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Feb 21, 2021 · 19m · top-founders

SpringBig Raised $11.5m on $100m Valuation at $20m Revenue in Niche CRM Space

Jeffrey Harris · 11m spoken Nathan Latka · 5m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this interview, Nathan Latka speaks with SpringBig founder and CEO Jeffrey Harris to examine how the cannabis loyalty and CRM platform scaled from a 2017 pivot to nearly $20 million in ARR. Harris details the company's hybrid SaaS and SMS monetization, sales and retention strategies, product diversification, and $11.5 million Series B financing at a $100 million valuation.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 34.3% of the talking time here. How this is scored →

Nathan as informed peer 5.3 Guest teaching 3.5 Guest disagreement 1.2 Nathan pushing back 3.0
05100:0010:000:00–3:03 · Nathan as informed peer 4/10 Episode Hook: Estimating SpringBig's Monthly Recurring Revenue Nathan inquires why cannabis retailers do not simply use established CRMs like HubSpot. Jeffrey explains SpringBig's specific value proposition in loyalty software and SMS segmentation tailored to dispensary compliance.3:03–6:24 · Nathan as informed peer 6/10 Dispensary Pricing Tiers, SMS Overages, and Expansion Dynamics Nathan calculates SpringBig's baseline monthly recurring revenue from client counts and average prices, pushing to see if they cross higher revenue thresholds. Jeffrey clarifies that enterprise overages push their actual monthly totals significantly higher.6:24–10:04 · Nathan as informed peer 5/10 Institutional Venture Funding History and Founder Strategic Motivations Nathan reviews the company's funding history and examines the gross margins of their new brand network. Jeffrey outlines the mechanics of the 85% margin brand-sponsored text message model.10:05–13:59 · Nathan as informed peer 7/10 Sales Team Structure, Quota Benchmarks, and Regional Territories Nathan calculates the sales rep ARR quota and immediately stops Jeffrey to correct the distinction between gross revenue churn and net revenue retention. Jeffrey clarifies the internal benchmarks and his philosophy of restraining client messaging volume.13:59–17:39 · Nathan as informed peer 6/10 Acquiring Budtender to Scale Reputation Management and Canadian Growth Nathan explores the valuation multiple from their recent funding round and their acquisition strategy. Jeffrey details how acquiring Budtender enhances reputation management and establishes their Canadian operational footprint.17:40–19:37 · Nathan as informed peer 4/10 Customer Acquisition Cost Payback and The Famous Five Questions Nathan touches upon SpringBig's customer acquisition payback economics before moving smoothly into the standard Famous Five closing questions.0:00–3:03 · Guest teaching 4/10 Episode Hook: Estimating SpringBig's Monthly Recurring Revenue Nathan inquires why cannabis retailers do not simply use established CRMs like HubSpot. Jeffrey explains SpringBig's specific value proposition in loyalty software and SMS segmentation tailored to dispensary compliance.3:03–6:24 · Guest teaching 4/10 Dispensary Pricing Tiers, SMS Overages, and Expansion Dynamics Nathan calculates SpringBig's baseline monthly recurring revenue from client counts and average prices, pushing to see if they cross higher revenue thresholds. Jeffrey clarifies that enterprise overages push their actual monthly totals significantly higher.6:24–10:04 · Guest teaching 4/10 Institutional Venture Funding History and Founder Strategic Motivations Nathan reviews the company's funding history and examines the gross margins of their new brand network. Jeffrey outlines the mechanics of the 85% margin brand-sponsored text message model.10:05–13:59 · Guest teaching 4/10 Sales Team Structure, Quota Benchmarks, and Regional Territories Nathan calculates the sales rep ARR quota and immediately stops Jeffrey to correct the distinction between gross revenue churn and net revenue retention. Jeffrey clarifies the internal benchmarks and his philosophy of restraining client messaging volume.13:59–17:39 · Guest teaching 4/10 Acquiring Budtender to Scale Reputation Management and Canadian Growth Nathan explores the valuation multiple from their recent funding round and their acquisition strategy. Jeffrey details how acquiring Budtender enhances reputation management and establishes their Canadian operational footprint.17:40–19:37 · Guest teaching 1/10 Customer Acquisition Cost Payback and The Famous Five Questions Nathan touches upon SpringBig's customer acquisition payback economics before moving