396: From Bootstrapping Struggles to a $60M Exit and Beyond - with Bob Moore
Primary Topic
This episode features Bob Moore discussing his entrepreneurial journey from bootstrapping struggles to significant business exits, particularly focusing on his experiences with his companies RJ Metrics and Crossbeam.
Episode Summary
Main Takeaways
- Bootstrapping can be a viable path to business success, though it often requires intense perseverance and adaptability.
- Strategic exits and spin-offs can propel further entrepreneurial ventures if managed wisely.
- Understanding and leveraging network effects is crucial in multi-sided markets, especially for platforms like Crossbeam.
- Data security and trust are paramount when handling sensitive customer data across partnerships.
- The timing of market entry is crucial; being either too early or too late can impact a startup's viability significantly.
Episode Chapters
1: Introduction to Bob Moore
Moore's background and the foundation of RJ Metrics are explored. Key struggles and the eventual growth trajectory leading to its acquisition are discussed. Bob Moore: "The early years were all about survival and figuring things out on the fly."
2: The Stitch Success Story
The spin-off from RJ Metrics to Stitch and its rapid growth and sale are detailed. Bob Moore: "With Stitch, we saw an opportunity and moved quickly, capitalizing on the market dynamics at the right time."
3: Founding of Crossbeam
Challenges of starting Crossbeam, its business model, and the unique problems it solves in the SaaS ecosystem are highlighted. Bob Moore: "Crossbeam came out of seeing a gap in the market that no one else was filling—securely leveraging partner ecosystems."
Actionable Advice
- Always be prepared to pivot; market conditions can change rapidly and require a swift strategic response.
- Focus on building strong relationships with partners and customers, as they can provide critical support and resources.
- Pay close attention to data security, especially when your business model involves sharing sensitive information.
- Leverage previous entrepreneurial experiences to avoid past mistakes and streamline operations in new ventures.
- Stay informed about market trends and technological advancements to capitalize on emerging opportunities.
About This Episode
Bob Moore is the co-founder and CEO of Crossbeam, a SaaS platform that helps companies find overlapping opportunities with their partners to drive revenue.
People
Bob Moore
Companies
RJ Metrics, Stitch, Crossbeam
Books
None
Guest Name(s):
None
Content Warnings:
None
Transcript
Omar Khan
Welcome to another episode of the SaaS podcast. I'm your host Omar Khan, and this is the show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch, and grow your SaaS business. In this episode, I talk to Bob Moore, the co founder and CEO of Crosbeam, a SaaS platform that helps companies find overlapping opportunities with their partners to drive revenue. In 2008, Bob and his co founder Jake started RJ Metrics, a pioneering cloud analytics platform, which they bootstrapped for the first three years. Those early years were grueling as the founders struggled with product market fit, acquiring customers and generating enough revenue to stay afloat despite being early to the market.
By 2012, they found traction, grew the business, and raised over $20 million in venture capital. However, in 2015, their business model was disrupted and the company stopped growing. Eventually, they sold the company in a deal Bob described as good but not great. In 2016, Bob and Jake spun out a piece of RJ metrics, technology used for helping companies move data between systems into a new company called Stitch. In a lightning fast 18 months, thanks to a stroke of good fortune and timing, they sold stitch for $60 million, a much more successful exit than their previous venture.
But Bob wasn't done yet. In 2018, he co founded Crossbeam, a partner ecosystem platform to help companies build more valuable relationships with their partners. But to make it work, both parties had to sign up simultaneously, which created a complex landing two jumbo jets at once scenario. As Bob described it. Initially, this made it extremely challenging to grow the business, forcing the founders to come up with more creative solutions to onboard companies.
Adding fuel to the fire. GDPR compliance became a priority just as they launched, creating even more complexity. Despite the hurdles, Bob and his team persevered. Leveraging their network. They onboarded early adopters, and after two years of hard work, the network effect kicked in, helping to fuel growth.
Today, Crossbeam generates eight figures in annual recurring revenue and serves nearly 20,000 companies. Their team has grown to over 100 people, and they've raised just over $116 million in venture capital capital today. In this episode, you'll learn how Bob and his co founder survived the grueling early years of RJ Metrics when they were bootstrapping, broke and struggling to acquire customers. How the founders spun out a piece of RJ metrics IP into a new company after the acquisition, leading to a successful $60 million exit in just 18 months. How Crossbeam overcame the cold start problem in building a two sided marketplace where they had to onboard customers basically in pairs what specific lessons from RJ metrics and Stitch Bob applied to navigate pivots, find product market fit and scale crossbeam more effectively, and why?
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Hey there, SaaS founders. Are you looking to grow your B two B SaaS business to the first million in annual recurring revenue? I've got something that can help you. Introducing the SaaS Club newsletter, your weekly source of proven strategies, practical insights and exclusive interviews with successful B two b SaaS founders who've been in your shoes and are ready to share what they've learned. Each week, you'll get a quick five minute read delivered straight to your inbox full of growth tactics, lessons learned and insider tips to help you tackle those early stage challenges and grow your business to seven figures and beyond.
So what are you waiting for? Head over to Sasclub IO newsletter and join over 4000 other SaaS founders and entrepreneurs who are already using these insights to grow their businesses. Subscribe to the SaaS Club newsletter Today and get the support you need to keep moving forward on your SaaS journey. Bob, welcome to the show. Great to be here.
Bob Moore
Thanks for having me. My pleasure. Do you have a favorite quote, something that inspires or motivates you that you can share with us? This kind of rotates over time. My favorite thing right now that I think I say more than anything, is two things are allowed to be true at the same time.
I don't know where that came from. I didn't come up with it. But I think a lot of times, particularly in business and in life, people tend to exist in these absolutes because it's easier. But very, very few things are absolute. And if you can kind of identify the two truths that coexist at the root of an argument, then you can kind of pick which truth is the more important one.
And that's a good way to resolve it rather than kind of like dogmatically disagreeing. So that is a, you know, I could put that on a bumper sticker these days. How often I say it. I like it. I like it.
Omar Khan
So tell us about crossbeam. What does the product do, who's it for? And what's the main problem you're helping to solve? Yeah, crossbeam is an ecosystem led growth platform. And really what that means is that we're a piece of software that sits in between companies who are collaborating with one another, and it allows them to figure out where and how their data intersects.
