Mark Johnson, cofounder & CEO, Four51
TLDR; Minneapolis B2B ecommerce software firm Four51 recently picked up $5m in outside capital with intentions of quadrupling headcount over the next three years. We talked with the CEO to hear more about the past, present, and future of Four51.
When did Four51 begin?
The company was founded in 1999 by myself, Gary Nemcek, and Rich Landa. We’ve been together for a long time! Gary is still involved with much of our traditional enterprise base, while Rich is focused on product development, both share the titles of cofounder and executive vice president. Our original product was CommerceTools, a B2B ecommerce SaaS to connect buyers and suppliers that was ahead of its time/market in 1999.
Are Fantools and CommerceTools still supported today?
CommerceTools is our traditional SaaS application for suppliers, still core to what we do with hundreds of customers.
Fantools was an adjunct product that we launched during the social marketing bonanza, it was similar to what you’d find with Hubspot or Hootstuite. It had a short lived product cycle as we found a better orientation with the release of CommerceTools.
What is the difference between CommerceTools and OrderCloud?
CommerceTools and OrderCloud are powered by one codebase and data model, the difference is in delivery. OrderCloud is a decoupling of CommerceTools that allows each customer to create and deploy their own unique versions with highly rapid prototyping and deployment. It’s more of a platform of a service instead of just software as a service.
OK, fast forward then to when you launched OrderCloud, how has that been going?
At first we introduced it very specifically, then more broadly to our customer base, to test out the technology and our deliverability. We saw tremendous uptake that provided us with a lot of confidence that we were on to something. It wasn’t until about a year ago that we began to market the product and our pipeline growth has been very strong.
What does a typical customer look like?
Generally between $50m and $1b in revenue in the areas of manufacturing, wholesale distribution, retailing operations — companies that have a need for multiple interface/user experience with different configurations; a 3PL company or a multi-channel manufacturer.
We have a number of what I would consider to be enterprise SMBs who are very centered around their customer experience. Our single largest customer is a $28b/year office supplier with hundreds of thousands of SKUs and 500+ unique front end ordering experiences powered by OrderCloud. Some name brand customers include Taylor Corporation, Innerworkings, Papa Johns, Giftcertificates.com, and US Foods.
Who do you compete with in the market?
We compete with customers who want a cloud based offering such as NetSuite, SAP, Hybris, CloudCraze built on Salesforce.com, and Magento, at times.
Four51 has raised just over $5m before this latest round, is the total capitalization now ~$10m?
Well, we actually bought out our previous investors in 2011, so this latest round brings the total to $5m.
Why the recapitalization and why these investors?
With the success that we’re seeing in the market, I believe we have a solid formula to grow in a more aggressive way over the next two years. Really to do more of what we’ve been doing since OrderCloud came along. We chose the investors that we did because we weren’t out looking for an institutional investor and decided that we could do an incremental round with some experienced technology investors that include Roxanne Googin, Andrew Fraley of Circle East LLC, and one other unnamed group from New York City. They share our values associated around our distinct growth plan and our projections over the next phase.
What was your revenue in 2015?
Right now from a SaaS revenue perspective I can say that we are north of $10m ARR.
Four51 doubled headcount from 30 to 60 in 2016, and now want to reach 225 in the next three years. How do you plan to grow your headcount that agressively over the next 36 months?
For us, it’s all about blocking and tackling. We’ve already added over a dozen people since funding and have designed some solid, proven ways to bring people into our business, not to mention the amount of referrals we receive. The biggest areas of hiring will be in technology and sales.
Is there anything that I didn’t ask or that you want to add in closing?
There is a huge transition in business-to-business firms to digital self services driven by a number of factors and we’re excited to be fueling that.