Why Domo's Crazy Valuation Makes Sense, at Least According to Josh James (Video)

When it first launched to the public this month after four years of development, the new business intelligence company Domo had built up a roster of 1,000 customers and was valued at $2 billion.

Meanwhile, established competitor Tableau has some 23,000 customers and is publicly valued at nearly $7 billion.

So, Re/code’s Arik Hesseldahl asked at the Code/Enterprise Conference: San Francisco, “How do you justify a $2 billion valuation?”

“Not that way,” laughed Domo CEO Josh James.

“Our average revenue per customer is much much higher, but more important is the opportunity,” James explained. He’s now on his second billion-plus-valued “unicorn” technology startup, after taking Omniture public and selling it to Adobe for $1.8 billion in 2009.

Plus, argued James, Domo is more useful than the competition. As a measure of that, he said, more than 50 percent of those thousand customers have their company’s CEO using the product.

This article originally appeared on Recode.net.

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