SaaS Interviews with CEOs, Startups, Founders
1669 Weird Way He Gets Customers, $1m in ARR for Data Pipeline Visibility
18 Feb 2020
Chapter 1: What is the story behind the launch of Intermix?
Launched Intermix back in 25. Again, giving visibility into data pipelines. Working now with really an enterprise segment as they're growing. Working with 25 customers. Call it a 50,000-ish ACV. But anyways, they're flirting with in the next couple months about a million bucks in terms of ARR. That's up from about 30,000 bucks a month just a year ago.
So healthy, more than doubling year over year. Burning capital. They've raised 5 million bucks. Nine people in San Fran, New York, and Europe. Less than 5% annual revenue. revenue churn, but more than 5% expansion as well. So 100% net revenue retention annually, spending up to 10 grand to get a new customer. So healthy payback period as they look to scale. Hello, everyone.
My guest today is Paul LaPasse. He is the CEO and co-founder of Intermix.io. He holds multiple patents for cloud computing and performance analytics. And in 2007, he co-founded GoGrid, one of the early cloud computing companies, which he grew to over $50 million in ARR. Paul, are you ready to take us to the top? I am. Thanks for having me. You bet. Okay. That's a big cliffhanger.
We have to finish up the GoGrid story before we talk about Intermix. What happened to the company?
The company got acquired. Who'd you sell to? In 2011 by Datapipe, a big data center cloud provider.
What was the ecosystem like back then? Yeah. So, I mean, was it a good exit or a soft landing or what?
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Chapter 2: How did Paul Lappas grow GoGrid to success?
We had the opportunity to blow it up to be much, much bigger if we had taken on a lot more capital. It's very expensive to build cloud services online. But we were really, really happy with the outcome. That's great.
All right, Intermix. So did you go directly into Intermix after GoGrid? Or if not, what was the in-between story?
So I spent a couple of years consulting with a few companies to help them bring their products to market. You know, I had focused on technology at GoGrid and I really wanted to spread my wings and learn more about other sides of the business, marketing and sales. And so, you know, I sort of was helping some other other startups.
I landed in 2013 in how I got the idea for Intermix at a company called Criticism. Criticism. It was later renamed to Aptelligent. Much better name. It was a crash reporting tool for companies developing mobile apps. And it was a super, super big platform. We had a little library that ran on over 1 billion devices across Apple and Android.
And what was really interesting about the company is that we were sitting on a ton of data. For example, we could tell you for Android how many activations were done on the AT&T network in Los Angeles in January because of the data that we had. And it wasn't what we were selling.
But my co-founder, Lars, that had joined Intermix at the same time as me, that's where we met, approached me one day and said, hey, can we put this data into a place where we could sell it? I have a few companies that would be interested in buying it. Some private equity firms, other consultancies that were just interested in this industry data that was really hard to get
And so I said, sure, you know, how hard could that possibly be? And I hired a data scientist to help me to do that. And almost immediately when that person joined, they were like, okay, great. Where's the data? I was like, well, it's here. It's in all these databases. Just go out and find it. And he's like, no, I need to have it all in one place. It needs to be clean and complete and correct.
And I need to be able to run my tools on it, my specialized data science tools. And I said, okay, interesting. And then I spent three months doing that and getting the data to a place where it was useful. And Really, at the time, I, talking to other peers in the industry, realized that a lot of companies were having the same challenge in making data scientists successful.
And so, you know, decided to leave that company, and Lars and I joined up to start Intermix shortly after that.
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Chapter 3: What challenges did Paul face before starting Intermix?
Uh, it's a subscription and, uh, people will either prepay for one year or two years.
Okay. So on average, I'm sure you have a lot of cohorts, but we're short on time. What would you say like an average company might pay per year to use your tool?
It's between five fingers, moving up to six fingers, uh, to a six figures now.
Okay. Okay. Got it. And that's kind of first year ACB. So call it maybe anywhere between 50 and a hundred grand. Yeah. What do they, so let's, let's role play for a second. If I sign up today for 50 grand, give me a sense, paint, paint a picture here. What would I get for that?
So what you get for that is a single dashboard whereby your, your, your data teams, the ones that are, that are, that are, that are building out your data lake infrastructure that your data scientists plug into, you'll get a single view of,
into all the apps that are connected all the users that are running queries the way that data flows through that system and a very very easy and quick ability to a figure out is everybody having a good experience are apps working is the data lake working or if not why and what's the root cause of that so that you can very quickly pinpoint where data is getting stuck interesting okay very good and uh put this on a timeline for us so what was the official year you launched
So we launched at the end of 2016. And one of the interesting things Nathan is that we got to revenue, our first dollar of revenue came only six months after we wrote the first line of code for the business.
I love that you lead with that. It's like a technologist who says, you know what? All techies don't just only focus on product. We made money after six months. Maybe not made money. You had revenue in six months.
Right.
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Chapter 4: How does Intermix provide data pipeline visibility?
What do you mean by that? What do you mean when you say you're still seed stage? How do you define that?
So the way that I define that is we're still, you know, we have a lot of revenue. We have good customers. Our churn is really, really low. How low? Tiny. It's, um, we're, um, you know, um, over a hundred percent revenue retention because a lot of our customers will expand with us.
What about gross churn though, if you peel back that onion?
Um, so our platform. is focused on Amazon Redshift right now, which is a major cloud data warehouse. So as companies shift to other data warehouses, they might churn off of us, like Snowflake or BigQuery. And so our vision is to support all of those databases going forward, but for right now, we're small.
So we support the biggest one. So is that code for maybe 10-ish annual revenue churn on a gross basis? Or what is churned today annually?
Gross. It's under, under 5%.
Oh, I mean, that's super healthy. Okay. So you'll lose less than 5% of your revenue annually. You more than expand that same core by 5%. So you have net revenue retention North of a hundred percent at this point. Yes. That's great. Okay. Yeah. Take me back to the backstory. So you, you said define seed stage and I, and I said, how do you define that?
Yeah, well, we're at the point where we're still figuring out the right go-to-market, right? What is the best way for us to acquire a dollar? Can we make at least $3? Can we make that money back within one year consistently and have enough data points where we can go to an investor and say, hey, if we... billion of your dollars, we'll be able to grow at this rate over the next two years.
We're close to that at this point, but we're not quite there yet. So we're still at that stage of the company.
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Chapter 5: What is the business model of Intermix?
Yeah, exactly.
Have you talked to the, like, I'm talking about people that play lower down the ecosystem. So like, so for example, lighter capital will go like pre VC, as long as you're North, like 15 grand a month in revenue. I mean, have you talked to folks like that or no?
Not yet. Yeah. We haven't had a need to, but, um, I think venture debt is a, is a great idea. Um, and I'm going to look at seriously doing it, um, next year, just because it's another financing option without giving away equity. Oh, totally, man. I love it.
I mean, obviously capital, it can be a little expensive, but again, if you understand your growth levers, it's, I'd rather keep the equity, you know? Exactly. Yeah. All right, cool, man. Let's wrap up here with the famous five. Number one, what's your favorite business book?
Good Strategy, Bad Strategy by Richard Rumel.
Number two, is there a CEO you're following or studying? I really love Lou Cerny at New Relic. Number three, what's your favorite online tool for building your company?
Gosh, I log into Heap Analytics a lot to get tabs of our metrics.
Good one. Number four, how many hours of sleep do you get, Paul? Seven. That's good. In which situation? Married, single, kiddos?
Oh, you know, I'm married with a small toddler and one on the way. And so it's shocking that I get seven hours of sleep, but our kid thankfully sleeps through the night for now.
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