SaaS Interviews with CEOs, Startups, Founders
RockContent 2x To $25m in Last 12 Months, Helping 2000 Customers Scale Content
05 Sep 2020
Chapter 1: What revenue growth has RockContent achieved in the past year?
It's slowly decreasing, but it's still around 40% of the total revenues. So we have around 50% SaaS. Out of 25 million, we have around 12 to 13 million in SaaS. We have around 40% of that, which would be around 10 in marketplace and a little 10% approximately in professional services. You are listening to Conversations with Nathan Latka.
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My guest today is Diego Gomez. He is the chairman, chief executive officer, and founder of Rock Content, a SaaS blogger, researcher, and evangelist. Rock is among the fastest-growing SaaS companies and a global leader in content marketing solutions. Diego is also an endeavor entrepreneur, angel investor, and in his spare time, he blogs at SaaSholic.com. Diego, you ready to take us to the top?
I'm ready. I'm excited to be back. All right. Let's not bury the lead here. We're going to get into a product in a second. But first, you said fastest growing SaaS company. So what do you got today in terms of revenue and where were you a year ago? So Rock has been in a trajectory to really lead the content marketing category and we've seen really fast growth over the last few years.
Last year, we closed at around 13 million. This year, we're expecting to close between 25, 26. And where are you today in terms of run rate? around 24 and something. Wow, so just because of COVID, you're only planning to add about a million dollars in new ARR between now and the end of the year? Yeah, we're expecting one to two million, and we slow down a little bit in sales in the future.
Okay, there you go. So there you guys have it. Fastest growing, we just quantified it. Diego, let's back into the product here for a second. You have four critical components to the business. Tell me about the products and the product lines and how you help customers. Perfect. So content marketing is a complex and challenging process for several companies.
We have four main offers to help marketers tackle that with a complete suite. So we have a talent marketplace where we have 80,000 freelance creators. It's called Visually, visual.ly. There you can find talent to create infographics, videos, PDFs, eBooks. It's a very important piece of our ecosystem. We also have Rock Studio, which is our content marketing platform.
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Chapter 2: How does RockContent structure its product offerings?
And he said, Nathan, look, whether you're in Boston, Boca Raton, or Brazil, applying these sort of fundamentals of a sales methodology is really important in the buyer journey. the sales process qualifying matrix to a world class team as a recipe for success.
And he goes on and said, adding that to a business whose mission you guys is firmly grounded in customer success rock is on a course for super interesting success in this content first world. So he's clearly a big fan of what you guys are building. Yeah, I'm a big fan of his his book. The sales acceleration formula is one of my favorites.
Our CRO, Matt, was coached by him and worked directly with him. So he's a big inspiration. When we spoke last week, he's always providing advice and helping us with strategy and direction. You were talking about churn earlier and how you like professional services as an R&D tool, but also to retain customers. Your net retention is higher when you put professional services on an account.
What is your revenue churn annually today? So last quarter, we closed at annualized 94%. So that's around half a percentage point monthly. Sorry, 94% retention? Yes, annualized. So around half a percentage point monthly. We are working very hard to improve that, driving NPS up, going up market. It's a combination of different initiatives that we are being able to give.
This month, by the way, was our first month with 100% revenue retention across all our SaaS products. Got negative a few points. It was pretty exciting. Wait, how did you do that? I mean, Diego, we're in the middle of a crisis. You're telling me not one single of your 2,000 customers paid you less? They did no downgrades or anything? You lost no dollars of revenue?
No, no, I'm saying net revenue retention, so not gross. In terms of, we had a lot of expansion in cross-selling. Because our business has a suite of offers, the journey is the customers typically start in one product, more often than not, a cheaper product like Stage, which is a simple website and content hub hosting platform.
And then they go to studio to ion and gradually this, the cross cell machine is picking up fast. I'm really excited about that. That's my main. Can you quantify that? I mean, do you know what your expansion is annually on an annualized basis? Um, I don't have this in front of me right now, but I can bring it up in one minute from now.
It sounds like if you have 0.5% monthly revenue churn, your expansion is at least 0.5% if you hit 100% net revenue retention last month. Yes. Last month was a massive cross-sell move for us. I think we were negative 3%. mostly through cross-selling our interactive content platform to all customers. Let me see if I can find expansion rate.
