SaaS Interviews with CEOs, Startups, Founders
1723 Flat at $2.5m/Year And Totally Happy Helping MidMarket Companies With Their CRM
12 Apr 2020
Chapter 1: What is the background of GreenRope and its founder?
Hey guys, I'm recording this here on April 5th. It's Sunday. Everyone's trying to survive the crisis. Quick note to you guys, we are moving, you know, we used to delay these episodes by, you know, four to eight months after we recorded them in terms of releasing them on the podcast. We've changed that.
A lot of these interviews you're gonna hear over the next many months are gonna be ones we recorded only
days prior we think that's a smarter way to run the show i've made the change so expect more urgent information coming out secondly i am getting destroyed on itunes reviews by these people that say nathan's rude he's hard-hitting blah blah blah which by the way i am it's part of my style it's what works the problem is people that love that style never take the time to go leave a five-star review
So I only get one or five star reviews on iTunes. And right now there's a streak of one star reviews that is driving me crazy. It would mean the world to me, guys. If you're loving the show, you love how direct I am. You like the style. If you go leave a review on iTunes now, if you do that and tweet it to me, text it to me, email it to me, whatever you want.
I'm going to reply with a very special surprise. I think a lot of you guys will really like it is heavy, heavy data oriented. All right. So I appreciate that. Thanks, guys. Enjoy the show. Green Rope, again, helping nonprofits, small businesses, and more so today, even higher enterprise-related customers. 3,000 paying customers, paying call between $70,000, $75,000, up to $250 per month.
He's growing the company nicely, right? It's a bootstrapped company, great business that generates cash flow and creates 20 good-paying jobs, doing about $2.5 million per year in terms of run rate. Hello, everyone. My guest today is Lars Helgesen. He is the CEO and founder of a company called GreenRope, a complete CRM and marketing automation platform.
Started in the internet marketing space back in 2000 when he co-founded one of the world's first email service providers called Cooler Email. As a pioneer in responsible email marketing, they grew that company to over... software company specializing in marketing communication with over 1,500 clients.
In 2010, after spending several years designing and implementing in a more comprehensive way, Smith needs a small and mid-sized business as he launched the current company GreenRope, a cloud-based platform that simplifies and consolidates companies' sales, marketing, and operation. The company currently serves over 3,000 companies worldwide. Lars, you ready to take us to the top? I'm ready.
All right. Those 3000 folks, those aren't just like, you know, free users dancing around those. That's cold, hard cash, right? Paying customers. Some of them are. So we do, we do some trades and, um, you know, we help, especially now, uh, we actually have a program we just launched.
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Chapter 2: How has GreenRope evolved since its inception?
Yeah. So that's a significant increase, obviously. And how many, just so we can understand that the value added reseller network you've built better, how many of those VARs have sent you at least one paying customer over the past year? All of them. All of them. Well, yeah. So how many are there? So we have about 1200 of our direct clients.
And then on top of that, we have another, I'd have to look at the numbers again. I think it's about four or 500 nonprofits. Okay. And then we also, and then we have another, the remainder of that, another 1500 come through our partners, through our reseller channel. Okay. So hold on. Just so I make sure I understand this.
There are 1500 resellers that sold one customer each, or there's like 30 resellers that brought you 1500. Exactly. That's it. I see. So how many resellers is it about 30? Uh, 25. Oh, wow. Okay. I guess pretty close actually 25 resellers. And can you paint, like put a face on one of those? What do they look like? What's the website of one of them? They're all over the place.
So because we do a white label program, we're pretty sensitive about that. If you were to look at a company like Credema, C-R-E-D-E-M-A dot E-U, they're based in Switzerland. And they do a lot of ā they work a lot in the manufacturing and logistics and trade types of organizations. So they're pretty ā they're an example of one.
And the idea is that we completely private label the entire experience for them and for their customers. So ā They and their customers don't know that they're using GreenRope. They are using, as far as they know, the Credema platform. Interesting. And that's how it works with all of our resellers.
We have a reseller that targets shipping and logistics, another one that targets churches and things more regional in Texas. We've got another one that targets law firms, another one that goes... after real estate, another one that does janitorial services. So, I mean, it's all over, all over the place, but typically we work with companies that are really good at managing a channel.
