Hey - Marc here.

Happy Saturday morning, motivated B2B SaaS Founders!

Here's at least one tip to keep in mind as you grow your B2B SaaS company:

Today's issue takes about 5 minutes to read.

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In today's issue, I share some key takeaways from a recent interview between Nathan Latka, the host of Daily Interviews with SaaS Founders, and Joe Sullivan, the CEO, and founder of Mapware. They discussed how his drone mapping startup landed enterprise deals.

Joe is an experienced founder of software companies with strong business development skills in emerging markets. He previously worked at OfferBoard, which exited and has three little startups. Now, Joe is homesteading, a big flannel aficionado, and a sick beard game.

About Mapware

Mapware is a cutting-edge software company that specializes in transforming photos into rich 3D maps using a process called "photogrammetry." The company has built a user workflow with drone flight automation to rapidly capture data from a commercial off-the-shelf drone.

Although it has military applications and its largest customers tend to be the US Air Force and Army Corps of Engineers, the software is available for anyone to buy. The company operates on a subscription model of $199 per month.

It has seen tremendous success in the government space, getting orders from several hundred or even a thousand users at a time. With some customers paying up to $200,000 a month for their services, Mapware has experienced a bumpy road but is now finding its product-market fit and packaging the software accordingly.

PS Joe got 25 employees now on his team at an average revenue per employee of $140,000. That puts Mapware at about a $3 million run rate today.

Challenges

Dealing with two regulatory agencies would be a "total nightmare."

Joe realized there would be significant challenges when he considered subscription crop dusting as a potential business model. Managing two regulatory agencies would have been very difficult, emphasizing the obstacles that startups may encounter when dealing with complicated regulatory frameworks.

Advice to Other Founders

Understand your market and focus on the customers that bring in the most revenue.

Their product had been struggling in the commercial market, but they found success in the government space. This highlights the importance of identifying your target market early on, rather than trying to be everything to everyone.

Consider payment methods, pricing tiers, and contract lengths when developing your pricing model.

They discovered their government customers often had specific restrictions on how much they could spend and how they could pay. By developing a pricing model that matched these constraints, they were able to make their product more accessible to this market.

Be hands-on with your customers to manage customer concentration risk.

They had a large customer paying $200k per month, which created significant customer concentration risk. To manage this risk, they focused on a high-touch, outbound sales process that allowed them to develop deeper relationships with their customers.

Bonus

Joe’s favorite book is "High Output Management" by Andrew Grove.
His current favorite online tool for building Mapware is ChatGPT.
At 36, he’s married with three kids.
Something he wishes he knew when he was 20 is that school majors don't matter.

TL;DR

Mapware CEO Joe Sullivan emailed a thousand people at Comcast and said, "buy my drone mapping technology. We can inspect your telephone lines faster than anyone else." He got that contract on day one back in 2015. Today, he serves a lot of government agencies. This is Air Force, military, etc. You know, doing about three million bucks in revenue today, but highly concentrated. Looking to expand that to 9 million this year, growing. He's got 25 on the team. He did a 6 million series A back in 2019, in addition to a couple of million bucks in convertible notes that transitioned over, but again scaling nicely here. Team of 25. High revenue per employee. We'll see if he can triple this year.

PS Here is a link to the full interview if you are interested in listening to the full episode: 3 customers and $3m ARR, how this drone mapping startup landed enterprise deals

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See you again next week.

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