RocketReach Kills Low Margin Product, Doubles Down on $70 ARPU Customers, $10M 2017 ARR goal with CEO Amit Shanbhag

Amit Shanbhag

In Episode #635, Nathan interviews Amit Shanbhag. He bootstrapped RocketReach from 0 to over 300K registered users in its first year. RocketReach and RocketReach API are trusted by some of the largest companies on the planet like Apple, Google, Chase and Morgan Stanley—just to name a few. He has more than a dozen patents and has started his professional life writing code for geostationary satellites. He’s also a judge for the MIT $100K competition and hopes to invest more time and money back into the startup ecosystem.

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Famous Five:

  • Favorite Book? – N/A
  • What CEO do you follow? – Sundar Pichai
  • Favorite online tool? — Google Search
  • Do you get 8 hours of sleep?— 4-5
  • If you could let your 20-year old self know one thing, what would it be? – Amit would tell the young ones to take risks, give everything you’re doing a good shot, and that worrying isn’t productive

Time Stamped Show Notes:

  • 01:28 – Nathan introduces Amit to the show
  • 02:08 – Amit was in Episode 465 and just passed 100K paying customers
  • 03:03 – RocketReach has 300K signup users
  • 03:31 – RocketReach has doubled its growth
  • 04:00 – “We tried to go more into the lead generation space”
  • 04:21 – The end customers hold RocketReach responsible for higher quality data, which is out of their control
  • 05:04 – RocketReach is similar to LeadGenius
  • 05:10 – LeadGenius charges higher for their data
    • 05:48 – LeadGenius uses a combination of people and software to gather data
  • 05:56 – Amit wants RocketReach to rely purely on software, without human intervention
  • 06:25 – The other problem with the lead generation space is when the users don’t follow up with the leads generated for them, then put the blame on RocketReach for not having quality leads
    • 06:51 – Amit isn’t sure if Lead Genius is doing something about this problem
  • 07:36 – CAC is quite high
  • 07:52 – The lead generation part of RocketReach hasn’t really piloted
  • 08:17 – RocketReach was getting $3K – 7K per delivery set, but the retention rate is low
  • 09:00 – RocketReach is using a lot of open APIs like AngelList and Crunchbase
  • 10:17 – Most of the APIs that RocketReach uses are paid APIs
  • 10:55 – Amit has decided that RocketReach will not continue down the lead generation path
  • 11:06 – Amit wants customers to think of RocketReach as a productivity tool that is accessible on their browsers
    • 11:26 – “We wanted to become more of a de facto productivity tool for sales”
    • 11:33 – RocketReach focuses on features that can make a team more productive
  • 12:17 – RocketReach doesn’t have the self-serve team feature on their website, at the moment
  • 12:57 – RocketReach currently has 7 team members and is still bootstrapped
  • 13:02 – RocketReach has one of the highest revenues per employee in the lead generation space
  • 13:12 – If RocketReach had continued with the lead generation model, it would have made sense to raise
  • 13:25 – RocketReach is trying to scale without hiring a sales team
  • 14:20 – RocketReach has an average of $70 monthly RPU
    • 14:30 – But the number of paying users is complicated
  • 15:25 – RocketReach’s 120K users mentioned in Episode 465 is the number of registered users
  • 16:13 – Amit doesn’t see the need to reveal the number of paying customers
    • 17:18 – Customers are paying anywhere from 1K-50K
  • 17:42 – Gross customer monthly churn is 7%
    • 17:53 – The churn has gone down a bit
  • 18:56 – RocketReach has 2 different revenue streams
  • 20:40 – The Famous Five

3 Key Points:

  1. The lead generation space isn’t as easy as it seems.
  2. It IS possible to stay bootstrapped while, at the same time, scaling your business.
  3. Take risks, give your best shot, and worry less!

Resources Mentioned:

  • 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
  • Organifi – The juice was Nathan’s life saver during his trip in Southeast Asia
  • Klipfolio – Track your business performance across all departments for FREE
  • 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
  • Freshbooks – Nathan doesn’t waste time so he uses Freshbooks to send out invoices and collect his money. Get your free month NOW
  • Show Notes provided by Mallard Creatives