SaaS Interviews with CEOs, Startups, Founders
1495 Mom of Newborn Passes $1m Run Rate Helping Businesses Text Customers
28 Aug 2019
Chapter 1: What inspired Adi to start IMpower Solutions?
founded Empower Solutions 2011 today, doing between a million and two million bucks in terms of run rate. They've 10X year over year. They raised three million bucks about six years ago, hoping to get cash flow profitability here in the next couple of months. They're serving about 2,000 paying customers, 36% gross revenue churn per year, 38% expansion.
So added together about 102% net revenue retention each year. They've got about 12 people all over remote locations, again, building, paying about 6,000 bucks to acquire a customer, payback periods anywhere
Chapter 2: How has IMpower Solutions achieved significant growth?
between two and eight months. Hello, everyone. My guest today is Adi Bittan. She is the co-founder and CEO of Empower Solutions, which provides businesses with tools to text with their customers. Adi, are you ready to take us to the top? Oh, yeah. All right. Tell us about the company. And is this a pure play SaaS business or not? It started as a pure play SaaS.
We've kind of done some things that aren't pure SaaS. to push us to a place where we can do pure, pure SAS. So we can talk about that. It's kind of interesting. And give us the, tease us a little bit. If you look at your total revenue over the past 12 months, how much of it is pure SAS percentage wise? Uh, like 75%. So fair, a fair amount. Yeah. All right, let's back up.
Tell us about the company. What's it do? Um, so our thesis is, when we started seven years ago, actually exactly today, was that... By the way, happy anniversary. Yeah, thank you. Thank you. It's quite a milestone surviving, you know, past three years. So seven years is something we're pretty proud of. So the thesis has always been people are not going to want to call businesses.
They're going to want to text businesses. And over time, businesses have caught up to that idea. But how do you give people and businesses tools to do that in an effective way, scalable way? So what we do is exactly that.
We take either existing lines or give businesses new phone numbers and give them the tools they need so that they can text with customers, but not on their cell phones in a way that just doesn't scale. We give them things like documentation and templates and automations and
most importantly integrations of what what they currently use so just a consumer a consumer could text a number and you have an automated solution on the back end to talk to the customer right so it's automated semi-automated or manual depending on the business and what they need and what they can afford okay and then um you've listened to a bunch of shows so you kind of know the drill which i like give me an average what's the average customer pay per month would you say so we've gone from having customers paying like
10 bucks a month to now our average. Yeah, that's how we started seven years ago. And now our average is close to a thousand.
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Chapter 3: What unique tools does IMpower provide for customer communication?
Okay. A thousand a month and launched 2011. Now, what have you scaled to today in terms of total customers? We have 18,000 customers. Oh, wow. Okay. Yeah. So but some of them are still in our freemium plan, which we no longer offer. And about 2000 of them are paying. Got it. Okay. So 18,000 free and paid 2000 pure play.
Now, you know, the drill here, if I take 2000 times that $1,000 average per month price point, that gives you about 2 million bucks a month in revenue. Is that accurate? It's not accurate because we started at 10 bucks a month and we didn't kick those people off. So what's the updated average? If it's not 1,000, what's the average across 2,000, would you say? Oh, I don't know. I'd have to look.
I just look at the last cohort. Can we back into it? Do you mind if we back into it? Can you tell me general size today? What are you doing per month in revenue? Oh, no, we don't release those numbers. Okay. But I can tell you the most important thing is we keep pushing that average up, right? So I look at last quarter cohorts. and keep pushing that number up at average revenue per business.
Yeah. Can you, I won't push you harder than this, but it would be valuable to get like a range, even as big a range you want, as big as you want to keep it. I mean, you're like at a million dollar run rate or 10 million run rate. Generally, where are you? Well, one to two. Okay. Thank you for that. I appreciate that. That helps me kind of ask better questions. Okay.
So one to $2 million run rate today and walk me through how you got these 2000 customers. Where are you acquiring them from? So, like I said, we started kind of very small SMB and worked our way up. As we realized, the problem with SMBs was mostly retention, because they go out of business. But all of our customers, save for maybe 5%, have come through word of mouth.
