DiscoverOrg

Henry Schuck had worked for a sales intelligence company while in college, then left to attend law school. A friend from that earlier job, who wanted to start something similar, kept calling him. Schuck initially said no, but the friend persuaded him to go in on the venture. The reasoning was practical: Schuck had previously steered a company from about $300,000 in revenue to close to $5 million before a private equity exit, and his friend believed he understood how a company like this worked.

DiscoverOrg was built around a mix of technology and a team of live researchers who continually called into IT, marketing, HR, and finance departments. The platform maps organizations starting from the top of each department, such as the CIO, CMO, and CFO, and provides direct phone numbers, email addresses, technology stack information, and triggers happening at target companies. Customers pay an annual subscription for access to a slice of the data, such as Fortune 2000 IT decision makers, along with a set number of users and limited downloads and exports. Henry describes the product as a SaaS platform integrated into customers' CRM systems and constantly updated.

The source does not describe how the first customers were acquired. What is clear is that by 2014 the company had reached a $25 million annual contract value with more than 100 employees, and that growth became the basis for outside investment. Two private equity term sheets were turned down before the company hired a banker and chose TA Associates, which Schuck says trusted his leadership rather than dictating how to run the business.

Retention was the strongest signal. Henry says annual renewal rates are above 90%, and the company treats success as the product: customer success reps are trained to be consultative and to teach clients how to use the platform to generate more revenue. Expansion has come from added seats, new data sets, and a predictive intelligence suite. The company also reports that its customer acquisition economics are good enough to watch rather than cap. Its location in Vancouver, Washington, a Portland suburb, helps keep costs down compared with Silicon Valley. The average customer is estimated to be worth $300,000 to $400,000 over their lifetime, with customers staying roughly three to four years. Contracts range from about $30,000 to $1 million a year.

In late 2016, DiscoverOrg had more than 2,100 customers, estimated monthly recurring revenue of about $5.8 million, and a projected year-end run rate of around $70 million. It had about 315 employees and was profitable, which Henry notes is rare in software.