GM! It's Friday, March 3rd - Today, we're covering how an entrepreneur built a SaaS business to $70M ARR in just 2 years 🤯, tools we think you should check out, and how a founder used ChatGPT to recover $100k from a billionaire that refused to pay.
Growing To $70M ARR in 2 Years
Daren Trousdell has scaled NowVertical to $70M in revenue in 2 years.
He aspires to build the business into the next dominant big data, ML, and AI platform. Comparable to an IBM, which is worth about $115B.
But he's going about it in a non-traditional way...a roll-up.
So What’s the Business?
NowVertical is building a platform of big data, ML and AI tools for the enterprise and he's doing it by rolling up small-and-midsized software analytics companies.
It all started when Daren advised a company called Signafire in 2017. He was impressed with its data fusion platform that compiled all client data in one place for easy analysis.
The company had been around since 2013. It wasn't growing like it once did but did have a few large clients and loyal customers that loved the product (e.g GM, JP Morgan, and Blizzard).
So Daren raised $10M and aggressively started acquiring small data analytics companies with promising technologies and a few big clients - each acquisition in the $5M to$10M range (part cash, part stock).
He then combines the technology into a suite of tools, packages them all up, and cross-sells the new product into companies that are already working with NowVertical.
The key insight is realizing that the big data & analytics market is big...like very, very big, but it's dominated by a few large players that work with the country's largest customers (e.g the fortune 1000).
At the same time, there are thousands of small players with really strong technology that couldn't get to scale but managed to create relationships with a few large enterprise customers.
If you aggregate these companies, something powerful happens:
- Platform Synergies: Each company they acquire adds a unique technology to their suite of big data solutions, making their service more powerful and compelling to large enterprise customers that would prefer to work with 1 big vendor.
- Build In Distribution: Each company they acquire has a few big enterprise customers that are sticky (e.g they stay for a long time) and pay millions for the service. By aggregating these customers under one umbrella, you can cross-sell these services and increase the amount that each customer pays.
Daren is very open about his playbook:
- Find: Identify software and services businesses in the big data, AI, and ML space that have both a powerful product offering and a few big clients.
- Buy: Acquire these companies for between $5M - $10M with a mix of cash + stock.
- Optimize: Centralize some services that are redundant like the technologies and certain teams.
- Rollout: Sell the new product offering to existing enterprise clients and grow within these accounts.
- Repeat: Take profits and outside capital and acquire additional service providers and software companies around the world to create a global footprint.
TOGETHER WITH AURA HEALTH
The Secret Ingredient To Disrupting the $4.8T Wellness Market
It’s not a “blueprint for success” that drives companies – it’s passion.
A startup called Aura is bringing more personalized mental health access to millions worldwide, and you can invest.
And while they already have over 7 million users on their digital wellness platform, mental health resources are still a huge need for millions more.
How can startup investors be sure they’ll meet that demand?
Forbes 30 Under 30 founders & brothers Steve and Daniel have just the right fuel…
Why Aura’s Mission Was Inevitable
The growth of Aura is personal for these brothers.
When their mother struggled with mental health after a divorce, Steve and Daniel were shocked by how difficult it was to access quality mental health resources.
An estimated 1 in 4 Americans ages 18 and older suffers from a mental disorder in a given year. And yet, most resources are one-size-fits-all and unaffordable for many.
Steve and Daniel were inspired to do something about it.
Their work has resulted in Aura, a digital platform with:
- $7M in annual recurring revenue
- 100k paying subscribers
- Hundreds of millions of minutes spent on the platform each year
They already have investments from Cowboy Ventures, Reach Capital, and execs from Spotify, Facebook, and Masterclass.
You have 3 days left to join them as an Aura investor and get 15% bonus shares.
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Tools & Resources You Should Know About
1) The Gentle Nudge: I recently spoke with Marcin, a successful entrepreneur & investor based in Austin, Texas.
- After selling his business in 2015, he's been on a mission to help others start their own entrepreneurial journey.
- He's building a business from $0 to $1M+ revenue by December 2023 and sharing every step along the way.
It's been so fun to watch. Check it out below!
2) Insight Voice is an AI tool that my friend is building. It helps founders grow their businesses with organic content.
- The app asks you 10 questions, you respond conversationally via video (this is cool), and in seconds it creates engaging written content.
- The best part? the content is all platform-specific, so you get a blog, newsletter, Twitter, and Linkedin all written in a way that excels on that platform.
- The founder is a friend of mine and since pivoting his idea 2 weeks ago he's had 40-50 calls a week all inbound and closing 60% of them!
Watching your friends succeed is awesome. Let me know if you're building something cool and I'll share it here!
Not sponsors. I just like them!
CEO Recovers $100K from Client by Using ChatGPT to Write “Scary Email”
You Should Know:
Instead of hiring a lawyer, Greg Isenberg turned to ChatGPT when he had a billionaire client who wouldn’t pay the $100k+ owed. ChatGPT wrote up an email that threatened to take legal action and damage the client’s credit rating.
- You can see the prompt Isenberg entered and the “scary email” drafted by ChatGPT here.
- Within two minutes the company executive reached out after five months of silence saying, “Let’s get you paid.”
- Since ChatGPT’s launch, entrepreneurs have been utilizing the chat bot in creative ways to write computer code, brainstorm ideas, and draft content
- Stories like Isenberg’s show the true potential of this AI chatbot
Greg's use of ChatGPT has to make us wonder— how many professions, even those that require advanced degrees, can be automated?
That's all from me!