According to co-founder and CEO Dharmesh Singh, sales and revenue operations SaaS FullCast intends to be the platform between CRM and financial planning systems.
Founded in 2016, the company ended 2019 with eight customers and a SaaS-only run rate of $500,000. In 2020, it’s grown to 15 customers and expects to earn an ARR of $1.3 million.
Revenue operations planning is too manual, says Singh. The traditional approach is to use Excel spreadsheets and execute operations objectives in CRM systems manually through custom code or IT support.
But as companies scale, they need to streamline the workflow between planning and execution.
That’s where FullCast comes in. “We are building this platform so teams can have a no-code experience where they can come in and build the plan, click on a button, push the plan into execution, then keep it synced all the time,” Singh explained to Latka in an interview.
Singh believes FullCast offers a one-of-a-kind product. “Much like Marketo [is for] marketing automation and Salesforce for CRM, there needs to be a platform for revenue organizations end to end.”
The SaaS aims to fill that role, and it’s willing to invest in itself to get there.
In 2018, FullCast raised $2.75 million in an equity round, where it received a valuation of $10 million pre-money. Before then, however, the company hadn’t built its platform — all it had was a prototype for its minimum viable product (MVP).
To fund the MVP, Singh and his co-founder built a business around services to scale small and midsize business customers and encourage them to get more robust around sales operations. After earning $1 million in revenue with the agency side and securing capital in 2018, FullCast built its platform, then moved to the mid-market segment and switched to a SaaS-only business in 2019.
Source: GetLatka
Today, Singh is laser-focused on the next level of the company’s growth.
FullCast’s team of 10 serves customers across a range of industries who pay an average ACV of $70,000. With four full-time engineers and one account executive who helps Singh find new customers, the CEO plans to raise more capital to invest in support for forthcoming growth.
To be able to hire more engineers and sales reps, Singh wants to raise $2 million on a convertible note with a $15 million cap. “We don’t want to go to series A until we get past $2 million in ARR.”
As the company balances new customer sign-ups with its need for a bigger team, this “bridge financing” to invest in more growth is a worthy option.
Plus, with additional revenue from customers, Singh says FullCast can “really start investing and hiring more people that we need to support the growth of customers.”
What is FullCast’s annual revenue?
In 2020, FullCast anticipates generating $1.3 million in ARR.
Who is the CEO of FullCast?
Dharmesh Singh, age 50, is the CEO and co-founder of FullCast.
What is FullCast’s valuation?
FullCast has a $10 million valuation.
Transcript Excerpts
Invest ahead of projected growth, then raise capital
“We need to hire in customer success. We need to hire an additional SDR, and you have two options: Either you continue hiring on-demand based on the customer growth, or you invest a little ahead of time to plan for the growth., right? So, if you’re going to invest a little ahead of time, more in finishing some of the engineering work that needs to get done, then you need a little money; not a lot. If you can get past $2 million or $2.5 million [ARR], you’re better suited to do a much larger series A at that point of time.”
Prototypes don’t have to be a liability — they can be assets, too
“What [venture capitalists] saw was the MVP, the prototype. They had a clear understanding of the product itself, because we had already prototyped the MVP. We had kind of taken some of our services customers and started moving them to the platform already. So, it was like, ‘How big is the market?’ There’s a huge market we’re going after. We think it’s at least a $10 billion market.”
How to make a smooth transition from outsourced to in-house
“You need to have the processes built internally to be able to in-source. Also, it helps when you’ve been working with an outsourced partner consistently, because you build some repository of knowledge that you don’t want to lose. … We want to bring the same people on FTE roles because they have subject matter expertise.”
Choose a target customer that aligns with your product
“We’ve got customers across SaaS and outside SaaS as well. Our niche is anybody where they have a large enterprise sales team that [has] the notion of territories and segments and multiple roles that are involved in selling motion, so we intend to streamline all of that.”
Find new avenues of revenue as your SaaS pivots
“[Growth comes from] new logos and change of ICP. We sell to customers like MongoDB, Udemy, essentially in the mid-market space. We’ve got net new customers because we just ejected out of the SMB [space] into the mid-market completely.”
