829: SaaS: Will He Get $25m Valuation on $1m ARR in Predictive Analytics Space?

Published: Oct. 31, 2017, 9 a.m.

Christopher Day. He\u2019s been a successful entrepreneur, having sold two companies to a Fortune 100 company before turning 40. He\u2019s had businesses from residential painting to investment banking doing cross-border M&A transactions. Along the way, he has found time to mentor other entrepreneurs and participates in helping solve legislative issues to foster entrepreneurial growth in the State of Indiana. He\u2019s now building a platform with DemandJump that is looking to solve prescriptive analytics and qualified traffic. The DemandJump team has discovered marketers only have 20% visibility of their actual ecosystem.

Famous Five:

  • Favorite Book? \u2013 Good to Great
  • What CEO do you follow? \u2013 Jack Welch
  • Favorite online tool? \u2014 One Pager
  • How many hours of sleep do you get?\u2014 4
  • If you could let your 20-year old self, know one thing, what would it be? \u2013 \u201cThe power of relationships\u201d

\xa0

Time Stamped Show Notes:

  • 01:48 \u2013 Nathan introduces Christopher to the show
  • 02:36 \u2013 DemandJump sells their platform on a subscription basis
    • 02:41 \u2013 They have annual subscriptions and professional services
  • 03:10 \u2013 82% of the revenue is from SaaS, 1% is from a one-time payment and the rest is for the other model
  • 03:48 \u2013 DemandJump allows marketers to have 100% visibility of their competitive ecosystem, which is the first time this has been made possible in history
    • 04:57 \u2013 They show marketers where to focus to capture traffic from their competitors
  • 05:15 \u2013 Average annual contract value is $45K with beta customers
    • 05:30 \u2013 Average annual contract value now is $100K -$250K
    • 05:43 \u2013 DemandJump has started to work with mid-market companies
    • 06:00 \u2013 Self-service for mid-market will be from $200 to hundred million
  • 06:27 \u2013 DemandJump currently has 22 customers
  • 06:50 \u2013 DemandJump is getting close to their million dollar revenue mark
  • 07:11 \u2013 DemandJump was launched in 2015
    • 07:36 \u2013 The traffic cloud was built in October 2016
  • 08:05 \u2013 2016 revenue was $165K
  • 08:20 \u2013 MRR by December 2016 was $10K
  • 08:30 \u2013 2017 goal is to hit $1.5 in ARR
  • 08:54 \u2013 DemandJump raised $4M with 18 Angel investors on their board
  • 10:08 \u2013 DemandJump is looking to raise another $5M with a 15% pre-money valuation
  • 11;12 \u2013 Christopher sold software companies before
  • 12:00 \u2013 Annual logo churn is 8-9%
  • 12:24 \u2013 Annual revenue churn is almost the same with logo churn
  • 13:00 \u2013 CAC is around $10K
  • 13:31 \u2013 Most of DemandJump\u2019s customers pay annually upfront
  • 13:55 \u2013 Paid marketing spend was around $5K
    • 14:19 \u2013 40% of DemandJump\u2019s budget goes to sales and marketing
    • 15:49 \u2013 They will double or triple their paid marketing spend because of their target
  • 17:20 \u2013 Assumed LTV is 36 months
  • 18:54 \u2013 Team headcount is 17
    • 19:29 \u2013 They\u2019re all based in Indiana
    • 19:40 \u2013 7 are in engineering, 3 focus on customer success, 3 on sales, 2 on marketing and a newly hired CFO
  • 21:17 \u2013 The Famous Five

\xa0

3 Key Points:

  1. Marketers will have a HUGE advantage if they have 100% visibility of their ecosystem.
  2. Paid marketing should be aligned to your target market, otherwise you\u2019re just wasting your money.
  3. Relationships and networking is of the UTMOST importance.

\xa0

Resources Mentioned:

  • Simplero \u2013 The easiest way to launch your own membership course like the big influencers do but at 1/10th the cost.
  • The Top Inbox \u2013 The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
  • GetLatka - Database of all B2B SaaS companies who have been on my show including their revenue, CAC, churn, ARPU and more
  • Klipfolio \u2013 Track your business performance across all departments for FREE
  • Hotjar \u2013 Nathan uses Hotjar to track what you\u2019re doing on this site. He gets a video of each user visit like where they clicked and scrolled to make the site a better experience
  • Acuity Scheduling \u2013 Nathan uses Acuity to schedule his podcast interviews and appointments
  • Host Gator\u2013 The site Nathan uses to buy his domain names and hosting for the cheapest price possible
  • Audible\u2013 Nathan uses Audible when he\u2019s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
  • Show Notes provided by Mallard Creatives