SaaS Interviews with CEOs, Startups, Founders
1478 The Art of the Start: First $1k in MRR and How He Did It
11 Aug 2019
Chapter 1: What is the main topic of the episode?
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launched seg mate app back a couple years ago 2017. it did a big launch call it 250 grand top line revenue immediately to pay off call it 20 30 40 out to affiliates but that you know generated 120 130 grand for him to invest in building out the software he's now trying to figure out how to use kind of info products to drive cash and sales and really figure out how to double down on driving the recurring model which starts at 10 bucks a month for his kind of chat bot software
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 Carl Schuchert.
He has helped build a few startup software, SaaS apps and info products, e-com related SaaS and membership software. Currently, he's building two software and training programs. SegmentApp.com is a chatbot and messenger marketing platform and Impulsly.com is an e-com funnel building application. Carl, are you ready to take us to the top? Let's do it. All right.
Which one of these bad boys makes more money? I want to focus on that one. Currently, Segment does. All right, let's focus on that one. What's that company doing? And is it a pure play SaaS company? Yeah, it's a pure SaaS company. It's Segment and Automate Messenger chatbots for marketing. That's pretty much what it does.
We're like a full option suite of tools that marketers and businesses, it's kind of a do-it-yourself chatbot marketing platform. And yeah, we've got 637 users currently. Those are paying customers? Actually, 79 are monthly paying. And the other ones are, we bootstrapped our company.
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Chapter 2: How did Karl launch SegMateApp successfully?
And when'd you launch? We launched actually this one year this month. Okay, so October 2017. Yeah. And bootstrapped how many folks on the team? Just you and another founder or what? Yeah, so we've got two developers and the other founder is a developer as well. So we have three full-time developers. And then we also have a graphic designer. And we also have a VA on the team.
And then myself as the marketer. Okay, very good. So good. And basically remote or everyone in the same office? Yeah. Remote. Yeah, that's good. And how are you managing, you know, spend right now? Obviously you're paying salaries. Did you, is it your own money you put into the company or what? Yeah.
So the first initial seed was definitely my own investment, including my, my business partner, Keith. And we've, we've been growing our whole company based off of affiliate marketing. So we do like private promotions where we'll do webinars. And that's why I said like, you know, 558 of those users are,
um, prepaid an account and we basically, um, kind of growth hacked it with, with, uh, affiliates. Yep. Very interesting. And, uh, and so you were zero revenue this time last year cause you were just launching. Do you have any data yet on churn? Uh, yeah. Well, refund rates about 9% and our churn for our yearly churn was around 19, which I know is kind of high.
Um, that's logos like lost or, or revenue. Uh, No, it was, it was, it was like from refunds because most of the people were actually, um, you know, they prepaid and then they refunded within their refund period. Okay. They prepaid for the whole year. No, what they did is they bought less subscriptions. So like we were offering like a 15,000 subscription account at like a one-time price.
And then if they went over, they'd end up into a subscription after that. So they prepay for the subscriptions. What do you mean 15,000? So anytime someone becomes a subscriber on one of our growth tools, that's how we bill. So our monthly bill is based off of how many subscribers you have. Our accounts start at 500 to 1,000, 1,500 subscribers. And they go up from there.
But we were actually, we packaged them together at like a special offer with affiliates with like a 15,000 person account. So they pre-purchased that 15,000 account. They wouldn't have a bill until they went over that. And then when they go over that, then they actually start at whatever they're at. What'd they pay for the pre-purchase? We had a 497 and a 997 package. Okay.
So how much did that affiliate launch do for you in terms of revenue? Um, 219,000. Okay. And obviously you pay what? 50% to affiliates off the top? Uh, 40%. 40%. Okay. So you got call it 140, 130 kind of bumping into your bank account. You use that and that's really your, been your seed capital the past 12 months. Exactly. That's great. Very cool. All right, good.
So 19% kind of revenue churn per year. Those are people saying, Hey, like I didn't use the $497 payment I paid for it. Like shoot me a refund basically. Yeah. OK, interesting. How many of them converted? Well, I guess we know 79 of them converted to a paid plan monthly. Yeah. So we have publicly we have our monthly plans. So we you know, we get traffic from there from various places as well.
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Chapter 3: What revenue model does SegMateApp use?
