SaaS Interviews with CEOs, Startups, Founders
1130 "We're way cheaper than Mailchimp", is that enough?
28 Aug 2018
Chapter 1: What is the main focus of Moosend as an email marketing platform?
his team of 20 plus people based out there in UK, in Greece, launched in 2013 to make email marketing easier. They're coming in and really just price undercutting MailChimp, having some success. They have about a thousand users, 700 of which are paying about 200 bucks a month. So today doing about 135, 140 grand in monthly recurring revenue. That's up from about 60 grand
a month in revenue about 13 months ago or so they're doing six percent logo churn per month obviously focused on driving that down lifetime value about 18 months or three grand in total lifetime value in dollars 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. My guest today is Yanis Saras. He is the CEO and founder of a company called Moosend.
He's been in the banking technology in the past, including Goldman Sachs, JP Morgan, and also was marketing technology, obviously now in the present. He's a learner at heart using technology to cook beautiful dishes. Yanis, are you ready to take us to the top?
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Chapter 2: How does Moosend differentiate itself from Mailchimp?
Hi. Hi, Nathan. How are you doing? Yes, sir. Okay, good. So tell us more about the company. What do you do and how do you make money? Right, so we're an email marketing and marketing automations platform. Obviously, our clients use a platform to set up their email newsletters, design them, to set them up, to send them to their audience. They can segment their audience lists or obviously...
Just do a normal email blast or they can do automations. And the cost of our platform starts from free all the way up to, depending on how many subscribers you have, as far as it can go, basically. And so why would somebody use you over MailChimp? I mean, this is a very fragmented space. It is very fragmented. We have many, many, many clients that came over to us from MailChimp.
We've actually created a technology that migrates a whole account from MailChimp to MailChimp. Okay, but why are they switching? Yeah, sure. So there is a few reasons. As you said, it's a very fragmented space. And in a fragmented space, one of the main reasons is pricing. So we're a cheaper alternative mail team. We have all the features... at a cheap price.
Second reason is we have an awesome customer support team. While products like MailChimp, you may have to wait two, three days on a ticket or on a queue to get your answer. And to be honest with you, marketing tools these days are quite advanced. I mean, to set up a marketing automation is quite advanced.
I strongly believe, although this is all opinion, I'm biased on that, but I strongly believe we have better marketing automations and we have the best marketing automations that you can find on email marketing tools. I mean, the numbers don't lie. So let's just jump into some of the numbers. What is the average customer pay you per month? So the average customer would pay us $200. Okay.
That makes sense. $200 per month. Now that's not cheaper than MailChimp. I mean, there are many MailChimp plans way cheaper than that. Sure, but you've asked about the average customer. So the average revenue per user per month is $200. We have people that they send 5,000 emails for $10. I mean, if you compare the pricing between the two products, there is no question about it.
On average, every plan that we have is 40% cheaper than Meltium. And actually, just to add to that, we don't have restrictions about the number of campaigns you can send. So you can send one or 1,000 campaigns a month, and we don't basically restrict you on the number of campaigns you can send. So how do you make sure then you have kind of long-term viability as a company?
Because you could have people come in and abuse the system, drive your costs through the roof because they're sending unlimited sends, and just take advantage of your system. But, I mean, it could happen theoretically, but it's like a buffet meal. You know, you pay $10 and you eat at a buffet. You know, you can't have people that they can go in and abuse the system.
But overall, it works quite well. And actually, it's, you know, abuse the system. Abusing the system would mean that they would send unlimited campaigns to their customers. No one really wants to do that. Because at the end of the day, they will get so many complaints. Well, I'm talking about spammers. I mean, spammers would not use a product like ours.
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Chapter 3: What are the pricing strategies used by Moosend?
You churn 65, 72% of your customer base every year. How do you get that lower? You know, it's tricky. That's where, you know, really good support, really good product comes into play. We keep, you know, at the end of the day, what we do is we try to understand where the churn comes from. I think personally that support in this business is basically the way to be churned.
At the end of the day, the people are churning because either they don't understand the product, so we're missing something with customer support, or because they don't get what they need in terms of open rates. So that's deliverability. We try to battle churn through those. We do a lot of meetings with our clients to explain to them, you know,
what they can expect from email marketing and what sort of open rates your industry gets. Recently, we haven't launched it yet, but it is announceable. We're launching a tool that when they type a subject line, it will predict the open rate they're going to get in the campaign. So we kind of give them some expectations in that respect. So that sort of thing. Interesting.
