SaaS Interviews with CEOs, Startups, Founders
1414 $6m in ARR, 3x YoY Growth Knotch Helps Enterprise Brands Measure Their Marketing
08 Jun 2019
Chapter 1: What is Knotch and how does it help brands measure marketing?
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Notch again launched in 2014, now doing about 6 million bucks in terms of run rate. That's 3x year over year, August 2017, doing only about 2 million. So healthy growth, $14 million raise, 20 enterprise customers that pay caught on average 300 grand first year ACV. They haven't churned anything. So net revenue retention annually is about 140%, which is great.
just really working out CAC to LTV stuff. They assume LTV is call it three, four million bucks, assuming a 10% churn rate, even though they don't have any churn, which means they could spend call it 50, 60 grand, something like that on CAC. Lots of room to play there as they look at growing their sales team. 30 people right now based between New York City and other remote location.
Again, transparently collect, own, and action the data from your digital content marketing for enterprise brands. 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 Anda Gunska. She's the CEO and co-founder of Notch, the leading independent provider of real-time intelligence for marketers.
Founded in 2013, Notch has been recognized as one of the most innovative marketing technologies in the world as it seeks to change the way global brands engage and understand their audience. Anda, are you ready to take us to the top? I'm so ready. All right. Tell us about the company. What do you guys do and how do you make money?
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Chapter 2: What is the revenue model of Knotch?
And she is like, you know, she's the CMO that all CMOs want to be. And, uh, I didn't know that at the time because I didn't know anything about the industry, but she was kind enough to, I guess, just take a intro. She, I guess she did a bit of research on us and then introduced us to her team. Um, and that's really what kicked it off. We did a really good job of over delivering for that team.
And then she started introducing us to other CMOs. She then ended up investing in the company, which was amazing. And so we had a really strong story going into meeting Unilever, JPMorgan Chase. JPMorgan Chase has probably been a similarly amazing, I guess, customer and situation for us. Kristen Lemkow was the CMO there, then started introducing us to other CMOs.
So really, we started getting our first few customers by, I guess, word of mouth, CMO word of mouth. So that initial Beth though introduction. So by the way, was this when she was still at GE? Yeah. Yeah, at the time she was a CMO of GE. Okay, so GE was your first customer there. How did you get that cold intro though? I mean, that's really the secret sauce here. How'd you get that?
Well, I was coming to New York. We were based in Silicon Valley at the time. And I was coming to New York and meeting literally everyone I knew and just asking them, do you know any CMOs? Here's my value prop. Can you help me get to them? I probably met 200 people before I got five introductions. And of those five, only Beth responded. Oh, interesting. Very interesting. Okay.
And she ended up invest. Yeah, that's great. She ended up investing as well, which is nice. How big was your angel? Like your first round, your seed round? So we did an initial round of four and then a second round of 10. Did you do that initial one like on the safe or was it a typical convertible note?
We did the initial one in Silicon Valley on convertible notes and then the second one was an equity round. So walk me, that's a big move. Most people say you go to Silicon Valley if you're building a software startup. You went the other way. Why?
Because I felt that in order to be truly empathetic to the people we were selling the product to, we needed to get out of the bubble and get closer to the people we're selling the product to. And there's a lot of CMOs in New York. There's CMOs. And if they're not here, they come here all the time. So it makes sense.
And to be honest, it's not just about the CMOs because we work with a bunch of people on their teams. We work with their agencies. So it was really important that we were close to them. Is no churn a bad thing? You know, it's funny. I've been thinking a lot about this. I think to some extent it's weird with investors almost. It also fucks up a lot of the metrics that you're trying to calculate.
So in a way, it's bad on paper because it makes your job harder. But I mean, who are we kidding? Of course, it's an amazing thing. I mean, it means that we figured out how to do customer success properly and that we have a product that works. I'm not going to complain about it. Well, let me position it differently.
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Chapter 3: What are the inflection points in Knotch's growth journey?
I think there's a lot of opportunity to be that independent source of truth across all digital marketing. So, yeah. Very good, Anda. Let's wrap up here with the famous five. Number one, what's your favorite business book? That Comstocks book. She just came out with it, right? It's frilly new. It's coming out on Monday, actually, which is very exciting. I got to read it before.
Um, so yeah, imagine it forward. What's the next one? Imagine it forward. Very good. Number two, is there a CEO you're following or studying right now? Yes. Jeff Bezos. Of course. Number three, is there a favorite online tool you have for building your business? You know, I really like this product called Nota Bene. It's started by Sam Lesson.
It's a really simple app that enables you to take really fast notes and send them to either yourself or your assistant. What's it called? N-O-T-A, Nota Bene, B-E-N-E. Interesting. I pronounce it with a Romanian accent. I like it. It makes it sound like it should be priced more, right? It makes it more expensive. Number four on the, how many hours of sleep are you getting every night?
About six and a half. That's good. And what's your situation? Married, single, kiddos? Why is that a question? Well, I'll tell you why. Because a lot of people, when they listen, they like to go, oh my gosh, she's married with seven kids and she's building a house. I can do it too. They get inspired. So what's your situation?
Chapter 4: How has Knotch achieved significant growth over the years?
I thought you were going to say that people are going to try to date me. No. I'm in an amazing partnership. Okay. Got no kids yet? No kids. That's great. And do you mind me asking how old you are? 30, I just turned 30 a few days ago. Congratulations. Very good. Last question. What do you wish your 20 year old self knew? That I needed to trust my gut. How so?
Were you stuck in corporate or something? No, no, but I've been building a company for a while. I was in the VC land before. And then before that, I was building NGOs across the world. And, you know, you have a lot of moments when you have to make hard decisions with very little data and you have to just trust your instincts. Guys. I've trusted my instincts more.
Trust Your Instincts, Notch, again, launched in 2014, now doing about six million bucks in terms of run rate. That's three X year over year, August 2017, doing only about two million. So healthy growth, $14 million raise, 20 enterprise customers that pay caught on average 300 grand first year ACV. They haven't churned anything. So net revenue retention annually is about 140%, which is great.
Just really working out CAC to LTV stuff. They assume LTV is call it three, four million bucks, assuming a 10% churn rate, even though they don't have any churn, which means they could spend call it 50, 60 grand, something like that on CAC. Lots of room to play there as they look at growing their sales team.
Chapter 5: What strategies does Knotch use to acquire and retain customers?
30 people right now based between New York City and other remote location. Again, transparently collect, own, and action the data from your digital content marketing for enterprise brands. Anda, thank you for taking us to the top.