SaaS Interviews with CEOs, Startups, Founders
How this 1 person team did $2m in Revenue Last Year
01 Feb 2024
Chapter 1: How did Ray Reich achieve $2 million in revenue as a one-person team?
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.
Guys, companies like Gainsight use Benchmarket.ai to put together industry-leading reports like the Customer Engagement Report or the Future of AI Report. Ray's done this as a one-man show. He's got a bunch of, obviously, contractors and partners, but really there's only one, him, full-time.
It did over $2 million of revenue last year, a million specifically in building these report sales, so about 20, 25 of those, another million in sponsor revenue and his media assets. This is the way to build a software company today. CAC arbitrage using your media assets, which he also makes money on, so almost negative CAC,
and then start building software on top of that which he's starting to really systematize with these reports he's generating via embeddable iframes and you're trying to see it on benno.ai gainsight maxio other sites as well hey folks my guest today is ray reich he has over 30 years of experience in subscription-based software service and sas companies his passion for data-driven metrics informed decisions making started his selection to the ge executive management development program
And he was subsequently enhanced by his experiences across five successful subscription software company exits. He is now building Benchmarket.ai, among many other things. Ray Reich, you ready to take us to the top? I'm ready, Nathan. I've been looking forward to this for some time. Me too. See, it's funny.
You're top of mind for me because I see you executing a brilliant podcast strategy right now, but you do so many other things as well. Where are you spending most of your time today?
Well, the number one thing, the reason I founded the company was to build the B2B SaaS and cloud industry largest benchmarking index that allows SaaS operators to go in and see how they measure up to like company peer groups across every function, every process.
And so if there's a SaaS partner listening today and let's call it B2B SaaS and they're a marketing tech company and their average price point is 12 grand a year, they could go to benchmark it and sort by those filters I just mentioned to find other comparables?
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Chapter 2: What strategies does Ray use for customer acquisition and revenue generation?
Here's how we do it. Here's how we publish it interactively using our platform. And he's like, I was in a meeting with our CMO last week. I want to do benchmarking. He scheduled a meeting in two weeks. We had a new customer for over $50,000.
I see. Okay. So that's how you're monetizing. You have folks like Gainsight paying or research partners paying for access to the data set.
Correct. Well, more importantly, they syndicate the research to their customers and to their marketing database. And that's how we collected data, Nathan. So instead of me having to go out and build relationships with the participants for a benchmarking research program, my partners like Gainsight or SalesLoft or exactly do that on our behalf. And then we co-own the data.
Okay, I see. So what's, I mean, this sounds like you're getting a lot of value from Gainsight. They're helping you fill out your, you know, your sample size, your cohort, you're organizing it all, but they pay you 50 grand. What do they get out of it? Yeah, what do they get out of it? What are you delivering?
Every partner we've done this with gets a executive report, which is a tuple funnel demand generation engine. In fact, with Gainsight, they'll tell you that the state of customer success benchmarks is one of their top two demand generation pieces of content marketing assets. You help fund that. They fund it, I run the program for them.
Oh, I see, I see. So when we go to gainsight.com and they put out like their big annual report, a lot of the organization of the data and the research and the right questions to ask and all that is you on the back and helping get it together.
We did 90% of the work to write the research, the digital data capture survey, Calculate the benchmarks and publish that through an executive report and interactive benchmarking portal where you can go to gainsight.com, search for customer success benchmarks and everything you see there, we did for them.
I see. Okay, this makes tons. So that's what they're paying for. That's a lot of work.
It is. It's a 100-day program end-to-end and we do 90% of the heavy lifting, but they give us access to their customers and their marketing database to collect the benchmarks.
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Chapter 3: How does Ray leverage benchmarking to benefit SaaS companies?
And I scroll further down that page and I see the actual embedded iframe powered by Benchmark in the bottom right.
