Non-Technical Founders Building a Venture Scale SaaS Company: Sendoso CEO Braydan Young (Part 5)

Sramana Mitra: When you made that decision to bring in an enterprise, you were feeling this tension. Did you add to enterprise customers?

Braydan Young: We added.

Sramana Mitra: I thought that’s what you would be doing. People want more enterprise customers.

Braydan Young: We looked at churn. We could look and see who’s doing the sending in the platform. Mid-market enterprises were consistent senders. They would send all the time. You can close SMB faster, but they can’t influence your roadmap.

At that time, we didn’t have an exec team. That was 2019. At that point, we raised Series B from Oak Ventures, which was a $40 million round. Now, we raised about $53 million all together.

Sramana Mitra: What kind of revenue level are you at at this point?

Braydan Young: We’re probably at $15 million ARR. We also have a spending side. How much are spending on the platform? If we’re doing $15 million ARR, we’re probably twice that on the spending. Then COVID hits. COVID was fantastic for us. Everybody needed to ship stuff out to my employees now and my people.

We were working on a feature for sending stuff to CEO’s. They send it to the main office, but the CEO is in another place. We called it address confirmation. You get an email saying, “Brayden is sending you something. Let us know where you are.” On day one of COVID, we pushed that. We went crazy in COVID. We absorbed most of the conference budget.

It was a fun year to the point where we got to $50 million ARR and we raised $100 million from Softbank. We used those funds to build the warehouses. We had a big warehouse in Vegas. We moved to Arizona. We opened a bigger one in Hayward, Sydney, Montreal, UK, and Ireland. We were sending B2B swag around.

Sramana Mitra: What kind of revenue level are you at now?

Braydan Young: We’re in the mid-50s to mid-60s now. We are 2.5 times that on the sending paltform.

Sramana Mitra: Was there something you did differently in the period between the Softbank round and now?

Braydan Young: HR sending became a big use case. We always built for sales and marketing. HR wanted to use this for internal sends. We built that. That was great to have. We had to build a way to do that. Where we didn’t focus on enough in the early days was working with agencies and helping agencies scale.

Sramana Mitra: What kind of agencies?

Braydan Young: Typically there will be an agency that helps with branding in a company. We plug into those guys.

Sramana Mitra: How did the business split up between enterprise and SMB?

Braydan Young: In 2022, the economy started shifting to figuring out our margins and traditional growth. The first thing was, we shifted the amount of employees we had. We had 600. We had a layoff and cut back to 400. The 400 was made up mostly of the SMB business. It was about half of our business at that time. They were really good customers, but they were churning at a crazy rate. You have to have a better tech touch model there. The other 30% is midmarket. The other 20% is enterprise.

Sramana Mitra: Now the business is skewing more in the enterprise.

Braydan Young: Right. The nice thing about us is our TAM is gigantic.

Sramana Mitra: It’s horizontal.

Braydan Young: The problem is you can’t use the same thing you use for Google at an automotive company. They look at gifting differently.

Sramana Mitra: Finding salespeople who can change positioning and messaging is very hard. You need to do that with marketing and create messaging matrices.

Braydan Young: Exactly. You look at how the big guys do it. Salesforce has divisions. For us, it’s the same person. One other thing I’ll add is, there’s always been a SaaS fee. We have a free version. It’s going back to our roots of coffee sending as a way to get in. That has been a very good lead generation model for us.

Sramana Mitra: It’s similar to what the open-source guys are doing of starting with a free product. Great story! Thank you for your time.

This segment is part 5 in the series : Non-Technical Founders Building a Venture Scale SaaS Company: Sendoso CEO Braydan Young
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