SaaS Interviews with CEOs, Startups, Founders
1456 Hyper Secure CRM Tool Passes $10M in ARR
20 Jul 2019
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Founded IntroHive back in 2012, today, past 10 million bucks, or they're doing about 10 million bucks right now in ARR. They're about 3X-ing year over year. So healthy growth, 50 companies paying them per month, very much in the enterprise space. 15, that's 1.5 million raised. Net revenue retention over 100%.
They've got about 125 people in a bunch of different remote locations, you know, payback periods, you know, pretty low. When they do want to get aggressive though, you know, he's happy to spend over 12 months to acquire the customers in a very, very hot space. 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 Jody Glidden. He's been CEO of IntroHive since it was founded seven years ago.
He's a frequent blogger and speaker on topics of sales acceleration, especially among enterprises. Jody, are you ready to take us to the top? Yes, I am. Thank you. Yvette, tell us about IntroHive. What's the company do and are you a pure play SaaS model?
Yeah, sure.
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Chapter 2: How did Introhive achieve $10 million in ARR?
Yeah, we are pure play SaaS. It's a system that looks at all of the enterprise data sources, uses machine learning and tries to make sense of it. It creates various different use cases and applications for helping to accelerate sales. Things like creating a searchable relationship graph that salespeople can use and, and a bunch of other things.
Very cool. And give us a general sense of kind of pricing. What's the average customer pay per month or per year, would you say?
It depends on the size of deployments. We have some customers that are a hundred thousand employees or more. They get better pricing obviously. And then, and then there's, there's smaller companies, but somewhere in the you know, 20 to $25 per seat per month range.
And sorry, do that at a company, at actually a company like logo level. So on average, are you signing up like 30 seats, a hundred seats?
Oh yeah. Most of our deployments are, are pretty large. Um, as far as normal, what you'd normally see in SAS, we don't really do the normal SMB model. Um, we are primarily, uh,
companies of 500 people uh or more okay we do have a few smaller customers that might have 100 or 200 seats but that would be that would be rare okay and so if the average is kind of 500 or more what would you i mean what does that look like in terms of acv Uh, yeah, we're, we're in, uh, we're, we're kind of in the, see the eight digits sort of size now.
So we're just, just kind of, we're tripling every year.
Um, sorry, sorry, sorry, sorry. Not you as a company. I meant, I meant the annual contract value on, on that kind of new logo signing up.
Oh, um, for somebody of 500 seats. Yeah. Yeah. Um, they, they're usually, you know, depending on what products they choose, cause we have a number of products. but a lot of companies start with us in around that a hundred thousand dollars a year range. Cool.
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Chapter 3: What is Introhive's business model and target market?
you know, you know, the only CRM to protect against security breaches or handle your most like sensitive data. Why don't you lead with that?
Yeah. We talk about it a lot in our blogging and in our thought leadership stuff and at conferences and stuff, but we don't, yeah, we probably don't make it as front and center as we probably could because we're We onboarded a half dozen employees today. One of the things in the speech to them, the kickoff thing with the guys was, for a company of our size, our logos are almost unheard of.
We're not one of those companies that has five seats at PwC. We've got 100,000 seats at PwC. It's like that with a lot of our customers. Our customers are giant banks and the biggest law firms in the world and the biggest techs. They're the most... data sensitive companies in the world. So it's a, yeah, I think it's something that's unusual about us for sure.
Just because of kind of how we had to build the solution.
Yeah. And you said you just recently passed 10 million bucks in ARR.
Uh, yeah, we're right. Yeah. That's right. Yeah. And then we're, and then we're tripling every year. We're, we have a goal to triple again in 2019. It's going to be hard to keep that forever, but that's, yeah.
Yeah.
Well, but I mean, so if you're doing, so, you know, 10 million run rate today means you're doing about 830 grand a month. And if you just tripled that, that means you were doing what, about 250 grand just about a year ago per month.
Yep. It's been pretty consistently for the last three years, we've been triple tripling almost on the dot.
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Chapter 4: How does Introhive's pricing structure work?
Because if you look at the length of our sales cycles, we have to think pretty far in advance in order to make sure there's enough pipeline to have it closed in time. But so far, I think the guys are doing a really good job.
What is that pipeline right now? What's the timeline?
Our sales, it's somewhere around six months. We're just starting to get below six months now on the average. So Um, but, but really close to there, which, you know, in the old days it would be like two years. So, so we've moved that in a lot.
Yep. Now it sounded like your starting contract value is called maybe a hundred grand. And it obviously goes up from there. What are you willing to say? How aggressive are you being? What are you willing to spend to acquire 100,000 bucks of new ARR?