I mean, while you're doing that, while you're looking for that 3% expansion last month and 0.5% churn gives you basically net revenue retention of 102.5%. So obviously if you do that annually and do that every month, that's basically 125% net revenue retention on an annualized basis. Yeah, but last month, because we are introducing this new product, I am across the board to our customers.
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Chapter 3: What is the average customer payment for RockContent's services?
They had real revenue. They had around, I am the interactive platform came from them. I am product has around $6 million in annual revenues. I think a significant more than that, but that was back then. So when you bought the company, they were doing six million a year in revenue. They also had visually, which was a scribble live product doing around two million, if I recall correctly.
So that company together was doing eight million in total revenue. How did you come up with the money to go buy that company? Or is it like an all stock deal? That's why we raised $10 million to pursue this acquisition. The consideration was a mix of cash and stock. Unfortunately, I can't disclose the specifics, but we raised for pursuing this deal. Yeah.
So I'm saying anyone doing the math, if the company was doing 8 million in revenue and you're saying you went and raised 10 million to the deal, I mean, there's no way they sold for one, a little more than a one X revenue. What you're saying is there was also some stock options in play as well that juice the deal for them. Yes. Yes.
There were, uh, we had some delusion and especially for key members that remained with us. We had a very strong team joining us. Very good. Okay. Um, and so if someone's listening right now and they're going, I wonder if Diego would be interested in acquiring my company, what's like the perfect fit or is there a specific sector you're looking to acquire in right now?
We really like, uh, any space that it's adjacent to content marketing. So there's not a specific focus right now, but all the pieces that touch the content creation distribution, analysis and hosting are interesting to us.
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Chapter 4: How has RockContent's customer base evolved over time?
I cannot give you a little more color on that, but we get a lot of opportunities in the pipeline and we're always observing what's out there. We really think about our strategy is to own the customer in a sense that we want to provide every need that they have when it comes to content marketing. So we want to...
consolidate a few categories like vertical marketplaces that tie, so let's say, audio, other skills that we don't have on our talent network today, and products that could match the same customer's needs. Would you ever go buy a network, one of these networks where you can go hire writers to create content for you? Or no, you want to stick to pure SaaS acquisitions? I would consider definitely.
Visually, for instance, which was one of the Scribbles Live's products was acquired because we didn't have a talent network in North America back then. Now we have this skill and we have a large pool of talent. We would consider looking at other marketplaces like that that would add new skills.
By new skills, I mean, let's say an audio marketplace or a specific language, a Spanish marketplace or German. But we are mostly focused on SaaS. Guys, there you have it. Diego, let's wrap up here with the famous five. Number one, favorite business book. I would say the outsiders. The outsiders, that is a good one. Number two, is there a CEO you're following or studying?
I am in a Warren Buffett phase. Number three, is there a favorite online tool that you use to grow your company? I would say that's a hard one. I would say... Gmail is where I live, but it's not a favorite though. It's pretty much... Very original answer there, Diego. All right, number four. Fireflies.ai, transcribing my needs. I'm loving this though. There you go.
Number four, how many hours of sleep do you get every night? Five, six when I sleep a lot. And what's your situation? Married, single, kids? Married, no kids. No kids. And how old are you? I'm 34. 34. Last question. What do you wish you knew when you were 20? That's a hard one for me. I wish I knew how to better lead and communicate by inspiring people and by setting the example and the tone.
I am an introvert, so I'm working a lot on my personal communication skills and leadership skills. That's something, I think it's an ongoing journey forever, but I wish I started studying that earlier on. Guys, rockcontent.com, growing fast. 2018, $4 or $5 million run rate. 2019, they finished a $13 million run rate. And this year, they're hoping to close at a $25 million run rate.
Currently already at $23, $24 million in terms of run rate. Healthy customer base of 2,000 customers. A portion of them are also paying for professional services. They're scaling nicely. $12 million raised. A lot of that was to fuel two acquisitions they did. He's still looking for great acquisitions. 400 people on the team, 100 engineers, 45 quota-carrying sales reps.
Net revenue retention last month was above 100% for the first time as they look to continue to scale and drive growth a lot through expansion and cross-sell opportunities. Diego, thanks for taking us to the top. Thanks a lot.
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