SaaS Interviews with CEOs, Startups, Founders
1240 Everlance Passes $150k in MRR, Saves 30,000 Customers Big Time Tax Dollars
16 Dec 2018
Chapter 1: What is the main topic discussed in this episode?
done investing, went through his MBA, eventually found a CTO partner back in 2016 to build Everlance. It's a much better mousetrap to get access to financial data and then figure out how to provide utility value to end consumers, end teams from that data. They currently have over 400,000 folks using Everlance really to help them automatically travel, sorry, and track
their mileage in almost like a tinder for taxes kind of way they raised three million bucks june 2017 had about 10 000 customers 50 grand in mr now uh tripled both those numbers so healthy growth two percent net monthly revenue churn which is the same as logo churn in this case one pricing plan they'll spend anywhere between two months of uh of customer value up to you know 12 13 months of lifetime value to acquire these customers
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.
Chapter 2: What is Everlance and how does it help users?
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, everyone. My guest today is Alex Marlentes.
He went to UCLA and got a BS in complex systems, then was at Goldman Sachs as an investment banking analyst, then an investor at Valiant Capital, Stanford Graduate School of Business MBA, and most recently, Everlance co-founder and CEO. We're going to dive into that today. Alex, are you ready to take us to the top? I am. Thanks for having me. You bet. What is Everlance doing?
How do you make money? Everlance is an automatic mileage and expense tracking app. So it's pretty simple. One way to think about it is if you're self-employed and you need to keep track of your business expenses for taxes, a lot of people might do that using a shoebox receipts or paper mileage log. Everlance automates it all using a smartphone app.
And now we also have employees using that same tool for reimbursement. That's interesting. So I've seen these apps and my tax accountant back in the day was always like, Nathan, you should be tracking this. I'm like, do I look like the kind of guy that's going to keep a post-it note on my dashboard in my car and record starting miles and ending miles and then add it up at the end of the year?
There's no chance I'm doing that. So they would say, well, install the Intuit app or install apps like this. And I just had never got addicted to them. So how are you? I imagine you thought a lot about onboarding. How do you get people addicted to this thing right away? Yeah, it's a great question.
Um, you know, one of the things that actually helps us a lot is you probably have seen ads for, you might've seen ads for my like you or QuickBooks self-employed. Those are two competitors. And actually they do a lot of sort of like broad based media outreach. So, um, YouTube ads, TV ads, radio. And so that'll kind of help educate that category.
And one of the things that they'll say, and I think it might be helpful for you, is every thousand miles you track is worth up to $540 as a deduction. And so for a lot of folks, mileage could be sort of the most valuable source of their business write-offs. And They just don't pay attention to it, but they really should.
But to answer your question, what we think of as sort of our moment of joy or like when we hook people is when the app automatically records something for them. So for sort of a direct-to-consumer thing, that can be challenging because you've got to move them through the funnel of giving you permissions for their location.
They actually have to go for a drive, sort of have the tool sort of magically do the work for them and then show them the value. And then generally, if they went for a drive and they see, hey, drove 20 miles to go visit this client, And, you know, boom, that is an $11 write off. And all I need to do is sort of swipe right one second.
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Chapter 3: What strategies does Everlance use to onboard new users?
Yeah, that's great. Now, that's 2%. Is that gross logo churn or revenue churn or what? It's the same. Okay. Got it. Yeah. Cause you don't have one price point. Is it gross or net though? It's that it is net. Okay. So, so net monthly churn. Great. And then where are you doing any paid acquisition at all?
Or are you just doing kind of more kind of growth hacks, getting in the same channels as these other guys that are pouring money on ads? Yeah, we're doing some paid stuff. You know, a lot of where it makes most sense, like we'll do a little bit on like Apple search ads, some retargeting, things like that.
The general philosophy is we never want to pay for a user that, you know, has, you know, ideally we can get sort of like a two month payback period because of, you know, they'll do that annual subscription and pay us $60. But we never want to see anything close to, you know, past 13 months. Got it.
So fairness, well, hold on, let me make sure you're kind of between two and 13 months, two months would be kind of 10 bucks, 13 months would be, you know, call it 65 bucks, something like that. Is that generally accurate? Yeah. Okay. Interesting. Um, how do you, being at the scale that you're at, how do you decide what tests to run?
And if so, uh, what, uh, amount of money will you drive through a new channel to get a cohort? That's, that's something that you can actually analyze with meaningful results. Yeah, that's a great question. Um, You know, I think we're now ready to sort of experiment and grow a lot faster. So, you know, if we talk again in a few months, I think I'd have some more results for you.
But one of the bigger tests we're doing right now actually is selling Everlance to teams. So we have a product called Everlance Teams. kind of basically almost like selling a group license of the consumer product. But pricing can look very different, sort of what the company needs. One way that we sort of think about it is kind of like Dropbox. So Dropbox is a great productivity tool.
Eventually, someone will bring that tool into the workplace. And then there'll be sort of like an administrator who wants it to tie into payroll or wants to see other employees from our web dashboard. And so that's pretty interesting to us. We've had a lot of inbound interest for that product. Um, a lot of times like we can't really serve it.
It's like, oh, this would be great if it tied into, um, you know, workday or, you know, Oracle or something, you know, some big sort of heavyweight thing like that. Um, but in general, we're excited by that because we think that the pricing could be, you know, pretty different. Yeah. And, and tell me about funding history. Have you bootstrapped or raised? We raise money.
We raise money right out of the gate. In total, we've raised a little less than $3 million. Okay, got it. Why did you make the decision to raise right out of the gate? It seems like something pretty lightweight you could get off the ground with just sweat equity. I know, I know.
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Chapter 4: How does Everlance generate revenue?
He, uh, went through, uh, you know, done investing, went through his MBA, found, eventually found a CTO partner back in 2016 to build Everlance. You know, it's a much better mousetrap than,
get access to financial data and then figure out how to provide utility value to end consumers and teams from that data they currently have over 400 000 folks using everlance really to help them automatically travel and sorry and track uh their mileage in almost like a tinder for taxes kind of way they raised three million bucks june 2017 had about 10 000 customers 50 grand in mr now uh tripled both those numbers so healthy growth two percent net monthly revenue churn which is the same as logo churn in this case one pricing plan they'll spend anywhere between
two months of customer value up to 12, 13 months of lifetime value to acquire these customers. Healthy economics. Alex, thank you so much for taking us to the top. Thank you.