SaaS Interviews with CEOs, Startups, Founders
1485 Social Media Management For Banks Raising $1.5m on $8m Pre (4x ARR)
18 Aug 2019
Chapter 1: What is the main topic discussed in this episode?
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gremlin social raising one five on an eight million pre right now have about 300 customers paying north of 625 bucks a month so caught 187 grand per month or north of that that's up from caught 150 about a year ago so good growth their churns too high at 11 but they're working on bringing that down team of 15 people based in st louis and alabama again helping the banking industry more effectively use social media in a compliant way to grow their businesses
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 Doug Wilber.
He's the CEO of Gremlin Social, where he leads the creation, development, and execution of the company's long-term vision and strategy. He's a financial services veteran, previously serving as president of North America for Assembly Payments, where he oversaw all sales, marketing, and operational efforts for the region. Doug, are you ready to take us to the top? You got it. The top.
What is Gremlin Social and how do you guys make money? Sure. Gremlin Social is the leading social selling platform for regulated industries, specifically banks, mortgage lenders, insurance, and whatever. Okay. And so give me an example of a customer paying you. Yeah.
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Chapter 2: What is Gremlin Social and how do they generate revenue?
And Q4 will be a really important quarter for us to be able to really understand that the changes that we've put in place are taking effect because we do have... Our customers are signed up for longer term contracts. So yeah, they've got a monthly fee, but we bill them annually. And we have them locked up on three-year contracts. And so right now, this December season for us is...
pretty heavy on renewables for us. And so a lot of effort went into heading into this quarter and into December specifically to make sure that we have the right process in place. I mean, 11% churn though. I mean, that is like way too high. I mean, that basically means you churn through your whole customer base in nine to 10 months, right?
I mean, I don't understand how do you have that much churn, but you're saying you have three-year contracts locked in. Yeah. So it's those folks that are coming off of those three-year deals. And frankly, I mean, that's sort of the way things used to be. And then part of the More aligned to how we want them to be in the future, right?
So I'm very much focused on a couple specific goals in the company. Churn being one of those things. Secondarily being, what do our deals look like that we're bringing in the door? And how can we make sure that we get more of those deals more quickly? you know, to land a $625 a month customer, what are you paying fully weighted to acquire them? Yeah, it's actually not that much. We're fortunate.
We've got some really good channel partners that help us to drive deal flow. So we don't spend a lot of money on advertising marketing. It's really just, you know, we've got a sales team and they get commission off of, off of sales. So, you know, the cost to acquire a customer is very affordable for us. Okay, you're talking like 200 bucks or a grand or what? Oh, I mean, definitely less than $200.
Okay, so I mean, if I was looking at investing in a company, my argument would be like, prove you can spend a dollar to make two, but it sounds like you don't really do direct paid spend. So if I gave you money, you'd be using essentially my money or this new money you bring in to test these new paid channels. These aren't paid channels necessarily.
These are, you know, one of the things that is really critical to understand about the financial services space is that buyers of technology within these organizations, they don't buy off the streets. per se. So they work with endorsed solution providers. They're all part of trade associations.
They look to be able to provide guidance on how to and where to invest in their technology and what technologies to invest in. And so we're in the endorsed social media solution for the American Bankers Association, for example. That provides us with a conduit into the 5,500 FDIC insured banks in the United States.
And so what we're looking for is in part of what we've been focused on since I came on board is, you know, how do we land two, three, four more of these, you know, really exclusive channel relationships that help us drive our deal flow without going out and spending a lot of money on Google AdWords and things like that, that we don't really believe necessarily are effective ways to spend our marketing dollars.
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Chapter 3: How does Gremlin Social ensure compliance for banks on social media?
We have a pretty good understanding what the model is. But you just told me you have no direct spend. So the way I would put it is we understand what a good partner relationship looks like for us. We understand that the metrics need to be aligned, that the value proposition needs to be aligned to what their customer looks like, what their customer is looking for.