smoothly into the standard Famous Five closing questions.0:00–3:03 · Guest disagreement 1/10 Episode Hook: Estimating SpringBig's Monthly Recurring Revenue Nathan inquires why cannabis retailers do not simply use established CRMs like HubSpot. Jeffrey explains SpringBig's specific value proposition in loyalty software and SMS segmentation tailored to dispensary compliance.3:03–6:24 · Guest disagreement 2/10 Dispensary Pricing Tiers, SMS Overages, and Expansion Dynamics Nathan calculates SpringBig's baseline monthly recurring revenue from client counts and average prices, pushing to see if they cross higher revenue thresholds. Jeffrey clarifies that enterprise overages push their actual monthly totals significantly higher.6:24–10:04 · Guest disagreement 1/10 Institutional Venture Funding History and Founder Strategic Motivations Nathan reviews the company's funding history and examines the gross margins of their new brand network. Jeffrey outlines the mechanics of the 85% margin brand-sponsored text message model.10:05–13:59 · Guest disagreement 2/10 Sales Team Structure, Quota Benchmarks, and Regional Territories Nathan calculates the sales rep ARR quota and immediately stops Jeffrey to correct the distinction between gross revenue churn and net revenue retention. Jeffrey clarifies the internal benchmarks and his philosophy of restraining client messaging volume.13:59–17:39 · Guest disagreement 1/10 Acquiring Budtender to Scale Reputation Management and Canadian Growth Nathan explores the valuation multiple from their recent funding round and their acquisition strategy. Jeffrey details how acquiring Budtender enhances reputation management and establishes their Canadian operational footprint.17:40–19:37 · Guest disagreement 0/10 Customer Acquisition Cost Payback and The Famous Five Questions Nathan touches upon SpringBig's customer acquisition payback economics before moving smoothly into the standard Famous Five closing questions.0:00–3:03 · Nathan pushing back 2/10 Episode Hook: Estimating SpringBig's Monthly Recurring Revenue Nathan inquires why cannabis retailers do not simply use established CRMs like HubSpot. Jeffrey explains SpringBig's specific value proposition in loyalty software and SMS segmentation tailored to dispensary compliance.3:03–6:24 · Nathan pushing back 4/10 Dispensary Pricing Tiers, SMS Overages, and Expansion Dynamics Nathan calculates SpringBig's baseline monthly recurring revenue from client counts and average prices, pushing to see if they cross higher revenue thresholds. Jeffrey clarifies that enterprise overages push their actual monthly totals significantly higher.6:24–10:04 · Nathan pushing back 2/10 Institutional Venture Funding History and Founder Strategic Motivations Nathan reviews the company's funding history and examines the gross margins of their new brand network. Jeffrey outlines the mechanics of the 85% margin brand-sponsored text message model.10:05–13:59 · Nathan pushing back 6/10 Sales Team Structure, Quota Benchmarks, and Regional Territories Nathan calculates the sales rep ARR quota and immediately stops Jeffrey to correct the distinction between gross revenue churn and net revenue retention. Jeffrey clarifies the internal benchmarks and his philosophy of restraining client messaging volume.13:59–17:39 · Nathan pushing back 3/10 Acquiring Budtender to Scale Reputation Management and Canadian Growth Nathan explores the valuation multiple from their recent funding round and their acquisition strategy. Jeffrey details how acquiring Budtender enhances reputation management and establishes their Canadian operational footprint.17:40–19:37 · Nathan pushing back 1/10 Customer Acquisition Cost Payback and The Famous Five Questions Nathan touches upon SpringBig's customer acquisition payback economics before moving smoothly into the standard Famous Five closing questions.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 61.9% · guest 38.1%0:00 · Nathan 61.9% · guest 38.1%3:00 · Nathan 27.7% · guest 72.3%3:00 · Nathan 27.7% · guest 72.3%6:00 · Nathan 26.1% · guest 73.9%6:00 · Nathan 26.1% · guest 73.9%9:00 · Nathan 18.8% · guest 81.2%9:00 · Nathan 18.8% · guest 81.2%12:00 · Nathan 31.2% · guest 68.8%12:00 · Nathan 31.2% · guest 68.8%15:00 · Nathan 21.3% · guest 78.7%15:00 · Nathan 21.3% · guest 78.7%18:00 · Nathan 73.7% · guest 26.3%18:00 · Nathan 73.7% · guest 26.3%
Sharpest disagreement ▶ 5:15 Correcting Baseline Revenue Assumptions

Jeffrey firmly rejects Nathan's simple baseline math of 850 accounts times $1,500, insisting total revenue is a bunch more due to outsized enterprise spenders.

