Mode founder Derek Steer hopes is startup can replace Looker – a company Google acquired for $2.6b in 2020. In an exclusive interview with Latka on Sept 13th, Steer shared how he plans to win.
Founded in 2013, Mode Analytics provides advanced data visualization software for analysts focused on making it easier to find ideas and analyze data more comprehensively. Today, 700 customers pay to leverage the software to glean useful insights and make critical decisions – Mode calls these users “Editors”.
For every 1 editor using Mode on a team, there are another 20 people that want to view the Mode dashboards. Mode can upsell against these 2 metrics to drive net dollar retention even higher than 140%.
This business intelligence solution handles SQL, Python, and visual analysis to provide insights more efficiently. Users take advantage of a self-serve experience to streamline analyst workflows, minimizing the time required to find answers to critical business questions. Additionally, companies can write SQL directly onto the data warehouse to avoid the data preparation processes.
Mode makes it easier to explore large data sources more efficiently, thanks to Helix, the superfast in-memory data engine. The platform allows users to analyze data without burdening databases with heavier loads.
In a recent interview, Mode’s chief executive officer Derek Steer discussed key factors that make Mode stand out in the analytics space.
Mode Grows Revenue 100% YoY To $40m Today
Three main factors have driven Mode’s revenue growth: pricing plans, price competitiveness, and its helix data engine.
Mode offers three pricing plans: Mode: Studio, Business, and Enterprise plan. These packages are suitable for individuals, data-driven teams, and large organizations that require enterprise security.
Companies signing up for these plans gain access to packages that come with advanced features, such as the Helix data engine and embedded analytics. Steer underlined the importance of combining Python and SQL in Mode. This approach enables Mode’s clients to take advantage of both without sacrificing one for the other. Many businesses only realize the need for one of the tools after they start working in Mode.
As a result, they find it easier to expand their activities or possibilities by leveraging Python and SQL. For instance, Python is the best tool for setting up Jupiter. The tool makes it easier to conduct data analysis by setting up a Python notebook on a desktop. On the other hand, Python calculates median better than SQL.
Steer noted that his company faces price pressures from customers when it comes to editors vs. viewers. For this reason, Mode charges similar prices for all users, regardless of whether they’re editors or viewers. This approach helps Mode stand out from the crowd in the analytics space. In addition, it helps larger corporate clients with hundreds or thousands of editors and viewers.
Customers prefer this pricing model because some users spend a limited time in Mode. Steer also highlighted the need to achieve a delicate balance between adopting a specific pricing plan and remaining competitive in the industry.
The management team tested wide-ranging pricing models before making the final decision. In the end, the approved model has worked for the company as it managed to achieve 35 percent in revenue expansion annually.
This in-memory Helix data engine comes with superior data handling capabilities than other tools like Excel. Helix can handle up to 10 gigabytes of data. Clients benefit immensely from this capability. However, it presents significant cost pressures for Mode.
On the upside, Mode Analytics formulated a workaround to create a delicate balance between customers’ needs and the vendor’s cost-cutting measures. As such, clients need to choose the right plan based on their throughput or the amount of data they pull into the Helix data engine.
With Helix’s first axis, key considerations include data storage requirements per month, memory usage, and throughput. Helix’s second axis covers a single project (one-off). Many clients prefer signing up for the basic contract or plan to assess memory usage requirements and other factors.
Mode measures the amount of data uploaded into the Helix engine in one pass instead of the data aggregated over a month. As such, throughput focuses on the data storage demands per project rather than monthly data uploads. Clients can expect upload limits based on this approach.
How Mode Is Bolstering Product Design By Increasing Staff from 120 to 168
In an interview, Steer told Latka that its analytics software is ideal for data scientists looking to leverage Mode’s advanced data visualization capabilities. The software provides superior capabilities since its model differs significantly from traditional business intelligence tools available on the market, including Looker.
Forward-thinking companies benefit immensely from the software, enabling them to transform the way they use data. With a workforce of 168 professionals, Mode Analytics is undoubtedly growing from strength to strength as it attracts additional corporate clients. In October 2020, Mode had only 120 team members. According to Steer, the company is more likely to employ over 200 workers in the near future to bolster growth and operational capability.
The company’s growth trajectory creates a need to increase the number of employees in various departments. As such, the company is continually increasing the number of engineers to enhance its operational capabilities. Mode’s highly complex software product necessitates the introduction of additional engineers to keep improving the product. Currently, the firm employs 60 engineers.
10K Editors and The Best Editor to Viewer Ratio
Although Mode has used different pricing models, it currently charges the same price for editors and viewers. Corporate clients have different editor to viewer ratios, depending on the nature of their business. A typical ratio is 20 viewers to editors. In some cases, the clients have a 10 to 1 ratio in terms of viewers to editors. Derek Steer noted that this ratio is typically common with non-tech clients. Media companies tend to have a larger number of viewers than editors.
In such cases, the clients no longer view via Mode but rather through a dedicated web portal. The web platform does not come with editor features. Companies with a large number of viewers can take advantage of lower prices, which are similar across different types of users.
Larger companies can negotiate lucrative contracts with Mode to ensure a cost-effective deal. Most SaaS vendors adopt a tiered pricing model to cater to varying customer needs.
Mode attracts many analysts and data scientists who previously relied on platforms like Looker. It provides access to dedicated dashboards that cater to the needs of analysts and data scientists. On the other hand, there are dashboard features optimized for non-technical users (viewers). This approach empowers entire organizations to work more efficiently when it comes to data analysis.
Unicorn Dreams: Breaking $1b Valuation in 2022
Growing a SaaS company is all about expanding current customers and finding creative ways to get new ones. The firm kept gross annual revenue churn under 15% this year with 50% expansion for 135% combined net dollar retention.
Latka believes Mode will break a $1b valuation in 2022 when it breaks $60m in revenue based off these recent comparables:
- G2 hit $60m in ARR and $1.1b valuation
- Copado hit $52m in ARR and $1.2b valuation
Userzoom hit $71m in ARR and $1.1b valuation - Clickup hit $80m in ARR and $4b valuation
Steer and his team bought the mode.com domain name for $500,000. The CEO expressed satisfaction with the price they paid for the domain name. Additionally, he believes that the choice of the domain name was a good investment. They paid the amount after undergoing a funding round worth $33 million.
Steer won’t disclose a current valuation; however, one year ago, the valuation was $300,000,000 with an ARR of $19 million. Now, ARR is $40 million. Latka expects the firm to announce a $100m+ fundraise at a $1.5b valuation some time in the middle of 2022.
