Illuminato

Nick Caruso spent about 15 years as a sales professional and roughly 20 years in technology. He used a range of CRM systems, including Salesforce.com, and kept finding that none of them helped him win more deals. They helped with lead generation, but not with converting a prospect into a closed sale. That gap became the idea behind Illuminato, a SaaS product built around the individual sales rep rather than the company that employs them.

The founding team was three co-founders who had worked together before: a former CFO with several successful exits, a former chief marketing officer, and Caruso. The company was founded in mid-2015 and went through about a year of development and beta testing before its summer 2016 release. Caruso said they had "sunk in several hundred thousand dollars" before selling anything. The money came from the founders' own funds and an angel round of "about 700k," with five other angel investors, all from the DC area and all people who already knew the founders.

Caruso later said the nine-month wait for the first release was too long. In hindsight, he said, the team should have shipped a less polished version one much earlier and started collecting user feedback sooner.

The company's bottom-up model targets individual reps who pay with their own credit cards, not corporate buyers. Early paid advertising on LinkedIn in July and August brought in thousands of premium sign-ups, but most did not stick around. The team found more success with viral growth: one rep at a large company, such as IBM or Oracle, starts using the product, then invites teammates through team features. Early on, the team reached those first users through their own LinkedIn networks, direct contact, and references from existing users.

The viral path worked better than paid acquisition. Caruso said the company had "almost zero marketing to date" and described its growth as "a completely viral growth pattern." The team also found that referral discounts did not work, the same lesson they say Dropbox learned. Illuminato instead gave away more product features to free users. The company reported zero churn among its paying customers, though that is based on a small sample of more than 100 paying accounts.

At the time of the interview, Illuminato had more than 1,000 users across roughly 500 companies, with an average price of about $30 per user per month on a freemium model. Caruso said the company was roughly break-even and profitable, but declined to share revenue or conversion rates. The team stayed small, at four people plus contractors, and was not pursuing venture capital.