What about the other economics? What are you paying to acquire a customer? What's your CAC? We, right now, we don't spend $1 on ads. We don't spend money on ads. What's your fully weighted CAC? So it includes the salaries of your marketing and sales people. Right. So, you know, I guess we have the marketing team right now is two people. It's very low. That's what I was going to say.
I mean, it's quite low. Okay. What's the total team size? So two of them are marketing and sales. What's the rest of the team look like? So 25 people are in total in the company. So we have 10, 12 people in product. We have around four people on sales, two people on marketing, and operations is the rest.
Do you guys remember the last time you sat down for a meal with a friend or a business colleague and they pulled out two phones and put them on the table? Do you remember what you thought? Whenever I see this, I go, oh gosh, what a tool. But look, sometimes you can't blame these folks. They're trying to separate their personal lives and their business lives with two separate phones.
Some of you guys with just one phone might get frustrated when you're not sure if calls coming in are personal or business. And we've all gotten a call from an unknown number and wondered if it's, again, a business call or a random caller. Well, now there's a new tool in town making all this easy. Sideline gives you a second number so work and personal communication can live on one device.
With the Sideline app, it's easy to own a dedicated business number and still separate work and personal numbers, again, all on that single phone.
you'll know when work when calls are for work or if they're personal you can keep things private and i love this part you can text from these two separate numbers so clients versus customers versus your own kind of personal friends all from one phone you'll look more professional you can automate text whenever you're busy and you can team up with others on your team to share responsibility for that one single phone number in case you're away or not available
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Chapter 4: What is the average revenue per user for Moosend?
So we need to be better than that. And what do you... I'm curious where most of your growth is coming from in terms of the list size of your customers. Are most of them importing lists from MailChimp or other channels? Or are they installing an opt-in form you give them on their website and they're just getting organic new opt-ins every day? 100% the first. I would say 95% the first.
You know, people are, unfortunately, people are, you know, we obviously strongly prefer the second because that means that we have control over where they got their lists from. Unfortunately, in the first case, you don't have that control. but everyone has a list from someplace. Some people have acquired it in obviously a legal way and some people have acquired it in a bit more sort of shady way.
At the end of the day, 95% of our customers import lists from someplace, some tool. Yep. Okay, good. And then as you've driven the growth of this thing over the past four or five years, have you bootstrapped or raised capital? We haven't raised capital at all right now. We're 100% bootstrapped.
We have external advisors that we go to sometimes ask questions or make sure that our strategy aligns with what we're trying to achieve. But we haven't got any external capital in the company still. Okay. And what is growth rate? Sure. I just want to say it was a decision we wanted to take in the early years, and I think it has paid off in that respect. Yep.
Now what does growth rate look like as a bootstrapped company? You're doing 135 per month today. What were you doing 13, 12 months ago? I would say we, I'm not going to take the last year into consideration, but every other year we essentially doubled every 18 months. Sorry, we doubled every nine months. So if I go back, you know, 10, 11, 12 months, you were doing what?
60 grand then now you're doing, you know, 130, 140. Yes. Well, to be honest, last year was a bit slower, but around that, I'd say that the numbers are correct. Why was it slower? It was tricky. Companies like us, we're still a small company. So just to make this clear, we're still a small company. And where are you based? Where's the team?
So the company is a UK company, but the majority of our operations come from Greece. Okay. Okay. So our office right now, where I am right now is in Greece, in Athens, Greece. And it was slower. So last year was quite slow because we lost one or two of our biggest customers. They're still customers of us, but they really downsized their marketing department. And that obviously made... How much?
Like you lost five grand a month in revenue, 10 grand a month in revenue or more? 15 grand. 15 grand. Okay, got it. Yeah. So... We obviously caught up to this number, but it really sort of changed the growth rate for last year, to be honest with you. Do any of your current customers today make up more than 10% of your monthly revenue?
Uh, no, we have one or two, let's say whales on our, uh, um, you know, on a revenue sheet right now, but overall, uh, uh, we don't, we don't, you know, we're quite, quite segmented in that respect. Good, good, good. All right, Yanis, let's wrap up here with the famous five. Number one, what is the last business book you read? Last business book. All right.
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