Full Transcript Nathan Latka: Hello, everyone. My guest today is Dharmesh Singh. He’s a lifelong learner, who’s looking to add value to every relationship he touches. He co-founded fullcast.io with Bala in 2017, to transform how go-to-market operations are done based off his prior experience scaling ops at Salesforce, and Microsoft. Dharmesh, you’re ready to take us to the top? Dharmesh Singh: Yes. Sure. Nathan Latka: All right. So help me understand the space you’re playing as, is it sort of a pure place, SaaS company and the RevOps space? Dharmesh Singh: That’s correct. We intend to be the platform between CRM systems and financial planning systems. Nathan Latka: Specific to any niche, SaaS companies, for example, or for anybody? Dharmesh Singh: No. We’ve got customers across SaaS and outside SaaS as well. So our niche is essentially anybody where they have a large enterprise sales teams that have the notion of territories and segments and multiple roles that are involved in selling motion. So we intend to streamline all of that. Nathan Latka: Who do you feel like you’re replacing, or how are they solving the current need that you’re solving? What are they using to do it? Dharmesh Singh: So the basic problem is that planning is extremely manual. That’s done in Excel spreadsheets by sales strategy folks, and that gets nuggets visibility on the ops side of the house. So ops is executed in CRM systems manually through custom code or through IT support. And so our new view is that as companies scale and change cycles get shorter, the loop between planning and execution needs to get streamlined and it needs to be always on, right? So we need to take planning out of Excel into a SAS based platform that’s always connected to the CRM systems, and it reflects and stays in sync with all the changes that are happening on top of CRM. Dharmesh Singh: People are leaving the company, people get promoted all the time. Sales as companies evolve is enforcing and defining new runtime policies all the time. Right? My routing policies change, who gets to own accounts change depending on the account status. It might be an account manager, it could be a CSM. All those are runtime policies that need to get enforced, and that stuff is done either through custom code or depending on IT. So we are essentially building this platform, so teams can have a no-code experience where they can come in and through the plan, click on a button, push the plan into execution, and then keep it sync all the time. Nathan Latka: And Dharmesh, when these teams fall in love with you and they really integrate you, what do they start paying on average per month? Dharmesh Singh: On average, deal size across customers is about 70 K for the year right now. That’s the average. We’ve got some customers that are started with only what, 20 reps, and they’re as low as 30 K. We’ve got customers at 600 reps, they’re all the way up to 150, 200 K. Nathan Latka: Yep. Okay. Got it. So your upsell revenue and your expansion opportunity is right now, purely based off number of seats? Dharmesh Singh: Number of people as well as modules. So depending on, are you looking for territory segmentation? Are you looking at a quarter? Are you looking for planning, headcount planning? So all those different modules. Nathan Latka: Take me back to sort of day one, right? So when did you found the company? Dharmesh Singh: We founded the company end of 2016. We left Salesforce in December of 2016 to go work on this full-time. Nathan Latka: And who is we? How many founders? Dharmesh Singh: Me and my partner, Bala, the two of us. We were at Salesforce. We worked at Microsoft. So we’ve been together for what, 14 years. And then we decided to bail. Nathan Latka: Was this an internal need you saw? How did you know this was a problem? Dharmesh Singh: So we had experienced planning at Microsoft, which was a six-month process and Bala and myself, we were part of the sales planning customer for life team at Salesforce. And dealing with 1500 sheets being sent to 400 managers, August to February. And so we started looking at solutions internally to start streamlining the process. We looked at tools like Anaplan out there, and none of them could meet the need of what you ended up doing. Then Bala and his team built a prototype version internally for Salesforce. And we felt that, I think there’s a need for this in the mid market. That we should go out and build a platform and dedicate it to this function. Nathan Latka: Now, how did you guys get the initial capital to get the thing going? Dharmesh Singh: Hustle. Now, initially when we left, we built a business around services to scale SMB customers and get them to start getting more robust around sales operations. And while we built that cashflow engine, we were prototyping our basic MVP out there. And then we raised a little amount of seed funding in June, 2018. Doubled down on building the platform, moved out- Nathan Latka: How much was that around in 2018? Dharmesh Singh: 2.75. Nathan Latka: Okay. Dharmesh Singh: And we then built the platform, moved to the mid-market segment and switched over from a services, to a SaaS only business. And we launched the product- Nathan Latka: In what year? Dharmesh Singh: February 2019. Nathan Latka: Sorry, you turned off all services and switched to pure SaaS in 2018 or 2019? Dharmesh Singh: 2019. Nathan Latka: Okay. Got it. And so this is obviously a great way to build a SaaS company, right? To sort of deal with the cash flow on the initial code, getting developed to just do consulting in the space that you’re going to end up solving problems for anyway. What did you grow revenue to in 2018 on the agency and sort of services side? Dharmesh Singh: About a million dollars on agency. Nathan Latka: And today, none of your revenue comes from that though, correct? Dharmesh Singh: