began experimenting with paid acquisition
and has had success early on. Due to their annual billing upfront,
the company is receiving full payback immediately, on a cash basis
and within 12 months on a recognized revenue basis.
How much has Any.do raised thus far?
Any.do has raised more than $6.5M to date across multiple rounds.
While Perchik would not disclose specific numbers around total
funding, he did note that the company is profitable today.
Their team of 20 full-time employees is based in both Tel Aviv and
San Francisco right now. Going forward, Any.do is focused solely
on finding product-market fit for their new personal assistant
feature and are currently in A/B alpha tests with 1k U.S. users.
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How Rant & Rave Orchestrated
VC Buyout and Scaled to North
of $28M in ARR
Surveys are one of the oldest tools companies have used to collect
information on their customers. But, as the world has evolved, their
utility has continually decreased over time: things have changed
and customers are providing less and less useful information at a
rapidly declining rate.
This thesis is exactly what Rant & Rave was born to address.
Their customer engagement platform helps brands proactively
communicate with and gather fast feedback from their customers.
Their real-time feedback uses sentiment analysis to monitor
customer emotion and drive retention.
How much is Rant & Rave
doing in MRR?
Rant & Rave is built on a pure-play SaaS model and currently
charges their customers $100k annually. They are focused solely
on serving enterprise customers and have landed large players
such as Barclays, Manchester United, DPD, and more.
The company has scaled to 285 total customers today and
is currently north of $2.3M in MRR. According to CEO Nigel
Shanahan, the company has grown revenue 35% year over year
and are up from $1.7M in MRR 12 months ago.
What is Rant & Rave's
churn?
On both a logo and revenue basis, Rant & Rave is currently
retaining 95% of its customers annually. While they haven't
reached net negative revenue churn yet, Shanahan is confident
they will in the near future. Their team has grown to 105 full-time
employees today, with 18 allocated towards sales and marketing.
The company is landing 4-5 new customers per month with
an approximate CAC of $18k and a payback period of under 3
months.
How much has Rant &
Rave raised?
Rant & Rave was originally founded in 2000 and raised $2M at
that time. However, Shanahan architected a management buyout
in 2006 and has bootstrapped ever since. Clearly, the gamble to
take the company over and pivot has paid off for Rant & Rave.
Their team of 105 is headquartered in Coventry, UK.
Rand & Rave
CEO/FOUNDER
Nigel Shanahan
ARPU
$8.3K
MRR
$2.3M+
ARR
$28M+
INDUSTRY
Customer Engagement
2016 REVENUE
$20M
TOTAL CUSTOMERS
285
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How Rock Content Broke $12M
in ARR in Latin America
When it comes to Latin America, SaaS companies are probably not
the first thing that come to mind. Slowly but surely that sentiment
is changing however, with more and more software companies
being founded each day in emerging markets across LATAM. And,
thanks to influencers such as Diego Gomes, founder and CEO of
Rock Content, it's only a matter of time before that perspective is
forever changed.
Gomes founded Rock Content in 2013 as a content marketing
platform with tools and services on top. Companies scan their
marketplace and pool of 10,000+ freelancers to hire talent to write
articles, produce videos, design graphics, and more.
How much is Rock
Content doing in ARR?
Rock Content currently is broken down into three revenue streams:
their SaaS offering, marketplace fees, and professional services.
Today, their SaaS subscriptions make up 30% of their revenues,
marketplace fees contribute to 50% of revenue, and professional
services compose the remaining 20%.
According to Gomes, they closed 2017 with $10M in revenue and
are currently at $12M in ARR.
What is Rock Content's
churn today?
Rock Content breaks up their customers into four segments: small,
mid-market, enterprise, and resellers. As expected, their smaller
segments have been exhibiting the most churn, while their larger
clients have held steady. Overall, Rock Content is at 72% revenue
retention annually.
Remarkably, the company has been able to grow to scale without
significant funding. To date, Rock Content has only raised $2M
from outside investors.
How much is Rock
Content paying to acquire
a customer?
Organic traffic has driven a significant amount of leads for this
Latin American company, thus driving down CAC. Of their team of
300 full-time employees, 20 are solely dedicated to marketing and
content generation. Today, they pay approximately $2k to acquire
a new customer and optimize for a payback period of about 6 to
8 months.
While the team is not actively looking for investment at present,
Gomes noted they are always "dating investors." With a new
product launch on the horizon, additional funding may be on the
horizon for this wildly successful platform.
The company has grown to just
north of 1,500 customers right
now, with each paying an average
of $7k annually.
Rock Content Offices
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From MVP Built by Freelancers
to $100k in MRR: Talkpush
Finding and hiring the right candidates is a challenge as old as
time. Companies have consistently struggled to find and retain the
best talent across every industry. With recruitment software that
uses messaging and chatbots to talk with candidates, Talkpush is
helping to ease the load of overburdened recruiting teams across
the world.
Talkpush is built on messenger APIs like Facebook and WhatsApp
and injects messaging between candidates and employers. They
have the capability to collect audio, video, and text from candidates,
making a standard resume a thing of the past. Their core solution
is currently helping recruiters increase their individual output by a
factor of five or more, in most cases.
How much is Talkpush
doing in MRR?
Talkpush is a pure-play SaaS product and charges their
customers based on volume. They target enterprise customers
with plans ranging from $1k to $6k per month.
The average customer
pays Talkpush
approximately $3,300
each month.
The company has scaled to north of 30 customers and just
crossed $100k in MRR in April. The company is growing quickly
and processed more than 1M interviews last year alone and have
scaled from just $40k in MRR 12 months ago.
What does Talkpush pay
in CAC?
Today, Talkpush has yet to experiment with paid marketing. CEO
Max Armbruster noted the company first built out their customer
success team and is now honed in on developing their sales team;
marketing is next on the list of priorities.
Nonetheless, Talkpush is currently paying $11k in CAC with an LTV
of $62k. They have also achieved net negative revenue churn of
5-10% annually.
How much capital has
Talkpush raised?
Talkpush has raised $1.5M in capital to date. According to
Armbruster, this cash was spent on technical resources and
building out an engineering team. Despite being a recruiting
company themselves, Armbruster lamented about the three year
journey Talkpush embarked on to find the right head of engineering.
