SaaS Interviews with CEOs, Startups, Founders
1418 $2.4M ARR Marketing Automation Company CEO Would Sell for $10M Today
12 Jun 2019
Chapter 1: How does ActiveDEMAND function as a marketing automation platform?
My new book, How to Be a Capitalist Without Any Capital, is out. You can get it at capitalistbook.com. Here's what Nicholas said on March 6th on Amazon.
Chapter 2: Why did Sean Leonard decide to launch ActiveDEMAND in 2014?
Incredibly incisive, useful, and sensible. The author is not greedy and is in fact extremely generous and does not hold back on the knowledge he imparts. I've barely made it halfway to the book, and I'm already gushing over the book because it's an absolute gem. Nathan gets to the point quick, shows proof, and best of all, shows you not just what to do, but how to do it in explicit detail.
Chapter 3: What is the average revenue per customer at ActiveDEMAND?
To say the book is actionable is an understatement. Now, you guys that listen to the podcast know I'm detail-oriented, so that review might not surprise you, but I hope you grab the book. It's now a Wall Street Journal Instant National Bestseller.
Chapter 4: How has ActiveDEMAND scaled to serve 500 agencies?
Grab it at capitalistbook.com.
Chapter 5: Why is ActiveDEMAND planning to raise capital?
Audible version is available too. Marketing automation company Active Demand launched in 2014.
Chapter 6: What valuation would Sean Leonard consider for selling ActiveDEMAND?
Sean Founder says he would have started earlier.
Chapter 7: What strategies are used for customer acquisition at ActiveDEMAND?
Today they're doing, call it, between 200 and 300 grand per month.
Chapter 8: What insights does Sean provide in the Famous Five segment?
That's up 30% year over year from last year. They're bootstrapped, serving between 500 and 1,000 customers that pay on average, call it, 400 bucks per month. He's willing to spend up to two months of value on acquisitions, so call 800 bucks on acquisition, two-month payback period. Team of 50 people in Alberta, Canada, and Ukraine building the company.
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. 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 Sean Leonard.
He's the CEO and co-founder of Active Demand, where he remains dedicated to helping businesses by way of implementing advanced online marketing strategies, marketing automation technology, and sales and marketing expertise that is simple, effective, and affordable.
As an entrepreneur, Sean boasts more than 25 years of successful experience launching, owning, operating, and growing businesses, in addition to over 20 years of successful global sales and marketing experience in the industrial automation industry. Sean, are you ready to take us to the top? You betcha. All right, active demand. What are you guys up to and how do you make money?
What's your revenue model? So it's a SaaS model. It's a case that we, it's a software as a service platform or a marketing automation system. So it's a case that we sell subscriptions and a little bit of services, not much. Most of the revenue is pure software subscriptions. Less than 10% professional service? Yes, definitely less than 10%.
And is that kind of an onboarding fee or is it some other custom stuff you're doing? It's pure custom stuff. We don't charge onboarding fees. Quite often we have marketing agencies that are using the platform and they end up doing a lot of the services work for the clients.
And Sean, why mess around with professional services at all if it's not directly tied to retaining customers and increasing LTV? Um, it's a case that, uh, sometimes, uh, our agency clients end up being, uh, understaffed, right? So if there's a limiting factor with our clients not being able to execute instead of us, you know, saying, okay, well, good luck, go hire some folks.
Uh, we've been, uh, uh, taking on some of the sort of white labeled agency services. And what are customers, you know, without going down every customer cohort, what's the average customer paying you per month? Would you say? Um, boy, that's a, that's a good one. I think it's a case that, um, yeah, I would say average customer is probably 400 bucks a month. 400. Okay. And tell us what you do.
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