Nick Franklin is the founder of ChartMogul, a platform that calculates and reports on metrics for SaaS businesses. ChartMogul raised a $600,000 seed round from Point Nine Capital and angel investors in January 2015, followed by an extra $900,000 seed funding in August of the same year.
We caught up with Nick to chat about his startup journey to date including how he raised funding from one of the industry’s most prolific VCs…
From animation to heading up Zendesk
Nick began his journey studying computer animation. A born Brit, Nick got a scholarship to study at the Art Institute in San Francisco for a year. When he returned to the UK, Nick studied illustration at the University of Lincoln where he started to discover his true passion…
“In all honesty I wasn’t really applying myself at Uni”
“I got quite bored of studying illustration in all honesty” says Nick “so I started to teach myself programming.”
Nick’s first programming project was a social network for illustrators called amateurillustrator.com. The site “had around 10,000 members who shared their artwork” says Nick, “in all honesty I wasn’t really applying myself at Uni, that’s why I was building this social network for artists”.
When I asked him how he pivoted from illustration to tech, Nick recalls a friend showing him some C++ back in 2003, a time when he was living in the San Francisco Bay Area “I got exposed to that and realised that it’s not impossible to build software if you learn how to do it” he says.
In his final year at University, Nick began working part time for Evi (named True Knowledge at that time) working on AI software for answering questions in plain English, “a bit like Siri” Nick says. Nick stayed at True Knowledge after he graduated before moving to Zendesk in 2009.
“I thought if I don’t take the leap now, I’ll probably never do it”
Nick joined Zendesk as one of just nine people on the team at the time, heading up the EMEA region, building up a small team in London before moving to Asia as part of Zendesk’s expansion. “We opened up an office in Tokyo and Malina and I ran the Asia region [for Zendesk]” he says.
While he was in Asia, team Zendesk built an internal KPI dashboard. “I realised that maybe there were other companies out there that could do with having a similar dashboard” says Nick “companies that wouldn’t want to go through all the same work.”
“I had been pondering over the idea for nearly a year before I left Zendesk” he says. “I had been at Zendesk for about 5 years. I was recently married and I thought if I don’t take the leap now, I’ll probably never do it.” In early 2014, Nick started to think about how an analytics dashboard product like the one developed at Zendesk would work. He started to learn Ruby on Rails “to get back in touch with programming to learn a more modern framework.”
The right market at the right time
In 2014 when Nick left Zendesk, the SaaS industry was booming, although Nick says this isn’t something he really noticed at the time. “I was [part of] the first/second generation SaaS companies like Zendesk and Hubspot, HelpScout etc. People who started in those companies quite junior, when these companies got large and some IPO’d, a lot of those people left with ideas [for their own startups].”
With so many young entrepreneurial minds with experience in the SaaS sector, it’s no surprise that hundreds of subscription products for managing internal business processes began to pop up.
You have to ask do I continue with a good job in a fantastic company or do I take the leap?
After nearly a year of pondering, Nick finally handed his notice in at Zendesk, giving up his stable career for the entrepreneur life. “I guess that’s the risk, that’s the trade off you have to make” he says, “you have to ask do I continue with a good job in a fantastic company or do I take the leap?”
Nick’s experience was very much in line with the business he wanted to found, “but where my experience wasn’t so great” he says “was building an engineering team and things like that so I had to fill in the gaps there.”
Berlin over London
When he left Zendesk, Nick and his wife didn’t return to London but moved to Berlin to start his new business. Nick recalls how UK immigration policies would make it a slow and difficult process for his wife (who is South Korean) to get a Visa…
“The way they formatted the immigration policies in UK since 2013 has meant that it’s effectively not possible for married persons (who’s spouse isn’t an EU citizen) to move to the UK and start a company.” says Nick. “I’m sure it’s highly destructive for the UK economy…” With the recent news of Brexit, Nick is even more certain he made the right decision “because it’s just going to be easier to hire people here.”
For the first few months ChartMogul was funded by Nick’s savings. ChartMogul closed its first round of seed funding at the end of 2014 with $600,000 from Point Nine Capital and 2 angel investors.
“I met Christoph [Christoph Janz of Point Nine Capital] in the second half of 2014. I’d met with him a couple of times, he had invited me to talk at one of their events also.”
When Nick felt that ChartMogul was ready (having gone through some beta testing and improvements based on early feedback), he met with Christoph and asked whether Point Nine wanted to be involved.
“If you’re working in a successful business as an employee and you’re doing a good job and you have bosses” says Nick, “they’ll know you and you know them so when you leave, they might invest in you…Michael Hansen who hired me into Zendesk was the first angel to come on board and also Alexander [Aghassipour] who’s one of the cofounders of Zendesk, also invested in my second seed round.”
So what if you don’t have experience or a great reputation in the field? “There is lots of other ways” says Nick, who admits “maybe it’s not as easy. But there’s incubators, accelerators, there are so many networking events [where you can meet investors].”
ChartMogul was up and running in private beta in late 2014, shortly followed by a public beta launched on Product Hunt. They started charging for subscriptions in January 2015 and got their first paying customers the same month.
“I was just looking at how many people were logging in every day and how frequently they were logging in”
Before ChartMogul started taking on paying customers, Nick says he wasn’t measuring much in terms of formal metrics. “I was just looking at how many people were logging in every day and how frequently they were logging in. I was talking to them and doing screenshares to see how they were getting value out of the product and if it was enjoyable to use.”
It was these metrics that helped Nick to get investment. “I put together a package for the potential investors, [including] this many people have signed up for a free trial, this many people have onboarded and this many people are logging in. Then of those people, [I reported on] the number of people logging in everyday etc. At that point around 80-90% of the people that had onboarded were logging in every single day, so the investors could see that there was clearly something there. The people that went through the setup steps were actively engaged… These were the main things that I showed to the investors before we had any revenue or any other real measurements.”
I asked Nick how many customers ChartMogul had when they raised the seed round. “Approximately two weeks into private BETA we had 200 trial signups… 200 signups means 200 businesses. For a consumer app that would be like probably really pitifully small, but these were real companies and I got at least four of them to provide a quote for my pitch deck.”
Do you need to be cashflow positive?
Like many similar sized SaaS companies, ChartMogul currently spends more than it brings in.
“We could be [cashflow positive] if we stopped hiring, stopped investing for the future.” says Nick. “Sure, we would have a profitable business, but we would rather invest for the future.. You’re not going to be very competitive if you don’t invest, and the whole point of taking on VC investment is you invest that money for growth or product development for the future vs short term profitability.”
If you want to build a better SaaS business, check out chartmogul.com. You can get $30/month off ChartMogul for 12 months with #GetStarted.
If you want to discuss your startup or idea, get in touch with Simpleweb today.
If you’d like to discuss your startup or project, get in touch with Simpleweb today.