Talkpush is a team of 35 full-time employees spread throughout
the world. Their largest offices are based in the Philippines and
Latin America.
Talkpush team
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7 Growth Channels That Will Take
Your Business to the Next Level
Fast
If you're a mature business, you're probably all too familiar with the
law of large numbers. According to Investopedia:
In business, the law of large numbers relates to growth rates,
stated as a percentage. The law of large numbers indicates
that, as a business expands, the percentage rate of growth
becomes increasingly difficult to maintain.
This makes intuitive sense. It's easy to grow 300% from year one
to year two when your company only generated $10k in revenue
early on. But when you hit $10M in ARR and you can no longer hit
triple digit growth rates with ease, where does expansion come
from?
Many businesses turn to the "land and expand" model to drive
additional revenue. Upselling new products to your existing
customers or encouraging them to buy more seats are proven
methods to increase your average revenue per user and drive
growth.
An alternative approach is to land more net new customers. Yet, in
a chaotic marketplace, where does one even begin?
We looked at the various growth channels and marketing
techniques companies are using to acquire new customers today.
From global expansion to creatively hacking content marketing to
incentivizing product demos with gift cards, these seven CEO's
shared their secrets for efficiently landing new customers.
How Becoming #1 on G2
Crowd Helped Catapult
Gong.io
Sales professionals are always looking for a competitive edge
and, thanks to Gong.io, they may have the answer to they've been
searching for.
Gong listens in on sales calls and helps organizations understand
what's going on during the conversation. They help individuals
optimize pitches by understanding where they can improve,
providing managers with insights around who needs coaching and
their corresponding blind spots.
Launched in late 2016, this conversation intelligence platform
for sales has scaled incredibly fast. They've grown from 12 beta
customers to 200 paying an average of $800 to $1,000 per seat
annually...all in year one.
What's their key to success? According to CEO Amit Bendov, their
secret has been getting "lots of inbound".
While the company uses lists, cold outreach, and conferences to
generate sales, 20-30% of their business is coming from organic
sources. And, with stellar rankings on sites like G2 Crowd, this
should come as no surprise.
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Gong.io is currently
ranked as the
#1 conversation
intelligence platform
for sales and #1 for
all sales tools on G2
Crowd.
Additionally, the company is the #3 rated B2B tech company in all
of Silicon Valley, ahead of Google and other giants.
These rankings are backed up by logo churn close to 0% and
annual net revenue retention north of 150%. Clearly this $2M in
ARR company is doing something right and word is getting out.
PDFFiller's Case for
Building Internal Growth
Tools
PDFFiller is a document management platform that enables end-
to-end document generation for businesses of all sizes. Operating
on a pure-play SaaS model, the company has grown to 200k
customers, each paying up to $15 per month.
A business doesn't scale to such impressive size without solid
tactics...so what drives PDFFiller's marketing machine? The
answer: a homebrew, sophisticated digital marketing platform.
Instead of leaning on outside software and tools, this bootstrapped
behemoth made the decision to keep everything in-house and
develop their own internal platform. Covering both organic and
paid channels, this custom solution is the backbone for all of
PDFFiller's marketing efforts.
Today, the company uses this tool to run 60M keywords on top of
SEO, SEM, and other paid digital marketing platforms.
Additionally, the PDFFiller team created an internal CRM complete
with an A/B testing system that optimizes their site's layout based
on the visitor's profile and acquisition channel. Each user is given a
unique, custom experience depending on who they are and where
they came from.
For their content marketing needs, the company also developed a
tool to help streamline collaboration.
"We have a marketing technology that allows us to find sites that
would be interested in collaborating with us and we have that as a
partnership program," explained Boris Shakhnovich, president of
PDF Filler on episode 494 of The Top Entrepreneurs.
PDFFiller
CEO/FOUNDER
Borya Shakhnovich
ARPU
$10
MRR
$2M
ARR
$24M
INDUSTRY
Customer Engagement
2016 REVENUE
$24M
TOTAL CUSTOMERS
200K
This platform also generates tens
of millions of landing pages that
ultimately drive 4M people to their
site monthly...all automatically.
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This process is driven primarily by automation, but also includes
human touch. Their technology automatically finds sites that
would be a good fit for collaboration, allowing their team members
to target vetted candidates and optimize close rates for guest
posts and backlinks.
PDFFiller's dedication has clearly paid off. The company is north
of $10M in ARR today, ranks for 2.7M organic keywords, and is
featured on 5,800 referring domains.
How Landing Their First
Channel Partner Took
SoloSEO to New Heights
The story of SoloSEO begins way back in 2005. CEO Michael
Jensen, along with business partner Aaron Stewart, founded the
company as a means to "scratch their own itch": as two emerging
internet entrepreneurs, they had difficulty driving traffic to their
own websites.
SoloSEO was born to solve this problem. They offer a set of do-it-
yourself SEO tools for individuals and SMBs, working directly with
customers and numerous strategic web hosting partners. They
strive to help anyone with a website that wants to rank higher by
providing a plethora of tools to reach their SEO goals.
Today, the company has scaled to 200k paid customers, with the
average generating between $20 and $30 in monthly recurring
revenue. SoloSEO is doing $4M in MRR right now and their channel
partnerships are a large driver for this scale.
SoloSEO is currently featured in a number of hosting companies
registration flows and operates on a revenue share model when
they are sold. Typically operating on a 50/50 or 60/40 split, the
company has developed a fruitful, lasting relationships with these
hosts.
But in a crowded space of SEO tools, how did SoloSEO stand out
and win these partnerships?
Prior to joining the team, SoloSEO co-founder Danny Ashworth
wrapped up a successful exit of his first company, BlueHost. After
selling BlueHost to Endurance International Group (EIG), Ashworth
joined the SoloSEO team full-time and immediately got to work.
Ashworth's existing relationship to EIG helped SoloSEO close a
partnership deal early on, helping them grow faster.
The team then
leveraged their deal
with EIG to land more
hosting partnerships
and help them
ultimately reach the
$48M in ARR mark
they are at today.
Why Databox is Hacking
Guest Posts Better than
Anyone Else
Creating high quality content is no easy task: it can eat up
significant resources that many early-stage companies just don't
have. And, without the proper distribution channels, there's no way
to ensure that traffic is driven to the article you've slaved over for
weeks.