So, and so, yeah, and each of them is various different sizes. You know, some of them are small, a few people working together, and some of them are bigger companies that have
whole staffs and agencies like marketing agencies and sales consulting firms one of the challenges with managing a bunch of white label platforms across 25 different value-added resellers is you now have kind of you have multiple tech stacks that you have to stay on top of right and sometimes like a bug in one isn't a bug in the other or you release something on one and it impacts another how do you compartmentalize all these things so your dev team doesn't go crazy
So we wrote the system to be extremely flexible. Um, and that's something that we did from the very beginning. We actually don't really impact things that way because every time we add a new feature, we make it something configurable. So we're not going to force a change down anybody's throat around any particular industry.
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Chapter 3: What strategies does GreenRope use to support nonprofits?
Um, I think that's just sort of the benefit of having had cooler email when we started that we had some, some residual revenue coming in every month from those email marketing clients. And that funded the transition into green row so that we could go from, because, because cooler email was that model. You go in and do email marketing. It's exciting for MailChimp or constant contact.
You know, there's no, you don't really need to show somebody and have a consultative sales approach to that. So we use that as a runway to transition to the way we do business now. I don't know that that's analogous or a lesson that I could that could we can impart to other founders. But but you exactly hit it on the head. The cost of having salespeople like that is very expensive.
And it also really limits how many new customers you can bring on in a particular month if you have to talk to somebody. That's right. Doing that, you got to have a higher price point to make it worth it. Or volume. Like it sounds like what you're doing is you get, they hit their quota because they have to process 10 demos a day or something. You have a high volume approach. Uh, yeah, kind of.
I mean, it's, it also is, it's the advantage of being a sort of an organically grown and funded company. You know, like I started this way back in the day in my apartment, so I don't have any investors. We just have to be organically growing and being able to pay our bills and the whole thing. So while we've in that, in that early growth stage, we were funding that with cooler email.
Now that we're in that stage now of, of being able to sustainably grow, they don't have to do 10 different, they have to do 10 demos a day. They, you know, they average, I think five to six. Um, so they're so, which is a good pace because they don't get burned out.
They can spend a lot of time working with a potential lead and show them the system without feeling like it's a boiler room and they got to jump right to the next demo. So it's, Yeah, so it's a balance, you know, and it's always, they always say that about business, right? It's always a balance. Yeah, but like to run that out, right?
So five demos a day times five working days in a week is 25 demos a week times four weeks on average, right? That's a hundred demos per sales rep, your two sales rep per month, right? Let's assume they have a close rate of 10% of those a hundred demos. That's 10 new customers at 200 bucks a month, right?
So that's $2,000, a new ARR, a new MRR they're bringing on or 24 grand, a new ARR, a good sales rep, needs to be able to get their comp, their base plus quota up to like 150, 160 usually. You can't afford to pay 50 or 60 grand in comp on 24 grand in new ARR added each month from these folks. Well, that's that. And you get on another thing, our conversion razor. You're closer to 40 percent.
So, OK, well, even that 48 grand a new ARR per sales rep doesn't leave you enough room to pay commission to those folks to get up to like a competitive like a good what a good sales rep can make. So the one thing that we do that's also different is I pay indefinite recurring commission with our salespeople. So interesting. They're just building over time.
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Chapter 4: How does GreenRope's customer base differ now compared to the past?
Well, Lars, you're more profitable than we work and you're more profitable than Airbnb. And I can name a huge list of large companies that you are more profitable in. So kudos to you. All right, let's wrap up with the famous five. Number one, favorite business book. Am I allowed to include my own book? Yeah, yeah. What's your own book? CRM for dummies. CRM for dummies. Very good. How's it doing?
How many copies have you sold? I think we're up around 20,000 now. That's pretty good. That's with Wiley, right? Yeah. Yeah, that's good. All right. Number two, CEO you're following or studying? Elon Musk. Number three, what's your favorite online tool for building your company besides your own? I would say, boy, that's a good question. Favorite for building my company right now?
We are working with Capterra and Technology Advice as two companies that were helping us get leads. Yep. Number four, how many hours of sleep are you getting every night? That varies from, I'd say, six to eight. Okay. And situation, married, single, kiddos? Single with a four-legged fur son. And how old are you? I am, God, I'm almost 48 now. 48. Great. Last question.
What do you wish your 20-year-old self knew? Um... Be very careful who you get in business with. Guys, there you have it. Green Rope, again, helping nonprofits, small businesses, and more so today, even higher enterprise-related customers. 3,000 paying customers, paying caught between 70, 75, 100, up to 250 bucks per month. He's growing the company nicely, right?
It's a bootstrapped company, great business that generates cash flow and creates 20 good-paying jobs, doing about 2.5 million bucks per year in terms of run rate right now. Lars, thanks for taking us to the top. Thank you for having me.
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