SaaS Interviews with CEOs, Startups, Founders
Cirrius Insights $640K MRR 100,000 Customers
05 Sep 2016
Chapter 1: What is the main topic discussed in this episode?
Good morning. I hope your jog is off to a good start or your commute is rocking and rolling. And you're really going to learn a lot from our guest today. His name is Brandon Bruce, and he's the co-founder and COO of Cirrus Insight, a bootstrap startup in Knoxville, Tennessee.
Chapter 2: What is Cirrus Insight and what does it do?
Cirrus Insight is a plugin for Gmail and Outlook that tracks emails, schedules meetings, and automatically updates Salesforce as you work. Cirrus Insight is the second highest rated sales application of all time on the Salesforce app network. exchange. Brandon, are you ready to take us to the top? Let's do it, Nathan. Thanks for having me. You bet. Knoxville, Tennessee. I love this.
You're not in the Valley. You're not in New York. Why Knoxville? We are out in Knoxville. We are here because my wife is a professor. So we moved from California to Washington, DC, and then to Knoxville. And thankfully, I couldn't have asked for a better place to start a company. I love that. Well, give us a sense of the size of Cirrus Insight. In 2015, let's just go top to bottom.
What were total revenue numbers in 2015? So ARR, about six and a half million. And then as far as company size, we've got 55 total employees between Knoxville, where we have about 35, and Irvine, California, with my co-founder, Ryan Huff, who runs engineering. And there's 20 people out there. And help folks understand, I don't know what ARR means. What's that mean? So annual recurring revenue.
Yep, annual recurring revenue. And what other... So that's kind of the high-level metrics, folks. Tell us what Cirrus Insight does in more detail. Yeah, so we, in 2011, launched the first integration of Salesforce, which is the famous customer relationship management platform in the cloud, and Gmail.
More and more companies were moving to Google Apps, and so we provide a Chrome extension that brings the Salesforce experience, leads, contacts, opportunities, cases, activities, into Gmail, which is where all of us as salespeople work. And we now do it for Outlook as well.
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Chapter 3: Why did the founders choose to start their company in Knoxville?
And, I mean, why did you do this? It was really built for ourselves. We found ourselves constantly switching back and forth between Gmail, where we did email, and Salesforce, where we tried to keep track of customer relationships and run pipeline reports and forecasts. And we didn't want to spend all day jumping between two browser windows.
So we decided let's bring Salesforce into Gmail, where we were actually talking with customers, and then be able to update it from there. So you were at another company doing sales or something? Yeah. And then Ryan has a great background as a Salesforce consultant. So he had built a lot of the top apps on the Salesforce AppExchange already.
And we saw this opportunity to serve an unserved market, which were those that were using Salesforce, but more and more companies were moving toward Google Apps. And thankfully, we've seen that trend continue over the last four years. So what's the... You said, and I did the research before even reading your bio just now, you guys are ranked extremely high in the Salesforce AppExchange.
For other people and other business lines looking to rank higher in the Salesforce AppExchange, what's the secret? How do you rank so well?
Chapter 4: What are the revenue metrics and employee count for Cirrus Insight?
I mean, the algorithm, I think, has changed slightly over time. But one of the things that helps us the most is that we are an end-user-based application. So you don't install... Serious Insight just once for your org. Instead, if you've got 1,000 salespeople, they will all use Serious Insight.
And we benefit from that because those 1,000 people can come in and write nice reviews about the app, tell the world how they use it, why it was valuable in their daily workflow. And that's been really, really good for us. So we've got over 1,100 reviews on the AppExchange, which puts us behind some pretty famous apps like DocuSign and EchoSign. Yeah, you've got 1,163 reviews.
That's really the key to moving up in AppExchange is getting those reviews written. Yeah, I think the reviews and also the volume of installs. So there's so many people using Google for work, Google apps now. And then also our new app for Outlook, which we launched six months ago or so, is also marching up the AppExchange. So we benefit from the volume of users as well as the volume of reviews.
So what do you measure in terms of like when you're measuring billing and ARPU and CAC and stuff like that? Do you measure number of seats or number of businesses? And a business could have a thousand seats. Yeah. Yeah, pretty much all the above.