What if there was an easier way to create more content, with less
effort AND have a small army sharing on your behalf? Databox,
a business intelligence platform doing $91k in monthly recurring
revenue, may have the answer.
The company, led by former Hubspot growth hacker Peter Caputa,
loves to take a collaborative approach when creating new content.
In order to kick off a new article, their team brainstorms a list of
topics and sends out a quick survey to their internal lists and any
potential collaborators they would like to include.
While contributors get tons of inbound questions all of the time
for potential guest posts, Databox aims to make the process as
painless as possible using their surveys and short requirements.
The team then uses these responses to crowdsource a large
amount of their popular posts such as 35 HubSpot Integrations
Top Users Swear By and 18 Tips for Increasing Your Sales Team's
Activity.
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By using just a paragraph or two from
multiple contributors, Databox can crank
out high quality content in just a few hours.
These posts also bring the company two additional benefits
in addition to driving organic traffic. By including a plethora
of contributors, these articles typically perform well on social
channels as they are frequently shared out by those who helped.
The content has also proven to create a community around itself
that more and more people want to be a part of and learn from.
Databox even takes this one step further by using these articles
as a means to target potential prospects. Instead of reaching
out cold to leads, Databox will diligently research the company's
blogging history and find ways to include their expertise in future
collaborative posts.
In exchange for a few sentences on the proposed topic, Databox
includes a mention to the company and appropriate linkbacks to
their website.
According to Caputa,
this strategy has
netted them 50%
response rates on
targeted agencies,
Hubspot partners, and
more.
By providing value and exposure from the beginning, Databox has
been able to use this methodology to add more warm prospects
into the top of their funnel at an impressive rate.
How Enplug Efficiently
Expanded Geographically
Some conferences can be a draining, ineffective use of your time.
Some conferences can change your business forever. Nanxi Liu,
CEO of Enplug, makes a compelling case for the latter narrative.
After speaking at the YPO conference a few years ago, Liu was
approached by another executive looking to transition from the
logistics industry to the technology space; he wanted to take her
company global.
Databox
CEO/FOUNDER
Peter Caputa
ARPU
$140
MRR
$91K
ARR
$1.1M
INDUSTRY
Customer Engagement
2016 REVENUE
$276K
TOTAL CUSTOMERS
650
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Within months, Enplug struck a deal and opened their first office
in Europe. By creating a partner program that allowed other teams
to license their brand and technology and sell it foreign countries,
they were able to more than double their footprint.
Today, Enplug's core
business serves about
1,000 customers in the
U.S. Their franchising
program features ten
partners in Brazil,
Australia, Japan, and
the U.K., with each
serving approximately
150 companies on
average.
Partner cuts vary based on the market and associate pricing, but
Enplug charges a fixed fee per license that scales down as volume
increases. And, with all sales salaries and expenses sitting on their
partner's P&L, they are insulated from a great portion of the risk
involved.
With a unique approach to white labeling, Enplug has been able to
add additional revenue to their $400k in MRR core business.
The Gift Card Trick:
Incentivizing Product
Demos
JazzHR, an applicant tracking and recruiting software, has an
unconventional way of getting prospective customers. As a way to
sweeten their cold outreach efforts, the company gladly forks over
Amazon gift cards to any potential leads that sign up and attend a
full product demo with their sales team.
JazzHR CEO Pete Lamson admitted the absurdity of the idea from
inception, but was cautiously optimistic as they experimented over
the course of a few months. After seeing little to no improvement in
close rate as result of the gift cards, the company ultimately shut
down the program.
But then something interesting happened.
Over time, JazzHR began seeing these initial demos turning into
substantial deals. While the gift cards didn't result in immediate
JazzHR
CEO/FOUNDER
Pete Lamson
ARPU
$200
MRR
$600K-$750K
ARR
$7.2M-$9M
INDUSTRY
Customer Engagement
2016 REVENUE
$7.2M
TOTAL CUSTOMERS
3K
Enplug Team
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conversions, they did help their sales team get off on the right foot
with new leads.
This information shifted their thinking and firmly placed their
gift card recipients warmly at the top of their funnel. And, after
analyzing the customer acquisition cost data, the experiment
proved successful.
Today, the program has been reinstated and remains financially
successful. After testing various values, JazzHR now offers $25
Amazon gift cards to all companies that complete a product demo.
The Right Way to White
Label and Insulate
Yourself from SMB Churn
Churn in the SMB space is a constant struggle for SaaS companies.
With a lower price point, putting the necessary touch to ensure
customer success is not economically viable. What if there was a
way to shield your business from this volatility?
Vendasta was well aware of this problem when they launched
back in 2008. The company has changed the game for SMB by
providing a complete, white label tech stack that helps these
businesses solve their marketing, sales, fulfillment, and delivery
problems.
Vendasta generates revenue in two distinct ways. First, they
charge value-added resellers a monthly subscription fee for
access to their sales and marketing platform, as well as their
marketplace. Second, they generate recurring revenue based on
the sale of their white labeled software products to SMB, with their
resellers typically marking up the product 5x.
Resellers, on average, pay Vendasta $1k per month for access to
their software and marketplace. According to CEO Brendan King,
the company has 1,200 resellers using their product to sell to
100,000 small businesses monthly.
King noted that Vendasta hit $2.3M in MRR last month, with
approximately one third of revenue coming from subscription
revenue and the remaining two thirds being attributed to product
sales. The company grew 45% year over year in 2017 and is aiming
to cross 50% growth in 2018.
With their unique SaaS business model, Vendasta has been able to
achieve net negative revenue churn. While the company
exhibits 15% gross annual revenue churn,
they have 117% net revenue retention yearly.
By white labeling their products and charging a monthly
subscription to their value added resellers, the company has
found an incredible growth channel that also insulates them from
rampant SMB churn.
Vendasta CEO, Brendan King
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Why He Left Hubspot to Run
$91k in MRR Databox
With so many sources of truth across your business, how can you
possibly make intelligent, data-driven decisions without spending
all day logging into twenty different platforms? This problem is
exactly what Databox has set out to address.
Databox pulls all your data into one place, so you can track
performance and discover insights in real-time. Their platform
features out-of-box integrations with 60+ different tools and helps
businesses easily visualize their data through a drag and drop
interface while allowing them to set goals and create scorecards
across any device.