Uh, yeah, you know, I, I don't think we pay too much attention to our sales costs or our marketing costs at this point because, you know, it's, it's, um, there's a really good return on the revenue that we bring in. Since it's high margin revenue, there's a really good return. Our valuations tend to be somewhere in the 20 times forward ARR level. So when you're looking at that, if you brought in
a million dollar deal and you spend a million dollars to get it. Although we've never even came close to, to spending that much money. But even if we did, let's say spend a million dollars to get a million dollar deal. Um, you know, there's, there's a great return on that right now. So we're not, we're not trying to, um, be profitable or anything like that. We're actually doing pretty well.
Sorry. Payback period has very little to do with profitability. That's just a sense of how long of a cash gap do you have to withstand before you get your money? Is it a short cash gap or can you afford to have a longer cash gap since you've raised so much money?
yeah but but we all we have great access to capital and we always have um so you know the great thing the reason we look at valuation so much as a as one of our metrics is that you know we know that that's a that's a source of financing for us at any time we want to draw on it well assuming the market stays frothy uh well we've got multiple sources that we've got uh we've got
debt financing available to us. We've got equity financing available to us. We've got founder financing available to us. So if you look at, you know, the really bad recessions, they usually don't take, you know, the markets usually don't dry up. Take 2008. Markets didn't dry up for more than like a year and a half. So, you know, that's not a big gap to close for us.
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Chapter 5: What challenges did the founder face when launching Introhive?
let's try to just spend what we need to spend and get, get as aggressive as we can. Um, not be silly about it, but you know, I think a first year spending the first year on, on sales and marketing costs is, is fine.
Makes sense. Talk to me real quick before we wrap up, uh, you know, obviously churn is critical. It sounds like you, I think probably have net revenue retention above a hundred percent at this point. Is that the case? And if so, what's the kind of the gross revenue churn per year?
Yeah, we have almost no churn. So the, the, um, And if you look at it from, so the types of customers that we've had hit the pause button. Essentially, our system, most of the time, for most of the use cases that people do, it's trying to improve a CRM that nobody was using. So our system goes in, does a bunch of automation, and all of a sudden now there's great data in the CRM.
The problem is we've had some organizations where customers have said, we need to switch CRMs because we were with this company and then we moved to that one or whatever. a lot of times that's a two year, uh, pause. So if that happens, we have to go pause as well. Um, is that churn? I don't know. Um, but other than that, among our enterprise customers, we haven't had any, any churn at all.
So when you look at those on a cohort basis, so like, so like the cohort you signed up a year ago in October of 2017, let's say that was worth three, you know, 500,000 bucks in ACV this year when they're renewing in October, what have you expanded that to? Does it go up to seven 50 or a million?
Um, Yeah, our expansions haven't generally been that dramatic. There have been some, especially when you have a customer of, let's say, 1,000 people, a lot of times we'll get fully deployed on day one. If you have a company that's operating in 50 countries with 300,000 employees, a lot of times we start with, you know, 10 or 20,000 seats.
And we deploy country by country by country throughout the months and years that follow. And then we'll, you know, add on products and so on. So with very large companies, there's a lot more dramatic expansion in the smaller companies. Not so much.
Got it. But again, that's why people tend to just look like net revenue retention on a cohort. Cause it doesn't matter if you're big or small, you just get total churn revenue and total added. Do you know what those numbers are yet? Or no, you're just growing so fast. You're not looking at it. Um, yeah, we're not really, um,
I mean, we only have about 50 customers, right? So, uh, most of them are, we, we have a pretty good split of, of, um, you know, large enterprise customers where they're, uh, we're, we're looking at things like, how are we moving the, the ACV from year to year? Um, which has been growing at about 20, 30% annually. Okay.
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Chapter 6: What strategies are used to acquire customers?
45. Last question, Jody.
What do you wish your 20-year-old self knew? Just to work as hard as you possibly can because it's so much fun and you learn so much.
Yep, guys, there you have it. Work hard, especially in those younger years when you can and you don't have a lot of responsibilities yet. Coming from Jody, founded IntroHive back in 2012. Today, past 10 million bucks, or they're doing about 10 million bucks right now in ARR. They're about 3X-ing year over year. So healthy growth.
50 companies paying them per month, very much in the enterprise space. 15, that's 1.5 million raised. Net revenue retention over 100%. They've got about 125 people in a bunch of different remote locations, you know, payback periods, you know, pretty low. When they do want to get aggressive though, you know, he's happy to spend over 12 months to acquire the customers in a very, very hot space.
Jody, thanks for taking us to the top.
Great, thank you.
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