SaaS Interviews with CEOs, Startups, Founders
EP 324: CEO of Datanyze Shares $6m Revenue Number
13 Jun 2016
Chapter 1: What is Datanyze and how does it generate revenue?
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Chapter 2: How did Ilya Semin grow Datanyze to $6 million in revenue?
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Top Tribe, good morning to everybody. Our guest this morning is Ilya Semen, and back in 2015, he created a prototype for a technology tracking tool to help his sales friends better prepare themselves before making cold calls. A few years and many iterations later, his prototype evolved into Datanize, the preferred sales intelligence platform for hundreds of high-powered sales teams.
During the week, he leads the management team in shaping the overall vision, culture, and strategy of the company. And on weekends, he puts on his developer hat and has been known to build game-changing new products by Monday morning.
Chapter 3: What challenges did Ilya face when raising capital?
Ilya earned his master's in computer science in Russia and received his MBA from Babson College. Ilya, are you ready to take us to the top? Absolutely. Let's do it. So first things first, tell us real quick, what is Datanize more specifically and how do you generate revenue?
Yeah, yeah, absolutely. So Data Nice is a sales intelligence platform. We help salespeople at technology companies be more productive and close more deals. And then we sell it as a subscription service. So companies like HubSpot and Marketo, Akamai, all these guys pay us a subscription fee to give access to their sales traps so that they can basically be more efficient.
Okay, no worries.
Chapter 4: What is the customer acquisition cost for Datanyze?
And break down, help us understand kind of where you're at currently. How many current customers are you serving?
We have about 500 customers.
Okay, 500 paying customers. And on average, you know, contract values and these things, they always vary greatly. What are your average contract sizes?
It's about $20,000 a year.
Okay, great. And do you do, do you require annual contracts or do you have mostly monthly payments?
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Chapter 5: How does Datanyze maintain low churn rates?
No, it's mostly annual.
Okay, mostly annual. Okay, great. And what year did you found the business in? You said 2012? Yeah.
Yes. In 2012, I found it. And for the first, I would say, two years, I was just trying to get to an MVP. The official launch was in January 2014.
OK, got it. Got it. And what do you remember what your first I always love asking this question, what your first year revenue was?
Uh, first year, I would say maybe $50,000, something like that.
I always love that.
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Chapter 6: What role does emotional intelligence play for tech entrepreneurs?
It helps people understand to build something great. You have to start small and just keep doing it longer and better than anybody else.
Yeah.
Awesome. Okay. So 50 K and first year revenue, you're really certain. It sounds like based off these price points, you're really serving mid to kind of enterprise level clients, right?
Yeah, absolutely. We focus on B2B companies, enterprise companies, and specifically technology markets. So technology SaaS companies, this is where our sweet spot is.
Okay. And you consider, I mean, this is really a SaaS company, right? Yeah, absolutely. So have you guys raised capital? And if so, how much?
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Chapter 7: How does Ilya handle equity discussions with co-founders?
Yes, we raised just a little bit. We raised $1.8 million in July 2014. Do you regret that? No, I think... Come on, Ilya.
Tell me the truth.
You know, for us, we actually didn't have to raise money at all. We were profitable back then. And we were making maybe a million dollars a year.
But the problem was when you start selling... Wait, when you say, Ilya, when you say making a million a year, was that top line or net profit? No, sorry, top line. Top line, okay. Right.
The problem when you start selling to enterprise customers is that they don't really like to deal with small companies, you know, two guys in the garage, like they don't like it. So they're like, well, we're going to sign this three-year contract. How do we know you're not going to go out of business tomorrow?
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Chapter 8: What are Ilya's personal insights on success and productivity?
So we started to think about raising money. So we raised a very good round and investors included somebody like Mark Cuban, for example, and top VC firms like Google Ventures.
Is Mark a fun guy to work with?
Yeah, absolutely. Absolutely. He is very busy, obviously. And right now it's, you know, I think they got into the playoffs. Yep. So I'm sure he's going to be very busy in the next few months. Hopefully his team will be successful. But yeah, he's a really nice person to work with. That's for sure.
Good. And give us a quick sense of size. In 2015, what was total top line revenue?
So we always measure in terms of ARR, right? Annual Recurrent Revenue. So in 2015, we went from about $2 million at the beginning of the year to about $6 million at the end of the year.
Okay, so just to be clear, the, okay, yeah, okay. So I understand that number. You're doing like obviously a run rate, but tell me what was just total, if you just add up the months, the total revenue in 2015, what was that just for a sense of size?
Well, gap revenue, it's probably $4 million or something like this. But like I said, we always measure. That's not a run rate. That's ARR. I mean, all this.
Yeah, just to be clear. Just to be clear, Ilya. So what you just told me is you're doing, you hit in December 2016, or sorry, 2015, you hit $500,000 a month, which is a $6 million annual run rate. Is that accurate?
Yeah, more or less. Yeah.
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