Correct. None of that comes from our revenue. So we injected all those services customers. We moved to pure product, and product, when we started, at the end of that transition was close to about a half a million dollars still. Converted those services customers onto the platform. Nathan Latka: Sorry, just to be clear. Are you saying in 2019 you ended with a run rate SAS only of about half a million? Dharmesh Singh: Correct. Nathan Latka: I see. And what do you think you’ll close this year at? Dharmesh Singh: Close to 1.3, 1.4. Nathan Latka: Okay. Where’s most of the growth coming from? Is it upselling new seats and models or new logos all together? Dharmesh Singh: It’s new logos and it’s change of ICP. So we sell to customers like MongoDB, Udemy, essentially in the mid-market space of zero. So we’ve got essentially net new customers because we just ejected out of the SMB into the mid market completely. Nathan Latka: How many total paying customers today? Dharmesh Singh: 15. Nathan Latka: Dharmesh Singh: Last year, we finished with about eight. Nathan Latka: Eight. Okay. Interesting. And so talk to me on something economics, you’ve only raised a 2.7 or did you decide to raise more capital? Dharmesh Singh: We are looking to raise some capital now. Nathan Latka: How much? Dharmesh Singh: We’re not ready for a [inaudible 00:07:27] yet, so we’re just raising on a note about a million to $2 million, what we think we need for the next 12 to 18 months. Because that plus the revenue coming in from customers should allow us to really start investing and hiring more people that we need to support the growth of customers. Nathan Latka: How many people are on the team today, total? Dharmesh Singh: 10. Nathan Latka: Dharmesh Singh: We’ve got 10 FTEs plus contract employees. So if you were to sort of mix the contract and the FTEs, you got about nine engineers. Nathan Latka: Okay. Got it. How many of the engineers are full-time or are not full-time? Dharmesh Singh: We’ve got four full-time. Nathan Latka: Four, full-time. Okay. Got it. And at this level, I mean, have you hired your first sales rep or are you still doing most of the selling? Dharmesh Singh: No, we have a dedicated sales person. We hired him as an SDR. We learned the ropes, we learned what are the problem space. And then we graduated into a full cycle AE role. Nathan Latka: With quota? Dharmesh Singh: I mean, too early for quota. I mean, right now, it’s between him and us. The quota is whatever the company’s number is 1.3. I do help, I get enrolled in sales, I help him with that, but we don’t have any official quota. Nathan Latka: Yep. Yep. No, that makes sense. Now, if you go and do, go raise on a note, call it one or two million, obviously, you want to minimize any amount of delusion. What cap would you try and raise that? Dharmesh Singh: We’re raising on a 15 million cap on it. It’s a safe note. Nathan Latka: Okay. Got it. Interesting. And the first 2.7 was on a safe as well? Dharmesh Singh: No, that was an equity price [inaudible 00:09:05]
Nathan Latka: How does that work? I mean, usually, you start with the safe and it converts at the next equity round. So you’re sort of going backwards, equity round and then safe. Why do that? Nathan Latka: We are looking at the safe node mode as a bridge financing because we don’t want to do two or series A till we go past $2 million in ARR. And so the thing we are trying to balance is we’ve got customers signing up and we need to hire in customer success. We need to hire an additional SDR and you have two options. Either you continue hiring just on demand, just in need kind of time based on the customer growth, or you invest a little ahead of time to plan for the growth, right? Nathan Latka: And so if you’re going to invest a little ahead of time, more in finishing some of the engineering work that needs to get done, everything else, then you need a little money, not a whole lot. And if you can get past two, two and a half billion dollars, you’re better suited to do as much larger series at that point of time. Nathan Latka: And Dharmesh, when you raised the 2.7 million in 2018, what valuation was that at? Dharmesh Singh: We did it 10 pre. Nathan Latka: And the pitch for that, besides your… It sounds like you have a great track record, that’s probably most of it, but how did you, when you shared the P&L with those VCs, and you said, “This is all agency revenue,” how did you make sure you prevented them from going up? “We’re not giving you that big valuation. This is all agency revenue.” How’d you make your agency revenue and asset versus liability? Dharmesh Singh: What they saw was the MVP, the prototype. And so they had a clear understanding of the product itself, because we had already prototyped the MVP. We had kind of taking some of our services customers and started moving them to the platform already. So it was like, okay, “How big is the market?” “There’s a huge market. We’re going after those. We think it’s at least, if not at anything, it’s a piece of $10 billion market.” Dharmesh Singh: Our view is we’re building a net new platform. There is no platform for ops. And you see this huge rise of RevOps, which is essentially a title, but with underlying point tools, there is no platform, right? And so we want to be a platform, much like Marketo was marketing automation, and Salesforce for CRM. There needs to be a platform for revenue organizations end to end. Nathan Latka: Talk to me about this raise audits. When you raise capital, you’re planning for a certain amount of runway to get to your two million in revenue, how much net burn are you putting out right now monthly? Dharmesh Singh: We are almost cashflow neutral. Nathan Latka: Oh. I mean, that’s pretty good. So you don’t really necessarily need to raise, you haven’t made those hires yet that would contribute to burn? Dharmesh Singh: