SaaS Interviews with CEOs, Startups, Founders
1358 He's Put in $450k Before Turning on Paywall, Smart or Not?
13 Apr 2019
Chapter 1: What is the background of Drew Sheahan and his business journey?
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Team of seven, birdseed.io, started building it in 2017. He's put $450,000 of his own money in, got that money from his past sale of his past company.
Today, burning 10 grand per month, pre-revenue, competing with Drift, Intercom, and other conversational marketing platforms, hoping to scale his first, you know, call it 100, 600, 160 signups, 700 to date, have really come from things like the Hustle newsletter, sent out to 650,000 people, 2,500 clicks to the website, 7% converting to a free user. Now the challenge is, can he monetize?
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 Drew Sheehan.
He is the founder of a company called Birdseed. In 2010, he started a GPS fleet tracking business from his upstairs bedroom that would eventually rank number 126 on the 2014 Inc. 500 list. He sold that company in 2016 to pursue solving the number one issue he encountered while scaling a business that generates website leads. That business has become Birdseed.io.
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Chapter 2: How much has Drew invested into BirdSeed.io so far?
Absolutely. Yeah. So, I mean, what we did was we basically took all the different tools and that the different types of visitors that would come to your website would need.
So we look at categorically your early stage, people who are still just trying to find information, gathering information, those that really are trying to qualify you versus other people, those that want to contact you, just have different preferences for how they do so. And then the biggest challenge being that the average small business who we cater to
They want to contact you, but frankly, if you're open 40 hours a week, the majority of the time you're not available. And even when you are available during those business hours, it's very tough for a small business to support live chat.
And so my point is, in reference to the intercoms and the drifts of the world who do a wonderful job of building just a phenomenal product, I think for most small businesses, the challenge they have is, Yeah, but what if I can't respond live to someone? And you see Drift, who's gone the direction of the chatbot. You see Intercom.
In terms of staffing it, the biggest issue is actually staffing a live chat 24-7. Drift is now doing this automated via chatbots.
Yeah, absolutely. Yeah.
So how are you fitting into the picture?
Right. So we take all those tools and instead of trying to hide them in different places or put them in different places in your website, we build all those different tools into one button. And you can customize which tools you use. Based upon your availability, you'll show different tools. But ultimately, I think where we win or where we potentially stand out is on forefront.
The first one is that we're easy to set up. Within about 15 minutes, you can get a number of tools live on your website.
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Chapter 3: What challenges is BirdSeed.io facing in monetization?
It's easier to support, as I mentioned. Even if you're not there to support responding to someone with a live chat, they can schedule a meeting with you. They can look through testimonials. They can do a whole bunch of different things and still be engaged no matter when they visit your website.
So how much have you put into the business so far? Because you're pre-revenue to date, right? We are pre-revenue. How much have you invested?
So I would say somewhere around $450,000. The product is fully built and that is my own money. Correct.
Okay. And so people are gonna be wondering, wait, where'd he get this money from? And you're, you got this from the sale of your past company, right? Correct.
Yeah. On the sale of, I was able to exit that business successfully.
Yep. Okay. And did you have any, did you, did that company raise any capital or no?
I did not. As you mentioned, I grew it out of my upstairs bedroom. I grew it relatively slowly, which is ironic about the being 500 since it's based on, you know, quick growth.
But, um, yeah, I mean, I didn't, I think we just were very fortunate and did a lot of the right things at the right time to be strategic in terms of as we grew, um, you know, be able to do the right things to continue to bring in new customers.
Um, interesting. Okay. So $450,000 into the company so far, what's the team size? How many people you have working on the code?
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Chapter 4: How does BirdSeed.io differentiate itself from competitors like Drift and Intercom?
To your point, I think in this world, the visibility is going to be the biggest advantage and the biggest disadvantage. I think advantage in the sense that you see this and you go, oh my gosh, and that's what's happened a lot of times. I can't believe no one's done this before, and so I want to sign up right now.
The biggest disadvantage is that attention is so difficult to come by that I think if you don't put your best foot forward... It's easy for someone to dismiss you and go, okay, you know, I've seen them. I'm good. I've moved on.
And so, you know, but you want to start, my point is like, you want to get the feedback loop started, right? Like you don't, you know what I mean? So you're right there. Anyways, look, we're running out of time.
Chapter 5: What is BirdSeed.io's approach to customer acquisition?
Quick last questions here. You launched this company in what, 2017?
Uh, the early 2017. Yeah. So we're about two years.
Okay. So you spent 450 grand over two years building this pre-revenue today. How much capital are you burning today?
Very little, uh, just development at this point. Like how much? Probably, I mean, again, it depends on the month, but probably about 10 grand a month, maybe 12.
Okay, got it. And then again, revenue coming on in the next kind of four to six months?
Yeah, we have a number of ways. I mean, we have about 700 companies that have signed up overall. I think if we were to literally flip the switch tomorrow to say, hey, you can sign up for this, you know, kind of like Loom, I think about 10% of those businesses would automatically just say, hey, I'd love to spend $40 a month to be able to remove branding and add a couple more users.
So why not do it though? That's my thing. Like you're there, dude. Like why, what are you scared? What are you, you're something you're scared about something. What are you scared about?
You know, for me, I think because we're a small team, it's a matter of, we want to just make sure as an example, if I'm going to take $40 a month from you that I can support it well. And I think, you know, we're very, very close, truly.
You're a caring dude. I don't think you'll have any problem supporting them. I can't wait for you to turn it on. So look, let's wrap up here now with the famous five. Number one, what's your favorite business book?
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