How 6sense Sells $150K Contracts With $1M Rep Quotas and 120% Net Retention

Imagine if you could take a dollar and 10¢ and get a dollar of new annual revenue. Could you get yourself rich off of that? Well, the question is how long do you keep those customers? Well, that's exactly what Jason Zintak is doing with his company 6sense, which he launched back in 2013. It's one of the leading revenue intelligent platforms here in 2024. But he did some strange things. He just took a $100,000,000 of debt from

SVB in 2023. That was after the big crash. So let's see if that risk pays off. But here are three numbers you need to know about 6sense. Number one, their sales reps have a quote of a million dollars. But again, the company has very few paying customers relatively speaking, but they all pay a lot, a lot of money, right? So we're talking under a thousand customers, but all paying 6 figures. Those customers stick with the

platform. This is number two. They have 120% net dollar retention. And lastly, again, have very healthy unit economics with $1.10 to get a new dollar of revenue, meaning they get paid back in about thirteen or fourteen months. You can build a real business on that. The question is, is all the artificial intelligence words they've put up on their website real or fake technology? Obviously, AI is a buzzword today. So the question is, can Jason Zintak and

6sense truly lead the way in revenue intelligence with their AI on their quest to break $200,000,000 of revenue? Watch the full interview here to get a sense of how Jason's thinking. Hey, folks. If we haven't met yet, my name is Nathan Latka. I launched and sold my first software company back in 2015 and went on to write a book about it, which you guys made a Wall Street Journal bestseller purchasing over 30,000 copies. Thank you

so much for that. After the book, I launched this show and one... Went on to create founderpath.com. I raised a large fund to do non dilutive deals with b to b software founders. So far, we've invested in over 400 software founders totaling a $150,000,000. Here in 2024, we're doing three to four new deals per week. So if you're looking for capital and don't wanna give up equity, go sign up at founderpath.com for free to get your

offer. Alright. Let's jump into the interview. Hello, everyone. My guest today is Jason Zintak. He's the CEO of a company called 6sense, which is transforming marketing and sales through artificial intelligence. Alright. Jason, you ready to take us to the top?

Yeah. Let's do it.

Alright. So before this, you were... Were you founder at Platphora or just CEO later on?

I I was hired in as CEO.

Okay. With an equity round or something? You an EIR somewhere?

Correct.

Yeah. Okay. And that was acquired by Workday in 2016. Right?

That's right.

And then you also were a CRO at Responsys?

Correct. Cool. Marketing company.

Mhmm. Yeah. Yeah. Good good. Hopefully, you got a little bit... Hopefully, you're on the cap table there in a meaningful way. Right? A small small exit.

Yep. Yep. And then we lived inside Oracle Marketing Cloud for a couple years.

Yep. So... Well, give me some context on you personally here first. I mean, you give, you know, fuck you money in those kinds of deals or was it really... You were still hungry, you really wanna go out and build 6sense and do your own thing again?

Well, I wouldn't call it that money. I mean, everything's a good capital event and the world keeps going forward, but I have a ton of entrepreneur hunger and actually saw the combination of responses to email marketing company, Oracle Marketing Cloud, and then the big data aspect of Platform. This is the combination of really those last three experiences.

Yeah. So explain, maybe tell the story of a customer that's giving you permission to tell their story, how they're using you today.

So most people would use our, what I call, a next generation sales and marketing platform to actually take the old lead world and contact world and flip it on its head. So today, B2B organizations are going to market via account

and want to leverage data in order to be more surgical with that sales and marketing tactic. So I mean, there are, what are there, seven and a half billion people in the world. We send today two seventy billion emails daily to a population of that seven and a half or three and a half billion use email, and so the waste and clutter is way too much. Our platform today allows you to de anonymize B2B buyers as

they're looking and doing their research. They no longer contact sales rep of old marketing department. They're looking to understand their purchase, and we help deanonymize that. And through that insight, we then have graphed five and a half million companies that allows us to engage more purposely with a tactic, I. E. An email, a display ad, a BDR sales reach out based on that insight.

Just to be clear, when you said we send 270,000,000,000 emails per day, that is not that is not 6sense. That is as a as a world.

That is the world. Absolutely. I was

gonna say, Pete, you got people coming after you just going, this is the guy that's responsible for my inbox, No. Seven

We're... I mean, through our data, as I said, we're trying to be more, you know, strike attack like a sniper. So we're trying to reduce the email sends, the global email sends, make it more appropriate. So it's a... In this world of engagement economy with the people at the accounts, it needs to be more spot on.

So are are people basically uploading their current best customer list to you, and you're generating a lookalike audience and then going after them with precision? Or are you giving like PII info... Not PII, but identifying information to like IP addresses browsing your customer's website so they actually know who the browser is?

