SaaS Interviews with CEOs, Startups, Founders
934 The Acquired Company at $160k MRR, 12 Months Later at $500k+ MRR, Here's How
13 Feb 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.
Chapter 2: What were the early challenges faced when starting the company?
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 guests today are Chris and Russ.
I'm gonna introduce Chris and then Chris will tell us who this other guy is with this badass tie on. But Chris founded a company and presided over one of the most interesting technology companies at CA Technologies before coming to Ringlead. Specifically, he was in the security and storage division. Now, Chris served as senior vice president of that division.
He also founded Total Defense, a cloud-based endpoint security company for the consumer SMB and enterprise. We'll jump into Ringlead today. Chris, Russ, are you guys ready to take us to the top?
Oh, absolutely. Sure, go ahead.
All right, Chris, tee up this guy. Who's Russ? What's he do?
This is a legend in the industry. I'll tell you, I've known Russ for many, many years. Russ was the founder of Computer Associates, known as CA Technologies today. He founded it. It's a great story years ago. He was there for over 35 years. He was the first one ever, Nathan, to build the first billion-dollar software company in the world, right?
So Russ found that, did it, amazing, and retired about a year ago. I got him lucky enough to partner with me after working for him for years. He's one of my mentors and legends in the industry. And he was ready to go a second round. He was like, let's go over another billion. So he came in today, one of the most successful people I ever met.
And we partnered together to start Ringlead about a year ago.
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Chapter 3: How did Chris and Russ transition from CA Technologies to founding Ringlead?
I have an opportunity to lead a new software company, SaaS based company in the data space. And I need you to partner with me. So I looked into it, looked into the technology, looked into the product line. Chris brought one of his best sales guys. They sold me on the technology. I looked at it and I said, hey, you know, this is an interesting space.
I get to build another cloud-based SaaS company, software company here in Long Island. And let's go for it.
Let's do it. Chris, how much equity do you have to give Russ to get him on board again?
I'll tell you, it wasn't easy, right? Because he doesn't like to be a minority in anything.
Yeah, but Chris, you're not a quitter. You don't roll over either. So I think once you wanted it, you figured out how to get it.
Yeah, yeah, no question. But I'll tell you, it was a tough negotiation, I can tell you that, right? So we're partners in the company, right? But I'll tell you right now, I love your show, by the way, you're so damn pointed.
You would be an ideal- Compliments always work, Chris. You lay them on.
You ask the right questions, you try to get the right information, love it, right? So here's it, our company's unique, right? Our employees own up to 30% of the company. That was one of the deals I had coming in, that I wanted to build a culture called performance-based employees own if they perform, right? And it's an instant investing in 12 months. It's very unique, right?
Approach to how to manage a start.
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Chapter 4: What unique culture did Chris implement at Ringlead?
We're not here to determine the outcome yet. We're here to build value, build a great product, and employees build companies.
By the way, what the hell is Ringlead?
Ah, there you go. Well, it isn't, I thought it was circus when I came in. It's not the Barnum & Bailey shirt. No, it isn't the Barnum & Bailey shirt, but it could have been a year ago.
You could have bought those assets, right?
Yeah, I could have bought it, but they went out of business, the Barnum & Bailey. No, we didn't want that to happen. So Ringlead is the number one data management solution in the total space today, right? So what does that mean? We simply sit on top of Salesforce currently, but we're going to have other plugins. We clean data. We prevent dupes in data. We enhance data. We enrich data.
And we do it all in one 360 platform on the press of a button, right? That's it. The only cloud-based, truly SaaS, 100% data management solution.
Are you connecting data sources as well? So think of this like an enterprise version of Zapier or a segment kind of company?
Yes.
Okay.
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Chapter 5: How does Ringlead's data management solution work?
Your employee still is. And if we keep raising money, we dilute our employees. So we build a culture of learning and performance-based and say to them, look, guys, if we're in it together, right, and employees still are the key to any great company and the ingredients and the ability to learn is also key.
So if we can build a great company and you have a functional product in an amazing space like we are, why don't we just sell more? Why do we have to lose money? Our goal is to not lose money, not devalue the company. It's the opposite, right? It's to make sure that our employees have value along the way. And we do it with a functional product in a great marketplace. And that's what Ringleast is.
A few quick questions before we wrap up with the last famous five here. What's churn look like annually?
When we started on desktop products, it was hard. I mean, I would say when we started on turn, it was probably, we look at turn by customer and we look at turn by revenue, right? So we look at our existing customers saying, are we getting more out of them, right? And what's the renewal rates? On desktop, it was probably 40 to 45%.
What's it on now?
Right now on revenue, we'll close at 92% on revenue.
Retention.
Yep, yep, 92% on revenue. Remember, we're getting more out of the existing customer. You're buying more capacity, right? On a customer model, it's a little bit lower. It's around, I would say it's about 65 to 70 because they acquired customers on price. They acquired people that want to vote.
Yeah, just to be clear, what that means is you are churning customers that are paying you less, right?
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Chapter 6: What pricing models does Ringlead use for its services?
It's lower. Okay, so we'll say right around 12 months.
Yeah, about 12 months. Okay. What's interesting, Nathan, just to close, is I see a lot of similarities to the early days that I had at CA. And the way we were growing and the culture we were building, a lot of similarities to Ringlead now. We've built a culture of there's a sense of urgency and everyone who comes to work, everyone feels invested in the company.
As Chris mentioned, it's a performance-based culture. They can earn equity and they can check every week. You know, it's a similar culture of we're going to grow this company. We're going to be successful. We're going to generate more jobs on Long Island. We all have common goals.
And you're going to sell for a billion and take this guy out to steak dinner. Right. That's how it's going to work. All right, guys, we're out of time. We're out of time. So. So, Chris, let's wrap up with you. Quick answers here. The famous five. Number one, what's your favorite business book?
I would say right now my favorite was I just read was Cardone by 10X, right? You know, Cardone's sales book just came in. We just signed his training program. Our guys go through it every day. The last one I just read that I thought was pretty good was that. I'm a big Jack Welch fan. Read every book.
Number two, is there a CEO you're following or studying right now?
Russ Arts. I follow him, study him every day.
Number three, besides your own.
It's a technology guy. I like Elon Musk.
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Chapter 7: How has Ringlead grown its customer base in the past year?
And at 3.38, I wake up seven days a week and start work.
So we'll call it about six hours on average. Yeah. All right, and Chris, what's your situation? Married, single, you have kids?
Married with two of the best kids in the world and one of the best wives. Denise, Lauren, and Tyler love them to death.
That's amazing. And how old are you, Chris?
Right now, I turned 51 yesterday.
All right. Hey, congratulations. Last question. Take us back 31 years. What do you wish your 20-year-old self knew?
I knew to pick the right company, the right partner, and the right product and believe in myself and not work for anybody for many years. If I believe that now, if I knew what I knew now, I'll tell my son the same thing. You own your own business, you work for the right people, and you learn. Don't chase the dollar in the first year.
Pick some way you're going to learn the most, and then you'll capitalize that 10 years later.
There you guys have it from Chris and Russ. Capitalize on it later. Don't go after that first dollar. They bought this company from folks they knew back just over a year ago, 2016. They've now grown it to over 700 customers, doing between 500 grand and 600 grand a month, up from about 160 grand a month when they first bought it. They are decreasing payback periods. They're decreasing CAC.
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