You need cash to fund the SAS, but like, how do you just like, you know, eat shit for a couple months and go just all in on the SAS and ignore everything else? Yeah. I feel like that's all I do is eat peanut butter and jelly and just, you know, and just, and just hustle my ass off.
A big part of my play has just been going to events, speaking at events, you know, and just spreading the word about it. Messenger marketing really still is just a baby in its infancy. It's like two years old since, you know. But do you see this like a drift? I mean, do you see this like competing with Drift and Intercom and Olark? Or is this more like chatbots built into Facebook's Messenger?
Yeah. So, um, I mean, I think like everybody chat bot is like such a, I don't know, relevant topic right now or whatever, but, um, those are supports, you know, those, those do, those are like a support, uh, software, which is great for a website to have support. Um, but messenger marketing is different.
And because Facebook has kind of lowered, uh, they, they, they basically made it frictionless for you to build your, your, uh, your leads. So because they already have most of the data, I would say like Eight out of 10 people that hit any website are probably on Facebook and are probably on Messenger with 1.3 billion people.
And because they already have that, there's no forms or anything required. So if there's a pop up or an exit intent or even a chat widget or something that's going to create some kind of engagement. Once they create an engagement, they become a lead on top of that list. So it's different. It's more like marketing, but it does have some support features to it as well.
So, I mean, that's where, you know, Intercom works and that's where Drift works.
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Chapter 4: How many customers does SegMateApp currently have?
But the problem that I've already found with that is if you're doing a lot of ads and you're building your list on Messenger and then you also have your Intercom account connected to your Facebook Messenger account, they can get super messy inside of the customer chat widget.
So one thing that we teach our people is that on their sales pages and their landing pages, use any of the Facebook Messenger lead magnets. So you could have like your chat widget, you could have a bar up top that has it in like an exit intent. Use all that stuff to capture the lead because it's lowering the barrier of entry.
But anything that you're customer facing, so like after someone becomes a customer or if you have a support, If you have like a SaaS product, you know, use Intercom, use Drift or something like that inside of there versus doing it on a landing page.
And also, of course, test it because you might find that your demographic would rather use, you know, a different type of chat widget than a Messenger one. Yeah. Your grand per month right now in revenue. I mean, how do you get to 10 grand per month in revenue? So a couple of things that we're trying to do right now. One is I'm putting together a pitch deck and I want to go after the VC world.
I want to try to raise a little bit of capital. I think that that's one thing that will help us, especially with our marketing expenses. And one of the ways that I know I feel like would really work is using bridge marketing campaigns.
So, you know, going after the real estate niche and having a whole landing page based off of the real estate niche and showing them how they could, you know, utilize chatbots for their business.
Going after local marketing niche, going after the e-commerce niche and just having like different sites kind of built around them using bridge marketing tactics, continuing to do affiliate marketing because it's obviously working and it's continuing to bring in capital. And then also going after third party integrations because we have an API as well. Mm hmm. Yeah, it all makes good sense.
It's just it's like the price point is so little. You have to do such high volume. I mean, you've got to get like, you know, hundreds of thousands of people using this to make it a meaningful business.
It's like either have to either have to like go down to like a dollar per month and be like a WhatsApp, get a billion users or, you know, increase this like 10 grand a month and focus on getting your first hundred customers. But you're kind of stuck in the middle right now. Yeah. Yeah. Kind of. I mean, with the agency offer, it converts really well.
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Chapter 5: What strategies are being used for customer acquisition?
One. Okay. And how old are you? I'm 41, 41. Okay. Very good. Last question here, Carl, how many, uh, sorry, what do you wish that you knew when you were 20? Uh, Gosh. Oh, you know what? When I was 20 years old, I actually started my first internet marketing business and I quit. I wish I would have kept with it. I should have just said, keep it going. Guys, stick with it.
Launched SegMate app back a couple of years ago, 2017. It did a big launch, caught 250 grand top on revenue, immediately had to pay off, caught 20, 30, 40% out to affiliates. But that generated 120, 130 grand for him to invest in building out the software.
He's now trying to figure out how to use kind of info products to drive cash and sales and really figure out how to double down on driving the recurring model, which starts at 10 bucks a month for his kind of chat bot software. Carl, thank you so much for taking us to the top. Thank you.