SaaS Interviews with CEOs, Startups, Founders
1016 How He Managed Launching 2 $100m+ Companies At Once
06 May 2018
Chapter 1: What is the main topic discussed in this episode?
This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn. Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple of hundred thousand dollars to 2.7 million.
I had no money when I started the company.
It was $160 million, which is the size of many IPOs. We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everyone. My guest today is Vijay Basani.
He's a serial entrepreneur with a track record of building successful businesses delivering enterprise-class solutions.
Before starting his current company, Sigilent, he founded AppIQ, an application storage resource management provider acquired by Hewlett-Packard in October 2005, and Web Managed Technologies, a policy-driven content delivery solution provider acquired by Network Appliance in August 2000. Vijay, are you ready to take us to the top? That's correct, yeah. Okay, good. So tell us about Sigilent.
What do you guys do and what's your business model? How do you make money?
Sigilent is in the business of helping companies of all sizes with cybersecurity. Specifically, our motto is that every company, with respect to the size of the company, deserves an enterprise-class security program to protect themselves against never-ending cyberattacks as well as compliance mandates.
And what's the business model? Is it a pure play SaaS?
We are a SaaS security as a service provider.
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Chapter 2: What is Sigilent and how does it help companies with cybersecurity?
So were you working on this company while you were still building AppIQ?
That is correct, yes.
Got it, okay. So did you build Sigilent because you needed that product at AppIQ, and then you said, wow, actually a lot of people need this?
Actually, I started two companies at the same time, separately.
I see.
And when we started Sigilent, at that time, there was a need for file analysis and reporting. And over time, that evolved into security information management, log management space. And in the last, this space has evolved and the company has evolved and our strategy has evolved over time.
Now, when you sold in 2005 to Hewlett Packard, I mean, was that a meaningful financial event for you or was that like a soft landing kind of thing?
That was a very meaningful exit.
Okay. What was the exit? Was it public?
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Chapter 3: What business model does Sigilent follow?
I had two other co-founders.
Okay, got it. And did you bootstrap that company or raise? We raised a ton of VC money. Like more than 100 million? About 30 plus million dollars. About 30 million. Now, what about on this one, on Sigilent? Have you raised capital or are you bootstrapping?
Initially, we bootstrapped and then we raised our money. To date, we have raised a total of 38 million dollars.
Okay, so you're very much a creature of pattern then, huh? That's correct. All right. And what are you at now today in terms of total customers using the platform?
We have several hundred customers using this Sigilent platform right now.
Okay. So can we say maybe between 300 and 600? Is that fair? That's correct, yeah. Okay, great. And what are you doing to acquire these customers? I mean, you're in the mid-market. This is a very kind of popular space. You have Nobi4 and Stu. They're kind of playing below market, lower price points. And then you have enterprise solutions above you charging a million per year.
So you are focused in the middle. How are you acquiring these kinds of customers?
We use inside sales model. So we have a pretty decent sized inside sales team. How big? We have about 30 plus people.
Oh, wow. And what's the total team size?
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Chapter 4: What challenges did Vijay face when starting Sigilent?
In total, we have 170 people in the company.
170. Okay, 30. So, wow. So, about 20% of the team is inside sales. Great. And they're following a typical playbook or have you altered the playbook at all?
Yes, we do. We do have a typical inside sales playbook. We also have a small number of channel partners.
Okay. Now, if you look at kind of new revenue each month, what percentage comes through channel partners versus direct via your channels?
I would say about 20% comes from the channel partners and 80% from exact sales.
Okay, and how do you incentivize the channel partners? Are they taking 30% of ACV or what?
We tend to give anywhere from 10% to 30% of ACV. But Jay, you're a nice guy. Well, no, we do care about our partners.
You know, you cybersecurity guys, you're supposed to be tough. You're supposed to keep the bad guys out, but you're giving away 30%, so that's good. You make your channel partners happy. That's correct. Yeah. All right. Now, as you're building a company, you're looking at scale. Talk to me about unit economics. I mean, what do you like to keep your payback period under?
We tend to, our goal is to get it below 18 months. Okay. What are you at now?
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