SaaS Interviews with CEOs, Startups, Founders
1228 SwiftPage ACT CEO "We're 1-2 Years Away from $100M in ARR"
04 Dec 2018
Chapter 1: What is SwiftPage and how has it evolved since its founding?
Now running SwiftPage, the company was founded in 2001. Just did a big recap. They went from 60,000 customers in 2015 and 26.2 million bucks in revenue up to 84,000 customers today.
Chapter 2: How did SwiftPage grow its customer base from 2015 to today?
They're scaling out ARPUs between 90 bucks and 150 bucks per month to get that customer. They're spending less than 500 bucks. So six month payback period as they look to scale. They've got a big announcement coming up soon where they're gonna be moving into the marketing automation spaces. Their team of 250 people continue to work really, really hard in Denver and other remote locations.
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 of hundred thousand dollars to 2.7 million.
Chapter 3: What strategies does SwiftPage use to scale its Average Revenue Per User (ARPU)?
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.
Chapter 4: What major announcement is SwiftPage planning regarding marketing automation?
My guest today is John Oshel. He's the president and CEO at customer relationship management and marketing automation software provider SwiftPage. He has a 30-year track record of building highly profitable and sustainable revenue growth for emerging companies and established global leaders. He's been recognized several times for his involvement in the tech industry.
John, are you ready to take us to the top? Oh, I'm ready, man. How you doing? I am doing well. So last time you were on was about a year ago. And there was one thing I remember from that interview that just floored me.
I go, this is a guy that basically bought $70 million worth of ARR with other people's money, kept 60% equity for common, and then sold off a little piece of it later that basically made up the cost of that. And you basically got it for free essentially, right? Yeah. Awesome. You got it right, man. It's called using other people's money. I totally get it. So I want to start off.
I want to assume my audience knows nothing about you for a quick second and then dive more into detail. So what is SwiftPage if people aren't familiar? Yes, WebPage has been around since 2001. I started as a little email marketing company. So think like a Constant Contact or a MailChimp, etc. I was an early investor in the company back in 2003, 2004.
I started advising the company probably in 2006. helped them form a board in 2009. Then in 2012, I have a funny story. We had a board meeting. I went to the restroom. I came back, and they said, hey, man, you're the CEO. I said, come on. There's got to be a bathroom rule or something in here. I took over as CEO in 2012.
The story, we did a couple of real quick acquisitions and took this little startup of 15 people to 350 Swifties around the world, four locations, and we've been growing and having a lot of fun ever since. Swifties, I love that.
Hey, real quick, just so people can appreciate what you and your team have done since 2012 when you come in, what was kind of general, and you can give me a range here if you want, if you're comfortable with it, ARR then versus ARR now? Yeah, so I won't give you like numbers, but I would say like over the last years, well, I would tell you when we acquired the companies in 2012.
That was the 70 million ARR, right? Yeah, they were losing money. So it was going this way, right? So we quickly turned that around. John, sorry, was that your, sorry, I don't mean to cut you off, but was that your only ARR at that point or was the core business? I thought you told me the core business was doing 30, you bought 70. Yeah.
So what we were doing, the core business was the little email marketing company. So that was that was doing some, you know, some some recurring revenue at that point. And we added, you know, top on top of that, the revenue that we added was actually declining. It was a distressed asset. But we turned those around.
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Chapter 5: How has John Oechsle's leadership transformed SwiftPage since 2012?
Via acquisition. Which company did you buy? I can't tell you that. Oh, come on. All right. You get me in all kinds of trouble. All right. All right. But yeah, so, you know, so we're going heavy into marketing automation. So, again, it really looks as and we're saying, you know, conversion and retention. Forget about CRM. That is an old phrase. People have been talking about that.
Customer relationship management, they've been talking about that since the 90s. CRM is not where it's at. It's conversion and retention. If you look about where all the big boys are going right now, what are they all doing? They're all going after. three legs of a stool that makes up what I call conversion retention. And that's CRM, marketing automation, and service management.
If you have those three pieces, now there's lots of sub-pieces underneath of that, but if you have those three pieces, You own conversion and retention for whatever space you're in. So if you're Salesforce, you're going to own it for the enterprise, right?