It's a it's a little bit of both. So we would take a company's first party data, their CRM system, outbound, or their contacts, known users or known clients and prospects, and their marketing automation, and then marry that with behavioral web data, and that's part of our AI and ML that basically looks through that. We've mapped five and a half million companies worldwide, which is probably 80 to 85% of what the B2B org needs,

and that allows for that identity, this company eGraph we've built, which is the persona attached to the company worldwide, completely GDPR compliant, PII proof, and soon to be with California laws.

That's great. Okay. So give me a general sense. I'm sure you have a massive kind of deviation between kinda kinda kind of account sizes, but just because we don't have time to do all of them, what's the average customer paying per month, did you say, your technology?

Around 150 k.

Okay. Per month?

Sorry. Per year.

Per year. Okay. So call it maybe $12,000 a month, something like that. Yeah.

And that's probably the the mid market and then the large enterprises spend more.

Yeah. Yeah. We're just talking an average across all your customers. $10.10, $12 a month.

Yep.

Yeah. And then what... I'm sure you have some that go well into the millions. Correct. Yeah. What... Put this on a timeline for me. When did launch?

The company is about five years old. I came in two years ago, and in the last three years, we've tripled our bookings... Revenue bookings year over year. Mhmm. And the the company has gone from about 45 employees to a 150.

Okay. So 150 employees today to... Okay. But... So 2014 was launch date. Sorry. You said you came in three years ago?

Two years ago.

Two years ago. So we'll call that 2017, three years after launch?

Correct.

Found... All the founders still there?

All the founders are still there with the exception of one. There are four four cofounders.

Come on, Jason. Give me this... Give me the story. Give me that give me the half smile story here.

You know, I don't actually really know the story because I wasn't there.

Come on.

You You know, it was just a departure by 01:04 because there's probably too many cooks in the kitchen, but they're they're all... The majority are still there and involved and all investors still.

Yeah. So so you you come in two years ago, 2017, founded in 2014. Did you come in with the raise? Were you... Did you come in with a VC round?

I did. I I came... Yes, did.

You you... So... Okay. So I'm assuming you came in then with the... It with the Salesforce venture round or Bain Capital?

So it was it was... Well, it's a combination. In total, we... The last raise was 27,000,000, and so there's a little bit of a refresh at the time I came to give operating runway, but that's the aggregate, the last round. Salesforce was early. Battery Bane, Benrock.

Yeah. But industry industry ventures came in in in April 2019. You came in way before that. Right?

That's correct.

Yeah. That's what I'm asking. So which round did you come in with? The Bain round in 2015?

I came in after that Bain round.

After that Bain round. Okay. Got it. Were you were you were you chosen by Bain or what facilitated the CEO transition?

I think it was a combination with the founders, which were the CTO and CEO, and the board that thought the company had gotten to a certain juncture where they wanted to maximize and leverage with additional operating experience. And so that was the decision, you know, post round. Yeah.

Okay. Interesting. Now since then, total capital in the company is what?

$60,000,066.00.

Correct? Correct. All equity or have you leveraged debt?

All equity.

Do you have an opinion on debt considering your background in b to b SaaS? Have you ever used it?

Yeah. Definitely.

So what's your opinion on it? I mean, healthy for an entrepreneur to preserve equity or can be dangerous from a cash flow purpose... Cash flow perspective?

Right. I mean, as long as it's not over leveraged, I think it's perfectly healthy, and that's a decision point. Do you wanna, you know, do you wanna minimize dilution and how far in debt are you willing to go? But, you know, we... I've used it as small percentage of overall rates.

Yeah. If I asked you what you feel... This is an unfair question, but I'm gonna ask you anyway. A CEO looking to use debt, what do you feel like is too much debt as a ratio to their current revenue? Like half of their ARR, you know, in debt is fine, three x their ARR is fine?

What is too much? Double, I suppose.

You think that's fair? Okay. Interesting. Cool. Alright. I know you're going off limited data points there, but that's fine. Alright. A 150 folks on the team today. How many are engineers?

43.

43. Have you done anything to kite?

Pardon me?

Have you done anything there to to kind of reduce your r and d expense taking advantage of shred in Canada or other programs around the world?

Well, we have an India operations, and that's part of it, but we pretty much are work anywhere company, and we try to hire where the talent is as opposed to an epicenter. We're headquartered in San Francisco, but we now have offices in Austin and New York and Boston. Nothing international yet, although we have international customers.

Very cool. And then obviously, to land these customers at these ACVs, you can definitely afford, obviously, field sales, even inside sales, etcetera. How many quota carrying folks do you have?

We have 18.

18. Now did that program exist before you came or did you instrument the field, the kind of the sales motion?

We had about four reps at the time I came and we just... We grew the field organization as part of a calculated play.

