262 - How Treasure Data Went From $0 to $100M in Revenue - with Kaz Ohta

Matt Wolach: 0:10

From zero to 100 million in revenue, can you imagine what that path might be like? Can you imagine all the different stages of what you would be doing and what the company would be doing? You imagine the different price points you might be at along that journey. You don't have to imagine it. Kaz Ohta came in, he's a CEO of Treasure Data. And when he started, he was just the technical co founder. But he moved and pivoted and changed and helped the company grow and help a company change and it's really inspiring to hear his story. So you're gonna want to hear this if you're wanting to grow your company to be super big, he is going to share with you exactly how he did it.

Intro/ Outro: 0:44

Welcome to Scale Your SaaS, the podcast that gives you proven techniques and formulas for boosting your revenue and achieving your dream exit brought to you by a guy who's done just that multiple times. Here's your host, Matt Wolach.

Matt Wolach: 1:00

Hello, and welcome to Scale Your SaaS Thank you very much for coming. This is gonna be a really fun episode. I'm excited for it. But before we get into it, make sure you are subscribed to the show. You do not want to miss on any of the upcoming amazing guests that we have lots of cool topics to help you scale your SaaS and get your company where it's got to be. Today is going to be a lot of fun. I've got Kaz Ohta with me. Kaz How you doing?

Kaz Ohta: 1:22

Great. Thanks for having me, Matt.

Matt Wolach: 1:24

Absolutely. So glad to have you here. Let me make sure nobody knows who you are. Kaz is the CEO and co founder at treasure data. Treasure data is an enterprise customer data platform that powers the entire business to accelerate customer centricity in the age of the digital customer across all engagement channels, including marketing, sales and service cars moved to the US without even knowing how to speak English. super impressive. After majoring in computer science and contributing to several open source projects, Kaz found a treasure data 100 million plus ARR company Kaz once again, thanks for coming on the show.

Kaz Ohta: 1:59

Of course, thanks for having me, you know, excited to share our story and failures and success and all these.

Matt Wolach: 2:06

I can't wait. Before we get into all that. Tell me what's been going on with you lately? And what's coming up?

Kaz Ohta: 2:12

Yeah, so as you know, a lot of sass company is having a tough time right now. Right? So that interest going up, and then you know, stock market going down. So a lot of valuation got compressed. It used to be around 15x to 20x, Arr, sometimes, like hundreds, okay, 100 times ARR was a validation. Now as a medium, it's like five to six, right? And lucky for us, we actually raised 234,000,002 years ago. So we're actually fully funded. And we didn't have a crazy valuation. So we were in the sense, like, really lucky. But for me, what? Shareholders value creation, the rule is changed. It was gross at all costs. Now it's more efficiency. So we're driving towards the efficiency, which means like the profitability of this company.

Matt Wolach: 3:07

Yeah, I'm super glad you guys are going that way. It's super important. You can see this kind of happening all across tech, as we see a bunch of layoffs happening and people trying to get more and more efficient. But I want to go back into kind of where this thing started. How did you come up with the idea for treasure data?

Kaz Ohta: 3:22

Sure. When I started this company, I was CTO Chief Technology Officer. And I majored in computer science. And my research area was HPC, high performance computing. And at that time, my professor has built the world's fastest supercomputer. And basically combining half a million computers into one system. Right, wow. And I was a part of the team to build the file system for that. So the computer just basically handling a lot of data coming out from this gigantic supercomputer, right? So that gave me an opportunity to handle large amount of data set. And that created the basic idea of CDP customer data platform.

Matt Wolach: 4:06

So how does treasure data help its customers?

Kaz Ohta: 4:10

Yeah, so you can relate to your I would say consumer experience, okay, one day, I'm living in Palo Alto, California. And I got this email saying, Hey, you finally have a fiber coming into your house from my internet provider. Right? And I was so excited. So I called them, but I need to wait like 30 minutes. They're asking my phone number I'm calling from my phone, right? I use their service for 12 years. They didn't know my plan. And of course, the service agent didn't know about that Viva plan. So I went to retail shop, and I need to wait 20 minutes to talk with salespeople. And they the same thing happened. They're asking my phone number. They don't know my plan. They didn't even know about Fiverr and few weeks later, I got this email Hey Fiverr is actually not coming to your house from this Service Asia, right? That's just horrible experience. No. So those things are happening everywhere, every brand right now, right? So the way we're fixing is, every single customer facing Asian person in system will look up consistent single source of truth about the customer. And that system is called CDP customer data platform. And there are 150 CDP vendors available in the market. But we're the number one independent vendor in terms of market share and revenue size.

