SaaS Interviews with CEOs, Startups, Founders
1473 How to Raise $500k From Early Channel Partners To Break $20k/mo in MRR
06 Aug 2019
Chapter 1: What is the main topic discussed in this episode?
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went through an info product uh big big success there exited one of his first companies for six figures now in 2018 here in january launched right message basically helping you personalize your website based off email triggers and email campaigns he used it to his advantage trace 500 grand from some of the bigger email marketing players they now got over 150 customers paying called 140 150 bucks a month past 20 000 bucks in monthly recurring revenue five percent gross logo churn monthly too early on some of the other economics but you know around a two to three thousand dollar lifetime value team of eight
based in remote locations. 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 Brennan Dunn.
He's the founder of Double Your Freelancing and helps teach over 50,000 freelancers and agencies how to earn more money and work with better clients. He's also the co-founder of RightMessage, a software company that helps bring on-site personalization to the masses. Brennan, are you ready to take us to the top? I am. What's up, Nathan? All right. So is this the trend we see?
I've seen this all the time. Successful agency realizes the same need across many customers, build a software product, and now you have a great agency and a growing software product. Are you in that pattern? Not with the agency anymore. So I started with my agency in 2008. I exited that in 2011 to start another software company called PlanScope. Sold that in 2016.
And W Freelancing is what I did in between. And that's not an agency. That's InfoProducts. And then I started WriteMessage late last year. Okay, so give me a sense of kind of where your head was at when you launched the company. In other words, in 2016, that exit, I mean, was that a meaningful financial event for you? You're set for life, so you can go take big risks?
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Chapter 2: How did Brennan Dunn transition from agency work to software development?
And give me just, I don't want to spend too much time on the info product side of things, but there are many people that have built very successful SaaS companies on top of info product businesses. I think of lead pages and click funnels and these kinds of things. So what were you actually selling? Was it via Udemy or Thinkific or your own courses? What were you selling? It's my own courses.
They were basically video and text courses on pricing and marketing and everything for freelancers on running the business side of things. So that's always done well. The where right message kind of emerged from, which is my latest thing, was I started doing a lot of on site personalization, depending on what kind of freelancer you were, what kind of work you do.
the stage of your business and so on, and that worked really well, and that's what led to the current software business. Okay, so right message. Tell me what the company does, and is it a pure play SaaS company or not? It is.
It's just a software company, and what we do is we make it so we tap into your email marketing app or CRM and allow you to do on-site changes based off information that you have about somebody. So if they're a customer, don't promote, sign up, get them to upgrade or something like that, and they're back on your site.
It's interesting, you're using the email as the identifier versus like a cookie or something else. Is that a big difference? Well, we use the email as an identifier if we know who you are. If you're anonymous, then all we have is who sent you to the site, where did you land originally, and we use that data.
But once you become known, we merge that with things like tag or custom field data that you have in your backend. I see, and what do customers pay on average per month for this? It's between 99 and 299. Okay, but would you say 99 is a fair average across your base? Uh, average ARPU is 144 at the moment. Okay. You, you, you know, your numbers, your data guy, what other numbers you have?
Anything else? Uh, it's all on, it's all on barometrics. It's open. It's at barometrics.com. Yeah. We launched in January. We're at, we're just about 20,000 MRR. Uh, so in about three and a half months, we've done much better than PlanScape ever did. Um, that's good. So yeah, we're, we're growing 30, 40% a month now and happy with it.
And, and where, and by the way, if I take 20 grand divided by 140 for the ARPU, you have about 140 clients. 150 something, yeah. 150, okay, good. And then where's most of that growth coming from? Most of it is direct sales. So we're still kind of ramping up the unknown channels, but right now most of it is doing sales calls and closing people on the spot.
How can you afford though to put that kind of touch, a sales call on $150 a month product? It's tough to scale that. Yeah, I mean, we're not gonna keep doing, unless it's for more enterprise gigs, we're not gonna be doing hyper sales, but at this point, we're learning a lot about what people need.
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Chapter 3: What challenges did Brennan face after launching RightMessage?
I mean, at this point, LTV fluctuates so greatly. It's between two to three thousand right now, says Barometrics. So we're not really right now. We're just focused on really Intimately understanding why people pay us and how do we then incorporate that into our marketing?
So we're still, we're definitely still learning about, you know, what the different channels that are, what channels are working, what's, one of the issues that we have is we build a platform first, which you can literally change anything on your site given any condition.
And the issue we're having is there's a lot of education that needs to go into teaching people how to do this because they're not switching from another competitor. They haven't done this before. They've never personally launched their website. So the sales cycle is a little more interesting because we need to educate people about what to do with it.
And it's kind of like email marketing back in the mid-2000s where no one really had done it, right? It's very tricky too because whenever you have infinite choices in terms of what should I show a customer who visited three days ago and churned six months ago, you literally have a different thought process like funnel for every potential view and that can get very complex quickly.
Right, which is why we just rolled out a week and a half ago something called Right Bar, which is a bit like Hello Bar or Sumo Smart Bar. But the difference is it shows a different sticky welcome bar depending on where somebody's in your funnel. So you could say if they're anonymous, get them on my list. If they're on my list, get them to buy the early or the entry-level product.
If they bought that, get them to buy that premium product and so on. So when they come back to your site... depending on where they're in their sales funnel, you can target different call to actions to them. Interesting. Um, when you raise the capital, did you do it on a note or do you sell equity?
Uh, we raised through, uh, a safe round it's called, I guess, which is like, yeah, so it's, we haven't actually sold equity yet, but I think if there's a liquidation event, that's where it gets in. Yeah. What cap did you negotiate out of curiosity? Uh, 4 million. Okay. That's not bad. That's great. And then when was that? How long ago?
Uh, it was back in October and it only took, it took about a week. Um, No pitch checker. They were all friends of mine. So I just really emailed them and did it that way. When do you, do you go out and raise more money soon or what are you waiting for? What's the thing you're looking for? We're aiming to be profitable. So we have a lot of work. profitable out of the gate.
So we're not looking to jump from the different to series A or anything like that. I've traditionally bootstrapped everything I've done. So we run the company like bootstrappers, but we did, we fund strapped as Rob Walling puts it. Yeah. I was going to say, I mean, they're all friends. So you have patient kind of investors, but like once you raise even a dime of capital, just the economics change.
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