SaaS Interviews with CEOs, Startups, Founders

EP 605: Demandbase Will Break $100M ARR 2017 Helping 400 Customers With Account Based Marketing with CEO Chris Golec

21 Mar 2017

21 min

3714 words

2 speakers

21 Mar 2017

Audio

Description

Chris Golec. He's the CEO and founder of Demandbase. Chris is an entrepreneur and prior to starting Demandbase, founded one of the most successful B2B software and data solutions in the late 90s called Supplybase. With previous positions at GE and DuPont, Chris uses his wealth of experience to position Demandbase as one of the most rapidly expanding B2B marketing companies in the space. Famous Five: Favorite Book? – N/A What CEO do you follow? – Keith Krach Favorite online tool? — Amazon and Skype Do you get 8 hours of sleep?— No If you could let your 20-year old self, know one thing, what would it be? – "Go for it sooner" Time Stamped Show Notes: 01:22 – Nathan introduces Chris to the show 02:10 – Demandbase is a marketing technology company focused on B2B marketers 02:46 – Demandbase sells subscriptions to large enterprises 03:10 – Chris used his experience in GE to find what salespeople need 03:40 – Average customer pay per month 04:09 – Demandbase has raised $90M 04:51 – Demandbase was launched in 2007 05:20 – Demandbase started pushing the account-based marketing technology 05:32 – Chris explains what an account-based marketing technology is 06:03 – Supplybase was in a supply-chain space 06:37 – Chris started as a consultant 07:04 – Chris saw the huge opportunity from his clients' experiences 07:33 – Chris shares how he determines the red flags in revenue plans 09:05 – First year revenue 10:17 – Demandbase had their first round in 2007 for $2.5M 10:33 – It was an equity round 11:00 – Chris shares what he deems important to know before raising a round 11:07 – Have a goal 11:22 – Know that "it's not easy raising money" 12:00 – Demandbase currently has 400 customers 12:23 – Average MRR 12:40 – Team size is under 250 13:44 – Gross customer churn 13:59 – "Even if we don't add any customers this year, we'll still grow by 10% next year" 14:14 – Chris shares how the teams are designated by customers 15:00 – CAC 15:13 – Average contract value 15:40 – Demandbase is in San Francisco 16:55 – The Famous Five 3 Key Points: When you see an opportunity, go for it! Raising money is not a walk in the park – know your goal beforehand. Don't wait around, go for your dreams as soon as you can. Resources Mentioned: Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments Drip – Nathan uses Drip's email automation platform and visual campaign builder to build his sales funnel Toptal – Nathan found his development team using Toptal for his new business Send Later. He was able to keep 100% equity and didn't have to hire a co-founder due to the quality of Toptal Host Gator – The site Nathan uses to buy his domain names and hosting for the cheapest price possible. Audible – Nathan uses Audible when he's driving from Austin to San Antonio (1.5-hour drive) to listen to audio books. The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences Jamf – Jamf helped Nathan keep his Macbook Air 11" secure even when he left it in the airplane's back seat pocket Freshbooks – Nathan doesn't waste time so he uses Freshbooks to send out invoices and collect his money. Get your free month NOW Show Notes provided by Mallard Creatives

Chapters

1. What is the main topic discussed in this episode? 2. What is Demandbase and how does it serve B2B marketers? 3. How did Chris Golec leverage his past experiences to build Demandbase? 4. What is account-based marketing and why is it important? 5. What challenges did Demandbase face in its early years? 6. How much funding has Demandbase raised and what was its impact? 7. What is the current customer base and revenue model of Demandbase? 8. How does Demandbase manage customer success and expansion?

Featured

Nathan Latka

Chris Golec

Transcription

Chapter 1: What is the main topic discussed in this episode?

0.031 - 9.024 Nathan Latka

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.

Chapter 2: What is Demandbase and how does it serve B2B marketers?

9.524 - 23.805 Nathan Latka

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.

Chapter 3: How did Chris Golec leverage his past experiences to build Demandbase?

24.085 - 49.005 Nathan Latka

And I'm your host, Nathan Latka. OK, Top Tribe, this week's winner of the 100 bucks is Jose Avila. He is a 17 year old that doesn't want to go to college and he wants to start his own business. For your chance to win 100 bucks just like Jose every Monday morning, simply subscribe to this podcast on iTunes right now and then text the word Nathan to 33444 to prove that you did it.

Chapter 4: What is account-based marketing and why is it important?