If you're, um, you know, you take a look at what Adobe just did, bought, bought Marketo and you can see all these players are saying we have to have all three legs of the stool. Do you feel like you have those other two and you're going to get the third here with the marketing automation? I think we've got two with the marketing automation.
I think service management is an area that we've got to really go after. So I don't think we can sit here and say, you know, some people have customized the ACT platform to be a service management platform, but out of the box, it's not right there. So I think that's really the next piece that we need to go after. Yeah. And help us understand just so people can kind of bucket you appropriately.
I mean, should we think of you kind of like a constant contact in terms of like ARPU and customer account and things like that? Or are you kind of more mid-market enterprise? No, we are definitely down in the small business area. So when I say SMB, we kind of break it down into four buckets. So the first bucket is what we call lower, middle, upper, small.
So those are kind of more the larger companies in the SMB area, maybe 100 to 150 employees, et cetera. And then you get down to the next level is what we call small, which is kind of in that 50-person company range area. And then because we're so creative with our names, the next one is small, small, which is kind of like that 15 to 25 person.
And then down at the bottom, we call it the IBO or individual business owner. And so, you know, our sweet spot is really in that small to small, small to IBO. You kind of go up a little bit into that lower, lower, middle, upper, small sometimes. Got it.
When I talk to the folks at EIG and Derns International, and they own a lot of brands, whether it's HostGator or Bluehost, and they're trying to buy up other kind of things in the space, they talk a ton about, you have a huge volume of these. You call them, I think, IBOs, the small, small, or smaller, smallest thing.
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Chapter 6: What are the growth strategies for SwiftPage moving forward?
We look at unit churn, logo churn, and then we look at revenue churn. And they're all basically hovering in that one and a half percent, somewhere a little bit lower.
But yeah, I mean, once, listen, once we get you past that first year, and so any time you're dealing with CRMs and small businesses or whatever, you win or lose your customers in the first 45 to 60 days, right, when they're coming on. If you can get them past that and you get them through that first year, I got you for 6.2 years, right? That's our average lifespan of a customer.
6.2 years, wow, okay. Yeah. And that's where I think the difference is, Nathan, and this is so important. I think you see a lot of marketing automation players that are out there that are going like crazy and they're growing or whatever, but their churn is so high. And the reason being is that it's super easy to switch out a marketing automation software.
It's like, let me take my stuff out of there and put it in something else. If you design and start running your business on a solid CRM, it's a little bit more difficult to rip that out and put something else in. So we've got that stickiness of CRM, and now we're adding marketing automation on top of that. And I think it's a real winning formula. Yeah.
Now, I'm going to do a calculation here to try and understand your dollar-based lifetime value and then see how you actually use that to drive decision-making. At 1.5% logo churn per month, if I divide that, you know, one divided by 0.015, that's 67 months essentially of lifetime value or about five and a half years.
If I multiply that times the ARPU you had back five years ago or four years ago, it's higher than that now. That puts your LTV in dollars almost at 30,000 bucks per customer. Is that accurate? I mean, is that accurate in terms of what you're using to forecast today? Yeah. Yeah, it's probably a little bit high your mass a little bit high, but it's it's not it's with it's within a ballpark.
And how do you use a lot of people I think use LTV the dollar figure in ways that are not healthy. You know, you hear the three to one CAC ratio ball, but a lot of times there's just things that math can't take care of. So how do you use that that LTV and dollar figure as a kind of indicator strategically for you? Yeah, you know, the LTV is, here's one, absolutely we look at LTV.
I think the most important thing that we look at is CAC, right? What is our CAC and what is our payback, right? That's the real, you know, payback in months. So those are the real things that drive us. And I'll tell you, sometimes we make decisions to say, you know what, it's okay if our CAC goes through the roof because we're going to get more people on board. Yep.
And then kind of, particularly if we have such a long lifetime value. So I think we look at those two metrics more than we look at long lifetime value. What is your payback period today in terms of months? Yeah, it's about six to seven months right now. Okay, that's pretty good. I mean, that's pretty good. And so what does that bring CAC to then?
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