So what we worked really hard on was having extremely happy customers. that then tell other businesses about us, which is not easy to do in a, in a B2B setting. So you have to architect it in the right way. But right now we do no marketing at all. Um, zero ads, zero Facebook, nothing. No direct paid spend. No, no direct paid stand spend.
And it's all coming from either existing happy customers or other, um, Other providers that we work with, so partnerships have been helpful to us. Not necessarily officially, but, you know, folks that provide voice solutions, their customers come up to them and then say, hey, you know, I need a texting solution. Voice is no longer enough. We made sure a lot of those folks know about us. Got it.
And then they say, go to these guys. Yeah, that's great. When you look at growth, so you're doing a one to two million run rate today. Where were you a year ago? Probably like a tenth of that. Oh, so you've 10x year over year. Yeah. So it took us a long time to, again, find our flow. But once we did, now what we're doing is turning the crank on what we already know how to do. Okay.
But I mean, just to be clear, I mean, that is significant growth. You were doing, call it 100 to 200 grand in ARR. And now you're doing one to two million. I mean, it's 10x year over year growth. Right. Yeah. Okay. That's great. As most of that come from adding new customers or expanding the historical cohort?
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Chapter 4: How does IMpower Solutions handle customer acquisition?
Now that we do, the dilemma comes again. Like, should we should we or shouldn't we? No, that makes good sense. You're almost cash flow positive, should you, shouldn't you. Venture debt is becoming very hot right now. Is that something you've ever looked at so you can avoid dilution? I've considered it. I know all the venture debt guys here locally. Yeah. It's on my radar.
I have a few friends that have done it. I think it makes a lot of sense if you look at the financials. It's not just the dilution that's obviously a big deal. It's also you get VCs in, they have their own agenda, right? where you get venture debt, they just want, they want to you to pay back. That's it, right? So that's all you gotta do, keep executing.
With VC, it starts to be, you know, this guy's raising a fund, that woman's, you know, maybe leaving. You start having these different dynamics. And we don't know that we want that. Yep. Adi, you're dead on. Let's wrap up here with the famous five. Number one, what's your favorite business book? So I just read this one and I'm really excited about it. I knew you were going to ask.
It's really great. I actually bought a copy for a friend. High Growth Handbook. You familiar with it? Nope. High Growth Handbook. That's good. It's by Elad Gil. Okay. He's an entrepreneur. He used to be at Twitter. He sold the company, I think, to Twitter and maybe one to Google as well. High Growth Handbook. Highly recommend flipping through it. Brand new book. Last few months. It's good.
Number two, is there a CEO you're following or studying right now? Max Lefkin. Yeah, number three, what is your favorite online tool for building your business? For building the business. I'm a huge fan of Slack because we're a remote team. Number four, how many hours of sleep do you get every night? That's a tricky question. Two to three. You only sleep for two to three hours? Yeah.
So I have a startup and I have a two year old and a four month old. So married. Yes. Okay. Married two kids. Um, that, but that can't be healthy. I mean, you're, you're, you have to catch up at some point. You can't go on three hours of sleep every night. Right. But when you have a four month old, you just kind of have to juggle.
So this will go away hopefully soon when he sleeps through the night. Yeah. Um, but yeah, we'll, I'll sometimes, um, you know, just take a break and take a nap. Yeah. Very good. And do you want me asking me about how old you are? Um, for 41. Okay. 2018, 41, 40, 40 years young. All right. Uh, last question. What do you wish your 20 year old self knew? Uh, start sooner, iterate faster. Right.
Um, I didn't know entrepreneurship existed when I was 20 years old, honestly. Uh, only when I came to Silicon Valley 10, 12 years ago. Um, was I looking around saying, Hey, wait, lots of people do this and I can do it too. And it's exciting. And I love it. I just, something I didn't even occur to me. Right. I was on the path to, I used to be a lawyer.
I was on the path to, you know, get a job, do well, become a partner, all that stuff that just wasn't, as exciting as entrepreneurship is and is building something from scratches. So that's what I wish I'd known. Just start sooner. Guys, start sooner from a B again, founded Empower Solutions 2011 today, doing between a million and 2 million bucks in terms of run rate. They've 10X year over year.
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