SaaS Interviews with CEOs, Startups, Founders
Zoom Recording Tool Grain Hits 300 Teams, On Track for $1m ARR, New $3m Raise in Upround
25 May 2021
Chapter 1: What is Grain and how does it benefit remote teams?
We're about 50-50 between people who are on Unlimited and people who are on Pro. And so the average account tends to be a bit higher. Yeah, yeah. So you're maybe closer to like 20 or 30K in MRR. Do you think you can break a million dollar run rate by the end of this year? Oh, absolutely. You are listening to Conversations with Nathan Latka.
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My guest today is Mike Adams. He's the CEO and co-founder of Grain, a tool that empowers remote teams to record, transcribe, annotate, and share the most important moments from virtual meetings in a highlight reel. He previously co-founded DeGreed and MissionU, which is acquired by WeWork.
Mike believes that recorded conversations and the spoken knowledge they generate fundamentally expand our ability to listen, empathize, and connect with each other. Mike, you ready to take us to the top? I'm very excited to. All right. So you get an exit at WeWork.
By the way, was that sort of a life-changing event that allows you to take bigger risks now, or is that sort of just a nice sort of flat exit for everybody? It's a flat exit for everybody. And the big win I got was discovering the need and ultimately the product for grain that I'm building now over solving my own need for two years, building an online school.
And so our students were able to actually get absolved of their income share agreements and still, for the most part, get jobs. And so it ended up being kind of a win-win for everybody. So what happened to that? That sounds very interesting. Is that the one we were bought? Yeah, so we work about mission you fully remote on the back of Zoom started in 2016.
So we're one of the first like fully embracing the remote learning environment and cohort based model. And we ran into a lot of regulatory challenges at the state of California that has since made extremely clear that their position is that income share agreements where you pay a portion of your income in the future once you get a job and only if you get a job.
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Chapter 2: What challenges did Mike Adams face with his previous ventures?
Got it. So, so let me ask about that, right? When, when you do make that announcement, people will go, well, wait a second. It's very rare. You see a price round and then going back to unpriced, they'll go, wait, was there a down on, they're trying to manage through here. What's the story there?
Yeah, the story was an up round with an amazing investor on amazing terms, and we wanted to work together very, very quickly. So what happened is we launched on TechCrunch a year after that price round. This is about a month after the pandemic, and we made a positioning bet to say, we're on the back of Zoom. We are the Zoom app. When you think about Zoom apps, think of grain.
So we had a TechCrunch launch, and then one of the investors that I really had a great experience with, her name's Jenny, left court at Freestyle VC a year before. Timing-wise, it didn't work out for her to lead the price round, but she really wanted to get involved a year later, and so this was a really easy way.
We had a huge amount of insider interests, and so the rest of it was just bought up by insiders. Um, so that's where we did the 3 million and they took like a much bigger check than they would normally do. Um, just cause she was so eager and excited to work with, um, grain and we got really nice, you know, up terms on it as well. So it was just a simple, easy way to get more capital.
It was a cap higher than your last price round. Is that exactly. Yeah. Yeah. Substantially higher. Interesting. Okay, very cool. Let's dig more to the product because I think this is interesting, right?
You know, when I had Sid from GitLab on, he said the reason he has all his companies, all of his team members post meetings, even private meetings on YouTube, is if you go to their YouTube channel, you'll see you can open the transcript that Google automatically does and search the meetings quickly.
You're sort of doing that, but in a much sort of more formal way and you're building business around it. You're using it right now actually on this call. So what is brand? How does it work?
Yeah, so Grain taps into this recognition that the tools for the spoken world that we live in are primarily designed to facilitate the conversation, not to facilitate the transfer of information across the bounds of synchronous and asynchronous work.
That's where grain comes in is that we recognize that while like what GitLab does, where you can upload videos and these artifacts, if you record it all, the world is open to you. The grain takes it one step further and recognizes that you're doing cognitive processing. You're identifying moments in time that matter. that moment mattered.