49.559 - 88.703 Nathan Latka

I'll see you next time. Nathan Latke here. This is episode 605. And coming up tomorrow morning, we hear from 41-year-old CEO of Hornet, Christoph Wittig. They've raised $8 million to become the gay content hub. They've passed 17 million users and 3 million monthly active users, doing well over $700,000 in monthly recurring revenue. So how do you get an app that big and how do you monetize it?

Chapter 5: What challenges did Demandbase face in its early years?

89.044 - 107.059 Nathan Latka

Tune in to find out. Good morning, everybody. Nathan Latke here. Our guest this morning is Chris Golicki. He is the CEO and founder of Demandbase. Now, Chris is an entrepreneur who, prior to starting Demandbase, founded one of the first successful business-to-business software and data solutions in the late 90s called Supplybase.

Chapter 6: How much funding has Demandbase raised and what was its impact?

107.079 - 122.389 Nathan Latka

You may have heard of it. With previous positions at GE, GM, and DuPont, Chris has used his wealth of experience to position Demandbase as one of the most rapidly expanding B2B marketing companies in the space. Chris, are you ready to take us to the top? I am ready. Good.

122.489 - 127.897 Nathan Latka

So if you had to sum up kind of demand base in two sentences, tell us what it does and your business model, how do you make money?

129.239 - 129.479 Chris Golec

Sure.

Chapter 7: What is the current customer base and revenue model of Demandbase?

129.759 - 153.016 Chris Golec

So, uh, demand base is a marketing technology company and we're dedicated to the business to business marketer, helping them, uh, online, bring the right companies they want to sell to do their website through an advertising platform. We help them better personalize the experience on their website with our technology. and then turn that activity into sales for the sales team.

153.036 - 181.613 Chris Golec

So it's dedicated, again, to B2B, where most marketing technology companies have been focused more on consumer-type marketing processes. And we make money by selling subscriptions to our customers, who are predominantly mid-market, large enterprises, ranging... across a variety of verticals from high-tech companies, telecom, manufacturers, healthcare, large banks.

181.633 - 188.641 Nathan Latka

And you really got the inside scoop on this, right? When you're at GE and GM and you kind of see the needs they have from an internal perspective, right? Before I go out and build demand base.

189.762 - 208.706 Chris Golec

Yeah, absolutely. Every role I've been in has been around kind of businesses collaborating with other businesses. Having been a sales manager and a salesperson, I just saw the underinvestment that's been done on the marketing side relative to what sales teams need.

208.746 - 221.721 Nathan Latka

I want to learn more about the full story, but to avoid getting too deep into cohort by cohort analysis, which I'm sure you do a ton of, if you just had to average customer size in terms of what they pay you per month, what is the average?

222.95 - 229.419 Chris Golec

Yes. Our average customer is spending about two hundred and twenty thousand dollars per year or about twenty thousand dollars per month.

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Chapter 8: How does Demandbase manage customer success and expansion?

229.659 - 242.517 Chris Golec

Now, that said, some customers will start, you know, two to three thousand dollars per month. But two years later, they may be spending a lot more because they have success and they want to expand to some of our other solutions.

242.777 - 246.983 Nathan Latka

And Chris, just quickly, you raised capital, correct? How much have you raised to date?

247.807 - 249.73 Chris Golec

We've raised $90 million to date.

249.89 - 264.934 Nathan Latka

Now, guys, I'm cheaply making Chris obviously knew that number, having him say that, because I want you to really dive into this episode. You guys know I do a lot of B2B SaaS stuff. I've had over, I think, 250 CEOs that have directly told me they're in the B2B SaaS space. We're always talking about ARPU, CAC, LTV, etc.

265.475 - 273.207 Nathan Latka

Things we want to focus on with Chris that you'll hear over the next 10 minutes. First, more about what Demandbase does, their product positioning, where he thinks the market's going.

273.187 - 290.851 Nathan Latka

but we'll also learn from him in terms of things he's doing to drive expansion ARPU, what levers is he pulling from a seat basis or a product basis, how the team is structured in terms of inside sales versus outbound sales, etc., and then, again, where he sees demand base going over time. Chris, take us back to the start. What year did you launch the company in?

292.433 - 295.778 Chris Golec

2007. We're just coming up on our 10th anniversary.

295.798 - 302.367 Nathan Latka

2007. Maybe I'm giving you too much credit here, but maybe not. Did you invent B2B SaaS?

304.118 - 327.5 Chris Golec

No, I wouldn't say invented it. B2B has been around for a long time. I would even say within B2B, the account-based marketing category has been done for years and years. The technology just wasn't there to do it at scale. And so we started really pushing the account-based marketing category probably four or five years ago before anybody had really heard about it.