A lot happened in 2019
👨👨👦👦 3 New Hires
🖥️ 534 Code Commits
📞 593 Product Demos
📈 918% Increase in Revenue
💰 $195k Raised
🌴 3 Company Events
🚀 1 Accelerator Attended (Boomtown)
🎤 1 Conference Sponsored (SMMW)
🎙️ 2 Podcast Appearances
I like to spend the first week of every year reflecting on how things went over the past 12 months. What we did well; what we could have done better. What effort contributed to 80% of our revenue growth that we should do more of; what effort contribute to only 20% of our revenue that we should do less of.
Coming Out of The Trenches
2019 was a pivotal year for Cloud Campaign. We almost shut down the company in September of 2018 because we were barely generating any revenue and didn’t see a clear path to growing it.
In October of 2018, the next month, we finally discovered a scalable sales channel and started to see growth. We 5x-ed revenue in the final 3 months of 2018 and entered 2019 with conviction, excitement, and tenacity.
Setting Expectations
With a clear path to profitability and the company growing quickly, we had to decide what type of business we wanted to build.
Did we want a profitable lifestyle business that allowed us to make a nice salary and have relaxed days or did we want a high-growth startup that defined a category and provided jobs for the community?
We weren’t quite sure yet, but one thing we did know was that we’d be naive to assume we could grow the company from $100k ARR to $1M ARR without guidance to help us build the proper groundwork and avoid common pitfalls. Taking advice from my previous boss, Garrett Larsson, we decided to apply to accelerators.
“Accelerating” the Company
We knew we wanted to grow the company in a secondary market (for many reasons), and we wanted to choose an accelerator in a geography where we could realistically see ourselves setting roots. I was living in San Francisco at the time, and my co-founder, Ross, was living in Portland.
We decided on Boomtown Accelerator, which is based in Boulder, CO. In exchange for the program and $20,000, we signed away 6% of the company.
With two days' notice, we hopped on flights and flew to Colorado for the first day of Boomtown’s 12th Cohort.
The days were long and we ended up putting sales on hold because the selling hours (8am — 6pm) were generally full of content scheduled by the accelerator or ancillary tasks we had to accomplish. We dove head-first into the accelerator content, and while our sales trajectory slowed, we came out of the program with a great foundation.
- We brought on two of our mentors as advisors
- We discovered the importance of messaging
- We built the foundation and network to then start fundraising
With a few pitch events under our belt, a demo day, and some early press, we set out to raise a small angel round.
A Small Capital Injection
We had a theory and some proof around how we could grow the company, but we needed some capital to really prove out the theory and demonstrate that it was scalable. We could have stayed bootstrapped, but we knew we could grow quicker with a very small amount of capital and the guidance of strategic investors.
In August, we raised an angel round of $175k on SAFE notes. We turned down offers to raise a larger amount of capital and focused on keeping dilution low, while bringing on strong strategic investors — including the former VP of Marketing for Google, COO of Datalogix, EVP at Rally Software, among many other prestigious investors and operators.
Armed with a chunk of capital and some of the industry’s brightest minds, we got to work on growing the company.
Growing Our Sales Team
Around this time, we hired Andrew to accelerate sales and to help us define lead/customer workflows. We’ve always approached hiring with a mindset of trying to find candidates that are smarter and have more experience than ourselves so we can learn from them.
Andrew brought great sales experience to the team and his background working at a larger company helped with setting up sales automation and workflows to streamline our sales process.
Having an additional salesperson allowed us to ramp up our customer meetings and product demos.
Proving Out Our Theory
Like I mentioned earlier in the article, we had a theory of how we could scale the company with a little bit of capital, so we spent the Summer months proving that theory out and growing our monthly recurring revenue (MRR) from $12k to $25k.
We shared our story on The SaaS Podcast and Indie Hackers’ Podcast.
Armed with some data and an ambition to grow quicker, it was time to hire some more folks and raise a bit more capital.
Adding Fuel to the Fire
With a solid acquisition channel yielding a 10x ROI (fully-burdened), it was time to throw some fuel on the fire to really accelerate growth and start to grab market share. We were growing revenue by about 30% month-over-month in the Summer months, but knew we could grow even quicker with a couple of more salespeople and a larger advertising budget.
We hired another salesperson, Becca, who had impressive experience at previous companies qualifying leads, setting demos, and most importantly, building relationships. As our first sales development rep, Becca added a lot of structure to our sales org and allowed everyone to focus on their specialized roles.
In the midst of this, we started conversations to raise a Seed round. Luckily, we had already built a rapport with larger funds when we raised our Angel round, so it was just a matter of rekindling those conversations. We are still in the process of closing out the Seed round, but I will share more information in the coming weeks.
Here’s a snapshot of 25 out of the 600+ meetings we had this year.
The Next 3 Months
With our Seed round closing in the next two weeks, we intend on hitting the ground running Q1 of 2020. In the next month or so, we will be hiring a director of customer success and a lead software engineer.
Our customers are always our number one priority, so hiring a dedicated person to run our customer success department and instill best practices for the industry will be an important step and a very critical role.
We will also be growing our engineering team to continue delivering an amazing product experience, while starting to explore new product offerings to increase our average revenue per unit.