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Chapter 3: How did the acquisition by WeWork influence Mike's new venture?
Yeah, totally. So we have two plans. So there's a pro plan, which is $144 a year. And then we have a unlimited plan, which is $436 a year per creator seat. So grain is a tool for teams from default. So we don't have this idea of grain of like, well, there's this individual kind of usage in the team usage. It's like it's built to be used by and for and with your teams from the very beginning.
And so you can have your entire team on Grain and not actually have to pay for everybody who's in there, who's accessing and getting value out of viewing the content and having this centralized source of spoken knowledge for the team. You pay a license for those that are contributing and adding and editing the content. So if you just view it and you want view only, that's a free seat.
But if you're contributing and collaborating and editing and adding new recordings, you get an allocation of recordings according to your license type, whether that be pro, it has a set number of recordings or unlimited. Unlimited, you can use it on every one of your calls. So what's your sweet spot, Mike? What's a team on average paying you, right?
Because you're looking at number of seats and then the plan they're on to get up that average. Are we talking like a hundred bucks a month? Yeah, totally. So we find that it ends up being, depending on the team, the average team is about three people right now. So it's growing a lot. We have some teams that are dozens and dozens of people. We have some teams that are three.
So our self-serve model, we don't have a sales team yet. We're just kind of, you sign up for grain, you start using it and you can grow and expand that usage.
um the average team right now is about three so three at 12 a month you're talking about like 36 dollars per month so it's pretty cheap exactly so it depends on how much you need to use it and so what we found is that teams come into grain with one of two mentalities it's either i want a very specific use case in mind where i want to use grain instead of like the regular zoom recording or instead of uploading my files and transcribing them and i use it for like user research interviews or whatever and oftentimes those teams
find themselves selecting into like the pro plan. We're like, okay, that's enough allocation for me. And then there's this other group of teams that like, we use grain for everything. We use it for hiring interviews. We use it for team meetings. We use it for sales calls. We use it for customer success and support. And we also use it for customer research and for interviews.
And those teams don't want to have to think about like, oh, well, like, is this one going to cost me? Am I going to like have to pay more because, and so that's why we've created our unlimited plan is you just embrace this record by default mindset and
and then you pay grain for your service, and then you just are living almost in a new way of operating in the knowledge economy where you can make use out of your spoken knowledge without ever having to think about it online. Mike, I don't mean to cut you off, but we're running short on time. There's a bunch more that I want to learn. You got your first customer back in 2018.
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Chapter 4: What is the unique value proposition of Grain's technology?
So utility value, I'm going to churn. It's like, isn't the real question what you're doing with the recordings, not how many recordings you've done. Yeah, totally. So baked into that stat is that because if you reach a recording threshold, and the fact is that those that reach the recording threshold are not churning, the product has established value.
By virtue of the fact that you're adding recordings into the system, those users are experiencing the value, which usually comes from sharing.
As soon as I create a piece of content that's derivative, not sharing the whole entire recording, but a piece of that recording, and I drop that in Slack or embed it in Notion or I put it in Airtable, that is where our engagement metrics are focused, is on the percentage of people who are coming into the product and are creating content that gets shared externally, and then that gets viewed
And that's the like, aha, magical moment that I have as a grain user is like, oh my gosh, this was valuable to you. Like I created something in this amazing tool and then you got value out of that. I'm going to do that more often. I'm going to do it in more areas. And so we see that account expansion to those teams that reach that engagement threshold. Well, Mike, we're out of time.
Congratulations, guys. Check out grain.co. I'm not going to record and highlight important moments in your Zoom meetings. They were basically just turned on revenue about a year ago. They launched back in 2018 with a million-dollar round.
They raised $7 million to date as they looked to break a million dollars in ARR this year, serving 300 accounts and many, many more users inside of those accounts. Mike, thanks for taking us on the talk. Hey, thanks a lot, Nathan.
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