Bob Moore
A practical use case for that is something like account mapping, where you have a partner and you want to say, hey, partner, how many customers do we have in common, and who are they? Or are my sales reps currently trying to sell to any of the same companies as your sales reps? It's an incredibly common motion that exists between companies within their partner ecosystems. But historically, there's been a lack of data transparency and data fluidity, and because of that, it's really hard to build scalable plays on top of it. We solve for all of that by almost serving like an escrow service for data that sits in between those companies.
And it's a very kind of viral mechanic inside of the product, because once you have it working with one partner, the value is very evident. And companies get motivated to bring all their partners on so we've gotten up to just over 19,000 companies as of recording here, that are on the crossbeam platform. Yeah, basically using it for co selling, co marketing account mapping, kind of cross company collaboration for go to market in all the forms that it takes. So the business was founded 2018. Can you give us a sense of the size of the business where you, in terms of revenue, customers, size of team, that sort of stuff?
Yeah. So we're a little over 100 employees. We're in the low eight figures of revenue. We have a small international team. As I mentioned, there's about 19,000 companies on the platform.
A lot of those are on the free tier, but pretty sizable percentage of those now pay us. And we kind of run a PLG model. So there's a large universe of companies that pay through a self serve model where you kind of plop a credit card down and buy seat by seat. We have a sales assisted mid market function for what we call our supernode tier, which is kind of a. Call it a 20 to 50k acv, depending on your usage.
And then we've got universe of enterprise customers that can pay upwards of half a million dollars or more annually for larger enterprise deployments. So it does kind of run the full spectrum of different acv and pricing models. And I think you've raised just a bit over 116 million by now, right? Yeah, I think that is the accurate count, yes. So what I really love about your story is that a lot of the times when I talk to founders who are very early stage in building their SaaS business, they'll say to me, yeah, that kind of interview was interesting, but someone who's raised like 100 million and it just seems like a completely different world, miles apart.
Omar Khan
And then when you and I were talking and we talked about your first company, which we're going to go into in a minute, you were exactly there. You were like, hey, we were bootstrapping, we were broke, we were too early. And all the things that I hear so many founders talking about. So that's what I think makes your story so interesting also, this is your third company. You co founded two previous SaaS companies.
Bob Moore
The third one that went anywhere, it's probably the 8th or 9th one that. Yeah, we should clarify that too, as well. So why don't we start with that first business, RJ Metrics, which you founded back in 2009. So just like, where did the idea come from and what was that business all about? Yeah, so back in late zero eight, I was working at a venture capital firm in New York called Insight Partners.
It sounds more impressive than the reality of the job because I was probably the most junior person at the firm. My job title there was analyst, and the job was basically, I was basically a glorified SDR. I was cold calling into CEO's, trying to get those CEO's to share information about their businesses and hopefully find good investment candidates for insight. It was actually a really, really great job for a future founder, because you get to meet a lot of founders, you get to hear about company stories, good, bad and ugly. You get to see the mental math that venture firms do in evaluating companies.
But what I found was the part of the job that lit my brain up the most was actually the due diligence. After we found a company getting our hands on their data and being able to ask all these questions like who are the most valuable customers and where do they come from and what does the cohort analysis look like. I really, really leaned into that while I was at insight and tried to pick up as much work as they would give me in that universe.
By the end of 2008, I became convinced that a lot of that work that I was doing, you could actually build software to abstract it away. The ingesting of the data and the standardizing the models and the hosting of it in a database, even some of the writing of queries seemed like the kind of thing I could automate with code. If you eliminate that 90% of the work, that's the scaffolding around the analysis. You can spend all your time doing the analysis. I had this idea for a company called RJ Metrics that would effectively be that a completely cloud based, full stack data analytics platform.
Any business could plug in their backend database or wherever their data lives, and we would take care of all the hard stuff. We'll pull the data in, we'll put the data models on, and we'll let you build these awesome charts and dashboards that answer those questions. Bear in mind, this is 2008. Sass doesn't exist. That acronym is non existent.
ASP application service provider is what they used to call these businesses that were fully delivered via the cloud. And there weren't many of them. Like salesforce.com was maybe the only true full stack, pure play, end to end enterprise cloud delivered solution at the time. But I had a lot of conviction around this, and I met a co founder named Jake Stein, who also worked at Insight, who was equally as passionate about it. And we pulled our pennies together and we quit our jobs on a Friday in September 2008, and on Saturday Lehman Brothers collapsed.
So we ended up out kind of on our own, going after this business idea in a market where, despite the fact that we had just worked at a venture capital firm, there was not a snowball's chance that we were going to be able to raise venture capital anytime soon because the market was completely in gridlock and it kind of dropped us in this environment where we had to, like, eat what we killed. And the only way for us to finance this business, neither one of us had, like, you know, a ton of money stashed away in the bank that could keep it alive for years so that we could use to self fund revenue, was the only path. And we, this is like the classic, you know, bootstrappers mentality. We kind of did the build, measure, learn, build, measure, learn, lean startup cycle for a while there, because we were early to the market. It wasn't this thing where it was flying off the shelves.
It was a majorly complicated technical challenge to build the thing. And that was what I spent the majority of my time on. And my co founder, Jake was out there selling it basically before it was built. We were able to close. I think our first customer was paying us dollar 200 a month, and then our second customer was paying us dollar 50 a month.
We were taking what we could get, but it was enough to keep the lights on and keep us motivated. Between 2008 and 2011, we were able to get our first hundred paying customers, which represented our first million dollars of ARR. We were able to grow to about a dozen employees. And we did it profitably the whole way through because we didn't have the buffer to go into the red at all. And that was a real journey in that build, measure, learn cycle.
It's partly we found product market fit eventually, and it's always been a question of like, did we find it by moving our product into what the market needed? Or were we just early to the market and we were iterating on the same core vision? And what actually happened is that the market itself moved into a zone where people were more comfortable consuming stuff through this channel. And we were there waiting with a product that had three years of R and D already done on it. And I think, honestly, it's more the latter than the former.
Right place, right time. So you said you were too early to the market, and earlier you mentioned that it took you at least a couple of years to feel like you'd found product market fit. What were the challenges of trying to get those initial customers? Yeah, you got to the first million eventually in a few years time. But what did that first year 1st, 18 months look like in terms of how easy or hard it was to acquire customers?
