$70M Raised, $30k ACV, SaaS Success VidYard

Michael Litt

In Episode #414, Nathan interviews Michael Litt. Michael started his first video company, Redwoods Media, as his undergraduate thesis project. He then evolved with his partner to create another successful video software company, Vidyard. He has learned the value of supportive family and friends throughout his life as an entrepreneur.

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Famous Five:

  • Favorite Book? – Behind the Cloud
  • What CEO do you follow? — Mark Benioff
  • Favorite online tool? — Gmail
  • Do you get 8 hours of sleep? — I try to.
  • If you could let your 20 year old self know one thing, what would it be? – If you want to be an entrepreneur, surround yourself with people who love and support you. Focus on those relationships.

Time Stamped Show Notes:

  • 01:40 – Nathan introduces Michael
  • 02:15 – He started at the University of Waterloo and Research in Motion
  • 03:00 – He graduated at 25, and the Redwoods Media was built as his undergraduate thesis project
  • 03:50 – He contracted businesses to sponsor their company
  • 04:50 – They were passionate about the video company, and turned down jobs at places like Google
  • 05:30 – Vidyard is a video platform for business
    • 05:50 – They sell that technology to businesses on a monthly basis
  • 06:10 – Average revenue per customer is about $30k
  • 06:35 – They have an inside sales team
  • 07:25 – Four categories of businesses and sales teams
  • 07:50 – 132 people on their team, and they have almost doubled in the last year
    • 08:15 – Growth pains are opportunities to learn
  • 08:55 – Looking at retention instead of churn
    • 09:25 – Gross retention is 95%
    • 09:45 – Net retention is 135%
  • 10:47 – They have raised $70 million in funding
  • 11:00 – Customer acquisition cost is paid back in 1.5 years
    • 11:15 – Average customer acquisition is $40000
  • 11:45 – Customers stay for quite a long time, according to the numbers
    • 13:27 – Why lifetime value is tricky
    • 13:45 – They focus on payback period for their customers
  • 14:25 – Being honest about their business and their numbers for customer acquisition costs
    • 15:10 – They include hard costs, like any work supplies
  • 15:40 – Total customers is private
  • 16:05 – They are looking to triple the business for two years, and then double the business for the next three years
    • 16:40 – It would show their potential to go public
    • 17:00 – Building a fast growing, high-value business
  • 17:25 – Tom Tunguz’s Blog
  • 17:45 – Revenue is private.
    • 18:15 – They broke through $1 million for their first full year of sales
  • 18:45 – Michael has a holiday party every year at his office
    • 19:00 – Project Christmas has carried throughout their business
    • 19:28 – The Fall is a great time to raise money
  • 19:55 – Connect with Michael at Twitter, Instagram, Facebook, and LinkedIn
  • 22:20 – The Famous Five

3 Key Points:

  1. Your first business ideas will develop into bigger, better projects.
  2. Be honest about your company and spending.
  3. Surround yourself with people who love and support you as you pursue your entrepreneurial dreams.

Resources Mentioned:

  • Toptal – Nathan found his development team using TopTal for his new business Send Later. He was able to keep 100% equity and didn’t have to hire a co-founder due to quality of Toptal developers. 
  • Host Gator – The site Nathan uses to buy his domain names and hosting for cheapest price possible.
  • Freshbooks – The site Nathan uses to manage his invoices and accounts.
  • 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.
  • Behind the Cloud – Michael’s favorite business book
  • Gmail – His favorite tool, besides his own
  • Tom Tunguz’s Blog – Learn about the best models that public companies use
  • Connect with Michael at Twitter, Instagram, Facebook, and LinkedIn
  • Show Notes provided by Mallard Creatives