674: Sumo Logic Passes 1300 Customers, $140M+ Raised, Flirting W/ $100M ARR with CEO Ramin Sayar

Ramin Sayar. He’s currently the president and CEO of Sumo Logic, an industry-leading SaaS-based company backed by some great VCs and he has an impressive list of customers and partners. Previously, he was the senior VP and GM at VMware, where he developed the product and business strategy and led the fastest growing aspect of that business. Previously, he had multiple executive roles with leading companies such as HP Software, Mercury Software, Tibco software, iPlanet Software, AOL and Netscape.

Famous Five:

• Favorite Book? – Good to Great
• What CEO do you follow? – Tom Reilly
• Favorite online tool? — Twitter and LinkedIn
• How many hours of sleep do you get?— Around 6-7
• If you could let your 20-year old self, know one thing, what would it be? – Ramin would tell himself that the flow and steady path will pay off in the long run

Time Stamped Show Notes:

• 02:22 – Nathan introduces Ramin to the show
• 03:32 – Sumo Logic helps customers build, run and secure modern apps in a simple and easy to consume service of profitability
• 03:57 – Sumo Logic is a SaaS business
  • 04:04 – Priced and licensed depending on the data ingested and the duration of retention
• 04:25 – Average RPU varies
• 05:35 – Sumo Logic has a mass of service for their customers
  • 05:45 – Sumo Logic has some free services
• 06:18 – Customers’ buying pattern is consistent
• 06:43 – $15K-150K is the average contract price
• 07:34 – Sumo Logic has over 1300 paying customers
  • 07:42 – 51% is enterprise and the other half is midmarket and SMBs
• 08:22 – Sumo Logic was capitalized through 5 rounds
  • 08:34 – Total amount raised is over $160M
• 08:52 – Nathan had Tim Draper at Episode 129 from DFJ which Ramin mentioned
• 09:14 – Sumo Logic is 7 years old
• 09:33 – Sumo Logic’s founding roots came from the security roles
  • 09:38 – Not all users have access to data being generated
  • 09:48 – The founders believed that there should be a simpler way for more users to access data
  • 10:32 – The team initially felt that there was a competitive advantage in technology and an innovative way to deliver data analytics as a service
• 11:03 – Sumo Logic currently has 30K users
• 11:17 – Their vision was to democratize machine data
• 11:50 – Visa has been with Sumo Logic for a few years now
  • 12:04 – Visa started with their fraud detection cases
  • 12:23 – A few years ago, Visa launched a service with Apple
  • 12:32 – Visa uses Sumo Logic for business insights such as activation and patterns regarding how users use multiple credit card applications
• 12:58 – Medidata is trying to disrupt the pharmaceutical industry in the clinical trial process
  • 13:23 – Medidata used Sumo and decided they’re going to transfer to the public cloud infrastructure service
  • 13:42 – Medidata is an example of a different, non-tech company using the technology that Sumo Logic provides
• 14:10 – Sumo Logic assimilates, collects, ingests and analyzes different sources of data
  • 14:25 – Sumo Logic then purposely tailors the analysis through their machine learning algorithms to address 3 distinct use cases
  • 14:52 – Sumo Logic helps in continuous development
  • 15:07 – Sumo Logic provides one single platform that analyses information and puts it into context so that developers and other teams can get the 360 degree, holistic view of the information
  • 15:39 – Sumo Logic analyses a lot of patterns
• 16:34 – Ramin joined Sumo Logic 2 years ago
• 17:06 – In choosing a CEO, it comes with understanding the core values and culture of the company and how they relate to what the founders want
  • 17:20 – If there are odds, make sure to address them
  • 17:25 – Second is to make sure that there’s an alignment syndicate in founding members in terms of what the outcomes would be
  • 17:36 – Some CEOs are brought in to scale the company and in other cases, they are brought in to turn over the team or change the company’s direction
• 18:10 – One of the 2-3 founders of Sumo Logic is still on the team
• 19:00 – Average ARR
• 19:30 – “We don’t try to make consumers consume what they can’t initially”
• 19:40 – SaaS companies often have to prove their value and constantly fight to earn the business
• 19:56 – More customers are now signing multimillion year deals with Sumo Logic
  • 20:09 – The customers are seeing Sumo Logic’s value
• 21:12 – The enterprise segment for Sumo Logic is broad
• 21:26 – When Ramin first came to Sumo Logic, the focus was security
  • 21:43 – Ramin realized that most of their customers are development ops, tech ops and liability engineers, so they pivoted a bit
• 22:25 – For a SaaS company, the LTV to CAC that modern investors look for are the payback period and the magic number has to be 3.0 and more
• 22:50 – The other metrics that Sumo Logic tracks
• 24:09 – Sumo Logic’s payback period is between the 1-2 year mark
  • 25:13 – The enterprise, midmarket and SMBs have different payback periods
• 25:39 – Team size is 250
• 27:33 – The Famous Five

3 Key Points:

1. Create guidelines when it comes to looking for your CEOs—they should align with the company’s cultures, beliefs, and goals.
2. SaaS companies often have to prove their value and are constantly fighting to earn business.
3. Users’ access to data can be very limited and complicated; however, simpler and more innovative ways are being discovered as technology continues to advance.

Resources Mentioned:

• The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
• Organifi – The juice was Nathan’s life saver during his trip in Southeast Asia
• Klipfolio – Track your business performance across all departments for FREE
• Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
• Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible
• Audible– Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books
• Freshbooks – Nathan doesn’t waste time so he uses Freshbooks to send out invoices and collect his money. Get your free month NOW

Show Notes provided by Mallard Creatives