That is what I meant when I said that. And for us, if we could either just hide in time as we bring on customers and we have a ratio for that, or in some cases you need to hire ahead, like engineering is an investment. Some sales is an investment you’re making for the head. So we know we are growing, we need to invest in those areas. And so the decision is, do we stall that investment and just peanut butter it as customer and everything comes in, or we just take a little more money and invest in that growth. Nathan Latka: A lot of folks listening right now, launched their MVP with an outsourced dev team. They realized at some point they want to bring that in-house. You’re doing this right now. Help me explain the challenges of that transition. Dharmesh Singh: You need to have the processes built internally to be able to in-source. Also, it helps when you’ve been working with an outsourced partner consistently, because you build some repository of knowledge that you don’t want to lose. And so our goal is to not a goal for a company, but we want to bring the same people on FTE roles because they have subject matter experts [crosstalk 00:13:04]
Nathan Latka: So you’d hire them out of the agency to join you full time? Dharmesh Singh: Correct. Yeah. Nathan Latka: How do you do that without pissing off the… Or, how do you pull them away from the agency? Dharmesh Singh: That is a great question. When he started up with the agency, we started with the principle clearly defined. Essentially, for all practical people, they’re full-time employees and they work only for us. We set up that structure. We just didn’t want to deal with such structure of putting in an office and registering an office and all this stuff in the new place. So we said, “You guys can do this on your own here. We’ll pick that battle up later.” Nathan Latka: That’s great, Dharmesh. On that note, let’s wrap up here with the famous five. Number one, favorite business book. Dharmesh Singh: Good to Great. Nathan Latka: Number two, is there a CEO you’re following our studying? Dharmesh Singh: I love the Atlassian CEOs, both of them. Scott, I’ve tracked him for a while. I agree with his values and I agree with the way that he’s built the company. There are lots of great CEOs, but Atlassian is top of mind for me. Nathan Latka: If you guys want to learn more from Atlassian, we just had their CRO, Cameron Deatsch on the show, I guess it was two weeks ago. You can check it out at getlatka.com. Learn more about their growth from high volume, low ARPU, low touch to the ARPU expansion, enterprise sales motion now today. Dharmesh Singh: I would love to. Nathan Latka: Number three, Dharmesh. What’s your favorite online tool for building your company? Dharmesh Singh: Favorite online tool for building our company. We love Basecamp. We love Google Chat. Those are the two tools that we depend on. No, we don’t, our entire company on that, actually. Nathan Latka: Number four. How many hours of sleep do you get every night? Dharmesh Singh: About six. Nathan Latka: And situation, married? Single? Kids? Dharmesh Singh: Married with two college-going kids. Nathan Latka: Oh great. And how old are you? Dharmesh Singh: I am 50. Nathan Latka: Dharmesh Singh: I wish somebody had told me I should get started sooner on this entrepreneurial journey, but I think that’ll be it guys. Nathan Latka: Guys, fullcast.io playing in a RevOps space. They’re ex Salesforce folks, launched in 2016, built a million dollars worth of agency revenue to fund the change over to pure SaaS in 2019. Now have 15 customers paying average [ACBS 00:15:26] of $70,000 a year. Very much an enterprise sales motion doing 1.4 million in ARR to date. As they continue to scale. Raised 2.7 million back in 2018 at a 12 million post money evaluation team attend today. Four engineers in-house, one sales rep who’s an AE to scale out that team. Nathan Latka: And starting with the head of engineering, they’re going to try and raise you another round, a call the next three to six months, targeting a one to $2 million note on a 15 cap. We’ll see what happens. Dharmesh, thanks for taking this to the top. Dharmesh Singh: Thank you. Nathan Latka: One more time thing before you go, we have a brand new show every Thursday at 1:00 PM Central. It’s called Shark Tank for SaaS. We call it Deal or Bust. One founder comes on, three hungry buyers. They try and do a deal live, and the founder shares backend dashboards, their expenses, their revenue, [inaudible 00:16:14], LTV, you name it, they share it. And the buyers try and make a deal live. It is fun to watch. Every Thursday, 1:00 PM Central. Nathan Latka: Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2:00 PM Central. To make sure you don’t miss any of that, makes you click the subscribe button below here on YouTube. They big red button and then click the little bell notification to make sure you get notifications when we do go live. I wouldn’t want you to miss breaking news in the SaaS world, whether it’s an acquisition, a big fundraise, a big sale, a big profitability statement or something else. I don’t want you to miss it. Nathan Latka: Additionally, if you want to take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We’ve probably talked about your tool if you’re running a company, or your firm if you’re investing. You can go in there and quickly search and see what people are saying. Sign up for that at nathanlatka.com/slack. Nathan Latka: In the meantime, I’m hanging out with you here on YouTube. I’ll be in the comments for the next 30 minutes. Feel free to let me know what you thought about this episode. And if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people. We got to push them away. Put the thumbs up below to counter them and know that I appreciate your [inaudible 00:17:27] support. All right, I’ll be in the comments. See you.