 Hardest push from Nathan ▶ 12:09 Host Halts Guest on Gross vs Net Churn

Nathan repeatedly cuts in to stop Jeffrey from citing a negative figure, demanding gross churn without expansion revenue factored in.

 Biggest teaching moment ▶ 9:16 Dissecting Brand-Sponsored CPM Text Architecture

Jeffrey educates Nathan on how SpringBig monetizes the brand-to-retailer relationship through an 85% margin model that subsidizes SMS costs for dispensaries.

 Nathan holds their own ▶ 11:02 Breaking Down High ARR Quota Expectations

Nathan immediately runs the mental arithmetic on 10 deals per rep per month to point out that the quota equates to an unusually aggressive $2 million in new ARR per rep.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Episode Hook: Estimating SpringBig's Monthly Recurring Revenue 4412 Nathan inquires why cannabis retailers do not simply use established CRMs like HubSpot. Jeffrey explains SpringBig's specific value proposition in loyalty software and SMS segmentation tailored to dispensary compliance.
Dispensary Pricing Tiers, SMS Overages, and Expansion Dynamics 6424 Nathan calculates SpringBig's baseline monthly recurring revenue from client counts and average prices, pushing to see if they cross higher revenue thresholds. Jeffrey clarifies that enterprise overages push their actual monthly totals significantly higher.
Institutional Venture Funding History and Founder Strategic Motivations 5412 Nathan reviews the company's funding history and examines the gross margins of their new brand network. Jeffrey outlines the mechanics of the 85% margin brand-sponsored text message model.
Sales Team Structure, Quota Benchmarks, and Regional Territories 7426 Nathan calculates the sales rep ARR quota and immediately stops Jeffrey to correct the distinction between gross revenue churn and net revenue retention. Jeffrey clarifies the internal benchmarks and his philosophy of restraining client messaging volume.
Acquiring Budtender to Scale Reputation Management and Canadian Growth 6413 Nathan explores the valuation multiple from their recent funding round and their acquisition strategy. Jeffrey details how acquiring Budtender enhances reputation management and establishes their Canadian operational footprint.
Customer Acquisition Cost Payback and The Famous Five Questions 4101 Nathan touches upon SpringBig's customer acquisition payback economics before moving smoothly into the standard Famous Five closing questions.

Statements from this episode (21)