Yeah, it was. Looking back on it, it was like, it was excruciating. I think there was, you hear these stories about founders physically making themselves sick. I had like, I remember it was like in February 2009, I somehow came down with this terrible case of BPPV, which is a form of vertigo. So, like, you stand up and you're just completely disoriented and the room is spinning around you, and there's only certain positions that you can be in to, to kind of stabilize everything.
And the only way that I could not be nauseous was to be basically like hanging upside down. And I remember the timeline that it was February 2009, because we had just closed our first customer, who was that company I mentioned, who was paying us $200 a month, and we sold them the product before we had built it. And we basically told them it's going to be a six week implementation cycle. Well, that six week implementation cycle was actually a six week let's build the product cycle. And we were on a really tight deadline for that.
And I remember I was actually moved back in with my parents during that time. And I was like hanging, laying on their stairs with my head toward the bottom, with a laptop on my lap, with my knees folded up, writing code, writing terrible PHP code to make this stuff go. But that was kind of the, there's this self induced anxiety thing that I'm sure brings on all kinds of other challenges along the way. And then there's the economic realities of just kind of like scraping by during a time period like that. And so, yeah, my memory of it is now it's like this weird, glamorous, like, those were the glory days, right?
But it's never like that when you're going through it without kind of the benefit of time. So, yeah, it was very rough, and it was very ad hoc. And I think there was a lot of the shape that the product ultimately ended up taking had a lot to do with who we could get to pay attention to us. And this is where that first customer, by the way, to answer your question more directly on how we got these customers, that first customer was a friend of mine from college who had gone out and started a business and raised a little venture capital money. So I was able to talk him into selling him the dream and getting him and his company to sign up.
Then our second customer was someone that we had worked with at Insight, who had left insight to go to a startup, that startup, by the way, paperless post, which went on to be quite successful. Another one was a company that I had done some consulting for in the past while I worked at insight that kind of came on board. And the founder led sale is a very real thing, because I think in those days, getting anyone who will kind of listen to you and get bought into the vision that you have, who actually has any kind of spending capacity to say yes is a gift. And we accepted all of those gifts. And, um, what was nice is that it did allow us to build something that actually returned pretty material value.
Right? And those, most of those companies from those early days, even if they started out at $50 a month, ended up eventually as RJ scaled, paying us thousands and thousands of dollars a month, um, because their businesses grew, as our business grew and, you know, the, our ability to kind of justify a higher price point became stronger and stronger. One of the things that I think often happens with founders at that stage is you go through this rollercoaster ride where you have a lot of enthusiasm, a lot of belief in the product. You land a customer and you're like, this is it. And then things just kind of, nothing happens and the doubt starts to come in and the energy gets sucked out of you until the next customer comes along.
Omar Khan
And when you're in the early stages, when this isn't happening that often, what kept you going? What kept you showing up day after day to work on this thing? So first, just to acknowledge what you're saying, it's extremely valid and extremely true. The founder journey in those early days, the challenge with the early days, for me, always in all three of the companies this was true, is when it's really early, you're lucky if one interesting thing happens a day. You can be working really hard, but it's like you're doing the core work that may span many months to build a product or build a market or whatever else.
Bob Moore
But the one interesting thing that happens a day might be a sales call that you have that you've been looking forward to. It might be that you release or ship a new feature in the product. It might be an investor pitch meeting. Just the law of small numbers kind of says, like, you're lucky if you get one a day. So then those things can go well and they can not go well.
So, like, if the one thing a day is that you had a sales call and it was a total train wreck, and you basically got told that your product makes no sense and you're not going to get a second call with that prospect. That was a bad day, right? So that 30 minutes out of your twelve hour founders day, it's just, like soured by the one interesting thing that happened. That happened to be bad. Then again, there's other days where you close a customer and it's like, holy crap, we closed the customer today.
And even though that was just maybe, it was months of work culminating in one momentary thing that happened, which is a contract got signed, or credit card number got typed into your system, it colors that entire day. It's like, today was a really good day. As companies grow, you get the benefit of a lot of things happening in any given right, and you might close five new customers and churn one customer and have 20 good sales calls happen by all your reps, and six bad sales calls. And you have to be a little bit of a weighing machine to kind of understand the collective momentum of the business and how it's going. And it just kind of lessens the effects of the big good days and bad days.
But in the early days, you need to kind of apply a lot of that context in that weighing yourself. And I credit my co founder, Jake Stein from RJ Metrics, with being really, really good at this. He meditates. He is very aware of himself and who he is and what he's feeling and experiencing on the planet. He's very good at navigating things that create anxiety, and I've learned a lot of lessons from him in that.
And he would occasionally say that if something bad happened, he'd occasionally say, well, in a couple billion years, the heat death of the sun is just going to consume the earth, and none of that matter anyway. Just something that is just maybe a hyperbolic way of putting it all in context. I think that's always been something that's stuck with me. I think the other thing, and this is so important in founding any of these companies, is, at the end of the day, I could get lost in the work in a really good, healthy way. Like my version of flow state in those early days of rgimetrix was writing code to make this thing work.
And like I said before, the stuff that lit up my brain in my last job was doing this kind of analysis and bringing these kind of answers to life and processing this data. And I was fortunate to be able to, even if it was a day when we had a bad sales call, or when we lost a customer, or whatever else negative happened, I could pour myself into the rest of the work and actually love the experience of doing that and kind of get lost in the code and get lost in the journey of trying to create something that I was proud of, and that I knew that if I was a customer of it, I would get value out of it. And being able to stay really close to that, I think, was a really powerful thing that got me through a lot in those early days. How did you learn to code? I studied engineering as an undergrad, but I only minored in computer science.
But that is, I went to Princeton as an undergrad. I studied a weird major called operations Research and financial engineering, which is basically a mixture of statistics and economics and computer science. So I took just enough programming courses to be dangerous. I went through 300 level programming courses, and I was always just kind of a hobbyist coder. It was very difficult to go after the hobbies that I wanted to go after if I couldn't actually bring things to life through code.
I was taught the fundamentals through college coursework, and then the implementation details of how to actually stand up a web server and make all that work. There were no classes for that. That was all very self taught and pair programmed with people I met along the way. Did you ever raise any money for ijmetrics? We did.
So this is the interesting thing about that business. We had this bootstrapping cycle from zero eight to 2011, and then the great Recession kind of started to. Started to subside a little bit. And particularly in the venture markets, they really woke up, and there was this wave of capital that flew into the markets, kind of with, like, the SaaS wave that that came. Right.