How much is Databox
doing in MRR?
Databox is pure-play SaaS company that charges their customers
on a monthly basis, scaling up with usage. Their average customer
pays them $140 per month today and the company is adding 80-
100 new customers each month.
With 650 paying customers, Databox is currently north of $91k
in MRR. They have exhibited impressive year over year growth,
scaling from just $23k in MRR 12 month ago.
How much is Databox's
CAC?
According to CEO Peter Caputa, Databox has acquired most of
their customers through organic content marketing. They estimate
CAC at $315 right now and receive payback in under 3 months.
While the company originated as an enterprise solution, they
recently pivoted to specifically serve the SMB sector. Consequently,
churn has been a huge area of improvement, according to Caputa.
Databox is currently at between 4-5% monthly logo churn and
2-3% net revenue churn per month.
How much has Databox
raised?
Upon joining the company after exiting Hubspot, Caputa raised
$1.1M on a convertible note, bringing Databox to $4.8M total
raised. Caputa is focused on reducing churn and keeping CAC low
before raising an additional round.
Databox's team of 20 full-time employees is headquartered in
Boston and is shooting for cash flow break-even in Q3 of this year.
Databox Team
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How Filestage Scaled to $40k
in MRR With Content
Collaboration Tool
As content creators, collaboration is key. Making sure
valuable ideas are properly discussed and incorporated
into the final cut of an article, video, image, or audio file is
crucial to bringing the best final product to your audience
possible.
Yet, tracking changes, edits, and suggestions via email is
clunky and outdated. Teams often get frustrated by the
lack of organization and overall inefficiency.
Filestage was created to solve this issue and helps
companies make content editing efficient across their creative
teams. Their web application allows users to upload files, host
discussions and feedback, and approve and accept final edits,
streamlining the entire process.
How much is Filestage
doing in MRR?
Filestage is a pure-play SaaS company. Their average customer
pays them $100 per month and range from small agencies and
freelancers to large enterprises.
They've scaled to
400 customers today
and at approximately
$400k in MRR
according to CEO Niklas Dorn. The company has exhibited
impressive growth over the last 12 months and is up from $5k in
MRR one year ago.
What is Filestage's rate of
churn?
In their smaller cohorts, churn has been a difficult problem to solve.
Filestage is currently at roughly 6% monthly revenue churn in this
segment, mostly due to freelancers and small agencies no longer
requiring their product for additional projects.
In their enterprise and mid-market segments however, churn
is more stable. Filestage is 2-3% monthly revenue churn in this
cohort.
How much is Filestage
spending to acquire a
customer?
According to Dorn, the company doesn't spend any cash on
paid acquisition channels. Today, they focus mainly on content
marketing, cold outreach, and referrals. Filestage is at a fully-
weighted CAC of around $400 with a 4 month payback period.
The Filestage team has grown to 11 full-time employees, with five
focused on sales and marketing and the remaining six lasered
in on product. They've raised just 600k to date and looking to
continue their lean operation going forward.
Filestage Team
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Onboarding SaaS Tool
With 6 Month Runway...Will
AcademyOcean Make It?
Even if you have the world's best product or software, your
success hinges on ease of onboarding. If you have the answer to
everyone's problems, yet no one knows how to use it, what good
are you really doing?
AcademyOcean is a SaaS product built to help other SaaS
companies address this massive pain point. Their software helps
businesses create private courses that help educate customers on
new features and products. Companies use their tool to increase
stickiness, generate leads, and build loyalty.
How much is AcademyOcean doing in MRR?
Companies are currently working with AcademyOcean over
similar competitors like Teachable and Thinkific. Their product's
core differentiation is around their ability to educate and engage
customers at all stages of the sales funnel.
Today, the average customer pays AcademyOcean $200 per
month.
The company has
scaled to 15 total
paying customers right
now and is generating
$3,000 in MRR.
The company was launched four years ago by Ukrainian
entrepreneur Vladimir Polo and was born out of another idea
entirely. While AcademyOcean was originally a different,
unsuccessful SaaS product, the former company's custom
onboarding academy generated noteworthy buzz. Polo quickly
validated this demand and pivoted to what is now known as
AcademyOcean.
How many customers has AcademyOcean
churned?
To date, AcademyOcean has churned four customers of a total of
19 they've served over their lifetime. Polo attributes this churn to
poor product-market fit and believes the company has solved this
issue going forward.
At their current growth rate, AcademyOcean is adding 1 to 2 new
customers per month and expects that to multiply in the coming
months. Their team has just recently invested in marketing efforts
and are focused on content marketing at this point in time.
What is AcademyOcean's runway?
AcademyOcean recently raised $100k in exchange for 10% equity.
Their team of 6 full-time employees is based in Ukraine and,
according to Polo, is burning $8k in cash each month.
Going forward, AcademyOcean has approximately 6 months of
runway remaining and are confident that their marketing efforts
will drive the necessary growth to keep the business afloat. Be
sure to follow Polo and the entire team as they look to change the
way SaaS companies onboard!
Nathan Latka & Vladimir Polo
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How Botkeeper Uses AI to
Streamline Bookkeeping, Hit
$140k in MRR
Bookkeeping is nuisance for businesses of any size. Whether
you're a family doctor, car wash, Fortune 100 company, or growing
SaaS startup, bookkeeping has probably left you at wits end on
more than one occasion.
Thankfully, botkeeper has emerged on the scene to provide an all-
in-one solution for those that hate bookkeeping. Their software
solved the problem of hiring and retaining good accountants and
mitigates human errors. Botkeeper provides bookkeeping services
with 24/7 support, unlimited reporting, and smaller headcounts, all
at 30-50% cheaper than current options.
How much is botkeeper
doing in MRR?
Botkeeper is a pure-play SaaS product with services baked into
their monthly subscriptions. Their average customer currently
pays them $500 per month and plans scale based on quantity of
transactions.
Botkeeper
CEO/FOUNDER
Enrico Palmerino
ARPU
$500
MRR
$140K
ARR
$1.7M
INDUSTRY
Accounting, Software
2016 REVENUE
$300K
TOTAL CUSTOMERS
500
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What does botkeeper's
churn look like?
Botkeeper is churning customers at a rate of 4-6% annually
and has achieved net negative revenue churn. Today, they have
between 20% and 34% net negative revenue churn per month.