Matt Wolach: 5:34

That's amazing. So really, your platform is just data and everybody else kind of just links into is that how that works?

Kaz Ohta: 5:40

Yeah, so a lot of, I'd say consumer data is siloed in the company, right? So if you talk with like, large major brands, they typically have 190 applications, storing customer data here and there, right. And then you have legacy databases, you know, sometimes IBM's, Legacy Z series, you know, mainframes, and you have a cloud systems and you have more epic systems, you have advertisements systems, you have CRM, so everywhere you store a piece of information about your consumers and customers, right? So we're at a system of aggregation, where you aggregate everything, and we unify the data and create a real customers 360 view so that the business can rely on and execute.

Matt Wolach: 6:30

I love it. So it feels like it's that that data is kind of creating more, you know, connected customer experiences, it

Kaz Ohta: 6:36

feels exactly. Wow, that's

Matt Wolach: 6:39

pretty slick. So what should businesses be thinking? How can they determine, Okay, we need this, we're ready for this. Where does that happen?

Kaz Ohta: 6:46

Yeah, it's all about customers. Right? You know, I, this, this business is really interesting. We specifically target for the large enterprise. We don't do any SMB. So a lot of people talking about PLD. And all these were 100, person SLG, Sales Lead motion, right? Because our product price is more than half a million a year arr. Right? No one will buy a credit card with more than a half million products. Right?

Matt Wolach: 7:16

I say that exact thing. By the way, all the time, I have clients come to me because I help. Obviously, a lot of people out there know that I help people take their company and grow it and scale it and become awesome at sales. And they come to me and they're say, hey, we want to do plg. And I say okay, what is your price point? And they'll say 5000 A month or 1000? A month even or even 500 a month? I say, if you're over $100 a month, it is so hard. I mean, obviously, you guys had a half million, but you can't do it. It's not gonna work.

Kaz Ohta: 7:43

Yeah, exactly. So you know, the way I figured out this idea is just like, you know, to pick up the airplane and meet the customers. And that's what I'm doing. Right. I took three flights last time last week and meet all the customers and that that has been a consistent source of learning.

Matt Wolach: 8:01

I think that's important. I think a lot of people think of okay, we need to sell, sell, sell. But I mean, here you are, you've already achieved some good success. And you're still trying to learn from your customers that right?

Kaz Ohta: 8:11

Yeah, exactly. Because, you know, a lot of people also talk about product market fit. But the product market fit needs to happen more consistently, right? There will be a product market fit. But that segment of customer will be saturated at some point. So you need to find out next segment or the customer, next segment of the customer. And then you just create these layers of customer segments, where you have as a customer base, and that's how you grow. Right. So that's why always learning from new industry in particular, and customers are important. And that's why I'm spending a lot of time visiting and talking with customers and partners.

Matt Wolach: 8:50

A lot. I think that's super important thing. Sometimes we forget it at that stage. When you launch was that a big thing as you launched, you say, Okay, we need to go out and meet people, and we need to learn from our customers or potential customers.

Kaz Ohta: 9:01

Yeah, I mean, you keep doing it. That's the way to success.

Matt Wolach: 9:07

I love that. Yeah, you can't stop. How did you? How did when you started? How did you get some of those early clients just to get you know, some of the initial trust? And how'd you get them on board?

Kaz Ohta: 9:18

Yeah, we're a little bit of Lackey and also some of the connection we have, you know, first of all, you know, as you mentioned, we all have three founders we have was Japanese. So we didn't have deep network in Silicon Valley. Right. So obviously, we leverage our existing network in the home countries, right? So we were running some of the big data data analytics community together, and then there were 2000 people around so we just, you know, talk with all these people and then see what are the challenges and pain points and then come up with the, you know, product idea we can solve those challenges in Silicon Valley. Um, we, you know, fortunately got a really good angel investor called Bill Thai. You know, he, you know, he invested into treasure data, while I can't even speak English. So that's a funny story now for him. But at the same similar timeframe, he invested into this like, remote video conference company called Zoom. I still remember like, when I met Eric, you're on the CEO of zoom, and he's struggling to find out tester. And then I became a one, right? He invested in this company called Canva, like a solo female founder come to Silicon Valley and saying, you know, Bill, I want to find a co founder and Bill introduced Google's engineer, and then that became a $30 billion company, right? So Bill has really magical network of entrepreneur and and then we were lucky to have him and and then, like, using his network, we have a, you know, couple of, you know, early testers in it.