How do you... Again, I imagine you do this at other companies as well. You were the CRO at the last one. I mean, how do you... For people that are scaling their sales team, what is kind of the biggest mistake you see them doing, and what do you recommend people kind of put their kind of the sales compensation OT relative to the bookings target of the quota? Do you like to see a five x there, a 10 x? What do you think is optimal?

I think the biggest mistake young companies make is scaling before there's a product market fit, so hiring the field organization and hoping to work magic in performance against quota when you haven't really found a fit with the product that the market wants, and so you've gotta be careful there. Additionally, and so we sort of let the rope out slowly, if you will, and once it started to work and we saw attainment, we had roughly 90% attainment

against quotas for the reps, we knew that something was working, and so every next rep that we hired, we were pretty confident it would be productive. And as far as... And we we have... I forget your question on the ratio, but we have roughly a million dollar quota per rep. Okay. And and it works.

Yep. And now, obviously, this is

a grow responsibly and efficiently and so you're not... You don't get upside down relative to sales and marketing spend.

Yeah. And just to be clear, that is a $100,000,000 in new ARR bookings per year per rep?

Pardon me?

That's that's that's

$1,000,000 in in ARR booking per rep.

My my question is, over what period? Is that a monthly target or a... No. It's an annual. Oh, it's annually. Okay. Interesting. And and, obviously, this is a little sensitive because it's salary question, but do you generally like just that that 1,000,000 is, five x the full OT kind of comp for that salesperson?

That will... Roughly right.

Roughly. Is is that a pattern you look at when instrumenting a sales team based off your CRO role in the past on this one today or no? That's not an important ratio to look at?

Oh, yeah. Sure. You... I mean, you... Yeah. You wanna make sure that your your spend on sales and marketing is appropriate to delivered quota. Mhmm. So that's the ratio. And if if if a rep was bringing in 500 k instead of a million, I don't think we'd pay them as much.

Yeah. Good good answer. Alright. So customers, obviously, you weren't there on day one, but when you came in, explain to me kind of the first one or two customers that kind of you helped bring into the company. Where were they from? What growth channels were you using?

That's a good question. So we were probably 30 customers at the time. We're now roughly 150, plus First or minus a

customer, I don't know if I can even put it into the name of who that was. You know, I think the world is part of relationships and network, but candidly, I find if it's my relationship, I don't have an effective engine. And so I wanted to build and enable a sales organization so I didn't have to participate in that prospect, if you will. Certainly, I'm in touch with our customers and what we do. But, yeah, I don't know if I could...

That's okay. How how aggressive as a CEO and as a team are you willing to be to get that $150,000 ACV customer? Are you cool with the twelve month payback, or have you pushed up to twenty four months so you can be more aggressive?

We're... I mean, we're right now at a magic number of one to 1.1.

Explain what that means. We don't get to talk about that a lot.

So that would be a... It'd be a measure of your sales efficiency. So if you were to take your... For instance, your three to two quarters go by, you take your current quarter, like, say, Q2 of ARR, you subtract it from your last quarter's ARR, multiply it times four, so you have an annual rate, and then divide it by your last quarter's sales and marketing expense. And so if you're at a ratio of one or above,

you're roughly running a fairly efficient, today, unit economic sales metric. And then you say, Do I want to pour more gas in the fire and expand? And by the way, magic number by itself isn't really important if you're not also looking at gross margins and other things that matter relative to operating efficiency and use of capital.

So Jason, to simplify that math, is this statement true? You're spending between a dollar and a dollar 10 to get one new dollar of ARR? Correct. Yeah. Cool. So on a $150,000 account, you'll spend between a 150 and call it a 100 and you know, $6,070,000 bucks to get that account.

Yeah. I mean, right... That's correct. That's right.

Yeah. Yeah. Now where is most of that spend going towards? I obviously sales commissions is obvious. Is there any kind of unknown or kind of weird new channels you're testing and spending a lot on that are working?

You know, we we... As a... We... As an outbound organization, we're constantly trying to get more inbound and drive inbound through more efficient marketing to drive that. The marketing as a line item we spend more on. We have an inbound channel of BDRs. Well, actually, it's inbound and outbound, And then it's probably the balance between those functions we have now also partner networks that we're leveraging additional revenue from.

Mhmm. And take me into, obviously, stickiness in any SaaS company is critical. Right? So when you look at over the last twelve months gross revenue churn, what is that? Are you under 5%?

We're at we're at 94% and roughly and

That's retention, not churn, hopefully.

Oh, correct. Sorry.

And You would not have a business. You would

not Slightly have above a 120% net retention.

Got it. So that would mean if you're churning 6%, that means you're... You have about 26% expansion on the cohorts to get a 120% net.

That's right.