While initially bootstrapped by Palmerino, botkeeper has raised
a total of $4.5M to date. Their team of 50 full-time employees
is distributed throughout the U.S. Be sure to follow botkeeper as
they look to continue their impressive growth trajectory in 2018
and beyond!
They have scaled to over 500
customers today and are
close to a $2M run rate, doing
$140k in MRR last month.
They have grown from just $35k in MRR 12 months ago and
are hoping to end 2018 with more than $4M in total revenue,
according to CEO Enrico Palmerino.
How much is botkeeper
spending to acquire
customers?
Today, botkeeper spends between $1k and $2k to acquire a new
customer at a price point of $500 per month. They are landing
customers primarily through referrals and organically through their
website, but they also employ a team of 13 brand ambassadors
that educate people on their new way of doing bookkeeping.
According to Palmerino, the
company estimates a minimum
LTV of $12k over the course of
four years.
Botkeeper offices
Enrico Palmerino, CEO Botkeeper
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Why 500k Paid
Users Are
Turning to
GitLab for
DevOps
Support
DevOps is a difficult function to manage and optimize within most
companies. Thankfully, GitLab has emerged as a single application
for the complete DevOps lifecycle. They help companies anywhere
from project planning and source code management to CI/CD and
monitoring.
Launched in 2011 by Founder Sid Sijbrandij, GitLab began as a
simple open source project to assist DevOps teams and evolved
into a full-fledged company a year later. The team was accepted
into Y Combinator in 2015 with just 9 employees and has been on
an incredible growth trajectory ever since.
How much is GitLab doing
in ARR today?
GitLab has maintained a large focus on their open source version
of their product and are still committed to growing both their open
source and proprietary codebases right now. They currently have
three pricing tiers which range from $4 to $99 per user per month.
The company has grown their customer base to 5k total
organizations with approximately 500k total paid users. According
to Sijbrandij,
GitLab is north of
$10M in ARR today.
The company has exhibited incredibly growth over its history,
doubling their incremental ACV each of the last 5 years.
What is GitLab's churn?
In terms of annual logo churn, GitLab is south of 10% today.
Additionally, they've been able to achieve net negative revenue
churn of an astonishing 75% annually.
With annual contracts, GitLab optimizes for an instant payback
period on a cash basis with their typical contract lasting 12 months.
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GitLab
CEO/FOUNDER
Sid Sijbrandij
ARPU
$19
MRR
$2.5M-$3.3M
ARR
$30M-$40M
INDUSTRY
Information Tech, Software
2016 REVENUE
$10.0M
TOTAL CUSTOMERS
5K
How much has GitLab
raised to date?
According to Sijbrandij, the company has raised approximately
$40M thus far. Their team of 270 is fully distributed with 150 of
those members focused on engineering and product efforts.
The future looks bright for this fast-growing YC alum. It will be
interesting to see which direction Sijbrandij and the leadership
team take GitLab going forward as they've recently added
Automattic's Matt Mullenwig to their board.
Gitlab Team Summit Greece 2017
Gitlab Office
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Do Browser
Notifications
Work? iZooto's
$98k in MRR
Says So!
Browser notifications are hot in 2018. They can help companies
increase conversions and stay in touch with their audience, all
without ever collecting a single email address.
iZooto has been helping online retailers and publishers take
advantage of this emerging AdTech since March 2016. Their
classic SaaS platform helps these businesses retarget, engagem,
retatin, and convert their audiences by taking advantage of
browser notifications.
How much is iZooto doing
in MRR?
iZooto is built on both a pure-play SaaS model and a marketplace
model. The company charges retailers based on number of
subscribers that have opted in to receive notifications while also
helping publishers monetize their notification inventory with
advertisements.
They've scaled to 400 total customers with the average customer
paying them between $150 and $200 each month. According to
CEO Vivek Khandelwal,
iZooto is currently at
$98k in MRR with $54k
of that figure coming
purely from their SaaS
product.
iZooto
CEO/FOUNDER
Vivek Khandelwal
ARPU
$150-$200
MRR
$98K
ARR
$1.2M
INDUSTRY
Information Tech, Software
2016 REVENUE
$192K
TOTAL CUSTOMERS
400
iZooto Team
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The company has grown significantly YoY and was at just $16k in
MRR 12 months ago.
What is iZooto's churn?
iZooto is at 5% monthly logo churn today, but thanks to their pricing
model, they are able to consistently drive significant expansion
revenue.
iZooto acquires customers primarily through inbound via their
content marketing efforts and referrals. The pay $1,200 in fully-
weighted CAC and optimize for a 9 month payback period.
What LTV does iZooto
place on their customers?
According to Khandelwal, the company assumes a minimum LTV
of $3k over 12 to 13 months. Their team has bootstrapped to 32
full-time employees in India thus far and has no plans to raise
capital in the near future.
In terms of net monthly revenue
churn, the company is at negative
3% right now.
iZooto Team
56 LATKA OCTOBER 2018
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Why Helping Nonprofits Got
NeonCRM to North of
$6M in ARR
Doing what you love, helping others, and producing significant
value is a recipe for long-term, sustainable success. Luckily for Jeff
Gordy, CEO of NeonCRM, his SaaS product has been checking all
of these boxes since 2005.
NeonCRM is an all-in-one CRM software and tool built just for
nonprofits. Organizations use their product to manage fundraising,
membership, events, and websites in order to raise more, save
time, and grow faster.
How much is NeonCRM
doing in MRR?
Today, thousands of nonprofit organizations are using NeonCRM
to take their operations to the next level, with the average
customer paying them $200 per month. Pricing is dependent on
organization size and required functionality.
NeonCRM serves more
than 3k total customers
today and, according to
Gordy, is north of $6M
in ARR right now.
The company has also exhibited healthy year over year growth,
adding between $1M and $1.5M in ARR over the last 12 months.
What is NeonCRM's
churn?
Churn is an ever-present concern of SaaS companies, especially in
the volatile nonprofit sector. NeonCRM however, appears to have
a recipe for success and has achieved 6% annual gross revenue
churn with only 1% in net revenue churn.
Gordy takes pride in their ability to drive expansion revenue
through both new customer acquisition and increased usage. As
nonprofits become more successful with their fundraising efforts,
their number of contacts increases as well, allowing NeonCRM to
grow alongside their customers.