And we were able to raise a seed round in 2012, and a series A that was a $5 million. The seed round was a million bucks. The Series A was $5 million in 2013. And then we raised a series B in 2014 that I think was $15 million. So in total, we raised, like, a little over 20 million in venture capital for the business.
And it was really a byproduct of, like, I remember from our series A deck, we had a CAC ratio that was like 27 or something, right? For every dollar we spend on sales and marketing, we get $27 of ARR back. And we kind of had a really strong argument to make about being able to deploy incremental capital very, very effectively. It made a lot of sense in that market, and the capital was there, but it was talk about whiplash and incredibly transformational. I live in Philadelphia.
We started this business in Philadelphia. I hadn't left Philly in three and a half years, and then all of a sudden, I was flying to San Francisco for board meetings every six weeks for the next three years of my life. And it was a bit of a culture shock. And kind of getting dropped into that whole Silicon Valley Sandhill road scene took a little adjusting. So the venture money started showing up, the market caught up with you guys, and leads were flowing, and the business grew much faster.
Omar Khan
And none of that would have happened if you guys hadn't been able to endure the pain for those first two or three years to get through some of those hard times and get traction. And then you ended up selling the business in 2016 to Magenta, right? That is right, yeah. And there's a really interesting and somewhat tragic symmetry to the RJ metrics story that is always worth calling out, which is, I mentioned before. Right.
Bob Moore
We were early to the market, and I think we had this vision of building this cloud based analytics platform that is soup to nuts. It does everything for you to show up with your data, and we'll consume it and we'll host it, and we'll model it, and we'll build the charts and dashboards, and then we'll serve you up these beautiful analytics on a silver platter. And we were early for that in 2008, and, man, was it what the market wanted from 2011 to, like, 2014. And then in 2014, 2015, something really, really important happened in the landscape of analytics, which is Amazon Web services released this product called Redshift. And Amazon Redshift is just a giant cloud hosted analytical data warehouse.
To say it simply, it's a place to put all your data that is cheap and scalable and extremely fast at retrieving data when you ask it kind of analytical questions. And it kind of rocked the analytics universe because these large cloud based data warehouses, which, by the way, soon after Google released theirs, which is bigquery and Snowflake, which is now an iconic and enormous publicly traded company, came along with an even better version of that mousetrap. These things kind of ripped the concept of how to do analytics, right? And what the best practices were for analytics. It kind of ripped them to shreds, right?
And the monolithic model, which was the RJMetrics model, where everything sits in one giant stack, didn't really make sense anymore because it would be way better to just throw all your data into one of these warehouses and then put a bunch of different tools on top of it that can kind of be purpose built to consume that data for the different business stakeholders, as opposed to just relying on this one completely full stack thing that really its dashboards and everything are instrumented for the marketing team, which was kind of what our target market was. So what we started seeing was the first place that it happened was in SaaS companies and in gaming companies, kind of these really fast growing, early adopter folks. We just started seeing our pipeline dry up, and we started seeing some churn come into play. There was a company called Looker that came out around this time, and we kept losing business to looker, and it was always a head scratcher for us because Looker didn't do what we do. Looker was just data modeling and dashboards, and you had to bring your own data warehouse.
You had to drop looker on top of some kind of data warehouse. Well, we were the data warehouse, and we were the data ingester and we were the dashboards, and we were everything. So we always say, how could we lose to Looker? And the answer was always, oh, it's because their engineering team already bought redshift, and all their data is already in redshift. So they just need to pop looker on top, and they don't need rgmetrics at all.
They can cut out all the rgimetric stuff. So this paradigm of, like, redshift with looker on top, it expanded a lot over time, but it came to be known as the modern data stack. Right. If you hear that phrase, modern data stack, that's it's kind of this composable set of solutions that allow people to do the things they need to do with data to run their business better. And it really put us out of product market fit.
And just in the same way that we were just kind of heads down building this thing, and that thing never really changed that much. We just kind of kept making it bigger and stronger. We were early to the market. The market moved, and we had a product market fit window. Our product didn't move, the market moved, and then the market kept moving.
And, like, we lost our product market fit window. And I think it was a big failure in kind of, like, understanding where the puck is going and kind of what the bigger, like, technological trends that govern a lot of where demand comes from, like, a lack of really being able to anticipate that put us in a spot where, you know, we had been growing, like, multi hundred percent a year, our revenue in that business. And all of a sudden, in 2015, we were almost flat. We grew maybe 20 or 30% or something, which, for a venture backed business, is not good enough. Then, in 2016, we'd had a longstanding relationship with the folks at Magento, they had just spun out of eBay.
Actually, we knew the eBay folks fairly well because a ton of our customers were e commerce companies. Magento, if you don't know them, they're the world's largest open source shopping cart, basically e commerce platform, and they compete directly with Shopify. But it's if you want to stand up your own and have control over the code base in a greater way, they've got a huge, huge open source community around them, but their analytics were really weak and they were interested in acquiring us to make us the Magento analytics or Magento business intelligence unit to make a little bit more of a cloud play and provide a stronger analytics play, which is a really appealing pitch to us. And also we looked at the market and we started saying, well, I don't know that we can beat the modern data stack, and I don't know that we can pivot this company into the modern data stack without fundamentally disrupting a lot of what we've kind of built the fabric of the business on. So the Magento deal was, was a blessing in a lot of ways because the product to this, and by the way, Magento was then very shortly thereafter acquired by Adobe for $1.6 billion.
Some of the old RJ team still works at Adobe, and the RJ metrics product still exists. And it's part of the Adobe commerce cloud, which is the old Magento, which is the old RJ metrics.
It's found its place there. But the RJmetrics exit was not a fund returning 100 x or home run for our investors. It was more like get your money back or do a little bit better than that situation. And a little bit of money funnels its way back to the founders for an eight year journey. I think the culmination of that thing was a whole lot of lessons learned.
A little bit of financial upside that kind of justified the time spent on it, but certainly not one where we could stop. And I think it was one where now we had this muscle memory and this scar tissue that we had kind of accumulated, and it was time to go again and make it better this time. Then you told me, we'll talk about your book a bit later, but in your book you talked about the RJ metrics exit as being potentially, what, your $2.6 billion mistake. Thanks for bringing that up. I mentioned Looker earlier.
