SaaS Interviews with CEOs, Startups, Founders
How she increased ACV's from $5k to $150k in under 20 months for App Building SaaS
15 Jul 2022
Chapter 1: What is the main topic discussed in this episode?
I mean, you guys are north of a 2 million run rate at that point, just in your enterprise cohort.
Not quite there because we're a little land. We're actually right just about at the 1 million ARR.
You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
We've published thousands of these interviews, and if you want to sort through them quickly by revenue or churn, CAC, valuation, or other metrics, the easiest way to do that is to go to getlatka.com and use our filtering tool. It's like a big Excel sheet for all of these podcast interviews. Check it out right now at getlatka.com. Hey folks, my guest today is Jen Grant.
She's the CEO and has led Appify, an enterprise rapid app development platform since February of 2020. Previously, she spent 15 years in enterprise software as CMO of Looker. You guys remember we had those guys on back before the sale. Elastic and Box, all billion dollar outcomes. She's also spent four years at Google leading marketing teams and holds degrees from Wharton and Princeton.
Jen, you ready to take us to the top?
I'm ready to go.
We were just reminiscing because we had you on back in October of 2020. You had 45 customers, 200 grand in ARR. You were just getting going. What's the update? Has the product changed?
Yeah. So almost everything has changed. So I'd say the first thing that changed, and I think this is really great for your audience because this is exactly how a startup early stage kind of growth happens where we sort of started out saying, yes, this is for SMBs. This makes sense. Let's do volume. Let's get insights.
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Chapter 2: What significant changes occurred in the product since its launch?
And the minute you say that, you realize like, No SMB gives a crap. They just want their one thing. But every enterprise has that issue with these data silos everywhere. And we often hear from companies that they say, oh, my HR onboarding. First, I have to log into Workday. And then I log into this specialized onboarding system and I fill things out.
And then they have to log into this other system. And so this idea of like, great, build an app that makes it really easy for the user to And in the background where nobody can see, it'll deal with the fact that that data goes to this system, that data goes to that system, and all of this sort of complexity that typical enterprises have in their technology stack.
So that was really the insight was like, holy crap, we have this great, great thing for enterprises.
That's a shift.
Not as useful for SMB.
How many now? If you ignore SMB, how many enterprises would you say you're working with now as paying customers?
We've got about 15 enterprises. So it's still, you know, that's the other change is that when you're, when I was at Box, for example, we were constantly saying like, you know, 15,000 customers and then we had 100,000 customers and then we had 8 million, you know, it's like you have these really big numbers of all these customers and you're in the enterprise and you're like, 15, yay!
Yeah.
40 customers that pay you a million a year is a great business.
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Chapter 3: How did the shift to enterprise customers impact the business model?
Is it seat-based expansion, feature-based expansion, something else?
It's seat-based. So what we're seeing is one great example, one of our older customers, they started, they built one app and they had about 250 people using it. And then they built their second app and they added additional 300. And there was some overlap of app users. And then they added, now they're at five apps and they're, just shy of 1,000 users.
So that was one where we landed small and then grew over time.
Chapter 4: How has the average contract value evolved over time?
Nowadays, I'd say in the last six months, I hired an enterprise VP of sales. So that also changed our selling motion. So we're landing a lot bigger in the last couple months. The deals that we're looking at, we would land more at the 100,000 range. And then the expansion is like, oh, and then we'll get to 400,000 or that kind of range where we're like, okay, 1,500 users or...
Our biggest deal right now is 8,000 users. So that one we were like, woohoo.
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Check it out today at founderpath.com forward slash products. That's plural forward slash valuations. Again, both plural founderpath.com forward slash products forward slash valuations. You mentioned the recent higher enterprise sales. How many folks are full-time on the team today?
We're still pretty small. That's one of, and you know, as you, I'm sure I've heard from other entrepreneurs and you're, everybody's reading in the news. This is not the market to go crazy. And we're sort of feeling a little lucky that we've kept it tight. So we're at 35 people today and we kept our sales team to two SDRs and we have an AE and then our VP of sales, he actually sells.
So we just have those four.
So two SDRs, one AE, and then one head of enterprise sales.
Then the head of sales, yeah. The other reason for that is we found this whole, and this is really rare for a startup, But we found this channel to use. So the second thing that's interesting that we sort of discovered about Appify over the last two years is this ability to connect into any data source works in kind of a white labeled powered by Appify way. So we did we announced it in April.
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Chapter 5: What challenges did the company face while targeting enterprise clients?
And so that also allows us to stay lean, which in today's market turns out is a really good thing.
Yes. No, that makes tons of sense. Now you raised eight, nine, 10, 11, 11 and a half million ish, right? Nothing else raised since 2020, right?
That's right. Yeah. So we're still kind of running on that. And like every other startup, we're looking at our road or runway and saying, okay, are we okay?
Well, what do you optimize for right now? Right now where we're at, are you trying to plan for 24 months runway, 36 months, something else?
We're planning for a year runway because it's OEM deals. We don't actually need to hire any more sales because of the kind of
awesome expansion effect of the channel so we're we're able to kind of grow the way we want to grow without actually adding headcount and so we have like we need that year to sort of say okay let's sell the crap out of this um and that gives us some of our engineering innovation will continue but we also are sort of like okay let's just go sell the crap out of this yeah
So say Jen, so with 35 employees, I don't know where you're based in the States or maybe not even in the States, but if you have an average salary of $120,000 per year for 35 employees, that's a $4.2 million expense. So you feel like you got, yeah, you're not that high though.
Yeah. Most of our folks are in Bangalore, India. So we do have a large, that's where engineering is. So it's also very efficient.
Yeah, cut that in half and your annual headcount is probably something more like a million, two million, something like that, not four.
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Chapter 6: What strategies were implemented to manage customer transitions?
How did you find the anchor point in India to hire that first engineer and customer support rep?
Yeah. And I think that's a great, great point. It's hard. I would say not for the faint of heart. If you don't know someone in India already who has been there, done that, it's not a good strategy. Even though you look at the financing and you're like, wow, that would be great. Because it turns out it's actually really hard to hire in India. It takes three months.
So even when someone accepts a job offer in India, they have to stay in their current job for three months. And very often, they shop your offer. So they accept your offer, they shop it, they may find a better offer. And three months later, when you're dying for this headcount to start, they're like, just kidding. I'm going somewhere else. So it's very painful and hard.
And what makes it work is those anchor people. So in our case, our founder, our CTO is originally from India. He spends, you know, maybe six months, three months, a year out there. He's wonderfully charismatic. So he goes out and everybody gets excited and pumped up. And so he is able to bring in people from his network as well as excite the team we have.
And so that's been able to, and even then we still have people that don't show up on their first day of work.
Yeah, no, that's an art. It's an art form.
Yeah. It's a good strategy, but it is not, you know, you can't walk into it thinking, oh, I'll just hire people in India and it'll be fine. You've got to have those anchor leadership there to make it work.
Guys, Jen, on that note, let's wrap up here with the famous five. Number one, last business book you read.
Oh, it's still Simon Sinek. So. Okay.
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