How much does
NeonCRM pay to acquire a
customer?
NeonCRM currently pays $1,100 to acquire a new customer with
a payback period of approximately 6 months. Their LTV model
also suggests impressive value for their larger customers with a
duration of 13 years and a minimum LTV of $30k.
The company has been bootstrapped since its humble beginning
and has no plans to raise outside capital at present. Their team of
100 is based entirely in Chicago and China.
NeonCRM Space Theme at NTC Conference in Nola
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Can PRE.DO Break $10k in MRR
by End of 2018? CEO Thinks So!
Collaboration across teams is always difficult. When you factor
in scale, different locations, and cultural barriers, it can seem
impossible. Making sure everyone's voice is heard and the right
ideas make it to the top is art every business struggles to perfect.
PRE.DO was as a digital innovation tool to help companies
collaborate and get all employees involved during the idea
generation process. Their technology helps companies and
employees capture ideas, weed out duplicates, and prioritize the
best ones. Their goal is to provide insights during ideation and
make working together easy.
How much is PRE.DO
doing in MRR?
Companies are currently paying PRE.DO $449 per month to use
their software product in addition to a one-time, $5k configuration
fee.
The Danish company has scaled to five paying customers
today, including one of Denmark's largest banks, with some trial
customers in the pipeline.
They are currently
north of $2,200 in MRR
right now and aiming
to cross the $10k in
MRR mark by the end
of 2018.
Has PRE.DO raised capital?
According to Uffe Koch, CEO and Co-Founder of PRE.DO, the
company has been completely bootstrapped thus far. Thanks to
their one-time setup fees and the co-founder's successful past
exits, the company has enough runway for the immediate future.
Their team is based entirely in Denmark and has scaled to five
interns, in addition to the two co-founders. PRE.DO hasn't invested
significantly in online marketing efforts to date, but is zeroing in
on paid advertising for the second half of this year. The company
acquired its first five customers through their own network and
other organic channels.
Going forward, Koch thinks there is a bright future for PRE.DO.
With plenty of avenues for additional revenue streams within
the context of their current business model, he thinks there is
tremendous opportunity on the horizon. Only time with tell if this
bold Danish duo will scale this collaboration tool beyond their goal
of $10k in MRR by the end of the year. Stay tuned.
Redmark Design Sprint Innovation
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How ProcurementExpress
is Bringing PO's Into the
21st Century
In the past, when businesses make purchases, figuring out who
buys what items has been a hassle. Teams have filled out time
consuming, out-dated forms and wasted valuable time making
sure they are complete to the finance team's specifications.
In 2014, ProcurementExpress emerged on the scene to bring
purchase order management into the 21st century. Their mobile
and desktop applications replace archaic order forms and help
business spend their money easier and more efficiently.
How much is
ProcurementExpress
doing in MRR?
ProcurementExpress is focused on small and mid-market
businesses with $1M to $50M in annual deal flow. The average
customer currently pays them north of $200 per month.
According to CEO James Kennedy, ProcurementExpress has
nearly doubled revenue over the last 12 months and is on pace to
double again in 2018.
How much is
ProcurementExpress
paying to acquire
customers?
In terms of fully-weighted CAC, ProcurementExpress aims to
spend around $800 to land a new customer. In their current model,
they are able to land a new customer for every 20 demos they
perform. Word of mouth referrals, PPC advertising, and affiliate
marketing are their main channels for growth right now.
Going forward, the company is focused on optimizing all stages of
their funnel, with specific emphasis on the latter parts. According to
Kennedy, this is the highest leverage point for ProcurementExpress
in the near term.
What is
ProcurementExpress'
churn today?
Over the last four months
ProcurementExpress
has exhibited 2% gross
logo churn each month.
While the company has achieved net negative revenue churn in
the past, they have not been able to consistently maintain that
pace thus far. In terms of lifetime value, Kennedy models LTV at
around $13k over 50 months.
ProcurementExpress' team of 20 full-time employees has raised
only $300k to date, all from a small friends and family round. Their
distributed team is based in South Africa, Ireland, and Pakistan.
The company has scaled to 250
customers today and is doing $65k
in MRR right now.
Nathan Latka with Procurement CEO James Kennedy
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Will SecurityScorecard Cross
$25M in ARR This Year?
As a cyber-security professional in today's world, your job
has never been more difficult. Between the countless hackers
attempting to steal your valuable data and the seemingly infinite
ways to breach your system, protecting yourself is an uphill battle.
To make matters worse, as more and more companies transition to
the cloud, the well-being of their confidential information is often
placed in the hands of their providers. And, until recently, there was
no source of truth to verify and rate their security.
This all changed in 2014 as SecurityScorecard emerged on the
scene. Their software allows companies to audit their vendor
ecosystem with security ratings and continuous risk monitoring.
The company has become the leader in security ratings and
is used by hundreds of customers like GE, McDonalds, Pepsi,
AllState, and others.
How much is
SecurityScorecard doing
in ARR?
SecurityScorecard bills on an annual basis with customers paying
$2k per year to monitor a single vendor. On average, customers
pay them between $80-100k per year.
The company has landed 450 total paid customers today and
has been doubling revenue year over year.
According to
SecurityScorecard
CEO Aleksandr
Yampolskiy, the
company is on track to
break $25M in ARR by
the end of 2018.
What is
SecurityScorecard's
churn?
In terms of gross annual revenue churn, SecurityScorecard
currently operates at around 10% right now. Thanks to their
consistent ability to grow within their existing customer base, they
are exhibiting 15% net negative revenue churn at this point in time.
With annual billing upfront, SecurityScorecard is able to receive
rapid payback from their customers, on a cash basis. Overall, the
company anticipates a payback period of under one year,
spending less than $80k in CAC.
How much has
SecurityScorecard
raised?
Across their Seed through Series C rounds, SecurityScorecard
has raised a total of $60M to date. According to Yampolskiy, the
company is "flirting" with a $250M valuation and is not looking to
raise additional capital in the near future.
Scorecard's Offices
60 LATKA OCTOBER 2018
GETLATKA.COM - THOUSANDS OF DATA POINTS ON PRIVATE SAAS COMPANIES
From Side Hustle to $50M+
in ARR: SEMrush
Any business owner will agree: organic traffic is always the best
traffic. Yet, in today's competitive landscape, creating content
and webpages that drive this free viewership has never been
more difficult. Creating high ranking content and measuring its
performance takes a great deal of effort.