I mean, we certainly track a number of available users in a company's Salesforce org, the number of users on trial with us when we're talking with the decision maker at an organization, which is frequently a sales ops manager, sales enablement, sales effectiveness, Salesforce admin, VP of sales. We're looking for customer facing roles.
So we serve not only sales people, but also folks that work in customer support and customer success. Anyone that's in the inbox and the calendar a lot working with customers, they're benefits from our app. It's a big time saver.
And it helps organizations actually adopt Salesforce, which is one of the big challenges of any CRM platform, is that it's hard to get people to go in and update manually a database. So how many, I guess the right question is, I don't know if it's seats or businesses, how many total seats are people paying for on your platform as of January 2016?
Yeah, we serve about 100,000 end users and those are spread across over 3,500 organizations. Okay. And do people, obviously the organization is typically the one paying for it, right? People aren't paying for their own seat. We see a combination of both. So certainly our largest customers, which have thousands of seats, the company is paying for it.
But we see a lot of bottom-up deals as well where salespeople find the app so useful, they'll just come and pay out of pocket and expense it or just consider a cost of doing business and earn it out in running more commission.
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Chapter 5: How did Cirrus Insight integrate Salesforce with Gmail and Outlook?
And so what is... I guess that's smart because it ties back to obviously productivity and quota beating kind of metrics. What do people pay? What's the average ARPU? So today it's $19 a user a month paid annually.
And then we just introduced a new plan, a closer plan about six weeks ago that includes some additional functionality, like the ability to mass email out to customers and some higher end calendar integration with Salesforce. So am I doing it? Can I do this math this directly to get your monthly recurring revenue? Do I just take 100,000 seats times 19? No, unfortunately not.
That's a much bigger business. Yeah, that's much bigger business. We're looking to hit those numbers. But our price formally four years ago when we launched was $9 user a month. And then certainly we've seen some deals that are as the number of seats increases, the price per seat decreases. So there's a level of volume discounting that you see.
which is not unusual across the software as a service market. So maybe instead of doing ARPU, because maybe that's less relevant because of pricing changes and volume discounts, what was MRR in January of 2016 so we can get a run rate? Yeah, so MRR, we finished 2015 at around 640K MRR. And ramping up from there, we're off to a great start in 2016. Well, it's exciting.
And what do you credit this to? Software is obviously a tricky space. I think there's a lot. I mean, who is your number one competitor, would you say? So we compete with a lot of folks that are doing email productivity apps, which are not unusual. Kind of the sales acceleration space has really blown up over the last two years or so.
Our edge has always been in the depth of integration with Salesforce. So when companies really care about business process and workflow, That's where our area of expertise is. And so we serve companies wall to wall.
So whereas there's a lot of companies that are really focused just on the individual needs of salespeople, we can serve the full sales team as well as support, as well as customer success. And so we really are able to get our hooks into organizations and serve them so they're on one tool. So we have a lot of customers that will...
onboard a new customer-facing employee and give them a license of Salesforce, a license of Outlook or Gmail, and a license of Cirrus Insight, and they're up and running. But we compete with companies like an InsideSales.com, like a Yesware, other folks that are in the sales acceleration space. Okay. And help us understand it. You mentioned depth of integration as a key factor for you guys.
Hopefully, obviously, that depth is also helping you keep churn super low. What is your monthly churn at right now? So net negative turn. So we always add more seats than we lose. You know, the primary reasons and for those listeners in the SaaS business, they'll probably nod their heads.
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Chapter 6: What strategies helped Cirrus Insight rank high on the Salesforce AppExchange?
Yeah, so that's our CAC figure. And where are you spending most of that money? Is it just ads? No, we do very little in the way of ads. We do find retargeting to be valuable for us. We've certainly tried a lot of different types of advertising, but our best spend has been on events as well as partner marketing. So we have a network of over 350 consulting partners as well as some resellers.
And so we do a lot of co-marketing, webinars, web-based events, and in-person physical events with those folks as well. Okay. And you mentioned your team size was 55 folks. What's the breakdown on that in terms of engineers versus salespeople? So we've got 20 folks on the engineering team, broadly speaking. So those are engineers, product designers, product managers.
And then on the sales side, we have about 20. And then the balance are customer success and support. So there's about 10 folks there. And then give or take... Seven folks, eight folks on the marketing team. Some of those, if you total all those up, it's probably over 55. But that's because as a pretty flat organization, a scrappy startup, there's some folks that have that. Yeah.
