SaaS Interviews with CEOs, Startups, Founders
1051 CEO: "We Went from $35k in MRR to $350k in 12 months"
10 Jun 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 Aki Bolog.
He's a software engineer and a VC associate at OpenView Venture Partners, along with director sales and marketing at InfiniDB, co-founder and CEO currently at MarketMuse. Aki, are you ready to take us to the top? Yes, absolutely. It's a pleasure to be here. You bet. So is MarketMuse your sole focus right now or are you still dabbling in sales and marketing and VC stuff at OpenView?
Yeah, so I actually, I was a VC associate at OpenView a few years ago. Technically now I'm a venture partner with Wolfram Ventures where we look at basically AI investments, but MarketMuse is my sole focus. So venture for me is kind of a nights and weekends hobby, but at MarketMuse, I'm the original founder.
Chapter 2: How did MarketMuse grow from $35k to $350k in MRR?
I'm now a co-founder and CEO. I run our sales strategy for the most part. fundraising and so on. So it consumes my time for sure. But on the weekend, who doesn't like looking at venture deals? And tell us what MarketMuse does and what's the revenue model? Is it a pure play SaaS option or what? Yes, it's actually somewhat of a hybrid. So what we do is we use AI to accelerate content creation.
So given a particular topic, we download massive amounts of web content on that topic, crunch it and build a content blueprint that shows you exactly how to write to cover a topic comprehensively. And we're also now soon rolling out with a content planning solution that looks at your entire site and can identify where you have
blind spots in your content or thin content or content gaps, and basically prioritize those suggestions to drive your content planning as well. So essentially what we do is we use, we are building an AI kind of research assistant for all of your content planning and creation. And when was launch date? Yes. So we launched our first product two years ago.
There was a page level content optimization product called Content Analyzer, which is a SaaS product that's $500 a month for a seat to start. And it doubles or triples the output of each writer. That's still around today or it's transitioned? Still around today. So you can use that at marketmuse.com and
If you have a writer you're spending $2,000 or $2,500 a month on, you can double their output with this simple software tool. So that's where we started. And then we launched a second product, which are the content brief products, where basically given a particular topic you want to build authority for online, we can show you exactly how to dominate that topic online.
What are the subtopics you should mention? So I'll give you an example. So let's say completely randomly, let's say you want to write about dog food and you want to be known as the dog food authority on the web. Well, what you want to think about is what are all the subtopics you should cover? So what are the different types of dog food? What are the different characteristics of dog food?
For example, maybe there's high fiber dog food for elderly dogs. and so on, and so you'll want to cover all of these topics in your content. Today, the way that content planning happens is you're basically just using your existing knowledge of dog food and kind of put it together. Maybe you're Googling it, reading the Wikipedia article on dog food. You're trying to piece this article together.
We just go to the web, we download 10,000 content items on dog food, crunch it and use this machine learning engine to, to build a relevance based, what we call a knowledge graph that shows you exactly here are the things you would want to cover to be an expert, to write as if an expert were writing about dog food.
Here are the questions you'd want to address, you know, what, what types are there, et cetera. So you launched it in 2013. What have you scaled to today in terms of total customers? Oh, yes. We're well above 100 customers, most of them larger enterprise or even mid-size or enterprise publishing entities.
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Chapter 3: What is MarketMuse's revenue model and how does it work?
So take me back 13 months in December of 2016. What were you guys at about? Yeah. So December of 2016. So we had, we had just come to market, um, in, um, in late 2015 and it was very much managed services, uh, In 2016, we were closer to 35K MRRs, about 300 and change, but closer to 400K ARR.
As I'm traveling the world on planes, trains, and automobiles, you guys hear it, I'm closing loads of different deals, whether it's buying a company, closing a new account for getlatka.com, you name it, I've got to do it.
Chapter 4: What role does AI play in MarketMuse's content creation process?
And part of my issue is signing documents while I'm on the road. So I just found this new tool. I'm using it pretty aggressively. It's called SignEasy. So you can get started for free at getsigneasy.com forward slash sign. podcasts. You'll see contracts that I've signed there and boy, oh boy, are they big and they work and the app is so easy to use.
