SaaS Interviews with CEOs, Startups, Founders
1652 Should You Stop $360k Agency to Go All In On New SaaS Product?
01 Feb 2020
Chapter 1: What led Kimia to transition from a successful agency to a SaaS product?
Built an agency that did 360 grand a year in terms of content marketing services. Said, you know what? The margins here stink. I'm going to build software. That's what he's done. It's called ghostit.co. Now 10 customers paying 47 bucks a month. Automating again, content creation. 470 bucks a month right now and revenue up from nothing a year ago. They are profitable.
Chapter 2: How does Ghostit.co automate content creation for its customers?
They're bootstrapped. Full-time team of four. Two developers, two business and marketing. Again, as they look to scale. Too early to talk about unit economics, but we'll have them back on in a year and see what happens. Hello, everyone. My guest today is Kimia Hamidi. He is the co-founder and CEO of Ghosted, winner of top 10 companies to watch for 2018.
He's a speaker and host of content and coffee. Kimia, are you ready to take us to the top?
Chapter 3: What is the current revenue model for Ghostit and how many customers do they have?
Sure am. Let's go.
Awesome. So you know what you're in for. You said you listen to the show, right? Do. Yeah.
Well, I was saying I like to listen where the guests are appropriate, but there's a ton of valuable information. So I really like it.
Dude, I appreciate that. We should flip the strip one day and you can interview me.
Fantastic.
Let's do it.
All right, tell me about the company. What do you guys do and how do you make money?
Yeah, so there's two parts of the business. The first part is a content marketing agency where we produce blog posts, social media posts, e-books, all that kind of stuff for other companies, mostly in SaaS and internet. And then the other part is we just released our own software product.
And so the problem that that's really solving is a lot of people need help doing the peripheral tasks around marketing. So the blog posts, the social media posts, the email newsletters, but actually having a process for it.
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Chapter 4: What challenges does Kimia face in scaling the SaaS business?
So that content marketing management system is the actual piece of the software and we're going to be selling that.
Pre-revenue?
No, we have a few customers, but nothing substantial.
Okay. Well, you're talking like a grand a month or what?
Yeah, we've got around 10 customers.
Okay. That's great. 10 customers. And what do they pay per month?
Anywhere from, you know, I think our lowest customers, 47 and then a few more doing a little bit more, but it's more hands-on.
That's great. Yeah. By the way, I like, I love small numbers because everyone has to start at zero, right? So 10 customers at 47 bucks a month, you're doing about 400, 500 bucks a month right now.
That's right. That's great. For the software piece, the agency does significantly more.
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Chapter 5: How does Kimia ensure a balance between agency work and software development?
Like last 12 months, total revenue.
Yeah. So we're doing, we have around, I'll give you the MMR and then you can extrapolate from there. We have around 30 customers, you know, give or take our growth rates and our contracts at the minimum are around a thousand dollars a month.
Okay. So, so those contracts. So I imagine you said MRR, the thing is though, I mean, this stuff is typically not actually recurring revenue, right? So like how much cash did you collect over the past 12 months?
Yeah. So, I mean, we're doing around. So the problem is, well, actually it's not really a problem. We've structured it so that it's monthly packages of content.
Okay.
And so they're paying recurring over month. And so we lock them into either six month or annual contracts. And so to us, it is actually MMR. So it's just structured a little bit differently.
So 30 grand times 12 months, about 360 grand a year. Yeah. Give or take. The churn though is typically really high in that, in that kind of model. I mean, do they, do they continue to renew?
Yeah, so I mean, typically our churn, I would say around 5% annual. We do a really good job of keeping it down. So it's just a lot of conversations, doing a lot of great work.
What's that website? Our website? The website with the agency.
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Chapter 6: What strategies does Ghostit use to acquire new customers?
Okay. How many people at the company total?
So we've got around, we're a team of 11 total, made up of contractors and full-time employees. How many full-time? Our core team is four. Four.
Okay, very good. And where's everyone based?
We're remote. So mostly based out of Victoria, BC. And we've got one in Paris as well.
And you guys are bootstrapped or raised? Bootstrapped. But walk me through, I mean, burning cash today or does the agency revenue cover all the expenses?
Yeah, we're profitable. So everything is covering kind of all our daily expenses plus software development, which is where we really want it to be. And that's why we made that decision to move.
Yeah. Um, so what's most challenging for you? Like I imagine when people are making this transition from agency to pure play SAS, there's like a lot of conflict on like team members wondering what they should focus on today. A customer that it does consult, you do consulting work for who has an emergency or building the next two weeks sprint for the software product.
Yeah, that's a really good question. Uh, we've, we've done a really good job of separating it. So my co-founder Rahul and I, we do a lot of the actual like, uh, client work and then, uh, um, Peter, one of our developers, and then Patrick, another one of our developers, they are really focused on just building out the software.
And so there's very clear-cut guidelines on this is exactly the build that we need to do because we all come from various backgrounds that's entrenched in software and just kind of we read all the time and we do a ton of competitive research and all that. So we know what our potential customers want. So those boundaries are just really clearly drawn.
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Chapter 7: How does the team structure at Ghostit support their business model?
And then what is the, I mean, today the plan to go from 10 customers to 1,000 customers is what?
That's a big question.
Yeah.
I mean, there's a bunch of different strategies in that. I mean, we do our own content marketing really well. So obviously we can acquire customers through that.
Okay, quantify that though. So like what's a keyword you rank really high for?
Look up content marketing strategy process.
Okay. So, so is it, by the way, is that what you're doing? You're finding keywords and ranking really high.
So part of the, I'll actually give you some insights into the content marketing strategy. One of the things that I'm going through and doing is I'm looking for, um, other businesses that are doing really well with their own marketing process, deconstructing that into steps. So that's that massive blog post. And then each step is a template in the platform.
So I mentioned before content marketing processes. You can actually look in the software and there's a preset template that links to your social media. So you can just follow along, right? And so, sorry, go ahead.
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Chapter 8: What insights does Kimia share about bootstrapping versus raising funds?
Yeah, we've thought about both. I mean, bootstrapping, obviously we maintain all the equity and so that's much more attractive, but it really depends on the market and the growth. So if the software is just taking off, then, you know, raising is definitely on the table.
How many developers are there in the company full time? Two. Okay, so it's two and two, basically.
Yes, yeah, exactly.
Very good. All right, Camille, let's wrap up here with the famous five. Number one, what's your favorite business book?
I've got two, Principles and Hard Thing About Hard Things.
Both good. Number two, is there a CEO you're following or studying?
Yeah, big fan of Drew Houston.
Number three, what billing tool do you use? We use Stripe. Number four, how many hours of sleep do you get every night?
I sleep quite a bit, actually. I think I'm around seven, six or seven hours, depending on how much I play poker.
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