SaaS Interviews with CEOs, Startups, Founders
Cirrus Insight Is Doing $640k in MRR (Dec 2015) With Much Bigger Plans EP 226
04 Apr 2016
Chapter 1: What is the main topic discussed in this episode?
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.
Chapter 2: What is Cirrus Insight and what does it offer?
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. Okay, Top Tribe, this week's winner of the $100 is Rich Jones. Okay, Rich Jones, he is stuck in corporate. He wants to break free. He's binging on the show.
For your chance to win $100 every Monday morning, simply subscribe to the podcast right now on iTunes and then text the word NATHAN. to 33444 to prove that you did it. Coming up tomorrow, Morning Top Tribe, we speak with Diego Abba. He's launched an Italian fashion brand, doing $12 million per year in transaction volume already. It's unbelievable. Okay, Top Drive, 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. 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 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, D.C., 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.
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Chapter 3: How did Cirrus Insight achieve high rankings in the Salesforce AppExchange?
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, 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.
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.
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... Can I do this math this directly to get your monthly recurring revenue? Do I just take 100,000 seats times 19?
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Chapter 4: What strategies does Cirrus Insight use to maintain customer engagement?
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, I mean, what do you credit this to? Software's obviously a tricky space. There's, 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, you know, 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 Serious 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.
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Chapter 5: What is the significance of annual recurring revenue (ARR) for Cirrus Insight?
And help us understand, 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. And for those that are unfamiliar with SaaS, you know, one of the main reasons is simply the credit card number changes. So we have folks that are... Damn expiration date.
that are really focused on just following up on getting a new credit card and getting it updated. So, you know, churn is something that all of us in the SaaS business really focus on because we want to minimize that. And that's the magic of recurring revenue is getting it to come back next year.
just so everyone understands net negative and correct me, Brandon, if anything I say is incorrect, but net negative churn basically means the revenue that you upsold or that you gained from already current customers was greater than the total lost revenue from current customers. Is that accurate? Precisely. Okay. Got it.
So that's, so the number of new customers you add is really irrelevant in terms of measuring net negative and getting a negative churn. Right. What's the key reason or what's the key way that you're the key trigger you're using to get our incremental ARPU increases from current customers month over month?
You know, lately we've added that new tier, the $29 tier for the closer plan, which is already very popular. We'll be adding some higher end tiers coming up here over the next few months as well. So there's gonna be some upgrade opportunities for existing customers that are demanding more functionality. So our product team is hard at work on that.
We're also doing more on the customer success side. So there's a lot of companies that really want to figure out how to get the most out of Salesforce, how to maximize their workflows, get the most out of this really powerful platform. And so we're doing more on the onboarding and services side as well.
Okay. And what about things like... What about some of the unit economics like churn and lifetime value of customers? What is the current lifetime value of a customer or business in your case?
Yeah. So, so we're four years into it. We didn't do a lot of LTV calculations early on because we weren't sure, you know, how long customers were going to stay with us. Thankfully they stay with us for awhile. So our LTV right now, uh, is between 700 and $5,800. Um, you know, cost of customer acquisitions about 85 bucks. So, you know, we're able to recover our, our CIC pretty fast.
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Chapter 6: How does Cirrus Insight measure its customer metrics?
Subscribe now and text me to enter 703-431-2709. Okay, top tribe, I have to tell you many people go Nathan, you came out of nowhere, your website's growing so fast. How'd you do it? The answer is simple. So I use HostGator. I don't know if you guys know that, but I use HostGator. And the reason I do they have like about 4500 free templates I can use because I don't code.
They've got a great e commerce plugin. And guys, I bug the heck out of their support. They've got 24 seven support, which I love. So what I've done is I've worked with him. You guys know I make great deals. If you go to hostgator.com forward slash Nathan, you can sign up, get your own domain for 30% off and a 45 day money back guarantee. Okay. Again, I make great deals for you guys.
Go to hostgator.com forward slash Nathan to grab that now. So your tagline might be never log into Salesforce again.
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? We had Aaron Ross on earlier who kind of built Salesforce and he basically said inside sales team. Are you, are they, are they on a monthly quota or something?
Yeah, they are. And in fact, Aaron Ross is an advisor for us. So we certainly follow the predictable revenue model in many respects. So we have a sales development team that we call the outbound team. So they're reaching out to prospects and leads that we meet at events and that come to our website and to our app exchange listing. And then we have our account executive team.
That's our closing team that takes deals through from demo to close.
And what's the quota that you have each one meet each month, ideally?
Yeah. On the quota side, we're aiming on average. So it varies based on tier, but on average, about 50K a month per account executive.
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