I really enjoyed this interview with Dave for two big reasons:
- He’s playing in a space that is not typical for B2B SaaS
- He’s using freemium consumer adoption to drive enterprise leads at a very low CAC of $80 which he makes back in well under 12 months.
Dave is the CEO of TeamSnap. He has more than 20 years of experience in technology leadership positions. He was previously CEO of SANRAD, a venture-funded storage networking company, which he joined in 2006.
He also helped found LeftHand Networks, a Boulder-based company sold to Hewlett Packard. Prior to that, Dave was with Hewlett-Packard. An avid skier and wannabe competitive cyclist, Dave lives in Boulder with wife Deb and two children, Mariel and Gabe. He enjoys reading, cooking and microbreweries
Revenue Model:
Over 1m teams use TeamSnap and 250,000 of those teams pay Dave $80 per year to use TeamSnap to manage team communication, logistics, and more.
The average team has 30 people ranging from coaches, to players, to players parents.
TeamSnap leverages 3 revenue streams with the SaaS component making up 40% of the total revenue mix. SaaS revenues are about $20m in ARR from 250k teams paying $80 per year.
Total revenue is approaching $50m which Dave expects the company will cross in Q1 2018.
Overall the business is growing over 100% year over year.
On Launching in 2009 in poor economy:
Dave: 2009 was best time for us to launch. The trough of a recessions is best time to get company going due to low opportunity cost. In recession there are talented people available for hire.
2009 revenue was less than $100,000. It took Dave just 3 years to break $1m in ARR which happened in 2012.
Fundraising
First 5 years from 2009 to 2014 the company was bootstrapped. Dupont funded the company with his own capital and local area angels. He put a couple hundred thousand in himself in early days.
In 2014 they took their first institutional capital and have sense raised a total of $43.7m.
On seasonal users and how that affects TeamSnap gross logo churn monthly:
Teams pay $15 during the season then stop paying us off-season. We don’t look at this as churn because we know they come back next season. They are simply “in-active”.
The company looks at revenue per customer on an annual basis which averages about $80.
On customer acquisition:
We use our consumer app which people use for free to drive enterprise sales in a land and expand strategy.
30% of new consumer customers come through referrals. We’ve boosted that up by spending about $500k per month on Google and FB ads mostly. Payback is pretty strong, under 12 months.
They’ll pay $80 to acquire a customer that is worth about $280 over their lifetime which puts LTV to CAC ratio at about 3.5.
Cash Flow:
Net burn is really close to our discretionary marketing budget of $500k/mo. We are in good shape cash wise. Near September of next year (2018) we’ll be cash flow breakeven at much higher revenue level. We’ll figure out then what to do strategy wise.
We are on the path to being a billion dollar company. I have no desire to sell out quickly to anybody. Build as big as can, shoot for IPO, create fantastic product over long haul.
Strategy towards IPO:
Large competitors like Comcast compete with us with their subsidiary called SportsEngine. Dicks sporting goods has a competitor in space called BlueSombrero and AffinitySports. Lastly, a private equity funded company called BlueStar Sports compete with us.
Many of our competitors are purchasing small players and just aggregating. A short term private equity play versus a long term 20+ year deal.
Would you accept $400m offer from Comcast? (minute 22)
Well it would depend on the moment in time. In 2016 probably, in 2017 maybe, next year when revenue is higher, no way in hell!
What is your favorite business book?
The Hard Thing About Hard Things
Is there a CEO you’re following or studying right now?
Samir, SendGrid CEO
Whats your favorite online tool?
Apple pencil to evernote.
How many hours of sleep do you get every night?
7
What would you tell your 20 year old self?
I’m married with 2 kids, married for 30 years, and I’m “approaching a milestone birthday”. I wish my 20 year old self knew that “nobody does it alone”.
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