Assertion Supported
Harris: HubSpot Lacks Built-In Loyalty Programs and SMS Marketing Segmentation
“What we created is a unique SaaS platform that helps our retail clients and cannabis manage their loyalty program, which is something HubSpot doesn't offer. And then through that loyalty program, we create a lot of different segmentation for them that they can…”
Jeffrey Harris Feb 21, 2021 ▶ 2:05
Disclosure
Harris: SpringBig Launched in 2012 for SMBs Before 2017 Cannabis Pivot
“So we launched it in 2012, but when we launched it was originally for small business, like pizza shops, yogurt shops, nail salons, hair salons, and we decided to pivot to cannabis in early 17. So we're kind of like on spring big two point oh, which kicked off …”
Jeffrey Harris Feb 21, 2021 ▶ 2:29
Disclosure
Harris: SpringBig clients pay an average of $18,000 annually
“So they pay us on average about 18,000 dollars a year.”
Jeffrey Harris Feb 21, 2021 ▶ 3:09
Disclosure
Harris: SpringBig client monthly spend ranges from $450 to $60,000
“We have some guys that are actually paying 20, 30, even 60,000 dollars a month, and we have some paying as low as four 50 a month.”
Jeffrey Harris Feb 21, 2021 ▶ 3:16
Disclosure
Harris: A single SpringBig retailer sent 16M+ SMS in January
“Particular retailer sent out over sixteen million messages in the month of January.”
Jeffrey Harris Feb 21, 2021 ▶ 4:02
Disclosure
Harris: SpringBig MRR is 70% SaaS and 30% overage fees
“So about 70% of SAS and about 30% of overage, which we actually like that mixed percentage.”
Jeffrey Harris Feb 21, 2021 ▶ 4:16
Disclosure
Harris: SpringBig serves about 850 customers
“About 850.”
Jeffrey Harris Feb 21, 2021 ▶ 4:41
Disclosure
Harris: SpringBig had 500 customers a year ago
“500.”
Jeffrey Harris Feb 21, 2021 ▶ 4:47
Prediction Held up
Harris: SpringBig will reach $2M per month in 2021
“Yeah, we will hit that this year.”
Jeffrey Harris Feb 21, 2021 ▶ 6:22
Disclosure
Harris: SpringBig Bootstrapped Until Late 2017, Raised $20M Since
“So we raised about twenty million dollars since the end of 17. So we bootstrapped it till the end of 17, and then we said, you know what, let's get some partners in here.”
Jeffrey Harris Feb 21, 2021 ▶ 6:45
Assertion Supported
Harris: SpringBig reaches 27 to 28 million consumers
“So it's a way for brands with our twenties now, 27, twenty eight million consumers.”
Jeffrey Harris Feb 21, 2021 ▶ 8:48
Assertion Not checkable as stated
Harris: SpringBig brand ad product operates at 85% margin
“So it's about 85% margin.”
Jeffrey Harris Feb 21, 2021 ▶ 9:23
Disclosure
Harris: SpringBig Sales Reps Target 10 Monthly Deals With No Miss Penalties
“So we set quota at 10 deals per sales rep per month is the quota. And we don't penalize them if they don't hit quota. They just have an accelerator when they go over quota from the standpoint of making more commission on the 11th deal, the 12th deal, the 13th …”
Jeffrey Harris Feb 21, 2021 ▶ 10:16
Disclosure
Harris: SpringBig pairs six BDMs with six dedicated SDRs
“And half of our sales team are SDRs, right? So we have six BDMs and we have, every BDM has an SDR associated with them.”
Jeffrey Harris Feb 21, 2021 ▶ 11:23
Assertion Not checkable as stated
Harris: SpringBig sees about 0.5% monthly gross revenue churn
“On a monthly basis, anywhere between a half a percent.”
Jeffrey Harris Feb 21, 2021 ▶ 12:23
Assertion Not checkable as stated
Harris: SpringBig achieves around 105% net revenue retention
“So we run about a negative five percent. So about a 105%.”
Jeffrey Harris Feb 21, 2021 ▶ 12:36
Disclosure
Harris: SpringBig tells overactive clients to text less for long-term retention
“So we will actually go to clients as crazy as it sounds to say, Hey, you're texting too much, right? Because you're not seeing the value from it. Cause at the end of the day, I'd much rather have that client for five years and get them to generate a little bit…”
Jeffrey Harris Feb 21, 2021 ▶ 13:23
Assertion Not checkable as stated
Harris: SpringBig fluctuates around breakeven on a monthly basis
“So I think, you know, we're running, give or take, depending on the month, we're running either a little bit in the red or a little bit in the black.”
Jeffrey Harris Feb 21, 2021 ▶ 14:13
Assertion Open · timeframe Feb 2021
Harris: SpringBig raised $11.5M at roughly $100M valuation
“About a hundred.”
Jeffrey Harris Feb 21, 2021 ▶ 15:48
Assertion Not checkable as stated
Harris: SpringBig adds 30 to 35 customers monthly
“We add 30 customers, 35 customers a month right now, and it's going to go up.”
Jeffrey Harris Feb 21, 2021 ▶ 17:15
Assertion Not checkable as stated
Harris: SpringBig Customer Acquisition Cost Is Under $3,000 All-In
“Yeah, so it's about all in. It's a little less than 3000 dollars, so we're breaking even.”
Jeffrey Harris Feb 21, 2021 ▶ 17:45
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