He’s 31, Doing $700k/mo By Automating The Sales Process WIth $8m Raised

Anand Kulkarni

In Episode #265 Nathan interviews Anand Kulkarni, co-founder of LeadGenius. Anand left his job as a researcher and teacher at Berkeley to develop a tool that uses automation technology to find effective sales leads. Listen as Nathan and Anand talk over starting an SaaS business and exactly how to run an effective fundraising round.

Famous 5

  • Favorite Book? – Only The Paranoid Survive
  • What CEO do you follow? — Elon Musk
  • What is your favorite online tool? — Gmail
  • Do you get 8 hours of sleep?— Yes
  • If you could let your 20 year old self know one thing, what would it be? —I wish I had known how much fun it is to start a company – I would have started sooner!

Update from Anand:

“Most of the numbers I stated were right:
* MRR – ~$700K, ~ARR is around $8.5M. We’re growing at about the rate you guessed (+$1M ARR every 2 months)
* Negative churn rate
* Funding – $8.2M total, $6M series A led by Sierra
* LTV/CAC ratio of 10, ~$15K CAC fully loaded including cost of sale
I made two big numerical mistakes:
* Range of customer spend per month – as I said, I misspoke on this one but didn’t want to break flow. Client spending ranges from $2K to $100K/month, not $2K to $1M/month.
* Total customer count and ACV – I was off here by a significant multiple; it’d be great if we could cut those numbers out.  Think it was just one line in the convo.”

Time Stamped Show Notes:

  • 01:22 – Nathan’s introduction
  • 01:54 – Welcoming Anand to the show
  • 02:10 – LeadGenius is AI for sales – ‘top of the funnel automation’
  • 02:45 – One client is using it to map out every IT director in every Brazilian telecom company, and obtain their contact details
  • 03:30 – Charges between $2k and $1 million a month
  • 03:50 – Started in 2011
  • 03:55 – Total revenue in 2015 was $8 million
  • 04:20 – Worked with 200 customers in February 2015
  • 04:37 – Annual revenue of $40k per user
  • 05:00 – LTV to CAC ratio of about 10
  • 06:00 – Spending about $15k to acquire a customer
  • 06:30 – Some salary costs associated with accessing certain kinds of data
  • 07:30 – Currently have net negative churn
  • 07:40 – That means that growth from existing accounts offsets any loss of customers
  • 08:45 – About to release a new email product
  • 09:05 – Total MRR in February was about $700k
  • 09:30 – 50 team members locally, plus 500 outsourced
  • 10:00 – Raised $8 million total; the last round was a series A of $6 million
  • 11:10 – How do you make the decision about when to raise another round?
  • 12:50 – Pre-money valuation in the last round was in the tens of millions
  • 13:35 – ‘A good partner pays for themselves’ – think about partners, not valuation
  • 15:34 – Connect with Anand on twitter
  • 18:00 – Famous Five

3 Key Points:

  1. If you’re deciding whether to run an investment round, look hard at the milestones for your business. Is investment right now going to make significant progress toward those goals?
  2. Don’t just look at valuations when you’re choosing partners. They should bring something significant to the business beyond investment
  3. Whatever you’re planning to do, or dreaming you can do: start. It’ll be fun.

Resources Mentioned:

  • Freshbooks – The site Nathan uses to manage his invoices and accounts.
  • Host Gator – The site Nathan uses to buy his domain names and hosting for cheapest price possible.
  • Leadpages – The drag and drop tool Nathan uses to quickly create his webinar landing pages which convert at 35%+
  • Audible – Nathan uses Audible when he’s driving from Austin to San Antonio (1.5 hour drive) to listen to audio books.