So which is great. You know, we love that. We try to move fast. And so folks are working with customers kind of on all on all spectrums. So Brandon, a funded company, a typical board meeting might sound something like this with the lead VC of their Series A going, why aren't you burning money faster to grow?
And the entrepreneur is going, well, because I don't want to run out of money, because then the VC is going to buy more of the company. You guys are completely self-funded. Is that accurate? Yeah, we're a bootstrap startup. We've benefited from the early support of friends and family. And then a few early customers and angels came in to provide some early capital.
But otherwise, we consider ourselves bootstrap. We don't have any institutional backing. Was it convertible note or was that equity? Were those priced rounds with angels? Yeah, we just did convertible notes. Okay. And how much total did you guys raise in the beginning? About 1.15 million or so. And what year was that? When did you start the company? So we launched it in 2011.
We did a half million dollar note nine months later in the fall of 2012. And then the other notes have been just kind of as we go, we'd pick up notes for a couple hundred thousand dollars here and there. I love it. Brandon, I wish more people were like you. They don't need to raise capital. They just build a good business and it's just as profitable and helps a lot of people.
Why don't people do it anymore? They got to live in Knoxville to do it, right? Yeah. Knoxville is a great place to do it. It's a pretty scrappy town. We go after it. We value, as Jeff Bezos would say, you can work hard, you can work long hours, you can work smart, but you can't choose two out of three. We try to live that. We consider ourselves customer funded.
So we try to stay really close to the customer and make sure we're providing value every day. So on a monthly basis, are you guys profitable? And if not, what's your net burn monthly? Yeah, we basically try to keep it at breakeven. That's essentially our goal. So we reinvest everything in growth of the company. We believe in investing in the talent of the team.
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Chapter 7: How does Cirrus Insight measure customer metrics like ARR and CAC?
Yeah. Yeah, exactly. I mean, we're most comfortable if we're blowing way ahead of the line, right? But if things were to flip, we take that really seriously. We sort of analogize. We're more like a state government than a federal government. We can't print our own money. So we got to keep a pretty balanced budget. Yeah. So what do you think that you'll do?
I think you said you're doing $640,000 in MRR in December 2015. Maybe you're doing $650,000 January. What are you guys hoping to hit revenue-wise here in 2016? What would be a big goal for you guys? I mean, we've set our sights on doing, you know, about 16 million in bookings or so. So oftentimes we'll look at top line bookings for the sales team.
So trying to get those deals in the door, some of them may be multi-year, but we love those all the same. So yeah, if we can finish the year at a 15 to 20 million run rate, then that would be awesome. So what would that be? That would be what about 800 grand, eight, nine, well, no, about one, one, two, one, three.
Yeah, getting into the one and a quarter, one and a half million MRR run rate would be a great place for us. That'd be huge. I mean, if you're doing 650 now, that's basically doubling. I mean, that'd be incredible. Yeah, it's a big jump. Having these extra tiers is already starting to help a lot. And then we're really ramping into this outlook market, which...
by most estimates, is about 75% of the market. And those customers are 4 or 5 times larger. We continue to focus on the Google market, of course, because it's awesome. And it's what's gotten us here. But now we have a great expansion opportunity to build off the platform. I'm resisting the urge to make an old people outlook joke.
But I'll stay away from that for the sake of any of your customers that might be listening. Hey, we just want to meet salespeople where they are. There you go. That's a sexy way to say it. Okay, Brandon, before we get into my favorite part of the show, if people want to connect with you personally online and just track your success, where can they do that?
So we're on Twitter, of course, at Sirius Insight. And then our blog is wonderful. Our content folks on the marketing team do a great job.
So siriusinsight.com slash blog is where we post all of our updates, including a big release we did today, which actually brings all of the Salesforce applications that people have built on the force.com platform into the inbox where people can use them in Gmail and Outlook. So we're really excited about it. So your tagline might be never log into Salesforce again. Yeah. Yeah.
I mean, a lot of our reviews, actually, people will say, I use Salesforce more than I ever have before, but I don't log into Salesforce.com to do it. I do it from the inbox where I'm working all day. And what I meant to ask you this earlier, I had a note to ask this. Your sales folks, are they, are they, I mean, is this a typical inside sales team model?
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