SaaS Interviews with CEOs, Startups, Founders
1510 Would You Compete In a Super Fragmented Space like Checklists Apps?
12 Sep 2019
Chapter 1: What inspired Marvin to start Checkly?
Sold his first company for a couple million back in 2016. Now focused on Checkly. Again, helping make a checklist and the ability to build a checklist for free with no signup, super easy. Working and trying to figure out a paid model. Launched this one in 2016. Two people himself and an engineer full-time.
They've got about 200 customers paying six bucks a month for sort of 1200 bucks a month right now. But they have 80 to 90,000 total users that have signed up for the platform to give it a go. Hello, everyone. My guest today is Marvin Russell. He's the former CEO of a top digital marketing agency in Chicago and founder of MySite Auditor, a SaaS startup.
He grew to over 20 languages around the world. Both were successfully acquired. Today, he's the current chief checklist maker at Checkly.com, a new and simple way to make and share checklists. Marvin, are you ready to take us to the top? I sure am. Let's do it. All right. So I think the name is pretty self-explanatory. Am I missing anything? It's checklists.com.
Yeah, it's Checkly. It's just like Checklist without the ST. It's a nice, short, simple domain name. But yeah, that's it. Checkly.com. Just like Pepsi, you know, ending the I, but Checkly.
Sure. So this space is notoriously really difficult. Like if you asked who's winning the to-do list kind of app space, people could reel off maybe 10, 20 different answers. After the agency and after your other company exiting them, why decide to jump into this space and compete here?
Simple. As an entrepreneur, my head is everywhere. I've got a million things on my mind at all times. And there was no go to super simple checklist maker out there that I could find. There is a lot of to do list makers out there, but they make you sign up for stuff. They're complicated. They're bloated. They have way too many features. I wanted something super simple, super quick and super fast.
So I ended up building one for myself. And then that kind of just took off.
And is it a free tool or is it a kind of what's your revenue model if you have one?
It is free. You can make unlimited checklists all day, every day for free. But if you want to sign up and store those checklists and come back and manage them later, there is a small fee. So it's a freemium model. You can make unlimited free checklists, but there's added features on that you can pay a small monthly fee to get more features.
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Chapter 2: How does Checkly differentiate itself from other checklist apps?
Okay, good. And then fast forward to today. So is it just you kind of doing this thing with contractors or have you hired a few people? What's the team look like?
I have a small investor. I work for, I do a little bit of consulting for a private equity firm, one of the same firms that bought my last software company, my set auditor, and they wanted to stay in the business with me. They told me like, we want to be in the Marvin business, whatever you're working on, can we work on it with you? So I had a small little investment and
to help pay for a junior developer, I'll call it, but he's more senior now, but I have one developer who is my lead senior engineer, if you will, but he does all the tech stuff and I do all the business, design, strategy, I mean, you name it, all the other stuff. So he does tech, I do everything else.
Okay, so call it two of you guys, both in Chicago? Yeah, both of us in Chicago. That's great. And then, so what have you scaled to today over the past two years in terms of paying customers?
Well, we just, we were 100% free up until this year. And we had about 80 or 90,000 members. And the cool thing about us is the way we find all of our members is we're ranked, literally, if you go to Google and search checklist, we're usually number one or number two. And we've got about 90,000 members around the world. And we just added that paid model on that you can pay seven, I'm sorry,
$599 or $19 per month. And now we're up to a few hundred members that are paying on average that we talked about before, but a few hundred out of that 90,000 and that's growing like crazy.
Okay. So, I mean, can we say 200? Is that fair?
Probably just under 200, but like I said, it's a brand new paid option. It's working so far, but we're just at 200. By the end of the month, we'll be over 200.
Yeah, no, no. By the way, I think this is great. I want to dive into it, right? So 200 customers, six bucks a pop, so call it 1200 bucks per month right now in revenue. What month exactly did you turn on that paywall?
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Chapter 3: What is the revenue model for Checkly?
So what tests have you run so far, and why did you end up at $6 a month?
Well, the first question we had was, should we... Should we ask people for a credit card before they start their trial? That was the first question. Should we let them do the trial with or without a credit card? We tested both and with the credit card got way more conversions for us because on our model... Free conversions are paid. I'm sorry, free conversions are paid? Yeah.
Um, it's well paid conversions. Yeah, I'm talking about paid conversions. All of our trials have paid conversions. So the unique thing about sorry, Marvin, I don't follow that at all.
So if you sign up for a free trial with a credit card at the beginning, they don't all convert into paid at the end.
No, that's I'm sorry. Maybe I misunderstood the question. Yes, you can sign up for a trial. Well, the way Checkly works is really different than a lot of other checklist apps out there. Right when you get to Checkly, you can make a free checklist. You don't have to log in. You don't have to sign up. You don't have to do anything. You can just start making a checklist right from the home screen.
And at that point, you can do whatever you want. You can share that checklist. You can download it. You can save it. But you also have the option to To your account, create an account and come back and manage it later. If you do that, there's a trial sign up and you get a seven day trial. You have to pop in your credit card.
