SaaS Interviews with CEOs, Startups, Founders
1276 Workers on Oil Rigs Build Apps Using His Tool
21 Jan 2019
Chapter 1: What is the main topic discussed in this episode?
Launched this company, highly specialized niche product, which I love, back in 2011. Bootstrapped it and then raised 1.5 million bucks. Now serving about 50 logos. We'll call it hundreds or thousands of seats across those logos.
Chapter 2: How did James McDonough bootstrap his company?
A bottom-up approach to helping these folks, these frontline folks, build apps that make their lives better. Once they tell their buddies, eventually the CIO or the CTO gets wind of it. And then before you know it, they're expanding online. location to location. They've got a team of nine people based between Houston and other remote locations, call it 200 or 300% net revenue retention annually.
They have a really effective kind of expansion revenue strategy just based again from usage. They're paying about or sorry, charging about nine bucks a seat across those logos. 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.
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, everyone. My guest today is James McDonough. He's a passionate entrepreneur, technology CEO, and past top tier management consultant.
He's now bringing and blazing new trails here at Seaforge, which helps digital forms and procedures occur in seconds with zero coding. We'll talk about that today. James, Are you ready to take us to the top?
Excited.
All right. Tell us about Seaforge. The bio is a little confusing. What do you guys actually do and how do you make money?
Yeah. So Seaforge is the company's name. The platform is called Fatfinger. Our customers named it. And it came from my work. I worked my entire life in heavy industry. And basically, we enable frontline employees to build apps in seconds.
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Chapter 3: What is the purpose of Seaforge and its platform Fatfinger?
I know this sounds so simple, but it's always very difficult to say, OK. We're looking at our systems records. You're in your back end of Stripe and you see like, you know, 40 like at Exxon.com accounts signed up and you're going, oh, this one, it makes sense to put touch on. Try and sell the CIO directly. You call the CIO. They say, OK, we'll put on our credit card.
But then you got to like figure out how to get all those users on that credit card and then shut off their personal cards. And then there's like expense issues. How do you deal with that?
Yeah, so that flip over from, I guess, individual team to larger enterprise, that's where it starts slowing down in terms of the automation. Because Bob, the trial to first users and credit card, we don't see any of that. We just kind of see the data behind it.
When they start flipping over, then that's where we start getting involved in more of an enterprise sale because then corporate IT starts vetting us, taking us through the security and compliance and all of the manual billing and that type of thing.
Chapter 4: How do frontline workers build apps using Fatfinger?
So that's where it does start bogging down, but also the, I guess the contract values start getting higher.
Yeah. So what, what would Bob start at? I mean, is it a lower price point, a dollar, five, 10, something like that a month?
Yeah, we start. So we have a kind of standard and pro plan ranging from nine to 15 bucks a month per user, unlimited apps. Okay. And, and then, uh, and, and then maybe some enterprise plans that if they're wanting some more enterprise features, I'll talk about them.
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I'm trying to figure out the right question to ask to understand how much of your business is from the personal folks versus you've sold it to an IT department and then they sell it and they triple the volume inside of that one organization. So would you say like more than 50% of your user base is coming from a long tail and let's call that teams of five or less?
Well, so when they flip over, they'll buy big chunks of users, right? So the enterprise starts, I guess, becoming much more important than the... It's kind of like the top of the funnel. We almost treat the teams almost as leads and nurturing them to the larger deals. Yep. Which then those... Yeah, that revenue is more... than the smaller teams.
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Chapter 5: What challenges do frontline workers face with traditional systems?
Okay. Very good. Um, and then what about CAC? So what are you paying to acquire these new guys at the bottom of the, at the bottom of the pyramid?
Uh, so most of it happens through, uh, word of mouth and, uh, but if, you know, doing our different testing from online marketing, we can acquire a trial for about just over 20 bucks. Okay. And then you can acquire, uh, you know, an enterprise logo for, um, around a thousand.
Around a thousand.
Chapter 6: How does Seaforge drive system change from the bottom up?
Okay, good. And then how quickly do you like, obviously you have to manage your cash tight because you're, you know, you're, you haven't raised a ton on your break even. How long are you willing to wait to make that money back in terms of what they're paying you, your payback period?
Uh, so that the, the larger enterprises, they take a long time, right? Like you're, you're, you're going through the enterprise sales cycle. Um, but really, I, I guess we are making that, we're making the marketing, uh, in, I guess the, the cap back on the smaller companies and then the larger ones are flipping, um, you know, kind of put us in a different category.
OK, I understand. So if you spend a thousand bucks to acquire a customer, you should know like, OK, we get that money back in a month or on average, we get it back in 18 months. You're not it sounds like maybe you're not quite sure what that is.
It's we get it. We it's it's I guess long because the majority of our revenue comes from the longer sales cycles.
Got it. But if it's a longer sales cycle, usually that also means they're paying more per month. You see what I'm saying? So like it should actually.
Yeah. So we might acquire a logo for, let's say a thousand bucks, but then we'll land, uh, you know, 10 times, a hundred times that, uh, um,
16 months later oh i see because it's expanding yes yeah i see what you're saying okay good all right very you just kind of have to take educated kind of bets there in terms of what the potential account value could be oh yeah that's why i mentioned at kind of the beginning is there depending on the logo and the account opportunity just based on the size of that company is very important and where we i guess where we stick our effort all right james very good let's wrap up here with the famous five number one what's your favorite business book
of all time uh probably uh steven covey's the how to win friends and influence people with pets yeah that's good number two number two is there a ceo you're following or studying right now yeah i love peter d mantis uh number three what's your favorite online tool for building a business other than fatfinger.io uh probably asana we run our run my life on it number four how many hours of sleep do you get every night
Around eight.
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