SEMrush is a tool tens of thousands of businesses ranging from
small, solo bloggers to massive Fortune 100 enterprises trust to
help them manage and measure success across various digital
marketing platforms. Their all-in-one marketing toolkit helps
companies improve performance across SEO efforts, paid traffic,
social media, content marketing, and more,
How much is SEMrush
doing in ARR?
SEMrush was originally launched in 2008 as a side hustle between
its co-founders. However, due to incredible and consistent organic
growth, the company became their full-time focus in 2012.
Today, SEMrush customers pay a wide range in price, based on
usage. Their entry-level product begins at $100 per month and,
while most of their customers are at a monthly price point less
than $200, they've landed sizable enterprise deals in the high six-
figure ranges annually.
According to Eugene Levin, Chief Strategy Officer of SEMrush,
the company has scaled to 2M total users today with 30-50k paid
customers while adding more than 1k new customers monthly.
The company is currently at a run rate
greater than $50M and has exhibited
revenue growth north of 60% YoY.
How much does SEMrush
pay to acquire customers?
When Levin first joined the company two years ago, SEMrush was
receiving full payback from its customers in around 1 month.
The team initially focused on Google Adwords as a growth
channel, but has since shifted focus towards content marketing in
both English and other European languages.
Logo churn, especially at the lower price points, has been a bit of
an issue for SEMrush to date. On the other hand, from a revenue
churn perspective, the company has been able drive healthy
expansion revenue and has achieved net negative annual revenue
churn.
How big is the SEMrush
team?
Today, the SEMrush team has scaled to over 500 employees. The
company is headquartered in Philadelphia with offices in Europe
and Russia.
Despite their impressive market share and growth rates, Levin still
sees a tremendous opportunity for growth going forward. What's
next for this marketing tool juggernaut? According to Levin, the
goal is to cross $80M in ARR by the end of 2018. Only time will tell.
Since joining however, the company
has raised $40M in outside funding
and is now optimizing for payback
within 5 to 6 months.
Nathan Latka with SEMrush CSO Eugene Levin
OCTOBER 2018 LATKA 61
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How to Scale from $100k in ARR
to North of $1M in 18 Months:
Siftrock
There are countless marketing automation tools out there that
can help you communicate with your audience, regardless of size.
But, what if you want to take the conversation to the next level?
What if you want to increase your reply rate and find better ways to
engage your list? Siftrock has the answer.
Siftrock is a marketing automation tool that helps businesses
with large lists manage and mine replies to mass emails in order
to acquire more information and coordinate proper human touch.
Whether you receive an out of office, a notice of changed position,
or an eager response, their product helps companies automate
and improve their processes after the send.
How much is Siftrock
doing in ARR?
Siftrock is a pure-play SaaS product that bills annually. Their
average customer currently pays $7,500 per year based on usage
and deployed feature set.
According to CEO Adam Schoenfeld, the company is
currently serving 140 customers and just
crossed $1M in ARR.
Over the last 18 months, Siftrock has scaled from $100k in ARR to
their current 7-figure mark.
How much has Siftrock
raised to date?
In stark contrast to his first company, Simply Measured, which
raised tens of millions of dollars, Schoenfeld's team is entirely
bootstrapped. Seeing significant opportunity, the business has
elected for slower, more intentionally growth at this point in time.
Today, Siftrock is optimizing for a payback period of 10 months.
They are proudly hitting that mark right now and receiving payback
within 6 months after spending approximately $3,500 in CAC.
What is Siftrock's churn?
Being a young company, ripe with early adopters, churn is yet to be
an issue for Siftrock.
Over the last 18
months, the company
has exhibited 99.5%
gross revenue
retention with 135%
net revenue retention,
overall.
Siftrock's team of six full-time employees is based entirely in
Seattle and are focused on driving additional expansion revenue,
bolstering outbound sales, and innovating their product going
forward.
Adam Schoenfeld & Chris Hundley, CEO & Co-founder Siftrock
62 LATKA OCTOBER 2018
GETLATKA.COM - THOUSANDS OF DATA POINTS ON PRIVATE SAAS COMPANIES
Will SMARTASSISTANT's CEO
Shakeup Pay Off?
Customer experience is critical to long-term success. It drives
loyalty and, if done right, can even turn your customers into
advocates for your brand.
SMARTASSISTANT was created to help brands and retailers to
build intelligent digital sales assistants and provide excellent
customer service at scale. Their software determines a customer's
needs and requirements and helps recommend the right products
to make an informed purchase every time.
Their chatbots ask thoughtful questions and map these needs to
the right product features, ultimately providing the best options
for inquiring patrons. Their application helps banks, telecom
companies, and retailers through customer chatbots, Facebook
messenger, Amazon Alexa, and more.
How much is
SMARTASSISTANT doing
in MRR?
SMARTASSISTANT has built out a product on a freemium basis
and their core product was built out of an agency founded back
SMARTASSISTANT Team working
OCTOBER 2018 LATKA 63
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in 2006. Just four years ago, their founding team decided to pivot,
raise $3M from angel investors, and create a SaaS product.
Today, SMARTASSISTANT has scaled to north of 100 total paying
customers with the average paying between $10k and $100k
monthly. According to the company's President and CMO, Markus
Linder,
SMARTASSISTANT is
doing between $1M
and $4M in MRR right
now and has exhibited
more than 100%
revenue growth YoY.
What is
SMARTASSISTANT's
churn?
SMARTASSISTANT has been successful in reducing their churn
thus far and is currently in the single digits in terms of gross annual
revenue churn. Linder also proudly mentioned that the company
has achieved net negative revenue churn and is retaining 110% of
their revenue.
SMARTASSISTANT has been driving this expansion revenue
through usage as companies add additional brands, domains, and
supported languages. Their typical customer pays a first year
ACV between $50k and $100k with the company receiving
payback within a year.
How much has
SMARTASSISTANT raised
total?
SMARTASSISTANT has raised a total of $9M to date from outside
sources. The company recently hired a new CEO and is expanding
their offices in Austin and NYC.
Their team has grown to 100 full-time employees and is focused
on crossing $50M in ARR within the next few quarters.
