Editor’s note: Traction Watch is a new column focused obsessively on growth, and is a companion to the DEMO Traction conference series, which brings together high-growth startups with high-potential customers. Companies can apply here to showcase, or those similarly obsessed can register here to attend.
Startups grow quickly when they leverage the growth of other companies. One way to know that? When clients start racking up high revenues because they are using your product.
For the email marketing company Bluecore (formerly known as Triggermail), it’s shown to be a path to success. Founded by two engineers in late 2013, Bluecore capitalized on the momentum behind Big Data and how many of the biggest retail brands realized how a data-driven approach to email could work to their advantage. The company offers triggered email, a technique that sends “just in time” email to potential customers. When you embed some code on an e-commerce site, for example, a trigger will send a customized email when you lower the price on a new product.
Major retailers like BCBG, Cabelas, Sunglass Hut and TaylorMade use the Bluecore triggered email product. When the company started tracking data in January of 2014, they had only five employees and two clients. By the end of last year, they had 30 employees and expect to have 60 by the end of 2015. In the last few months alone, they have added another 21 clients to their roster. They now have 70 clients total, representing about 100 of the top retail brands in the US.
The product is helping those clients gain revenue. Bluecore analyzed click-through conversions, which is a measure of how long it took before a new customer clicked an email link to a product and then made a purchase. Based on their analysis, the company generates $8M per month in revenue for clients. Since they soft-launched in 2013 (see chart above), they have generated $55M in revenue for clients in total. There’s been a steady increase month-to-month in how much revenue their clients have produced.
They project their clients will generate about $100M in revenue (or $8M per month) using that seven-day conversion rate. If they extended out to a 30-day window, the number goes up to $200M.
It’s a gray area in some ways because there isn’t always a good way to tell if the customer purchased because of the email, so Bluecore measured in a window of only seven days. (Many email marketing companies use a measure of within 30 days to count whether the message itself was the reason for the sale. They allow more time in the “conversion window” but still attribute the sale to their campaign.) Note that the conversions were measured only for 90% of the companies that use the product, mostly because the remaining 10% either don’t allow Bluecore to analyze their click-through data or because the conversions are still too new.
What’s impressive about these growth numbers is that, while they don’t point to Bluecore’s own revenue (which they don’t make public), it does provide a good lesson in scale. As they add more clients, the conversions escalate quickly. Today, they have 70. As they add more, they can use real data analysis to find out the conversion rates and project actual client revenue. That in turns helps attract investors, partner, more clients -- it’s a scaling nirvana state.
The company also focused on building up and scaling their sales team. And, they hire only the best candidates. Each new potential hire has to receive a 100% “yes” vote from a group of interviewers before an offer is made to any candidate.
As client revenue increases, so does the strength of the company. The data proves that scaling up is often an exercise in riding on the backs of giants.