But in many of these instances, we're willing to do a revenue share and we want to make sure that those goals are aligned to make sure that we're falling at the top of the stack when they're out there talking to their members or giving us access to talk to their members. So we've got a pretty well-oiled model that we're looking at that, frankly, we've turned away a couple of relationships because
taken is that we're not necessarily out there doing A-B testing in the traditional sense, but I think we've got a really good understanding of what it's going to take to scale the business. No, it's more just along the general thesis that founders tend to like to say, it's all organic and inbound. We pay nothing. And I just see that as a massive weakness.
I would actually, in a world where the person that can pay the most wins the customer, you actually want to see people that have proved that they can afford a $2 dollar-based CAC to get a new dollar in ARR. That's actually where you want to put your money. And so it's a reverse psychology kind of thing. That's all. Talk to me about team today. How many are you? Yeah, we're lean and mean.
We're about 15 people. primarily based here in St. Louis. And we've got a small team down in Birmingham, Alabama that came to us via an acquisition. That's great.
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Chapter 4: What is the pricing model for Gremlin Social's services?
When was that acquisition? Just a few weeks ago, actually. Oh, so this is when you led? Yeah. What was the acquisition and why did it make strategic sense? Yeah. So we acquired a competitor. They're a company based out of Birmingham, Alabama called Social IQ. What was really interesting about that business was a few different things.
One, the CEO of that business, a gentleman by the name of Josh Dennis, who stayed on as our CTO and proven track record of building and scaling technology startups. So we really liked him as an individual. We really liked the team. We also really liked the fact that they have two very deep relationships with core processors.
And so in the banking world, your core processor provides much of your backend technology and social IQ is firmly embedded with FIS and CSI. So two leading core processors. And so we liked that. Of course, we like their customers and their revenue as well. So it really made a lot of sense to bring them under the hood, so to speak, and then to work to consolidate, you know, two platforms into one.
That's great. Very good. Let's wrap up here with the famous five. What's your favorite business book? Yeah. So, you know, it's funny. I was listening to some of your other podcasts and these guys are all rattling off books. I mean, for me, I actually I live a little bit more in the moment. So I've got a couple of news feeds that I subscribe to every day.
Technology entrepreneurship, you know, news feeds. And I gain most of my insight from those. They're kind of an under the radar CEO in St. Louis that you really respect. We're really fortunate that we've got a board that is constituted of a number of highly successful proven entrepreneurs.
And so, you know, I look to those guys on a day in and day out basis to sort of guide the direction of the company. Yeah. So the idea in that question is to give a name of someone that other people might go study. So is there a name of someone, again, that you really respect?
So, I mean, if I was to look at, you know, some of the big time, the big names, I mean, certainly I, you know, I follow what Bezos is doing. I follow what Tim Cook is doing, but I would say, you know, with every business, it's so unique to what they're trying to accomplish that I don't necessarily think that one CEO is somebody you should follow.
What's your favorite online tool for building your business? Salesforce. Absolutely. We live and die by what the data is in Salesforce. How many hours of sleep do you get every night? Usually seven or eight. And what's your situation, married, single, kiddos? 10 years of wedded bliss, two happy kids. Number five. What do you wish your 20-year-old self knew, Doug? To be a little bit more patient.
And I think that's one of the things that I've learned as I've gotten a little bit more gray hair, is being patient, trusting yourself, and making sure that you know you've got the right answer to the question. Guys, be more patient. Gremlin Social raising 1.5 on an 8 million pre right now. I have about 300 customers paying north of 625 bucks a month.
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Chapter 5: When did Gremlin Social pivot to focus on regulated industries?
So call it 187 grand per month or north of that. That's up from call it 150 about a year ago. So good growth there. Churn's too high at 11%, but they're working on bringing that down. Team of 15 people based in St. Louis and Alabama. Again, helping the banking industry more effectively use social media in a compliant way to grow their businesses. Doug, thanks for taking us to the top.
You got it, man. Thanks for having me.