Matt Wolach: 11:03

I think that's important, because a lot of times as we're getting started, we start thinking, Okay, should we do this? Or should we do that, or I'm not sure about this. I'm not confident about that. And sometimes just having someone there who's been there and done that, and can kind of point you in the right direction or introduce you to the right people is so critical. It sounds like that worked out really well for you.

Kaz Ohta: 11:23

Yeah, I mean, again, same, you know, we're having this constant product market fit, right. Okay, satisfy first five customers, and then 10, and then 20, and 30. So that's the only way subscription business can grow.

Matt Wolach: 11:39

I totally agree. And over that time, were you able to increase prices and continually get to that price point you were looking for?

Kaz Ohta: 11:44

Yeah, going up market right now, you know, I think our initial product is like 30 per month. And we're now sitting at the point of like, half a million on average, right? It's quite a journey.

Matt Wolach: 11:59

That is quite a journey. That's pretty fun. Now, English is a lot different than Japanese, how did you learn it?

Kaz Ohta: 12:06

We spend a lot of time so the first two years. So as a foreign founder, we struggle to get the visa, enforceable, right. Coming to the States. It's just really, really hard. And then there's this like a language barrier. So for the first two years, three of our founders, including myself, takes like 90 minutes, English calls every single day. So that's how we learn.

Matt Wolach: 12:31

Congrats, your English is awesome.

Kaz Ohta: 12:33

Thank you, after 12 years, have some confidence.

Matt Wolach: 12:37

Yeah, that's so cool. That's super cool. So I want to know, your company's taken off, what would you say? Were some of the best moves you guys made along the way to get you where you are?

Kaz Ohta: 12:48

Yeah, I gave a talk at the, you know, some of the conferences too. But we had a huge people around maybe four years, five years time. So when we started, we're trying to sell this data platform to more like technical it buyers, right? So we talked about PLCs, and all these. So we're like, Okay, why don't we have a data warehouse and data analytics infrastructure, people can come in and swipe and buy, right? That was the original idea. But then Microsoft, Google, Amazon Web Services trying to come in from the bottom, and then they're trying to commoditize everything, right? So we weren't growing to maybe like 5 million $10 million ARR range. But then all of a sudden, after they started releasing more product around data analytics, we started losing the customer. Our pipeline is not converting, and they're saying, oh, you know, what I can try with for free? Why would you pay for you? Right? So I almost thought company is going to bankrupt. But then, you know, we met one of the angel investor, Jerry Yang, who's the founder of Yahoo. And he was at 30 minutes where you know, cause there's only two ways to survive. One is you raise gigantic amount around and fight against all these like large giants, and competing against performance per price, but it's gonna be really hard anyway. Or you build more application on top of it, and then selling into business buyers or different personas, right. And then what we found out was a lot of a product is used by marketing department to analyze customer data, right? And we're a general data platform company, big data as a SaaS platform company at that time. But then we found out this little category, where you know, marketer is using our product, you know, analyzing customer data, we found out this little category called Seed Ep customer data platform around 2016. And there's only eight vendors, you know what, let's just like people into that, you know, category, and XQ. And there's a lot of drama, and I was the head of engineering and product. So I needed to convince first on my co founders, and some of the people didn't believe in so they are trying to fire me go to the board, and there's a lot of dramas happen. But, you know, after that we grew from like, 50 million, 20 million, arr 200 million. So I'm glad we did that change.

Matt Wolach: 15:34

I will say, and I think that that's a testament sometimes we feel like there's people against us. And even there, in this case, there are people against us. And we just have to stick to our convictions and know that even though it's going to be a shift, we've got to make that change. It sounds like that was probably a very frustrating and maybe anxious time for you, but kudos to you for staying with it and making that change.

Kaz Ohta: 15:58

Yeah, I was not anxious, I would say, for me was clear from based on the customers feedbacks. But I was the only one who met so many customers, so I knew more data points. So that way, I changed and probably made a lot of people anxious about it. But I just didn't have time to convince the entire company to execute. Right, while that business is almost collapsing.

