SaaS: How He Used Pizza to Hit $7.5m in ARR and $18m Raised for his Lead Scoring Tool

Evan Liang

In Episode #794, Nathan interviews Evan Liang. He’s the CEO and co-founder of LeanData which he founded after managing a data cleanup project at his first company and felt the pain of cleaning Salesforce data by hand. Prior to LeanData, he was the GM and VP of products at Caring.com where he grew a small acquisition within the company’s main business. Generally, he owned 50% of the company’s revenue over 2 years. Before Caring.com, Evan worked at Shasta Ventures, a leading venture capital firm focused on end-user driven businesses. Before that, he worked in project management at eBay and business development at Microsoft where he helped launch the Xbox 360. Evan started his career at Battery Ventures where he specialized in software and ecommerce investments. He holds his MBA from Kellogg and BS in Industrial Engineering from Stanford University.

Famous Five:

  • Favorite Book? – The Hard Thing About Hard Things
  • What CEO do you follow? – Rich Hagberg
  • Favorite online tool? — Slack
  • How many hours of sleep do you get?— 8
  • If you could let your 20-year old self, know one thing, what would it be? – “I want to be an entrepreneur and not a VC first”

Time Stamped Show Notes:

  • 02:03 – Nathan introduces Evan to the show
  • 03:04 – LeanData helps marketing and sales scale their lead management processes
    • 03:11 – They’re focused on two business processes: lead routing and marketing attribution
  • 03:20 – Cloudera is one of their customers
    • 03:30 – With all the leads that are coming into Cloudera’s system, LeanData will figure out which sales rep should follow up
  • 03:43 – LeanData works well with lead scoring predictive vendors
  • 04:30 – LeanData is a SaaS business
  • 04:36 – Average customer pays $20-30K a year
    • 04:42 – Large enterprises are paying 6 figures
  • 04:54 – The pricing depends on the number of seats
  • 05:24 – Marketing attribution is an upsell from the product
  • 05:34 – LeanData was launched in 2012
  • 05:46 – Evan has always been passionate with startups and he was just waiting for the right idea to come along
  • 06:18 – Evan was at Caring when he saw the problem that LeanData was able to solve
    • 06:40 – They had a large amount of data in Salesforce that was a big mess
  • 07:25 – First year revenue of LeanData was $200K
  • 08:08 – LeanData raised $1.3M from their seed round
    • 08:19 – Total funds raised $18M
    • 08:28 – The seed round was a priced round
  • 09:12 – Current team size is 50
    • 09:28 – 15 are engineers, 15 in sales, 5 in marketing, 8 in CS
  • 09:48 – LeanData currently has 250 enterprise customers
  • 10:13 – MRR is around $600K and ARR is around $7.5M
  • 10:34 – The weirdest marketing strategy of LeanData’s was sending pizzas to people
    • 11:00 – It was a marketing campaign and the customers picked the pizza place where they wanted their pizzas from
    • 11:27 – The problem was some chosen pizza places wouldn’t deliver so one of the SDRs would have to buy the pizza and deliver it
    • 11:56 – They were still able to get some sales from that campaign
  • 12:08 – The primary CAC is for events
    • 12:32 – One event is the Lunch and Learn Event
    • 13:05 – They spent around 600K in strategizing conferences over a year
    • 13:17 – Paid advertising spend is less than 10K
  • 14:04 – Annual logo churn is 15%
  • 14:13 – LeanData is currently net negative revenue churn
  • 14:30 – ARPU expansion is between 5-10%
  • 14:48 – LTV is around 5 years
  • 15:35 – LeanData’s competitors in the ABM lead scoring space
  • 16:27 – Gross margin is 80%
    • 16:42 – LeanData benefits from Salesforce
    • 17:16 – LeanData doesn’t need backend servers
  • 17:30 – Evan answers about their exit strategy since it seems like Salesforce is the only one who can acquire them
  • 18:30 – The Famous Five

3 Key Points:

  1. Organizing your data is crucial for the company’s operations.
  2. The weirdest marketing strategy can take people aback and still win business for you.
  3. The exit of a company depends upon the possibility of an acquisition; however, there will always be other options.

Resources Mentioned:

  • Simplero – The easiest way to launch your own membership course like the big influencers do but at 1/10th the cost.
  • 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
  • GetLatka – Database of all B2B SaaS companies who have been on my show including their revenue, CAC, churn, ARPU and more
  • Klipfolio – Track your business performance across all departments for FREE
  • Hotjar – Nathan uses Hotjar to track what you’re doing on this site. He gets a video of each user visit like where they clicked and scrolled to make the site a better experience
  • 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
  • Show Notes provided by Mallard Creatives