Exactly. And you'll see that on other sites like Maxio, where we conducted a benchmarking research program on the adoption of usage-based pricing. We can tell you how many companies are using usage-based pricing, how that impacts growth rate, sales and marketing as a percentage of revenue, et cetera, Nathan.
Oh, this makes tons of sense. Okay. So how many customers are you working with or did you work with in 2023 on at least one report, one paid report like this?
In 2023, we had 21 partners who paid for a report.
And can I ask how much total revenue you did in 2023 from that?
For the actual benchmarking, it was just south of $1 million. So if you do the math real quick, you're going to see it was about $44,000 per. And then the rest of our revenue were from sponsorships of our events and media assets. Can I ask how much that was? It was right about the same amount. So if you add those together, we're just south of $2 million, Nathan.
And how many people are full-time at Benchmarkit today?
Zero. Well, full-time. I have no W2 employees. I have three partners who have dedicated the last three years of their life to helping me build this business. We do it on a revenue share basis. I have another eight contractors around the world that I do a low monthly retainer plus a percentage of revenue share. I've done this 100% self-funded. I've been profitable since month four.
I love this. This is how massive SaaS companies get built. It starts off with someone that creates amazing content. They package it in a unique way. They start selling something which might be heavy services now, but who knows, tomorrow or the day after, it might be way higher margin, more SaaS, et cetera.
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Chapter 4: What role does community building play in Ray's business model?
Let's say you come back on the show five years from now. What are you probably saying? What is this going to grow into?
So we're building three things, Nathan. We're building all this content, benchmarks. Number two, a media asset where we have metrics that measure up in SaaS Talk with the Metrics Brothers, which Dave Kellogg and I do. And you've seen, if you look at Apple Podcasts, they're both ranked in the top 25 on a consistent basis.
So we're going to have a media asset, and then we're going to have these events. SAS Metrics Palooza, the only event dedicated 100% to sharing the best practices of operators who use benchmarks and metrics to inform their decision-making. We had 5,000 people attend in the last 12 months of just SAS Metrics Palooza with amazing speakers like Jeffrey Moore, Mark Roberge, Nick Mehta.
a main bend off, et cetera. So Nathan, if you're asking me what the ultimate vision is, we're going to become the community-led growth infrastructure for a really large SaaS company that wants to sell to CFOs and CEOs.
I love that. There's a lot of folks listening right now running SaaS companies that want to run their own virtual events. And they go, how the heck do I get 5,000 people registered for my virtual event? How did you do it?
Number one, all the content that we're publishing, we've had 18,000 SaaS companies participate in our benchmark. We market it to every one of those. And our sponsors all get a unique registration page for our events. They can invite their entire marketing database and customers. And we never share those people who registered through their registration page with any of the other sponsors.
I love this story, Ray. I'm very bullish on what you're building. If people want to learn, before we wrap up with the famous five, if people want to learn more about you, where's the best place they should go? What should they go check out?
LinkedIn. I post every day on something metrics or benchmarks related. So at Ray Reich, or you can of course always contact me at Ray at benchmark.ai.
All right. On that note, Ray, number one, favorite business book.
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Chapter 5: How does Ray utilize media assets to enhance his SaaS business?
Um, The book that I read recently that I love is called Strength to Strength. It's about how you change in the second half of your career to find success.
I love that. Number two, is there a CEO you're following or studying?
I don't know if I'd call him a CEO, but Bill Ackman, the leader of Pershing Square, I think what he's done as an activist investor, but more importantly, what he's doing for our social environment, I think everyone should be following Bill Ackman at Pershing Square.
Number three, what's your favorite online tool for building benchmark it?
Well, because we're doing all these virtual events, I've been using Airmeet as our virtual event platform. And I really love what they're doing. And then Riverside FM on the podcast side.
Number four, how many hours of sleep do you get every night? Seven, eight hours. All right. And situation, married, single kids?
I'm married for a long time, three adult children and a wife who is a CFO. So she teaches me about financial performance metrics every day.
That's awesome. And Ray, how old are you?
I'm older than 40.
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