SaaS Interviews with CEOs, Startups, Founders
1050 3+ Years to Hit $20k in MRR, Sell and Get Out!
09 Jun 2018
Chapter 1: What is the main topic discussed in this episode?
This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn. Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple hundred thousand dollars to 2.7 million. I had no money when I started the company.
It was $160 million, which is the size of many IPOs. We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everybody. My guest today is Stefan Fountain.
Chapter 2: What unique legal issue did the guest face with David Hasselhoff?
He is the only known startup founder to have been successfully sued by David Hasselhoff. That's right. His current company, PR.co, automates and fixes PR for global brands and their agencies. Currently serving 280 companies with content management tools and research automation across geographies, media channels, and company functions. Stefan, are you ready to take us to the top? Yeah, man.
All right. Why did David Hasselhoff sue you?
So... A little of a caveat here is that we got a cease and desist letter. But to put that on a business card or in a bio is too long. We're using an image of David Hasselhoff in his underpants as our company logo. And it took two years. And then somebody told his agent or his lawyer or someone about it. And then we got this letter.
So we tried to actually negotiate with the Hoff to see if he could come on board, you know, for equity and we could use his brand. And, uh, uh, that didn't go anywhere. So in the end we just removed David, David Hasselhoff in his underpants from our website.
And that's funny. Okay. What's the company doing? How do you make money?
So, uh, PR.co is a SaaS B2B business for bigger brands that have multiple locations and they need brand consistency across different channels. Um, And often, you know, you'd be surprised a lot of PR professionals still use Word and Outlook to send press releases with images embedded into the Word document. So it's kind of tricky, you know, I think there's less and less of it now.
But basically, we're moving all that PR workflow into the cloud and just making it more efficient. And it's cool to see our customers really love that.
And I mean, give me a general sense of the size of customers you're working with. What are they paying you per month on average?
Um, so I think the, so we used to have really small companies, startups. So our, our numbers are a bit skewed. So we'd have, um, you know, 50, 50 MRR accounts. And now recently we just signed Heineken and, uh, we have Sonos and Shimano as a customer, tailor-made golf. And those ACVs are, are a 20 plus 20 K plus per month or per year. per year, ACV annual.
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Chapter 3: How does PR.co automate PR for global brands?
Cause we didn't know that for years. We're like, you know, is the agency our customer? Is the brand our customer? Are these smaller startups? And now we're starting to find, you know, who really are the people that are best served by our tool.
And how many customers have you scaled to today?
It's 287. 287.
Okay, good. You know, down to the down to the decimal, you know, that's good.
So 287 comma one. Yeah, that's good. A new department of Heineken just signed up today. So that's nice.
So if I take 287 times $1,000 ACV, that's about $83 per customer per month, you're doing what about 24 grand per month in MRR, something like that?
That's pretty close.
Okay.
It's a bit higher. It's a bit higher. And then we have some one-time setup fees and that also sort of helps. And a lot of the customers pay yearly upfront. So that really helps in terms of being cashflow positive, which we are.
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Chapter 4: What is the average revenue per customer for PR.co?
So the way we look at it is the total revenue we're getting from new revenues, so new bookings. And then we compare that. So that's... I don't know, bro. It's late. I've had a long day, and I'm probably not getting the ratios right.
That's okay. Let me go down a different line of questioning here. What's your churn rate look like?
Yeah, so that's interesting. So also here, we have to divide the different types of customers we've got. We've got the churners on the low end of the scale, so under 50 MRR. Our churn rate's about 10%.
Monthly?
Yeah.
Monthly. Yeah. And if we look at the and this also by design, we you know, we don't really want those customers anymore. And so we've been also been pushing them up the scale. So we're we're getting them to get on a new pricing level.
So a lot of them are like, you can measure churn two ways, logo churn and revenue churn. Right. Revenue churn is better to use if you have kind of higher paying clients that you're doing a good job retaining. So what's your revenue churn look like each month?
Yeah, so this is the good news. It's not negative. So we're actually getting more from the existing customers than the smaller customers that are leaving.
Got it. So you're expanding revenue from your current base more than any lost revenue from smaller customers each month. Yes, exactly. And how negative is it?
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Chapter 5: How did the guest secure funding for PR.co?
Why? If it was a big problem, you'd have way more.
I think the main issue is that we've just been a bunch of engineers trying to build this product in our back room. And only this year we've been going out to sell and we grew 70%. Now we're figuring out how to do this scalable. And, you know, and that's starting to work. So I disagree.
I mean, I think that- Yeah, but 70%, Stefan, 70% year over year growth when you're talking about numbers this small is not that interesting. Like, I mean, it's the, you know, going from a dollar to $2 in MRR is 100% growth, right? Which is really, really easy. I mean, a company at your size should be like doubling or tripling.
There are bootstrap companies tripling year over year as a good indicator of a real problem they're solving. All right, let's wrap up, Stefan, here with the famous five. Number one, what's your favorite business book? Can I only say one? Yeah, pick one. Okay, tribal leadership, David Logan. Tribal leadership. Number two, is there a CEO you're following or studying right now?
Not a CEO, David Skok from For Entrepreneurs blog.
Number three, besides your own, what's your favorite online tool? Brain.fm. Brain.fm, that's a good one. Number four, how many hours of sleep do you get every night?
I have a baby, so right now it's three hours of sleep.
Three, my gosh. Okay, so in situation, you're married with one kid, right? Two kids now. Two kids. And how old are you?
I'm 37. 37. My kids are five and eight months. And the eight month old, that's sort of the sleep problem.
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