Sauce Labs Revenue and Customer Discussion with CEO, Charles Ramsey

Sauce Labs CEO, Charles Ramsey

In Episode #612, Nathan interviews Charles Ramsey. He’s the CEO of Sauce Labs and has been in that position since April 2015, and has served as Chief Revenue Officer from February to April 2015. Prior to that, he’s had 25 years of industry experience—he was a venture partner at JMI Equity and held a number of roles at Quest Software, including VP of marketing and sales.

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Sauce Labs Revenue: Growth by 952% from 2012 to 2015

Famous Five:

  • Favorite Book? – Finding Your North Star
  • What CEO do you follow? – Elon Musk
  • Favorite online tool? — No
  • Do you get 8 hours of sleep?— No
  • If you could let your 20-year old self, know one thing, what would it be? – “I wish I’d become a CEO sooner in my career”

Time Stamped Show Notes:

  • 02:27 – Nathan introduces Charles to the show
  • 03:03 – Sauce Labs has just raised a significant amount, $70M
  • 03:45 – Sauce Labs has raised a total of $130M
  • 04:04 – Charles shares how they decide to raise capital
    • 04:14 – Sauce Labs checked their ability for an acquisition
    • 04:42 – Sauce Labs had great timing
  • 04:54 – Sauce Labs does automated testing in the cloud for web app and mobile devices
  • 06:38 – Sauce Labs’ market is about continuous integration and delivery
  • 07:17 – Sauce Labs is SaaS based with an annual subscription and self-service
  • 07:58 – Sauce Labs has invested in pre-sell and technical support
  • 08:30 – Average transaction fee is $50K annually
  • 08:56 – The fee varies from the number of parallel testings the customer wants
    • 09:20 – The concurrency of 50
  • 09:45 – Sauce Labs is growing organically
  • 10:11 – Sauce Labs is an 8 year old company
    • 10:33 – “The founders started the company with the notion of automated testing from day 1”
    • 10:54 – 3 years ago, a number of ISVs realized that they wanted to leverage selenium
    • 12:03 – One of the founders is still in Sauce Labs and all of them are still on the cap table
  • 12:41 – Team size
  • 13:20 – Sauce Labs currently has 3500 customers
  • 13:58 – Sauce Labs’ 90-day post-transaction clause window
    • 14:17 – Depending on the complexity of the environment, it can require professional services
    • 14:26 – Charles shares what their technical team does
  • 14:58 – Average ARR
  • 16:00 – Average pay of self-serve customers
  • 16:59 – Valuation
  • 17:46 – Sauce Labs wants to focus on the enterprise companies
  • 19:15 – Gross annual customer churn
  • 19:46 – Sauce Labs is currently at net negative revenue churn
  • 19:54 – CAC
    • 20:00 – Sauce Labs is doing paid marketing
  • 21:20 – The Famous Five

3 Key Points:

  1. Do your research—know what your customer wants and needs.
  2. Focus your energy on the strengths of your company.
  3. Take courage, take the leap.

Resources Mentioned:

  • Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
  • Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible.
  • Audible– Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books.
  • The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences