The Ledger
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Epstein: Raising prices and moving Ambassador upmarket significantly reduced customer churn
“So one of the things that we really learned was actually most people would think this is counterintuitive, but actually charging more and going up market
Significantly reduced churn.”
Solo founders carry the operational burden despite hiring, says Jeff Epstein
“When you're the solo founder, essentially there's just so much more that you're just carrying the weight of, and it has to be that way, right? Like you can't you can't have it any other way. Even if you hire someone to do the work did the equity splits and thi…”
First-time founders dilute products by saying yes to every customer request
“And the first time founder, I'm like, I just wanted to say yes to everything and then just start building that. And then you end up going in 50 different directions and you're like, does it actually work for anyone specific? And so this time we're more intenti…”
Ambassador raised prices quarterly for five years without losing any customers
“We raised our prices every quarter for almost five years, and we didn't lose customers.”
Epstein: Small SaaS customers demand as much support time as enterprise accounts
“Every person has to answer a question they have to spend as much time, potentially more time with a small customer as they do with an enterprise customer.”
Ambassador includes customer success and engineering costs in its CAC calculation
“We basically tried to do like the most fully loaded version, which was a portion of, it was all of sales, a portion of success, and even a portion of engineering. So it was like a pretty, and then obviously like marketing too.”
Epstein chose sustainable Detroit business growth over chasing a billion-dollar valuation
“I wasn't willing to leverage the business to maybe become a billion dollar company that I'd rather build a sustainable lasting business in an area that hasn't seen success.”
Epstein: Non-dilutive debt is a great option overlooked by traditional VCs
“VCs aren't typically telling people to do that, but it's a really great option for companies that are sharing enough capital where they don't need to worry about being diluted.”
Jeff Epstein's Ambassador raised under $3 million in total funding
“We actually only, we raised under three million.”
Jeff Epstein's Ambassador generated around $8 million in revenue when sold
“I think when we sold, we were around eight.”
Jeff Epstein gained 40 pounds and slept poorly running Ambassador
“Over the course of 10 years, I mean, I gained probably 40 pounds. You know, I, you know, I wasn't eating healthy, right? Like I was traveling a lot. I wasn't sleep. I probably was sleeping like three or four hours a night. A long period of many years in a row.”
Jeff Epstein's Onboard.io raised $1.25 million pre-product and pre-team
“We only raised 1.25 million. So in this day and age, not a ton, but the beauty was it was old investors who literally gave us money pre-product, pre-team.”
Epstein: Ambassador's average customer pays about $2,000 per month
“Average customers paying us about 2000 per month.”
Epstein: Ambassador will be cash-flow positive in 2018
“We've operated super, you know, capital efficiently being profitable today. We will be this year cashflow from a cashflow perspective last year, we were a little bit in the red year before we were in the black.”
Ambassador could have raised $30M but chose to cap funding at $3M
“And again, we haven't raised, it's three million is a lot of money for a lot of people, and it is for us too, but as you know, for most venture-backed companies, I mean, a company our size could have raised 10 or 20 or thirty million dollars, and you can build…”
Epstein: Ambassador generates well over $3M in ARR
“We obviously do way more than three million dollars a year.”
Epstein: Most Detroit Companies Do Not Offer Stock Options
“Most companies, In our area don't give equity or stock options, right?”
Epstein: Ambassador's customer acquisition cost is approximately $7,000
“I think we, it's funny. We just did one. I think it was seven, seven, basically seven.”
Epstein: Ambassador Experiences Low Single-Digit Monthly Gross Revenue Churn
“We're in the low, you know, low single digits per month.”
Epstein: Ambassador's Customer Lifetime Value Exceeds $50,000
“I mean, we're north of 50,000 now in terms of lifetime value, which is pretty great.”
Epstein: Ambassador raised under $2.5M Series A, totalling $2.9M
“Just under two and a half million. ... We raised about 400 K a few years back, so it was really the second, it was, I guess, formally an A, but it was a smaller A, at least what we're seeing, you know, especially last year.”
Epstein: Ambassador average customer spend is $1,000 to $1,500 monthly
“It's probably over a thousand a month would be, probably 1500 a month would probably be average, and we still have some legacy customers, and we have some that are several thousands a month, but average is probably, you know, a bit over a thousand per month.”
Epstein: Ambassador generated about $3.5 million in revenue in 2015
“So it was about three and a half million dollars.”
Epstein: Ambassador reached an annualized run rate around $3.8M–$4M
“Yeah, so run rate was about probably just under 3.84 million roughly.”
Epstein: Ambassador achieves ~85% retention and under 2% monthly net dollar churn
“We don't measure it annually, but it's probably, our retention is probably close to 85%, 85%, which is which is maybe 10% churn. I mean, there's a couple different ways to measure it, but we also look at, you know, net dollar churn as well, so that, that's und…”
Epstein: Ambassador gives an Apple Watch or $500 for closed customer referrals
“Through our own referral program, we pay 25 dollars if you refer a scheduled demo. So if someone schedules a demo and completes it, then we'll give you a 25 dollar gift card. They become a customer. We'll give you an Apple Watch or you know, 500 dollars. So li…”
Epstein: Ambassador closes about 5% of product demos
“And we know that demos will close at, or, you know, at you know, five percent.”
Jeff Epstein sold Ambassador on a revenue multiple, not EBITDA
“It was definitely multiple revenue, you know, instead of like an EBITDA multiple.”
Jeff Epstein owned nearly 100% of Ambassador in its early years
“The first few years of ambassador was all me. And I, at points I owned almost a hundred percent over time, more, there were investors and then team received, you know, a bigger chunk of the equity”
Epstein: Ambassador is growing year-over-year at under 100%
“Not quite doubling. So we're not, not quite there, but you know, for us, it's a matter of not just growth at all costs.”
Epstein: Ambassador grew headcount from 11 to 40 in 2015
“We started 2015 with just about 11 or 12 people. So it was a big year. 2015. We raised a little bit of money and went from basically 11 to 40.”
Epstein: Ambassador's freemium launch resulted in 600 users who never paid
“I had this idea that we would be freemium, and Dropbox was like the most popular software out. We wanted to be freemium. I think the story I tell is we had 600 customers not pay us. 600 customers didn't pay.”