SaaS Interviews with CEOs, Startups, Founders
1277 Mailchimp for Shopify Customers Passes 5,000 Paid, $3m in ARR, 15k Shopify Reviews
22 Jan 2019
Chapter 1: What led to the founding of Privy.com?
Launched the company after a pivot, really, in 2015. Really focused on helping e-commerce brands build their email list. And then once, obviously, they're helping you manage all these emails and these leads, they're doing a lot of lifecycle emailing-related things today.
Chapter 2: How does Privy.com help e-commerce brands build their email lists?
Ranked very high in the app store at Shopify. That's a core strategy of theirs across many other partners as well. They now have over 5,000 paying customers, paying a minimum of 50 bucks a month, so 250 grand in monthly recurring revenue. That's up more than double year over year. They're doing about 100 grand per month back in June 2017. 4 million raise, 3% gross revenue churn per month.
They're above 100% net revenue retention annually today with about $100 CAC, two to three month payback. And that's just, that's only on select cases where they're actually spending money growing. Their team of 20 is all based up there in Boston. 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.
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Chapter 3: What is the revenue model of Privy.com?
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 Ben Jabowi. He is the founder of Privy.com, a marketing automation platform used by over 250,000 marketers around the globe.
He's worked with companies like Lisa, Hubble Contracts, Lifetime Fitness, The Ellen Show, Dr. Axe, and many more to rapidly accelerate e-commerce conversions and sales. Ben, are you ready to take us to the top?
Chapter 4: What customer segments does Privy.com target?
Absolutely.
All right. This is a hot space. Let's hear it. What do you guys do and how do you make money?
Yeah, so we found that in the small, mid-size e-commerce market, there was really a gap. So much of those marketers are focused on driving traffic to the site and then on automatic nurturing campaigns after conversion.
But, you know, if 98% of the traffic's not converting, that was the opportunity that we found to build a really easy to use, quick time to value SaaS platform focused on converting more website traffic into leads and sales.
Okay, got it. And what's the revenue model? Is it pure play SaaS or what? Yeah, it is.
So we go to market through a freemium model, but it's basically premium SaaS subscription based on the level of features that you need in terms of targeting, coupon integration, and certainly we have some scaling metrics based on traffic to the site.
It's pure play SaaS though? Yes. Okay, there's not like a transaction fee on sales driven if your tool's being used or things like that? Nope.
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Chapter 5: How has Privy.com achieved growth in paying customers?
Okay, great. And give me a, before I, I want to learn more about your backstory here, but before we do that, I don't want to go down every customer cohort, but on average, what would you say customers pay you per month?
Yeah, we have kind of two segments that we look at. We have a fully self-serve funnel. The average there is about 50 bucks a month. Okay. And then we have kind of a product qualified inside sales driven effort that's growing. That's about $300 a month. Okay, good.
It's a little variety there. Can you give me the revenue breakdown on those? What percent is coming from self-serve? What percent coming from the other one?
Yeah, so right now, let's see, it's about 80% of the business is self-serve. We actually just brought on our first member of the sales team about four months ago. So ramping quickly, but already 20% of MRR is coming from direct inside efforts.
And let's just keep going down that team path here for a second. What's total team size today?
We're 20 today. We'll be 30 by the end of the year. Breakdown is 11 on the engineering team. A handful of customer support. Small marketing team of three. And one salesperson.
I can always tell who's listened to this show before. You've listened, haven't you?
Yeah.
All right, good. I'm glad you're enjoying it. So okay, 20 people right now. And when did you launch the company?
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Chapter 6: What challenges does Privy.com face with customer churn?
We were focusing on brick and mortar retail, giving them kind of a SaaS platform to help them track which of their kind of online audience was actually walking into their store with phones using offers. So this online, yeah, super cool. A bunch of techies get excited about it.
Kind of Groupon-ish living social, like about hard to do the attribution thing.
Exactly. And just hard to sell into.
So how much money did you sink into that? About $2 million. Okay.
Chapter 7: How does Privy.com integrate with Shopify and other platforms?
And how did you know, like, it's always hard because entrepreneurs, we have to be optimistic. So we always tell ourselves, it'll get better next year. Let's keep pushing. It takes balls to say, you know what, we put $2 million in, we have to shut this thing down and move on. What prompted you to be able to do that? That's very, I mean, self-aware.
That's really nice of you to say.
Unless your bank account was at zero, that makes it easy, right? No, we were, we kind of,
had a suspicion that this was going to be a slog. So we had two M&A offers on the table, more like acqui-hire type situations. So we decided to pursue those. And then we were kind of right on the finish line with one of them and it fell apart. So, you know, the bank account was basically zero. We had about a thousand dollars in the account and the deal fell apart.
So we were really forced to say, are we shutting down? What was revenue, by the way, at that time? It was maybe $150,000.
A year? Okay. All right, good. Okay, so then the pivot, right? So obviously you pivot to what you're doing today, Privy. That was in, you said, 2016. Did you keep the same cap table or did you restart totally?
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Chapter 8: What are the future plans for Privy.com as a business?
We actually kept the entire, you know, the cap table as is.
Okay, so do you have investors? And if so, how much have you raised across both companies?
Across both efforts, we've raised $4 million to date.
Okay, yeah, because just to be clear, people that put in money back in, like, before 2015, they're still on your cap table, right?
Yeah.
Yeah, yeah. Does that ever eat you up inside? You're going, oh man, they bet on me for a whole different idea, and I could own 100% of this company if I just started from scratch, but obviously you wanna do good by your investors. How do you manage that in your head?
Yeah, the structure of our rounds has been very much seed and angel focused, so a lot of the people that came in originally were the people that came back in the second time around. Um, some of those are, you know, very close friends. Some of them are just awesome, hugely supportive investors. Um, and they've been relatively hands off.
So, you know, at the end of the day, yeah, I have had some of those thoughts, but, um, you know, at the core, you know, it's still the same brand. It's still the same kind of handful of people that are exactly.
All right. And then, uh, what do you have today in terms of total customers?
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