That would... So so that's actually in my opinion based off all the... We've done thousands of these interviews. Right? I would say net... Like world class at your ACV range is more like a 130, 140%. What do you need to do to get your, you know, expansion up higher above 26 year over year?

You know, I think it's a combination of things, but it's it's world class products. So we continue to evolve the product to the sort of customer needs for the efficiency, and and the more use, the more workflow that we're able to enable in the daily seller and marketer, and have that cross collaboration, the stickier the product gets, which then in turn drives net retention. We're releasing new products really every month, and so that additional feature that completes the product roadmap allows for the retention.

When you look at your different pricing axes, obviously, of seats is one, feature based upselling is another, and then some data or utility based upsell is one. Some people call it use bases. What is your usage metric? Is it number of records attained or what is it?

Well, we have all those three that you mentioned. So we have database size, we have number of users on the platform, we have our AI and ML models built so you can have different product categories that you're focused on which also be incremental revenue.

When you say database size, literally measured by number of records or is it literally a storage number?

Number of records.

Number of... Okay. Interesting. So that is... That pricing axis is based off number of records. Yeah. Interesting. Okay. Very good. And then I assume obviously you're burning to drive growth. Right? You know, are you comfortable with a million dollars a month in burn?

I am comfortable.

How far will you push that up? Obviously, relative to the last raise you did. Do you tend to raise for eighteen months of run rate, twenty four, thirty six months? Where do you where do you put it?

I tend to do it for eighteen months. And, you know, we're we're constantly trying to bring burn down, and I'm comfortable sort of in measured growth against efficiency.

Yeah. So last round was 27,000,000 if you're covering eighteen months of of burn. I mean, you code basically for saying you're cool with a one to one and a half million kind of burn per month as you try and scale.

Yeah. I I... You know, a million is my... Would be my objective or lower.

Yeah. That's your that's your I can sleep I can sleep good at night number.

Yeah.

Very cool. Alright. Good. And then we can do the math. Right? You mentioned a 150 customers. You mentioned earlier about a $150,000 ACV. It puts you about a 1,800,000 per month in MRR. Is that about right?

I'm not gonna confirm that, but...

Okay. Well, I... We... I'm only taking numbers you already gave me. So you said a 150 customers and a $150,000 ARPU. If one of those numbers is not accurate, we should fix it.

Yeah. So we're... Are you trying to get at our annual ARR? Sure. We're we're in the range between twenty and and fifty.

When do you think you break 50? Can you hit it next year comfortably or it's a stretch goal?

Yeah. We can hit it comfortably.

Okay. Interesting. Very cool. Let's wrap up here with the famous five, Jason. Number one, what's your favorite business book?

Favorite business book Probably would be, you know, from Andreessen Horowitz, The Hard Thing About Hard Things.

Number two, is there a CEO you're following or studying?

All all the big SaaS CEOs.

No. Come on. Don't be lazy. Pick one.

Well, I actually... You know, with Benioff and Salesforce as an investor, we model a lot of practices around their early growth success.

Yep. Let's say you get... You're on the minimum side of the range. You just gave me 20,000,000 in ARR. If Benioff comes in offers you 10 x that, mean, right, 200,000,000, do you sell? No. Yeah. It's boring for you. You already had a 1,600,000,000. See you gotta get up to $34.05 to really get your blood going. Right?

There's just more value in the company. I I told you we could comfortably hit in the next year and so Yeah. That metric.

Yeah. No. It's good. Alright. Number three, what's your favorite online tool for building your company besides your own?

Online tool for building the company. Well, the one that gets most often used is Slack. I don't know if it's my favorite tool. I'm not sure if it's social or productivity, we enjoy it.

Many too many memes in your Slack feed.

Yeah. Exactly.

Alright. Number four. You know,

honestly, it does help us stay stay connected.

Yeah. Number four. How many hours of sleep do get every night? Six. And situation, married single kiddos?

Married with three kids.

Three. Oh my gosh. You have your hands full. How old are you?

I'm 49.

49. Last question. What do you wish your 20 year old self knew?

That you're... That the... That every relationship you have is important and build that network.

Guys, there you have it. 6sense serving a 150 customers, a much better way to do kind of account based marketing using machine learning, artificial intelligence, and a lot of data sources. Those customers pay on average a $150,000 per year. The company today doing between 20 and $50,000,000 in ARR, hoping to break 50,000,000 easily. Next year, they've raised about $60,000,000. Jason's comfortable with a million dollars a month in burn as he looks to scale. A 150

folks on the team, 43 engineers, 18 quota carrying sales reps, 6% gross annual revenue churn with 26% expansion means a 120% net revenue retention. He's totally cool with about a 1.1 magic number, meaning he spends a dollar or up to a dollar 10 to get a new dollar of ARR. Jason, thanks for taking us to the top.

Yeah. I appreciate it, Nathan. Thanks for your time.