If you choose to stay after that seven days, then we ding your credit card and we move forward. And we've tested that out before. before with and without the credit card. And with the credit card helps us get way more conversions. People commit more. They're more anxious. They've told themselves they like the site enough that they're going to continue paying.
So we ask for that credit card now up front.
Yeah, Marvin, just to be clear, when you say more conversions, you're not saying that you get more people converting from free to a seven day trial with a credit card at the beginning. You're saying more people convert from a trial to paid if you ask for the credit card up front.
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Chapter 4: How has Checkly's user base evolved since its launch?
Yes, we have a higher conversion rate, I should say. Not more conversions, but a higher rate.
I know. I'm just asking about what rate in the funnel. It's not the free to seven-day trial. It's the seven-day to a paid. That is a conversion rate that's going higher if you ask for a credit card at the beginning. Is that right?
Yes.
Okay. The flip side of that is, well, how many less... pay, you know, sign up opportunities are you getting because you require credit card at the beginning? So did you run a test where you didn't have a credit card at the start?
We did run the test. I don't have those numbers off the top of my head. Um, but we did, we did test back and forth. I can tell you is the one that we landed on, which was asking for the credit card upfront. ended up giving us more paid conversions. So we ended up sticking with that. We tested two models.
We tested different pricing models and we tested whether or not we're going to ask for a credit card at the beginning of a trial. And the asking for the bigger, asking for the credit card definitely led to a higher conversion rate that got us more paid members in the end. Because the people who weren't willing to put their credit card in, they weren't really serious customers.
And they might have, you know, for whatever reason, didn't continue using our software for whatever reason. So once we got them to commit with a credit card, our conversion rates were a lot better.
Marvin, it's interesting how you phrase that because no one ever talks about the lost opportunity cost because you can't see it, right? So the lost opportunity cost in this case is, well, yeah, they might not be your perfect paid customer, but it's because they didn't get to use all your features because you required a credit card.
The flip side is, well, if they use some of those features and they got addicted, well, maybe they would have been paid. So how do you balance? I mean, this is emotion. By the way, there's not a perfect answer here, but how do you balance this kind of very emotional tug of war?
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Chapter 5: What challenges does Marvin face in monetizing Checkly?
Well, my last software company got up to 40 K MRR and that's, that's the, that's the thing that, that people don't understand about this. I have a lot of revenue goals and that's great. My, I'd love to get this company to 10K MRR by 2019.
However, the thing that's different about my companies and my software companies that we've been able to do is we have no overhead and we have no customer acquisition costs. So whereas other software companies are paying for ads and doing all these things to get customers in the door, we have none of that. We have zero customer acquisition costs.
So our revenue doesn't have to be 100K MRR or whatever the case is. We're just trying to grow at a modest rate and trying to figure out different ways to do add-ons. So to answer your question, we want to get to 10K MRR sometime in mid to early 2019. Yeah.
Marwan, those two things, by the way, are directly correlated, right? If you follow the thesis that the person that can spend the most for a customer wins the customer, whoever has the most revenue or has raised the most capital can spend the most to get the to-do list customer and then their revenue grows as a result. So those things are directly correlated, right?
They could be, but when you have insanely awesome, amazing search engine positioning like we do, why would you spend money on a customer when you don't have to? If you literally type in the word checklist, we're in the number one or number two spot. Free checklist, we're in the number one or number two spot.
We get tens of thousands of people every single month that come to our site because they typed in the word checklist into Google and they got to our site. So that's the same thing that happened with Mindset Auditor. We were on page one for free SEO audit, free site audit. And again, we get endless free customers looking for exactly what we do.
And there's just no need to pay for those to pay for those customers when they're coming to us and their target. If we put an ad up right now and we were like advertising on Facebook, people that type in the word productivity or something like that, they're not looking for checklists at that moment. We get almost everything. In checklist into Google, they come to our site first.
We beat out everybody. There's not one to-do list maker or checklist maker out there that beats us in that space. I guess that's my background. I guess that gives us a huge competitive advantage. But I definitely see your point. You know, paying customers, I mean, people, it definitely helps you build a better business. you know, customer base by understanding who's going to pay for what.
But if we don't have to, why should we?
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Chapter 6: What strategies has Marvin implemented to drive traffic to Checkly?
I've interviewed probably, I would say, two dozen kind of to-do lists or checklist app companies, and they're all struggling. I mean, drastically, because it's just it's being commoditized. Apple's releasing products like this, you know, note you're competing with like, you know, Google Docs, right?
These all these kind of weird competitors that are not meant for to-do lists, but that people use for to-do lists.
Yeah.
Well, let me give you a competitive advantage, something that differentiates us from everybody else out there. One thing that nobody else is doing that we're doing. I see a couple of some people trying to tap into this market, but we've dominated so far. We let you publish your checklist. So if you're a company or a brand.