SMARTASSISTANT Founder, Markus Linder
64 LATKA OCTOBER 2018
GETLATKA.COM - THOUSANDS OF DATA POINTS ON PRIVATE SAAS COMPANIES
Why Enterprises Are Paying
Sorry as a Service to Send Gifts
for Them
In a digital world, reaching out to your customers in an old school,
physical manner can easily separate you from the rest of the
pack. Instead of sending a template email thanking them for their
service, what if you could send a handwritten card complete with
freshly baked cookies...all at scale?
Sorry as a Service has set out to do just that.
Founded in 2015 by three co-founders during a 48 hour hack-a-
thon, Sorry as a Service helps enterprises send personalized gifts
at the press of a button. Their SaaS product integrates with all
web-based CRMs and allows companies to send handmade gifts
to their customers with little to no friction.
How much is Sorry as a
Service doing in MRR?
Sorry as a Service currently has two revenue streams: their high-
margin software that integrates with CRMs and their lower margin
handmade gifts they send on enterprises' behalf. The company
has scaled to 11 enterprise customers today and currently sends
out 400+ items daily.
The average customer
pays Sorry as a
Service around
$1,300 monthly, for
approximately $14.3k
in MRR today.
OCTOBER 2018 LATKA 65
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The company also makes 5-10% margin on gifts and is close to
break even with a $20k gross monthly burn rate.
How much has Sorry as a
Service raised?
Sorry as a Service was founded in late 2015 and joined both
Startup Wise Guys and Techstars the following year.
and has been able to run lean with a team of eight members
based in Estonia.
Being a young company, CAC has been difficult to estimate thus
far for Sorry as a Service. The team has one full-time member
dedicated to enterprise sales and also pays partners 20% of first
year revenue for referrals.
How can they scale?
Quantifying their value has admittedly been an issue for Sorry as
a Service at this point. While no marketing team would deny the
inherent value in their product, it often labeled a luxury service for
most companies.
Going forward, Indrek Poldvee, the company's co-founder and
leader of sales, noted they must improve their messaging in order
to close more deals. But, with impressive results thus far some
companies have seen 2.5x ROI on customer LTV versus traditional
vouchers and gifts things look promising for this Eastern
European startup.
$ The company has
only raised $250K
Indrek Poldvee, Co-Founder of Sorry as a Service
66 LATKA OCTOBER 2018
GETLATKA.COM - THOUSANDS OF DATA POINTS ON PRIVATE SAAS COMPANIES
Poor Employee Retention?
StellarEmploy Can Reduce
Turnover 30%!
Hiring and retaining great employees is the secret to scaling any
business in a sustainable manner. Yet, with more options than ever,
it can seem impossible to find the right talent and ensure they are
the type of team members you want to keep for the long run.
This problem is especially prevalent in the hourly job market.
Coffee shops, warehouses, call centers, and other companies that
pay wages on an hourly basis constantly deal with the burden of
employee turnover and bringing it their replacements.
What if you could mitigate and reduce this turnover? Luckily for
these businesses, StellarEmploy was created to attack this pain
point for companies of all sizes and industries. With a core product
proven to reduce employee turnover by 30%, they have set out to
help employers quickly identify and hire the best talent for their
business.
What is StellarEmploy
doing in MRR?
StellarEmploy uses an elegant 15-minute questionnaire, alongside
a ML algorithm calibrated based on their client's drivers of
success, to determine which applicants will be the best fit going
forward. They currently bill customers annually, based on the
number of hires they plan to make over the next year and charge
approximately $100 per hire.
The company has scaled to three total customers today and has
proven their efficacy in five different industries, reducing turnover
by 30% or more in each.
StellarEmploy is doing
$5k in MRR today
and looking to raise
$1.5M to build out a
sales team and further
improve their data
science efforts.
What is StellarEmploy's
churn?
StellarEmploy defines churn as any user that executes a pilot
without converting to a paid plan. Sara Nadel, StellarEmploy's
CEO, believes the company is still too young to measure churn in
a meaningful way.
In terms of customer acquisition, the company brings in new
business primarily through calculated hustle and cold outreach. In
the future, StellarEmploy is looking to grow their sales team and
invest in events to drive additional expansion.
Today, StellarEmploy is composed of its three co-founders and
one full-time employee. They are notorious for using contractors
and freelancers to fill gaps in the short-term, but are very eager to
bring on new talent soon. Be sure to follow this exciting early stage
company as they continue to grow!
OCTOBER 2018 LATKA 67
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How Vendasta Hit Net Negative
Revenue Churn with SMB
Churn in the SMB space is a constant struggle for SaaS companies.
With a lower price point, putting the necessary touch to ensure
customer success is not economically viable. What if there was a
way to shield your business from this volatility?
Vendasta was well aware of this problem when they launched
back in 2008. The company has changed the game for SMB by
providing a complete, white label tech stack that helps these
businesses solve their marketing, sales, fulfillment, and delivery
problems.
How much is Vendasta
doing in MRR?
Vendasta generates revenue in two distinct ways. First, they
charge value-added resellers a monthly subscription fee for
access to their sales and marketing platform, as well as their
marketplace. Second, they generate recurring revenue based on
the sale of their white labeled software products to SMB, with their
resellers typically marking up the product 5x.
Resellers, on average, pay Vendasta $1k per month for access to
their software and marketplace. According to CEO Brendan King,
the company has 1,200 resellers using their product to sell to 100k
SMB monthly.
Kind noted that
Vendasta hit $2.3M in MRR last month, with approximately
one third of revenue coming from subscription revenue
and the remaining two thirds being attributed to product
sales.
The company grew 45% year over year in 2017 and is aiming to
cross 50% growth in 2018.
What is Vendasta's churn?
With their unique SaaS business model, Vendasta has been able to
achieve net negative revenue churn. While the company exhibits
15% gross annual revenue churn, they have 117% net revenue
retention yearly.
Due to the varying sizes of their cohorts, CAC was not disclosed by
King during his interview. He did however, share that the company
optimizes for a payback period of 9 months when acquiring a new
customer.
How much has Vendasta
raised?
Vendasta has raised $13M in outside capital to date. The
company's team of 285 full-time employees is headquartered in
Canada and focused on hitting 50% YoY growth for the remainder
of this year.
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