Matt Wolach: 16:25

Yeah, that makes sense. So that's some of the good stuff that happened, what are some of the mistakes that you guys made that you wish you would have avoided?

Kaz Ohta: 16:33

I would say, hiring the executive team has been a consistent challenge. Right? You know, you have to have the best team in the industry. And right now we're becoming a leader in the category. So a lot of people from computer actually wants to join, and then you know, it's ultimately about people, right? If you have the best people, you become the best company. Right? Yeah. But, you know, you sometimes, you know, Miss hired some of the positions like, Okay, well, this guy has scaled the business from 100 million to the billion dollar in some of the large, you know, popular SaaS company and then come in, and they don't have any, I would say, driver mindset in the startup, for example, right? So people nice, like, some of the setup for them to succeed in certain stages. And we're learning those experiences, you know, and, you know, it's, it's, it's still a lot of challenge, like, who to bring in, and then how to create the best team for this certain period of time.

Matt Wolach: 17:40

Yeah, I've had that same experience, where you just need the right person at the right time. Sometimes they, they maybe have been the right person, but at the wrong time for your business growth cycle. And it's, it can be a disaster, and I've I've done that as well. It's just frustrating, because you think they're gonna be so perfect, and it doesn't work out. It's just annoying.

Kaz Ohta: 18:00

Yeah. stop learning.

Matt Wolach: 18:04

It is how has your role changed over this time going from launching and hoping you get some of your first customers to now where you are 100 million plus?

Kaz Ohta: 18:13

Yeah, quite a lot. So initially, I was CTO, so technical co founder, right? So my co founder was CEO. So my focus is just to get the product launched. So I have another co founder, who is more like an architect and coder. So I was a product manager, I was a sales engineer, I fundraise, right? Those are the early stage of the company. And I sometimes code, right. And then we started building more engineering team. So I started hiring, I don't know, 2030 engineers from my network, and then started having some no lightweight of structure in it, right? Implemented JIRAs and QA processes and deploy and, you know, security stuff, right? And then, you know, when you go to like, 50 million and 80 million, you just started having more middle layer and management, you know, built around, right? And 18 months ago, I became a CEO, you know, since then the role has been, you know, of course, usually expanded. And I usually think of my time as, okay, I'm gonna spend 30% of my time for the investors to really understand, you know, what they want and then how can we maximize the, you know, shareholder value, and 30% for the customer and then 30% of the people and then work another 60% to do the rest of the things. That's how I view it.

Matt Wolach: 19:51

I think that's why isn't it at whatever stage you're at hard work pays off, and I think you're showing that

Kaz Ohta: 19:56

hard work is the bottom line expectation. So I Work hard.

Matt Wolach: 20:01

Yeah, I agree. So as we wrap up, what advice would you have for other software founders who are just getting started?

Kaz Ohta: 20:08

Yeah, you know, I would say, you know, commit 10 years. Right. And, you know, when we started the company, there's a lot of startup in the same category, you know, someone could pop out from soundboard. You know, those engineering group who came out from Google started singing a product. Meta Microsoft music lots, right? After 10 years, we're the only one who survived. Right? Wow. So you know, we listen to the customer. We had a grid, right? So just keep going on. They know this business is recurring and subscription. Right? The more you commit it, that's the differentiation from all about our competitors.

Matt Wolach: 20:53

I agree. I think that's great advice. Just stay committed, and have that grit and know your customer. That's definitely something that people can do and, and learn to follow from you. Yeah, well, cause how can how can people learn more about you and treasure data?

Kaz Ohta: 21:07

Sure, for treasure data product, go to www dot treasure data.com sort of website shows a lot of information. And then to reach out to me I have a LinkedIn. So search console Keota, and then send the Connect, invite and say, Hey, we saw this podcast, so thank you very much.

Matt Wolach: 21:29

Okay, perfect. We'll put all that in the show notes to make sure that everybody knows cause Domo arigato for coming on. I appreciate it.

Kaz Ohta: 21:36

You got to it was Amos. Thanks for having me, Matt.

Matt Wolach: 21:39

Absolutely, and everybody else out there. Thank you for being here. Really appreciate it. Make sure you're subscribed to the show so you don't miss any other awesome leaders like Kaz coming on. We'll see you next time. Take care. Bye bye.

Intro/ Outro: 21:53

Thanks for listening to Scale Your SaaS. For more help on finding great leads and closing more deals. Go to Mattwolach.com