You can go to Checkly, create an account, and make a checklist for a sales agenda or make a checklist for a drone or make a checklist for anything you can think of, and you can hit the word publish. And if you hit the word publish, it publishes live on Checkly. It's free for anybody on the web, anybody in Google to copy and use that checklist.
I just can't. I think of a use case where I would do that. Like I'm trying to put myself in your shoes and those examples you just gave, I use like monday.com for that, right? If I want to do something with my team and publish it to the team and work together on that to-do list, I use Monday or Basecamp or Trello.
So here's the other good news about that is that any checklist that you publish live, you can track how many times people copy it, how many times people download the PDF. And if you look at our checklist up on, if you go to checkly.com and you look at the published checklist out there, they have thousands, hundreds and thousands of different copies and PDFs. People are
here's the other good thing is why is that important?
That's what I'm trying to say. Why? Like I'm looking at 2018 Hallmark Christmas movies list and schedule 4,000 views. It's at your popular templates right now. Like, okay, so what, like how, how is that important for, I don't know. I just don't understand how it leads to a business.
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Chapter 7: How does Marvin measure the success of Checkly's features?
So not only is she building her brand awareness, but she's offering something tangible that a person can come away with and use and copy and actually complete that checklist if they want to, if they want to watch all those movies. So in 2017, the number one thing that marketers were looking for is new ways to market their content with interactive content. Checklist is the perfect example of that.
You can market your brand with actual interactive content. Anybody can copy your checklist and start checking items off. Guess what? The company that, oh, wow, 10,000 people downloaded my checklist or 15 people copied my checklist and 1,000 people have completed this task but not that task. They've completed this task but not that task.
And that just gives you a huge advantage as far as understanding who your customer base is.
What does she gain from that? OK, so right now I'm looking at this checklist, the Hallmark 2018 Christmas movies list. Right. And there's one that starts on October 27th, Christmas at Pemberley Manor, all the way going through December 29th, a midnight kiss. It's got 4000 views. What I don't I don't understand. How does she economically gain from this brand awareness?
Yeah, but economic economically, economically, how does she gain from this?
Well, she wants to sell books, if I'm not mistaken, right? If you click on her link, I think the link goes to a book selling website or a website that sells her book.
So anybody that sees that website, which thousands and thousands of people, like you just said, have seen it, any clicks on the link on the checklist that goes to her website can say, oh, wow, this person has a brand new book that she's selling. And she can track that. She can see how many sales she's getting.
She can see the direct amount of traffic coming from Checkly and how many contributed directly to her sales using Checkly.
analytics and you know basic goal setups in google analytics got it got it interesting i mean look dude what i what i see here and what you've done which is really incredible i love that you built this for yourself a lot of entrepreneurs invent problems i love that you built it for yourself but like secondly you're clearly have a really interesting skill set when it comes to seo i mean you're ranking for these terms not only for checklists but also you're helping your users rank for lists that they're creating and i totally see the value there
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Chapter 8: What personal experiences influenced Marvin's passion for checklists?
Because they know that they're That $5 click, it takes 10 clicks for 50 bucks. And they know one of them is going to convert into a $50 a month customer. They know. And the reason they're going to convert to a customer is because they know what the activation metric is to get them to stay and not churn. Like that's why the engine works, right? So I just think you're doing different things.
By the way, like I love this. Like, I mean, I think it's a really interesting use case and I'm pushing it here just because I want to learn more from you and get in your brain a little bit. So I appreciate you playing along.
Yeah, you should make a checklist. Make a checklist of top entrepreneur podcasts, the 20 top entrepreneur podcasts. And if you make a good checklist, and maybe in a couple of weeks, your checklist will rank... That checklist will rank number one for top podcasts to listen to for entrepreneurs. And boom, if your podcast is number one, you'll get a lot more viewers.
I'm just giving you another example of how you would use the actual system. So That's how we differentiate from a lot of checklist apps out there. And trust me, we hear left and right that people want a free version of this checklist software. We hear it left and right and we're exploring ways to make a version free very, very good. That's the thing, they don't want to pay for it.
The question is how you monetize it. So you're definitely right. We have challenges as far as monetization of it, but so far it's growing a little bit. It's not too bad. We're Pretty happy so far, but obviously could be a ton better.
Yeah. You just strike me with with what you've shown me in examples. You give me the NFL thing, the Hallmark stuff like you strike me as someone that should be building like SEM rush or a drafts. Right.
I already did that. I already did that. I built my site auditor and we were in 20 languages around the world and I sold that company for millions. And now it's it's it's it. I've been called back to that company to help consult.
Why did you sell it, though, if that was so passionate for you in these checklists and the ranking you talk so highly about? I mean, I can feel your energy as you talk about these rankings. Why sell that thing that you're so passionate about?
Because I'm a crazy entrepreneur that can't sit still. I want to do different things. And if I'm not creating, I'm not happy. I want to keep doing different, different, different stuff. So I'm still involved with Mindset Auditor. I still run the company because they just literally just hired me back to come in and and get the, you know, right the ship, so to speak.
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