SaaS Interviews with CEOs, Startups, Founders
RJMetrics Founder $4m+ ARR Explains How They Lost To Looker
14 Jun 2020
Chapter 1: How quickly can a startup reach $1 million in ARR?
I'm trying to get a sense of how fast you go from zero to a million in ARR.
Yeah, so if we hit our targets, it'll be six-ish, nine-ish months total will get us from zero to a million. Okay, got it. And I think we're, based on this quarter, we're pacing toward that.
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Now look, I never want money to be the reason you can't listen to episodes. On the checkout page, you'll see an option to request free access. I grant 100% of those requests, no questions asked. Hello, everyone. My guest today is Bob Moore. He's a CEO and co-founder of Crossbeam, a collaborative data platform that helps companies build more valuable partnerships.
He previously co-founded RJ Metrics, which was acquired by Magento, and Stitch Data, which was acquired by Talend. Bob, you ready to take us to the top?
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Chapter 2: What was the initial vision for RJMetrics and its target market?
And one of them was this really cool data pipeline infrastructure that if you think about what data pipelines are at their core, it's really just a way to get data out of certain systems and placed into other locations in a way that scales where the end customer doesn't have to worry about rewriting a script every time somebody's API changes.
We built a system that allowed us to support that kind of data connectivity for dozens and dozens and dozens of SaaS tools. And when we sold to Magento, they weren't particularly interested in getting data from dozens and dozens of SaaS tools nearly as much as they were about getting data from Magento. We became Magento business intelligence there and
really focused in on helping Magento customers get better analytics out of their e-commerce data. So we had this leftover piece of technology that was the data pipeline stuff.
Should people think about that like a version of MuleSoft or Zapier?
Yeah, it's a great... I mean, the fact that Talend was the acquirer is a really great kind of proxy for that, which is kind of in that data integrations universe. So Making the plumbing that allows all of your cloud-connected systems and on-premise systems to talk to each other, to have data parity be correct, and to help your analytics have data flowing in the right places at the right time.
A good example, too, is if you're using a tool like Looker as a business intelligence platform, the question is, how did the data get to Looker? Because Looker doesn't actually go out and manage hundreds and hundreds of little scripts that run and pull data out of all your little services and locations. That's the kind of thing that an ETL tool will do. And that's extract, transform, load.
And that's what Stitch is. Stitch is this kind of core ETL tool. We had this leftover thing from RJ Metrics, and we were able to negotiate in the Magento deal that we retained ownership of it. We actually just took that, rebranded it as Stitch Data. Jake took over as CEO while I was at Magento for the earn-out.
basically built this business up off of this core technology and team that we had started with.
So did you have to give any of that? So the Stitch rollout, you said negotiated kind of this piece, your own, did Magento have any equity in Stitch? No, they didn't. Did your early investors that put 24 million bucks into RJ, did any of them have equity in Stitch? Yeah, they did.
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Chapter 3: What challenges did RJMetrics face in the evolving tech landscape?
But those companies, let's use the Smartsheet into Intuit example. Mark Mader, right, from Smartsheet doesn't want to share all of his data with Intuit without knowing if it's actually going to happen. Is that a good use case, Intuit and Smartsheet will use you to see where they overlap?
Yeah, this literally happened to me when we were selling RJ to Magento because we had other potential buyers and... All the buyers wanted to see our full customer list before they gave us a term sheet, but they don't care about the whole customer list. They just want to know about the ones that overlap with their customers. So that exact use case.
So M and a corp dev due diligence, even during venture investments, it's a whole category of use cases. Um, that's in the solutions part of our website. Um, I don't love it as much as the day-to-day sales enablement stuff, cause it's less recurring, but the value proposition is very real.
Yeah, really. Okay. Wait. So just to be clear, I mean, as you scale, do you think you're going to build a bigger business selling into BD teams and potential acquire like companies being acquired or it's the sales, it's the sales use case.
I think it's the go-to-market. I think it's the whole go-to-market funnel. So it's, it's marketing sales and kind of account management, customer success. Um, there's really clear cut recurring use cases for all of those, uh, that sit within our stack. So I think that's really, that's the, that's the primary, uh, method of growth and the big recurring use case.
Interesting. Okay. Um, for people listening right now that wanted, they, you know, in their seed deck, they said, we're a platform, we're a platform because they thought it would juice their valuation, but they know deep in their hearts, they're not actually a platform yet. And they're going, shit, how do we actually build what we just sold? How do you actually become a true platform?
Not just one that you use in your branding.
Yeah. And I would also just challenge the idea, do you want to be a true platform? Bill Gates has this definition of a platform that I like, which is that the economic activity that gets generated as a result of you existing in your partner ecosystem is actually greater than the economic activity that you generate for yourself.
At that point in time, the fulcrum has tipped and you are in platform territory. But in reality, a platform, in theory, is this fundamental layer that stuff gets built on top of. What we're seeing out in the market is that the big success stories, you look at companies like Zoom, companies like Slack, the latest IPO crop in SaaS, I would argue that very few of them are like true platforms.
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Chapter 4: What led to the acquisition of RJMetrics by Magento?
Well, that's my first. My daughter, Annie, she is three months old. Wow. Okay. So married, a kiddo. How old are you? I am 36 as of a couple of weeks ago. Amazing. All right. Take us home. What do you wish your 20-year-old self knew?
Oh, listen more and... be as intellectually honest as humanly possible because the things that aren't going right are the things that will probably turn into the best things you can possibly, you know, have as outputs a couple of years down the road.
I thought you were going to say that Looker would sell for 2.6 billion. Start Looker.
Whatever you do, just start Looker.
Well, guys, on that note, it sounds like it did again. Bob Moore launched in 2008. RJ Metrics raised $24 million, eventually acquired by Magento in June of 2016. They were doing somewhere between $4 and $10 million in AR.
They spun out a piece of tech Magento didn't value called Stitch, bootstrapped that up to about 30 people, another $4 to $10 million in AR, acquired by Talend in 2018 for $60 million. Through all this, he learned the importance of what it means to... build a healthy platform ecosystem or ecosystem around your tool and built Crossbeam, essentially escrow service for data launched in 2018.
About 15 million raised, 80-ish to 100 paying customers hoping to hit a million bucks in AR by April 2020. Bob, thanks for taking us to the top. Hey, thank you. Good roundup.
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