We started losing deals to this new company, Looker, and it's like, who are these guys thing. We ended up selling RJ metrics a couple of years later, I opened up TechCrunch and Looker was acquired by Google Cloud platform for $2.6 billion. So this is like a company that we were at one point in time neck and neck with and kind of going head to head on deals. And we were earlier in the market than they were, right. Going after our North Star of the value we wanted to create for people was effectively identical, but it was a difference in technological approach.
And then I think they knew how to execute really well and were really experienced founders. B, I think they had a better handle on where the market was going and c they had an ecosystem which was really, this is the, ultimately, a lot of this stuff ends up becoming an input to why I got so passionate about the problems that crossbeam solves. But I think one of the reasons Looker did so well is they won together with a lot of other products like Looker was only valuable if you could put it on top of a data warehouse. And frankly, data warehouses were only valuable if you had a product like looker on top that could convey the value and throw in a whole lot of data warehouses in a competitive market, and a bunch of other layers in that modern data stack that would eventually emerge that were complementary and drove a combined value proposition alongside looker that was really compelling. And all of a sudden, as soon as something is in any of those companies sales pipelines, it's probably in yours too, because the way that buyers were buying was changing.
The buyers were not buying these individual siloed products anymore. They were buying a stack. And the evaluation of one product was this incredible indicator and buying signal that there would be a need for all these other products as well that coexisted in the stack. And the coordination and alignment of all these companies that partnered inside of that modern data stack ecosystem allowed it to grow radically, radically faster because they could win together, they could sell together. And the buyers benefited greatly because it meant that it lowered the friction to them getting up and running with exactly the right tools for the job.
And that was a big aha moment. And I think crossbeam, it's not a coincidence that Crossbeam fits directly into that paradigm, right? Are you an entrepreneur looking to buy a profitable online business, or a founder ready to sell? Boopos is the number one platform for buying and selling profitable online businesses with their exclusive listings, as well as listings from other marketplaces and the option to submit your own deal for approval. Boopos has you covered.
Omar Khan
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So rjmetrics, not necessarily a life changing exit given you spent eight years working on this business, most founders maybe would take a little bit of breathing space to think about what they were going to do next before they go and invest their heart and soul into another startup. And you did that. It took you two years to get to crossbeam to find crossbeam, but you had this weird period in between this two year window from where you sold RJ metrics to where you founded Crossbeam, and in that time, you founded another SaaS company and sold it for significantly more than the RJ metrics acquisition. Yeah. So this is one of those things where you look back on it and it kind of makes sense, but you also, like, think about the logic on any given day, and it's like, how on earth did this all come together?
Bob Moore
So stitch data. The important thing about Stitch to know is that, technically speaking, Stitch was a spin out from RJ metrics. So when we cut the deal with Magento, they were very, very interested in the analytics platform and the dashboards and the way in which we could help Magento customers analyze Magento data. That was really the key thing. But one of the pieces of tech that we had built at RJMetrics, that actually was one of the newest pieces of tech that had the most recent investment in it was what we called the ETL platform.
We didn't make that term. There's a term of art in the industry, extract, transform, load. It was this library of 70 connectors that could go and talk to the APIs of all different SAS tools and pull the data out of those SAS tools and then put it into RJ metrics. Well, Magento didn't particularly need that to achieve what they wanted, and we saw it as valuable with a potentially different application than it had been being used for inside of RJ. So when we cut the deal with Magento, one of the pieces of negotiating that we did was we got them to actually allow us to retain ownership of the code and the IP of just that ETL part of the RJMetric stack.
And they took the pieces they needed to make it kind of bolt onto Magento as a Magento analytics product, but we kept the ETL product, which at the time we were calling RJMetrics pipeline, and RJmetrics pipeline became stitch. What we ultimately did with stitch was we redirected where that data would flow instead of it landing in RJ metrics, which is where it had been for some time. That data ended up being pointed at whatever the customer wanted it pointed at and the places where they wanted to point. It was Amazon redshift, it was Snowflake, it was Google Bigquery. It was all these data warehouses that had basically disrupted us inside the RJ metrics business.
We went and joined the very modern data stack that had destroyed us with our own technology that had been broken apart by it. Ironically, one of our biggest partners in all that became looker. The company that just ate our lunch, um, you know, in the previous business, became the one that helped propel us, uh, in, in this new company. Um, the other thing that was going on during this whole time is there was an earn out at Magento. So I had to go work for Magento, uh, for 18 months after the deal.
So at stitch, Jake, my co founder, became the CEO. I was the executive chair while I was employed by Magento, uh, as the head of their Magento business intelligence unit. And we actually had offices in the same exact building in Philadelphia on two different floors. Right. So there was kind of like this 18 month period where stitch was getting, you know, getting going and really working.
And I, you know, I had responsibilities and obligations inside of Magento. So it was like, you know, working hours, grinding it out, you know, doing the right thing for Magento, and then nights and weekends doing everything I can to help push stitch forward. But my co founder Jake really deserves all the credit for like the incredible execution on stitch during that time period. And then, yeah, to your point, we got like 1819 months into this thing and this company called Talend, which is a publicly traded data infrastructure company, came along and they offered us $60 million for stitch, which was just relative to the outcome we had just had at RJ metrics, especially divided by the amount of time spent on it was just like a mind boggling sum and it kind of represented like something really, really appealing as an outcome for two founders who'd been kind of grinding at this idea over the course of a decade or so. In effect, they made us an offer we couldn't refuse.
And by the way, it was a really smart acquisition for them. The business grew inside of talend pretty significantly and consistently, and it's certainly worth a whole lot more than what they paid for it these days, but they were willing to pay us for quite a bit of unearned future credit at that point because of how strategic it was to some stuff they wanted to do. So, ironically. Yeah, here we are in 2018. We've basically sold the same company twice.
Yeah. It's the second bite of the apple. Our investors, Eric Karlberg, who was on our board from August Capital, now he's at lobby Capital. He called it the triple Lindy. It's just like this very weird thing that no one ever seems to be able to pull off somehow.
We did. It is we, you know, we sold that same company twice, and it was. It was really fortunate for, you know, that that was the outcome that finally allowed, you know, employees that held stock options. Right. To get liquidity on those options and for me and Jake to kind of realize a lot of the upside.
But I don't really call Stitch like, a 18 month, like, flash in the pan crazy success story, really. Stitch is like the culmination of ten years worth of work, but really just finally figuring out how to position it in the market so it had a lot of value attached to it. All right, so then we get to 2018. Crossbeam. How did that get started?
