What do you do for an encore after completing a $200m exit? If you’re Larry Kim, you build a SaaS product based on one of your core skills, then pivot it after it flatlines to a more lucrative model that is now the world’s fastest-growing B2C sales and data platform.
Founder Larry Kim, who sold Wordstream for $200m in 2018, launched MobileMonkey the same year, quickly reaching $1m ARR in under 12 months. Discover what happened next in this GetLatka interview, as CEO Kim revealed what made him pivot and rebrand to Customers.ai, why he decided to finance his pivot with Founderpath, and how he’s leveraging proprietary data and AI to accelerate growth and move upmarket.
- Team of 40 with 15 engineers
- $2m ARR in 2022, targeting $5-7m in 2023
- $5m Series A in 2023
MobileMonkey launches in 2018, hits $1m ARR in 2019
MobileMonkey, an automated Messenger chatbot service, busted out of the gates and went from 0 to $1m ARR in less than 12 months. “I thought we had made it,” Founder Kim recalled. But the revenue soon flatlined: “Unfortunately, when you build on an ecosystem like a Facebook partner, you’re not really master of your domain.
So, when a product manager decides to kill functionality, it can kill you. Facebook made some difficult policy changes, and we lost all our SMB customers,” revealed the CEO.
Still stuck at $1m ARR in 2020, cash dwindled to $200k
After flatlining for 1–2 years and nearly running out of cash reserves, Kim needed to decide, “Do I reinvest or let the market reprice it?” He acknowledged that pivots rarely work but realized that the tech was similar to chatbots, so he decided to do a sales outreach and sales automation use case for B2C.
He hoped prospective customers would be interested in website ID and emails, noting, “It’s a drag and drop UX, but instead messages on Facebook Messenger it’s emailing.”
Chooses non-dilutive capital: $400k Founderpath loan
“There are different ways to finance a business. I was concerned it was a tweener: not quite a failure and not quite series A,” explained CEO Kim. Eventually, Kim chose a $400k loan from Founderpath, which was 40% of ARR. “I added an equal amount of capital to gross it up. That provided almost a full year of runway to show progress. Eventually, we got out and did Series A,” explained the Founder.
$400k funding in 5 days, paid off after $5m Series A closed
“With the Founderpath model, you just connect QuickBooks and the bank, and they give you a score. I wish all VCs were like that,” quipped the CEO, adding, “It was a very quick and dispassionate view and score of the business.” Kim further noted, “It was a no-brainer.
We had an incredible outcome. Tens of millions in enterprise valuation, which is significantly better than the tens of thousands I paid in interest.” He added that he got his load done in 5 business days, and it only took two emails to get his loan paid off early after closing his $5m Series A. Latka pushed Kim for the downside to Founderpath, to which he finally replied, “The rate is high like a credit card. But it’s an unsecured debt, so I understand why.”
MobileMonkey delivers unique dataset that drives proprietary LLM
“MobileMonkey had a considerable number of users using free software. We couldn’t monetize, but as a significant artifact, we had a large amount of data,” revealed the Founder. Kim leveraged that unique dataset to feed his own LLM.
When he pivoted to confirm the product-market fit of his new tool, he rebranded as Customers.AI. Latka jokingly asked him if he was just adding AI like many other companies today. The CEO smiled and replied, “We are significantly different. We have our own LLM fed by our own propriety consumer data points.”
How AI is transforming use cases as Customers.AI builds 2 years of runway
Latka asked Kim to explain his data usage process. The Founder explained, “At a high level, it’s a publisher network with device and browser fingerprinting that can detect the mouse installed, screen resolution, plugins installed, IP address, languages, and lots of other little things.”
He continued, “The layer on top is AI analysis. It infers if the data is a true match or not. There’s a layer cake of different data collection and analysis levels, so when we add customers, we’re getting to know use cases better and growing different use cases.” Kim concluded, “AI is super transformative for use cases. Now we’re moving upmarket, getting financing done, and have over 2 years of runway.”
Serving 100’s of customers with a team of 40, several over $100K ARR
Customers.ai currently serves hundreds of customers with its B2C sales outreach automation and generative AI prospecting platform. His ICP spends in the mid-hundreds, but several customers spend over $100,000 per year. He added that he also has over 1,000 self-signups outside his ICP. His team of 40 includes 15 engineers. Kim laughed when asked if he still codes and replied, “You write the MVP software and Version 1, and that’s all.”
Burning less than $1 for every net dollar
Kim spoke with pride about his current efficiency numbers, as the company eyes growth to $5-7m ARR in 2023 after hitting $2m ARR in 2022: “The climate is not one where you can spend tons and assume there’s someone to bail you out at the end. You need to look at your efficiency numbers. We are burning less than a dollar for every net dollar.”
Founder adds money at every Customers.ai investment round, including Series A $5m
Founder and CEO Kim closed a $5 Series A round earlier in 2023. Latka asked why do it when you’re independently wealthy (from the Wordstream exit), to which Kim replied, “I have also put money in at every round of investment in the company. The money is being used to help accelerate the development and growth of the generative AI outreach tool.
Favorite Book: Founder and CEO Larry Kim selected Zero to One by Peter Thiel as his favorite book.
CEO he’s following: “Brian Halligan of HubSpot,” replied Kim, adding, “He was CEO and now is chair.”
Favorite online tool: Kim chose AutoGPT as his favorite tool without hesitation.
Balance: Kim indicated that getting adequate sleep is difficult now, but he manages 6–7 hours per night. The 44-year-old is married with two boys, in Kindergarten and 3rd grade.
What does he wish he had known at 20? “I wish I had gone after bigger opportunities,” Kim shared, adding, “My last business was an ad management tool because I know a little about managing ads. But in theory, I could’ve leveraged those skills and ability to create any business. Now, we’re doing the leads and the tools. Wordstream is a management tool, but customers then spend over $10k on the leads. Now I have a much more interesting value prop and larger share of wallet.”