Case Study: SyncSketch x Silverstein

How The Next Unicorn’s CEO, Craig Silverstein, empowered SyncSketch to achieve hypergrowth, profitability, and a successful M&A

What is SyncSketch?

SyncSketch is a collaborative review platform designed for creative professionals in gaming and M&E industries. It offers real-time feedback, drawing, and annotation tools that allow teams to discuss and refine visual projects and 3D assets remotely. SyncSketch is particularly valued for its user-friendly interface and its ability to streamline the review process across various multimedia formats, enhancing communication and productivity in project development.

Summary

During global market shifts, such as those triggered by the Covid-19 pandemic or the acceleration of AI, SaaS founders have a small window to maximize growth and achieve market dominance. SyncSketch was no exception to this evolving landscape when the startup’s co-founders Bernhard Haux and Phil Floetotto saw a growing market opportunity for visual collaboration tools ahead of remote work’s golden era.

The Challenge

In 2019, SyncSketch was one of the most advanced, user-friendly visual review solutions available to professional artists. As a bootstrapped business, the company’s success depended on its ability to scale quickly and keep up with the demands of gaming and entertainment verticals.

SyncSketch initially went to market with a low cost subscription plan for professional studios 2016. By early 2020, SyncSketch accumulated a strong free subscriber base. However, the product wasn’t generating the revenue needed to scale operations and compete against companies with enormous marketing budgets and R&D capital injected by PE and VC firms.

Even though SyncSketch’s features and value proposition exceeded that of many competitors, user growth was driven by word of mouth among educators, which attracted customers to lower-cost tiers. As a result, enterprise account acquisition and onboarding operations hadn’t been solidified or streamlined.

SyncSketch Prior to Craig Silverstein

0 full-time employees / 2 co-founders working day jobs / 5-10 active contractors
Low 6-figure ARR
Unprofitable and underpriced product
< 10 enterprise clients
Lacked scalability in operations, business development, and strategic account growth
Lacked actionable business metrics and forecasts
Lacked proven business outcomes and strong B2B market penetration to strengthen value of potential transactions

The Objective

SyncSketch partnered with Silverstein to:

Evaluate the competitive landscape and improve market positioning
Supercharge SyncSketch’s business model, GTM strategy, and pricing to drive growth and profitability
Increase appetite for investment and M&A opportunities
Establish internal systems and operations to hire FTEs, control costs, manage vendors & resources, facilitate client onboarding, drive prospecting and relationships, and track meaningful KPIs

The Solution

The ROI

Silverstein’s strategic impact enabled SyncSketch to:

Achieve hypergrowth and profitability within 1 year while remaining bootstrapped.
Increase ARR over 17x in 3 years for a compounded annual growth rate (CAGR) over 155% (beat SaaS quartile benchmark for YoY ARR growth of 62.1%)
Grow Average Revenue per Account (ARPA) over 60% YoY (beat SaaS top decile benchmark of 38.1% YoY)
Tier features and plan product-led growth efforts to increase net revenue retention (NRR) to over 135%+ (beat top decile benchmark of 110% YoY)
Grow Average Revenue Per User (ARPU) over 20% in multiple years
3x Subscriber LTV
Hire in-house product, engineering, & DevOps teams
Become a market leader and industry standard as evident in numerous case studies from industry leaders and AAA studios
Attract higher value investment and acquisition opportunities due to advancements in market penetration and business outcomes
Navigate a successful due diligence process and M&A
Allow for strategic acquisition by Unity just 1.5 years after teaming up with Silverstein
Successfully integrate G&A functions into Unity

The Engines Behind Growth

The rapid revenue and account growth achieved while partnering with Silverstein did not happen by accident. Silverstein’s vision and execution of go-to-market strategy and business operations was supported by a thorough market analysis, a passionate and supportive team at SyncSketch, and a deep understanding of the value that SyncSketch offered its users. Growth was driven by unwavering alignment and collaboration between strategic operations and an elite product team that delivered a high-value roadmap.

Silverstein planned and led the execution of multiple pricing and GTM initiatives that were critical factors in achieving hypergrowth and profitability. The term hypergrowth describes a company with year-over-year revenue growth of 40% or more. In addition to revenue growth, SyncSketch began prioritizing cash flow by closing multi-year contracts, which enabled the company to expand internal R&D teams and remain customer-focused. To further increase average revenue per user (ARPU) and to optimize the upsell funnel, Silverstein advised on feature tiering for SyncSketch Team and Enterprise plans in addition to the product-led growth efforts that drove expansion.

“Pricing increases are just one way to increase revenue, and it’s not always the best way,” says Silverstein. “Increasing value to customers and ensuring easy access to that value is typically the best strategy to fuel strategic growth.” This methodology was shared across teams at SyncSketch and is the driving force behind many of Silverstein’s strategic initiatives.

Beyond revenue and user acceleration, Silverstein streamlined HR operations, revenue operations, vendor management, regulatory compliance, and application security, which empowered SyncSketch to service the most demanding AAA studios. Silverstein’s robust knowledge of SaaS operations was critical in building trust between SyncSketch’s cloud solution and industries that were paralyzed by skepticism about moving valuable IP to the cloud.

Conclusion

Building a great product that appeals to users is essential for building a sustainable business. However, innovative technology is only one factor that attracts funding or a successful acquisition. Companies showing rapid revenue growth, high customer lifetime value (LTV), and efficient cost management make a SaaS company more appealing to investors and larger enterprises seeking acquisition. The most important qualities and metrics that investors or acquirers focus on largely depend on their investment strategy.

Craig Silverstein played a key role in SyncSketch’s ability to exceed numerous SaaS KPI benchmarks, reach profitability & hypergrowth, and become a highly desirable acquisition target. His services provided tailored resources, expertise, and strategic plans that require a wealth of knowledge and experience.

Email contact@thenextunicornllc.com to learn how Craig Silverstein can help your company.

Craig Silverstein | CEO & Founder, The Next Unicorn

The Next Unicorn LLC