Yeah, so I had seen inside of RJ, inside of Magento, inside of stitch, little glimpses even inside of Talend, this problem that came up all the time whenever we wanted to collaborate with a company that was outside of our own company's walls. And it was almost like this prisoner's dilemma problem where if you wanted to answer questions about where and how your data intersects or your knowledge intersects, math is working against you. You cannot mathematically draw a Venn diagram unless you have all of the data from both of the sets of data. So if you want to know, hey, where do our sales pipelines overlap with a partner? The only way to do it is to show your partner your entire sales pipeline, including the stuff that doesn't overlap, so that they can run that math.
That is a non starter. Right. Like, I don't care how good of a partner you are, companies are careful about how information doesn't. Doesn't kind of leave their walls and what makes it worthwhile, right, to collaborate in that way. So what I did discover is that many companies participate in this age old practice called account mapping, which is basically an exercise where you email spreadsheets back and forth that have some kind of obfuscated or otherwise redacted version of your customer lists in them that are filtered down to just the ones that maybe would be relevant if they happen to overlap.
And people do these very manual, painful things to try and approximate where they might be able to collaborate with partners. It's a terrible process. You do still end up oversharing data that you shouldn't share. The data accuracy is low, and it's very hard to do it on a regular and frequent basis because of the mechanisms for exchanging and analyzing the data. It was just terrible, but it was the only thing that existed.
The realization was that there's basically a missing data layer that has historically never existed, which is all of the data that sits in the middle of all of those n squared Venn diagrams that exist out there at the intersection of every companies dataset with every other company's. And the. You know, I certainly wasn't the first one to make that observation. Plenty of people come up to me and say, I thought of the crossbeam idea back in 1997. This problem has existed for a long time.
What was actually new is the how to solve it part. And the answer to how to solve it was stitch, because what we did at stitch was this ETL concept where you extract, transform, and load data. It allows you to communicate with all these APIs for all these systems of record, pull data out that might look or behave very differently across a lot of different companies or systems, but then transform the data into a unified enough data model that it can be deposited into a data warehouse. And the novel idea for crossbeam was, well, with Stitch, we would take somebody's data and then put it in their own data warehouse. It's within your own data silo.
It's just a different place that it lives. The idea for crossbeam was, what if we had one big, effectively, like, data bank in the middle that was functioning, like I said, like an escrow service for data, right? It'll take care of all the hard stuff, suck the data in, cleanse the data, transform it into this universal model, allow people to be able to compare it, apples to apples across company lines, but then, most importantly, provide this extremely, extremely a tight trust and security layer that sits on top of the entire thing, that allows every company to have confidence that they retain ownership in their own data, and they can completely dictate who can see what, when and under what circumstances. And if you could do that, then that is the only way that you could actually construct this data layer that did not exist. And if you unlock that data layer, you unlock so much value that you can build on top of it.
And that was the vision for crossbeam.
I felt like there was such a compelling why now to this? That made it that if I tried to do it three years earlier, the API economy wouldn't have been mature enough and the data warehouses wouldn't have been powerful enough and it just wouldn't have worked. And if I waited three years later, somebody else was going to do it. It just felt like this might be my last big one. So we decided to give it a go.
Omar Khan
So I can see a number of problems with this. First of all, the trust issue that, wait a minute, I'm going to give all my data into some central place that you can use to run your business. That's the one thing you've got to overcome. The second thing is it's kind of like selling a telephone to the first person in the world, right? If there's nobody else on the other end, what's the point?
And so you've got a, you mentioned this earlier where you said it's like bringing together like landing two jumbo jets at the same time, because you've got to have both sides of this equation working for this thing to happen, and then it's got to happen at the same time. It can't be like, yeah, come onto our platform and then we'll find somebody in three months time and you can do this thing. And then how easy is it to repeat and scale? Right? So it just sounds like just a complete nightmare to manage.
So how did you navigate through that? Yeah, I mean, it was a total lunatics endeavor. Right? So the, you're dead on, on all those points. So the first thing you mentioned, which is like the trust and security piece, I should note that we, you know, we founded Crossbeam only shortly after GDPR went into effect.
Bob Moore
Right? So, like, every company in the world is scrambling to tighten down their security practices and the way in which data gets used inside of their, their companies and where and how it changes hands with subprocessors and things like that. And here I am showing up with a PowerPoint deck about how I'm going to build a startup for data sharing across company lines. Maybe the most contrarian thing you could possibly do. And I did get laughed out of the room in a couple of the early venture capital pitches for that.
But the important thing to realize about the trust and security piece is there's two layers to it. There's a layer you mentioned which is, can I trust this thing in the middle? Do I trust crossbeam, basically? Will crossbeam be a good steward of my data, keep it safe, keep it secure, do all the things they promise to do in terms of partitioning it so that no one can access it except for who I say can access it, that's actually really easy to overcome. Like anybody that uses Dropbox or box or Google Drive or even salesforce itself, you are relying on exactly that.
You're transmitting your data into a hosted SaaS product that has everybody's data, that has to keep these walled gardens up and make sure that nothing ever bleeds through that's not supposed to bleed through in other accounts. We know how to do that. We've been doing that for 15 years. Across all these companies, there's a lot of stuff that you can do to inspire confidence in that and document that it's done well, and we do all those things. The second piece, though, is the more insidious one, which is, do I trust my partners?
Even if crossbeam functions exactly, perfectly and does exactly what I tell it to do, what are the decisions that I get to make and need to make about how I actually do allow other companies to know things that exist inside of my CRM? This is where part of what crossbeam is and crossbeam is not becomes really important, because crossbeam is not a data co op. A co op would be, everybody throws their data in, it goes into a giant pot, and then everybody gets that data pot back out. And maybe it's abstracted or anonymized or something like that, but it's a free for all. We're all just going to toss our data in.
That would have a whole host of problems that would just be kind of non starters and, like, we're not in that business. Crossfeed is also not a marketplace. And what I mean by that is like, we are not in the business of helping connect partners with each other. If you don't have a partner already that you have a real world relationship with, and likely a legal partnership agreement with and NDAs with and kind of code of conduct and, like, terms of engagement with around how you go to market together, build products together, create value propositions that are shared among your customer bases together, then you really don't have a reason to connect on crossbeam yet. You don't go to crossbeam to horse trade data or buy and sell data.
