SaaS Interviews with CEOs, Startups, Founders
1368 "Better Than Hootsuite" Tool Passes $250k in MRR on just $300k Raised
23 Apr 2019
Chapter 1: Who is Gilad Salamander and what is his background?
Hello, everyone. My guest today is Gilead Salamander. He's an entrepreneur executive and enjoys visioning and creating innovative solutions for cloud, mobile, and web technologies. He's co-founded eClincher, a platform to manage and analyze social media and online presence. Gilead, are you ready to take us to the top? Yes, of course. I'm ready. All right, good. Tell us about the company.
What do you do and what's your revenue model? How do you make money? All right. So eClincher is a social media management platform. And recently we integrated with more online presence channels. We're helping businesses all over the world to manage everything from one integrated platform.
So they can connect to Facebook, Twitter, Instagram, LinkedIn, Google+, Google My Business, and many more channels. It's really helpful for them. They save tons of time every day. Rather than logging into each of the networks, they can manage everything from one place. We help them with publishing, engagement, analytics.
Chapter 2: What is eClincher and how does it help businesses?
Sorry, you help who? A consumer or a business or what? We help businesses. So our platform really helps businesses from all sizes, from the micro small business all the way to large corporation, government and so on. Enterprise, a lot of SMBs, a lot of SMBs. And on average, Gilead, what do these companies pay you per month for this?
So we, uh, we have three, uh, three main plans that we, we offer and it's a based on monthly subscription or yearly subscription. And the basic plan starts at 49, $49 a month premier for 99 and agency for 199 a month. And that allows them to manage, uh, up to a hundred, uh, profiles. What's I just, I don't want to go down every customer cohort. What's the average. So average payment, you mean?
Yeah. The average, what is the average customer pay you per month? About 49 a month. Okay. About, okay. Call it 50 bucks a month. Great. And then give us more of the history here. When did you launch the company? So we, uh, we launched the company, uh, or this concept of social media management platform in 2014. And, uh, since, since then we, we developed and added features.
Uh, we really known for best ROI tool. Uh, we were nominated by G2 crowd, um, lots of reviews and users as the best ROI tool in the market for social media management and marketing presence. Okay. And have you bootstrapped this or have you raised capital? We did both. So we have some Angel's investors. So how much total have you raised to date? From Angel's? Total. Total capital.
How much have you raised to date? I cannot disclose this one. Sorry. Okay. Well, I mean, I can just look it up real quick because you have to file with the SEC. Okay, so we raised $300,000.
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Chapter 3: What revenue model does eClincher use and how much do customers pay?
Okay, you raised $300,000. Great. And that was on a convertible note, you said, or straight equity? This was a note. It was a note. Okay, great. And what was this like? I mean, when did you raise that capital? I know, I think you're based in LA. Did you raise from local angels or did you go to the Silicon Valley or what? It's local angels in the Silicon Valley. Okay, great.
Did you use like a safe note, a convertible note or what?
uh actually so yeah actually it's an equity equity base this was done uh back in 2013. okay so now it's it's not a note it was equity yes that's correct okay and i thought you said the company was created in 2014 but you raised in 2013 how's that work we incorporated that's okay 2012 we incorporated the company we'll start with a different concept
And then we pivot in 2014 to social media management through loan platform. I see. So that's why I said that this company, which is about more of a social media presence management, really started in 2014. I see. And what have you scaled to today in terms of total customers on the platform? Tens of thousands. Okay. Now those are actual paying customers or users? Free users. Okay. Yeah. Yeah.
So what I'm curious about is how many paying customers do you have now on the platform? A few thousands. Okay. A couple of thousands. Can we say, can you give me a range? Can we say between a thousand and 2000? Is that fair? Uh, over 5,000. Oh, over 5,000. Okay. That's great. But put it, put it, put a lid on that for me. So between 5,000 and 10, is that, is that okay? Uh, sure. Okay. Okay, good.
That just helps, you know, it could be a million or 5,000, but saying between five and 10 is, is way more helpful. We're definitely still in the startup category, right? So we're still building the company, expanding while we're getting, you know, expanding the team. Um, what's the team size today? About 20 people. Okay.
I mean, if I take, just to be clear, if I take that a five, you said 5,000 minimum customers at a $50 price point, that means you're doing about 250 grand per month. Is that accurate? Um, yes, if you do the math, that's right. Okay, great. And what are you growing at year over year? So if you go back a year ago, what were you doing? Uh, so we're doing over a hundred percent year over year. Okay.
That means about a year ago, you were doing about 125,000 bucks a month. Is that accurate? Uh, roughly. Yes.
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Chapter 4: When was eClincher launched and what is its growth history?
Where's most of that growth come from? Is it new customers or is it upselling your current customer base? Uh, mostly it's organic. Uh, we do have some paid, uh, but I would say, over 95% of it is organic word to mouth, uh, people or referrals. Um, you know, like I said, being, you know, we were nominated as number one platform in the market. So being as such, you know, sorry, what does that mean?
That could mean anything. What does that mean? So it means that users go into, let's say, G2 Crowd or Capterra or some other platforms and they write a review about their experience and about the, you know, how they use eCleature. And they say basically that this is, you know, the best tool that they use so far. For what? Why would they use you over Hootsuite? So it's just a lot easier.
It's more complete, more features, less expensive. Okay. That's pretty much it, right? So why aren't you as big as Hootsuite yet? Why? It just takes time to grow a company in this kind of rate.