Get started today at getsigneasy.com forward slash podcast. So you were about 35K in AR at the end of December, sorry, in monthly recurring revenue at the end of December. So about 13 months ago, December, 2016, today you're over 400,000 a month in revenue. Is that accurate? Um, yeah, we're, we're getting, yeah, we're getting there. We're getting close to that. Yeah. Yep.
We'll say between three 50 and four. Is that fair? Yeah. Yeah. I think, I think that's around the range. I mean, it, what, what we're doing, we basically, that's like a number that, you know, I'm trying to just understand your growth rate. I mean, I mean, or is it like, is it as low as 200 or 300 or 400 or 500? I mean, generally, where are you guys at? Yeah, yeah. So it's in that range.
I mean, I don't want to get too specific because I'm also including bookings on some of the larger deals that are closing now. Well, you just divide that by 12 in terms of getting MRR, right? Or however long the contract value is. Exactly. All right. But generally speaking, I mean, we can say almost, I mean, 10x, right? 35k up to about 350k. Yeah, I think that's about right.
So that explains why you've raised, obviously been able to raise capital. So you just closed some today, hit the bank count. How much total have you raised? Yeah. So we're raising three in this round. How much total have you raised altogether? Oh, I'm sorry. In four in total. Yeah. Got it. Now you said that as if it hasn't actually closed yet, are you still raising as an open round?
You're going to let it roll. Yeah, it's an open round for about two more weeks. Uh, so we have, uh, we just did the first close today and then we have, um, a couple of, um, a couple of VC funds we're still talking to, to round out the rest. And, um, and, uh, yeah, so I imagine in the next two, three weeks we'll have the remaining million. How much did you, okay.
I was going to say, so you've closed 2 million of the 3 million already. Yeah. Got it. Um, good stuff. Okay. And what about some of the other economics around the company? What's your turn look like today? Yeah, so churn was about 11% last year. Logo churn or revenue churn? In terms of logo churn. Actually, in terms of revenue churn, but we really had... it was roughly similar.
Basically, the companies that churned were, you know, we didn't have multiple deals that churned, so it was roughly the same. But calculating revenue-wise, it was revenue churn of around 11%. And then there were some additional companies that we had, we should not have taken them on as clients. So they churned out pretty quickly.
It's a bit of a toss up internally, whether we categorize those as failed POCs or just a regular churn. But if you include that, it's in the upper teens of churn last year. Annually. Annually, over the year. And fully weighted, what are you spending to acquire these customers? Yeah. So we use content and data journalism to really drive our customer acquisition.
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Chapter 5: How has MarketMuse's customer base evolved over time?
Uh, gosh, that's a really good one. Um, I, you know, I, I don't, uh, I don't, but I do follow investors, uh, and I do study investors pretty closely. Number three, besides your own, what's your favorite online tool? Uh, favorite online tool. We, we really love zoom actually, uh, for, for video conferencing. We just had those guys on a CEO a couple episodes ago. It's incredible.
I mean, they're well over a hundred million bucks in ARR and their acquisition strategy is impressive to study. Number four, how many hours of sleep do you get every night? Uh, about six depends on how much terror there is, but about six. All right. And what's your situation? Married, single, you have kids, single, single, no kids. All right. And how old are you? Uh, 32, 32. Last question.
Take us back 12 years. What do you wish you knew when you were 20? Yes, I would have taken more risk. I mean, I took a fair amount, I thought, but I would have done more. You know, when you do something hard and you don't die, you realize you could have done something harder. There. There you guys have it. CEO of MarketMuse founded the company back in 2013.
He says he wished he would have doubled down, taken a little bit more risk, but doing pretty good for himself. Launched the company again back in 2013, helping folks scale their content strategy with AI. In December of 2016, they were doing about 35 grand a month in revenue. They've scaled that almost 10x to about 350 grand in monthly recurring revenue.
In terms of capital raise, they raised $4 million, serving 100 customers that pay about $5,000 per month. Churn is really low, less than 1% per month in terms of logo and revenue. They're about the same with their team of 22 up in Boston, New York, and soon to be Montreal. Aki, thank you for taking us to the top. Thanks for your time.
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