You go there to create this enabling layer on top of the go to market function in a partnership that already exists and already has those rules of engagement built around it. With those constraints in place, it really, really, really narrows the scope of where and how you have to think about these security challenges that come into play. A lot of the things we realized early on was one of the best sales pitches we could do is we could ask about their current account mapping process, which very often was every six months, we email a bunch of spreadsheets around with all of our partners with a bunch of customer data in it. We could always show people demonstrably how doing that via crossbeam would actually radically change the kind of level, the surface area of exposure and risk associated with those kind of collaborations. Right.
And doing that actually took people into a more secure place that was more compliant, where you could have a central administrative authority, like overseeing all those, the enforcement of those rules of engagement and things like that. And that is kind of the journey that we've always been on. Right. And for early stage and mid stage startups, they don't think a ton about that stuff, but that stuff is there and it's protecting them by virtue of being there. For large enterprises, they care a lot.
We've gone through exercises with companies around where they've, like, entirely written their partnership agreements, right, to envision the use of a tool like crossbeam, and kind of specify what's appropriate, not appropriate, what will and won't kind of change hands and under what circumstances. And that's actually built into, like, the legal agreements between these companies. People have done very real work to kind of make this solvable from a trust and safety standpoint. But even in solving all that, the other point you bring up is true, which network effects sound great, and they are great when you have them, but they are almost impossible to get started. Andrew Chen, a partner at Andreessen Horowitz, wrote this book called the Cold Start problem.
It's an entire book about this issue, which is, in a true network effects business like Crossbeam, there is no single player mode. So if one company just signs up and attempts to get value out of the product, they will not get value out of the product. There will be no way for them to derive value until a partner of theirs also signs up, also connects with them, also connects their data also configures everything. And you get these kind of like, very challenging, almost like race condition things, where if you don't have two partners that want to collaborate, arriving at the same exact time in the product, then they never match up with each other in a way where they're actually able to collaborate. And the first two years at Crosby was really, really painful for that reason, it took us those two years to get our first hundred people on and it really was solved by realizing that we could only create value in a situation where two people signed up at the same exact time together.
And we started only onboarding customers if they had a partner that they brought along with them for the onboarding call. There was no such thing as getting signed up all by yourself on Crossbeam and getting walked through it by a CSM. We did these things called joint jam Sessions. We still do them to this day, but they kind of were pioneered in the earliest days of the company where we would basically onboard two companies at the same time. And that's where the two jumbo jets, side by side on the same Runway at the same time, comes up because one might be using HubSpot for CRM and then one is using salesforce.
And they may have very different kind of security requirements, very different onboarding experiences, but they have to be onboarded at the same time and together because they will never see the value unless they're both there and energized and prepared, present at the moment of the unveiling of, hey, here's what's at the intersection there. And when those calls were run, well, the first half of the call was all of that onboarding junk. In the second half of the call, we could have left because the two partners had this aha moment, right where they finally were able to see how those datasets intersect. And there was so much for them to do that they had always wanted to do. Now that they finally had this visibility, and that was a big deal.
So two years of that and the virality kind of tipped. And we got to a point where it was working for enough companies that they invited all their other partners on and then they could conduct their own joint jam sessions because all those partners had a partner to start with. It was the person that invited them on. And then the virality loop really kicked in in a bigger way. Yeah, I think when we were talking earlier, you talked about that the first couple of years.
Omar Khan
And getting those first hundred customers use words like painful, grueling, pushing a boulder up a hill, because it sounds like it wasn't just, you couldn't just put a platform out there and say, here you go. It was like it had to be this whole kind of concierge service to find these people is kind of bring them together like a date and then help them get onto the platform at the same time, realize the value. It's like, talk about doing things that don't scale. It is. You know, I often say that crossbeam could have never been first time founders company, like it basically had to be founded by a repeat founder.
Bob Moore
Part of it is, you know, the pattern recognition from the RJ metrics and stitch both on the product and the market side. Right. That kind of led to the idea. But the other part of it is, if you remember from the RJ metrics story, that first hundred customers there, it was a bunch of my friends and contacts. But back in that part of my career, all my friends and contacts, they were just people at companies that were tiny.
They didn't really have any customers yet. Paperless post was two people and they had $50 to give us at RJ Metrics. And that's who we got at Crossbeam. If I had signed up a bunch of companies like that, it wouldn't have gone anywhere. Because the other thing about crossbeam is it's not all that valuable unless you're actually a going business concern that has some kind of scale to it where you're actually able to make hay out of those Venn diagrams I described.
So the first time founder effect came into play there at Crossbeam, all my friends and contacts, thankfully, were all the people that I've been dealing with for the last 15 years at these previous businesses. So the first company that ever signed up for Crossbeam was stitch. Duh. Right? The second company that ever signed up for Crossbeam was looker.
So once again, right, my old arch nemesis comes into play as kind of the hero in the parade of the later business. And we ended up with a really big cluster in the e commerce technology category because of all those magento relationships that came into play. And that's not a coincidence solving the cold star problem. It was founder led sales, but it was also spending every last ounce of relationship capital and social capital that I had pent up over the journey of the last couple of companies asking people to take a shot on this crazy idea. And it had to be people where that social capital was hard to come by because they were running big companies that had something going on.
They weren't just scrappy startups. So it all really had to come together in that way. And a lot of the privilege of being a repeat founder came into play materially. Did you say it took about two, two and a half years to get those first hundred customers on board? Yeah, I think that math is about right.
Probably closer to two. It was kind of the thing where it was like we might have gotten 60 people and then 200 people and then 1000 and then it's 8000. But the beginning of every exponential curve kind of looks linear, and it looked linear for a really long time. And then eventually the network effect kicked in, and you talked about the PLG kind of motions. So I think in the last four years, you've gone from, what, like 100, whatever.
Omar Khan
Like, what you're at like 19,000 now on the platform. Yeah, we are. Any. Any week now, we'll cross over the 20,000 companies on crossbeam market. Yeah.
What a great story. It is wild, and hopefully still just getting started. I do think there's a lot more to do here, and there are unquestionably hundreds of thousands of businesses out there that would benefit from what we bring to the market. I think we're still in act one in a lot of ways. How long do you see yourself working on this business if I'm still doing.