Chapter 5: How much capital has eClincher raised and what type of funding was used?
You're talking about over 10% month over month, essentially. So that's a huge growth. And it takes time to scale and grow a company. Train people, spend the money where it needs to be. It just takes time. How will you, though, continue to take market share from Hootsuite, if that's indeed the case? They were founded in 2008.
Today, 10 years later, they're doing over a quarter of a million bucks annually, super healthy company. Sorry, 250 million annually. How do you keep stealing market share? Sure, that's a good question. Essentially, when we do a demo or when a customer or a client starts a trial, 100% of them or the vast majority of them will say, wow, this is the best platform that I use so far.
So this is a very big thing. The conversion rate is extremely high for us. What's high? It's way over 20%. And that's from a free trial to paid? Correct. Okay. So that's really high. So that shows the satisfaction of the product and really answer their pain points and solving their problem. Do you require a credit card for a free trial? No, Hootsuite does, as an example.
Yeah, so other companies, they do, or they require you to speak to a salesperson. We don't have that. It's kind of a shelf product. We do support 24-7, so we help our trial users, leads, and customers 24-7, and that's something that they don't get in other platforms. What does churn look like today? It's very low. It's a single digit. So like, are we talking like 2% logo churn per month? Sure.
2%. Yes. Okay. How, how is it 2%? I mean, that's, that'd be very rare in the SMB space. Usually it's four or five, 6% because SMBs nine out of 10 go out of business. Um, so yeah, so we get, we get cancellations. Uh, a lot of them is mostly related to closed business or, uh, you know, change plans. Uh, but not, not necessarily because of, you know, product did not meet their expectations. Yeah.
So what, so what is your monthly churn? So about 2%. That's what it is. Okay. I know. I just found it surprising that the number I guessed is exactly what yours was. So it actually is 2% logo churn per month. That's correct. Two to three, I would say. Okay. And, and what do you know you have to get a new user to do on the first day they sign up to make them sticky? What do we have to do?
Yeah, from an activation metric perspective, what do you have to do on your platform in the first day to get value from it so that you make them really sticky? So yeah, so in terms of value, I mean, it takes really a few minutes to set up to connect all your accounts. and then schedule a post, and you're ready to go.
So in terms of return on investment, they're getting it within a few minutes of using the platform. And then as they use it every day, they discover more and more things that they can do with it, like the inbox, which is a great way to combine all the interactions with with users or consumers between the business and the consumers into one inbox.
So it's a discovery process for them during the first 14 days, which is a trial period. And if they need additional help, we also have tutorial videos and we have the live support. So typically, customers, if they're not that savvy, they may ask for help. How do I connect Instagram account? How do I convert it to a business account? And questions like that. So we are very helpful with that.
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Chapter 6: What is the current customer base size for eClincher?
It's not possible. Yeah. I mean, it's unlikely that they will pay without connecting any accounts. Yep. Yep. Okay, good. 2% churn. Talk to me about customer acquisition costs. So fully diluted, what do you pay to acquire a new customer? So like I said, the majority of it's organic, it's not paid. What does that mean though, organic?
Organic is that people find us on Google search, on review sites. They find us on the web, YouTube, other channels. Okay, so who creates your blog posts that rank in Google? Who creates those videos? So it's a combination. Most of it is done in-house. We also have some vendors that provide content for us. So of the 20 people on your team, how many of them are related to sales or marketing?
Yeah, I don't want to give you all the details specifically how many people and what, but yeah. So 20 people, that's roughly the company size. Well, just to be clear, Gilad, it's... it's not accurate to say your CAC is zero because everything is organic, right? Because the organic content doesn't just magically happen. Otherwise, everyone would be hugely successful.
You have a team in-house that strategically creates organic content. And that's what drives these new users to find you on YouTube or search. So I'm just trying to understand how you're optimizing for that. Yeah, I understand the question. I understand. I don't have the calculation in front of me in terms of,
you know, salaries plus ads and all that, and then divide it, you know, for use in conversion. But I would assume maybe $5 to $10. Okay. Well, no, I don't want to, and it sounds like this might not be a metric that you're actively looking at. Do you not really look at customer acquisition costs? Correct. So how do you know?
So remember, if you grow at a rate of over 10%, 15% a month, you know, it's just, it's a huge growth. So I don't have time to calculate I just have to accommodate all the You know, scale the platform, scale the company to support that. Yeah, but Gilead, if you're spending 10 bucks to, or I'm making this up, 100 bucks to acquire a customer, right?
And it takes you four or five months to get paid back, the faster you grow, the faster you actually go bankrupt because you're- It doesn't take me 10 months. It takes me one month. Okay, so that's what I'm saying. How do you know that if you're not calculating those numbers? I have a burn rate, and I know what my expense is, and I know the growth rate, how much revenue I bring in. Very simple.
If the revenue growth is much higher than your expenses, the company is growing. Well, of course, at a macro level, you can look at your P&L, but on an economic basis per customer, you'll have a cash gap if you have a payback period anything greater than one month. And the fact when you talk to me about, hey, when I have fast growth, I don't have to look at anything.
There are companies that have gone bankrupt because they've grown too fast for this exact reason. Yeah, I mean, again, each channel depends on the pay channel. So if you look at pay channels. Uh, you know, the return, you know, the breakeven point could be three months, one month. It depends on which one it is. Okay. So, so you are doing some customer acquisition via paid channels.
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