SaaS Interviews with CEOs, Startups, Founders
799: SaaS: How He Grew To $200k MRR, $2m Raised at $7m Cap
01 Oct 2017
Chapter 1: What inspired Olin Hyde to start LeadCrunch.ai?
Founder of Lead Crunch AI, again, launched their first product in 2013, pivoted in 2016, September specifically, with their new product. They now have over 90 lifetime customers, 55 currently.
They do about 200 grand per month in revenue, generating these on-demand reports, helping people really get better leads, more targeted leads, and do intelligent, targeted B2B demand generation for their customers. This is The Top, where I interview entrepreneurs who are number one or number two in their industry in terms of revenue or customer base.
You'll learn how much revenue they're making, what their marketing funnel looks like, and how many customers they have. I'm now at $20,000 per top. Five and six million. He is hell-bent on global domination. We just broke our 100,000-unit soul mark. And I'm your host, Nathan Latka.
Chapter 2: How did LeadCrunch.ai achieve a 300% higher sales conversion rate?
Many of you listening right now don't have time to listen to every B2B SaaS CEO that I've interviewed. If you want to get access to the database I've created with year-over-year growth rates, customer accounts, margins, and many, many other data metrics and data points, you can go to getlatka.com. Here's the thing, though. This database, I keep it to myself. It's so freaking valuable.
And to preserve the quality of the data and make sure that the people that have access to it have a true advantage, I'm only letting 10 companies on each month. So we're full this month, but you can go to getlatka.com to get on the waiting list for next month. And look, there's big people on the waiting list. I mean, the biggest VCs you've ever heard of. You've probably heard of them.
Chapter 3: What is the unique business model of LeadCrunch.ai?
They're big, private equity, billions and billions under management. So it's an impressive waiting list. Go get on now at getlatka.com. Hello, everybody. My guest today is Olin Hyde. He's the co-founder and CEO of Lead Crunch AI, an intelligent demand generation platform that accelerates sales with high precision analytics and content delivery.
In less than 10 months since launch, the company has grown to more than 90 customers who are getting 300% higher sales conversion rates. All right, Olin, are you ready to take us to the top? Absolutely. Thank you, Nathan.
Chapter 4: How does LeadCrunch.ai target mid-market companies effectively?
You bet. So this is your eighth startup and third in kind of artificial intelligence. Tell me about your last exit real quick and then tell us what Lead Crunch does.
Sure. The last one was Autosemantics, and we analyze social media feeds on the behalf of chief financial officers of public companies to identify and isolate pump and dump schemes. And that company was sold to a group out of Switzerland called AI1. And after two years of AI One, I had the idea of starting what's now the Lead Crunch. And it's been a fun journey.
We're almost four years into it now. We started off in healthcare and actually we're training a system to be a physician, actually training the computer to be a doctor.
Chapter 5: What customer acquisition strategies does LeadCrunch.ai use?
And we're able to modify that technology for marketing purposes. And along the way, we're able to beat IBM Watson and Palantir to win a Lockheed contract for the military, which taught us a lot about how to target. And we're using that targeting technology to help mid-market companies find their next best customer.
So why go to mid-market companies and try and sell there? It sounds like you could just sell one thing to the DoD and make $20 million. Why deal with SMBs?
Well, we originally were going to sell one system to the DOD. We got caught in sequestration. There were budget problems.
Okay, got it.
Chapter 6: How does LeadCrunch.ai measure customer success and retention?
And we really wanted – and we're doers. We like to get things done. And when you're a government contractor, you spend a lot of time in conference rooms listening to people speaking acronyms. And we really like working with people to help their dreams come true. And we started off our product in our – private alpha, 1,070 small businesses signed up to try it.
We were monetizing that and we discovered that we actually got better results from a little bit larger size companies. We've stayed away from the enterprise simply because we like the idea of democratizing the power of AI to enable everyone to achieve their dreams.
So what's the first time visit a SaaS business model?
Yes.
Chapter 7: What challenges did LeadCrunch.ai face during its early growth?
Well, it's a combination of subscription and on-demand. When you're a marketer, you don't need to buy a subscription for a campaign. You want to buy that as you need it. Just like you don't buy a subscription to Uber for your ride-hailing services, we provide on-demand services to create campaigns of leads.
What's your revenue split though, Olin? If you break down last month's revenue, what percentage came from on-demand sales versus SaaS sales?
It's early for our SaaS product. We're just now testing it, so it's about 1090 right now, 10 on SaaS, 90 on on-demand. But what's interesting about our on-demand, 130% of our customers rebook within 90 days. So even though we call it on-demand, those customers are coming back and repeating over and over again, and they're repeating at 186% of their original contract value.
Chapter 8: What are Olin Hyde's future goals for LeadCrunch.ai?
So we like to give the power to our customers so that they can fit us into their existing spending patterns.
So what's the average customer paying you per kind of on-demand deal?
Typical order will be around $20,000, and we'll typically take one to two months to fill that order. And again, we give our customers the opportunity to pull out inventory as they need it.
Okay. So, I mean, when you're looking at revenue predictability in terms of making hiring decisions and where to spend money on CAC and things like that,
Can you really accurately predict that that first $20,000 contract is going to come in and then three months later they're going to spend, I think you said 150% of that, so call it $30,000 on their next thing and they're going to come back every three months?
Yeah, that's what we do. We're an analytics company. Would you call that ARR or no? Well... I think it's on demand. I think calling it ARR is overselling it. I think that there's this fascination among the venture capital community with predictable revenue, and they immediately jump to the assumption that the only way it's predictable is if there's a subscription. Well, that's just not true.
Uber is very predictable because it's got the law of large numbers working in its favor. We're predictable because we can tell what kind of results we're giving to our customers. We get feedback from the customers throughout the entire campaign process, so we have opportunities to change it.
We have a customer success function, which is really what our company is built around, is ensuring that our customers are successful. When did you launch the company? The company was launched in August of 2013, but the product that we're talking about, Lead Crunch, didn't come to market as it is now until September 2016. So we've been in market around 10 months now.
And do you remember what – it's always usually embarrassing, but do you remember what first-year revenue was? Do it on Lead Crunch specifically. Oh, yeah.
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