Bob Moore
This in another ten years? That's great news, because it means that, a, it still exists and is alive and is a viable company that's worth existing, b, my board hasn't fired me for poorly executing on it, and C, it continued to light up my brain. Right. Like, all three of those conditions need to be true. Like, I would not be doing this if it was not something that I really, genuinely, on the whole, enjoyed doing and got a lot of, like, my own self actualization out of.
Out of going in and working on every day.
And if it stops working, companies die because they stop working. So I don't have a deadline. I think what I have is those conditions, and I've been through enough glass chewing that if we hit a downturn or something ever, I can chew enough glass to see the light at the end of the tunnel. But this is, in a lot of ways, this is my life's work. I'm excited to be working on it and not really thinking about the end.
Omar Khan
Love it. All right, we should wrap up now. Let's get onto the lightning round. I've got seven quick fire questions for you. Great.
What's one of the best pieces of business advice you've ever received? I think, really, my co founder, Jake Stein, from my first two companies, is a wellspring of these. He's a natural skeptic, and I think I'm a natural optimist. Every time I would read a business book and I talk about all these great things that I learned about it and how we should apply it to the business, he'd always say, what did you not agree with in that book? And it would often throw me for a loop because I get so hopped up on everything that I just read.
Bob Moore
Has to be the truth, that it really forced me to scrutinize and be critical about stuff that even I get really excited about, and that sticks in my head. And it's a weird to frame it as business advice, I guess, would be to say that, like, in that spirit of two things can be true at once. Everything deserves kind of a skeptics eye and an optimist's eye. And knowing the difference is critical in keeping these things alive. That's great.
Omar Khan
What book would you recommend to our audience and why? Oh, this is great. Is this the most shameless thing, to plug my own book right now? We haven't gotten to that part yet. I did write a book called Ecosystem Led Growth, which Wiley published back in March, um, which really tells a lot of the stories that I've shared here today.
Bob Moore
And also the, the playbooks that, uh, you know, the, the best, most successful folks who are on that crossbeam graph are using to grow their companies. Um, a less shameless version. I love the sales acceleration formula by Mark Roberge. Definitely worth checking out. Um, uh, really?
He was the early go to market leader at HubSpot who I think cracked the code on a lot of very non obvious growth playbooks that ended up working out in their favor. And I think it's kind of inspirational to read taking a non traditional look at some things that are often thought of as kind of rote in startups. An engineering approach to sales. Yes, it's an engineering approach to sales. Precisely what it is.
Yeah. Great. Well, congrats on the book. We'll include links to both those books in the show notes. What's one attribute or characteristic in your mind of a successful founder?
I think intellectual curiosity is just a must have that gets back to why I didn't quit in the times when things have not been fun has a lot to do with being able to find pieces of the experience that I was intellectually curious about that kept my mind working and active. Anytime that I felt like that was true, I found myself in a place where I didn't feel like I was wasting my time, even if I was maybe not reaching my full earning potential in that year. I was learning and I was growing, and I cared about what I was learning. And I think that intellectual curiosity is why. What's your favorite personal productivity tool or habit?
I'm an inbox zero guy. I use superhuman. I also have a bunch of. I use zapier pretty extensively to create automations between the various systems that I use. My favorite micro optimization in that whole scheme is I have a zap set up so that when I'm in slack, if there's a message I want to come back to later, I tag it with the save for later flag.
What that does is it actually copies that message and sends it into my work email inbox. That makes my inbox a universal queue that is inclusive of slack. I don't have these two queues, which is my inbox queue and my slack queue. I kind of single stream it down into one thing and every night when I unplug my inbox is at zero, right? I've triaged things, or I have had them set to come back the next morning or in a week or whenever.
And man, that gives me a lot of sense of mental clarity when I unplug for the night. You are a nerd after my own heart. I swear. We could do a whole episode just on ideas, on like that how to automate stuff. It's just, yeah.
Oh, there's so much. There's so much there. Yeah. Well, what's. Maybe I shouldn't ask you this question, but what's a new or crazy business idea you'd love to pursue if you had the time?
Oh man. With everything going on with AI, it's like hard. It's hard to even think about or pick. But I'll tell you, like, I love escape rooms. I think they're super fun and interesting.
I also am fascinated by them as businesses, which is like, you know, they typically exist in this really, really, really kind of remnant real estate, like in the basements of buildings or like, you know, up a long walkway in some random place that no other business would ever go and somebody, some puzzle master like, geeked out on building like a really cool puzzle three years ago. And now every single night they just bring in groups of people and make a couple hundred bucks. That's probably almost entirely profit. And it's like, seems like kind of a cool thing and not quite lucrative at the scale of, you know, cloud software businesses, but has a little bit of that fun intellectual curiosity thing and like a business model that I think kind of makes sense. So something in the escape room world, I think, is where I would do like a passion project.
Yeah. What's an interesting or fun fact about you that most people don't know? I was on an improv comedy team for five years professionally. So we were the Saturday night House team at Philly Improv Theater, which is a, it's the largest improv organization in Philadelphia. It probably did hundreds of hours on stage with that improv team good, bad and ugly, and I could talk about that for an hour as well.
But I credit a lot of my personality and also my comfort with doing stuff like this to that experience. And finally, what's one of your most important passions outside of your work? Oh, great question, my kids. I've got a two year old and a four year old, girls who are the apple of my eye that I never hesitate to take a break from the day to day and spend time with. And I only hope I'm doing it enough, but doing everything I can to do that.
Yeah, all love to them. Thank you so much for joining me. It's been a pleasure. Really enjoyed the conversation. There was so much to unpack.
Omar Khan
I hope we did your story at least some justice and gave our listeners some insights and some inspiration that they can go and apply to their own businesses. If people want to check out crossbeam, they can go to crossbeam.com. And if folks want to get in touch with you, what's the best way for them to do that? Yeah, finding me on LinkedIn is probably the place where I spend the most of my time, just on there as Bob Moore. And beyond that, if you want to check out any more info on the book, my personal website is robertjmore.com.
Bob Moore
There's book excerpts and other things you can get there along with books of the retailers that carry it. Perfect. We'll link to that as well in the show notes. Bob, thanks. It's been a pleasure, Bob.
Cool. Yeah, I've loved this really great conversation. Hope to do it again sometime. Yeah, it's awesome. I wish you the best and maybe there will be another conversation.
Omar Khan
If you're still working on crossbeam in a few years time. Let's see where you are then and continue the story. Cool. Sounds amazing. Thanks again.
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