We spent the first week of 2020 setting goals and initiatives for the new year in a cabin near Mt Hood, OR.
Key Takeaways From This Year
Personal Transitions
For me personally, it has been an interesting transition over the past 2.5 years. In many ways, I went from Solo-preneur → Co-Founder → CEO.
- Solo-preneur
I initially started the company in June 2017 with the intention of it being a lifestyle business that could be run by one or two individuals and generate “passive” income for me.
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After about 6 months of struggling to gain any substantial traction, I realized I was targeting the wrong market, had my lightbulb moment, and pivoted towards targeting marketing agencies. It was now apparent that this would be a much larger endeavor because we would need a more sophisticated product and a sales team to support our customer base. - Co-Founder
Luckily, a few months later I met Ross and he joined the company as COO. Our skills were complementary, which allowed me to focus on building the product and Ross selling it. It was the perfect match.
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Having someone else dedicating all of their time on the project added a large sense of validation. I was no longer embarrassed to tell people what I was working on, and I was optimistic for the future. Also, having someone to take over the sales side of the business allowed me to do what I do best — build the product and ideate a large vision. - CEO
With things running smoothly and the team growing, I’m beginning to transition into more of a CEO role. Where my focus and effort isn’t necessarily on performing at my optimal output, but rather paving the way and providing the resources to ensure everyone on our team can put their best foot forward and produce their best work.
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I can also lift my head up from the day to day tasks and begin to focus on the larger vision, setting monthly, quarterly, and yearly goals that will set the company up for success for years to come.
Shifts in the Social Media Space
I always find it imperative to watch for leading indicators or trends in your specific market. As a small, nimble company you can often be proactive in your measures to combat negative market trends or ride advantageous ones.
- Sprout Social Files to Go Public
Sprout Social, a large player in the space, filed their S-1 to go public towards the end of this year. S-1 filings are a godsend for competitors because they include every gritty detail about the company. We’re able to derive their revenue, how many employees have, how many customers they have, their burn, and what they intend to do with the money.
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From the filing, we learned that their average revenue per unit (ARPU) of $362/mo isn’t much more than ours, and is actually lower than our target ARPU. We also learned that a majority of their revenue is coming from their largest paying customers showing a heavily weighted distribution (Sprout Social initially started by selling to restaurants and then moved upmarket to target larger businesses). We also noticed that the valuation was a ~8x multiple of ARR, which is lower than other deals we’ve seen in the space, likely due to their relatively slow SaaS growth (30% growth in 2019).
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Lastly, Sprout Social filing to go public is great for us (and other players in the space) because it adds validation to the MarTech/AdTech market and creates a more bullish outlook on an overall bearish space. - Hootsuite is Listed for Sale
Towards the end of last year, a broker listed Hootsuite for sale for a speculated $750M (no public price tag was shared, just speculations).
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Anytime a company of that size gets listed for a private sale, it gives me pause. Are key shareholders burnt out after 10 years and just want a liquidation event? Is Hootsuite starting to notice the macro shift that has happened over the past decade and the exec team wants out while they’re at a peak? Or is it actually a great outcome for everyone involved and it’s time to move on? - SocialReport is Removed as a Facebook Marketing Partner
Social Report, another player in the social media space, was recently removed as a Facebook Marketing Partner (FMP). No clear reason was released, but this typically happens if a company is violating Facebook’s terms of use such as selling/sharing users’ data or accessing API endpoints that they shouldn’t.
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This instance resulted in Social Report losing publishing access to Instagram, which unsurprisingly resulted in customer uproar and inevitable churn.
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The key takeaway from this instance is that the ramifications for violating Facebook’s terms are very real and it pays to be a good steward of their service. Despite heavy pressure from customers to implement features that “competitor X” has, we have held strong to be good stewards of the API to maintain a positive relationship with Facebook and all of the 3rd-party platforms we work with.
What I’ve Learned this Year
I want to wrap up this article with key business learnings that you can hopefully apply to your business or career.
- Messaging Matters
Messaging is one of the most important skills that is rarely taught. Good messaging is critical for fundraising, hiring, sales, and marketing.
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If you can’t describe what your company/product does in a compelling way, you will have an extremely hard time building a successful business. - Give Your Customers a Voice
Regardless of whether you’re bootstrapped or you go the VC route, your customers are your lifeblood. Without customers, your business will fail, so treat them like the champions they are by giving them a voice.
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We have a public product roadmap where customers can suggest new features (and often do); this allows them to be engaged in the company journey and quickly turns a passive customer into a champion. We also hold an annual ‘end of year’ webinar to celebrate our customers and we have an ambassador program to reward customers for talking about us. - Build Culture from Day 1
We started growing the team this year and it became very apparent how important culture is. Good culture attracts good talent, makes it fun to go into the office, and builds a successful business.
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The sooner you start deliberately working on the company culture, the more organic it feels and permeates through everyone in the office.
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To build culture early on, we invested in company retreats and parties, company swag (shirts, backpacks, etc…), and weekly lunches. The company retreat ends up becoming a barometer for hiring good culture fits — essentially, would you want to spend 3 days camping with this person?
What are Your Takeaways from 2019?
I always love learning from other founders/operators. What are your key takeaways from 2019 and how do you plan on using them to influence your actions in 2020?
