SaaS Interviews with CEOs, Startups, Founders
29 Year Old Bootstraps to $2.4m Revenue, $1m+ in Profits
12 Jan 2022
Chapter 1: What is the main topic discussed in this episode?
active customers, about 1300.
Okay. 1300. So that would put you at what about 130,000 bucks in revenue right now?
About 140.
You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
We've published thousands of these interviews, and if you want to sort through them quickly by revenue or churn, CAC, valuation, or other metrics, the easiest way to do that is to go to getlatka.com and use our filtering tool. It's like a big Excel sheet for all of these podcast interviews. Check it out right now at getlatka.com. Hey folks, my guest today is Tyler Austin.
He's a husband, father, former Air Force serviceman, and a seven-figure real estate investor. And also today, the founder of REI SIF, a bootstrap SaaS company and prop tech helping real estate investors scale their sales and marketing. He also holds bachelor's degrees from Florida Tech and Computer Information Systems. All right, Tyler, are you ready to take us to the top? Let's do it. All right.
So what got you in? I imagine it was your own real estate investing, but what got you into real estate in the first place?
I got tired of traveling 50% of the year for the government, basically. So I started dabbling in real estate and wrote my own scripts because I was a cyber guy by trade to solve my own problem. And that kind of ended up slowly developing into, hey, other people want to use that, basically.
And so tell me about those people. Who are your customers today?
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Chapter 2: How did Tyler Austin start his journey in real estate?
And we officially launched in September of 2019. Sorry, 2,500 or 25,000 in MRR? 2,500 in MRR. Okay. Yeah. And so then, so that got us, there. And really, our big growth catalyst was in around June of 2020. We launched a challenge funnel, essentially. And that was where we started really getting a lot of traction to teach people how to really do real estate marketing.
Teach us how that works. It's very popular on the inner circles, but the common SaaS founder does not know what a challenge funnel is yet.
Yeah. So what we did is I realized that a lot of our churn was because of micro SMB entrepreneurs not being good entrepreneurs. So we had to fix the mindset of the customer coming into the gate about business, not really about our product. So we created a challenge to solve that problem called the auto lead gen challenge where we marketed it as, hey, you have a problem getting leads, come in.
And we're going to teach you how to get those leads. But the first week and a half of that challenge is actually how to actually set up your business. What kind of revenue do you want to make? How do you even calculate that kind of information? So that gets them adopted and confidence into what they're doing. And then we say, okay, cool.
Now that you have the foundations to know where you want to go and what to do to get there, let's teach you how to actually implement it. And we teach them how to implement generating leads through using our product, which adopts them into the product itself and understanding it and how to use it.
And then at the end of that product, we have essentially an upsell or that challenge is an upsell to put them into our highest plan.
What's the challenge though, Tyler?
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Chapter 3: Who are the main customers of REI SIFT?
Is it how many leads you can get over a 30-day period?
No, actually our challenge structure is two weeks of education on how to market and how to properly bring in big data and get it managed and then get marketing to it. Um, and then the second half of it, the second two weeks is, um, actually marketing to see how many total that you can get. So we kind of split in half.
We market it as a 14 day challenge, but once they get into it, we're like, psych, it's actually a 30 day challenge, 14 days of education and 14 days of, of actual, like doing the work. So how many leads did the winner get of that challenge? Um, we do it, we do it every single month. So we've had people that have come out of it, making a hundred thousand, you know, some
even, even more than that, um, closing multiple deals through the challenges. And I mean, we have, we've had like, I don't know, somewhere around like three or 3000 or so people gone through that challenge since last year, um, a ton. And every, every month we have, you know, it's a rolling challenge now. So we basically automated it.
Um, but here in January, uh, we do like a reset for the year where we're going to do, uh, the challenges live again to bring in a bunch of new revenue from the customers we already have. Plus bring in some new update the content because as your product updates, right? And we have a lot of new features we've done since last year.
So we need to update the challenge to get, you know, more of that feature adoption in.
So you guys already have it. The question for you is what challenge can you launch in January that gets your, you know, customers excited, but also by nature, almost by default gets them using your product more to decrease churn. So 3000 folks in there. Now that winter tower that might take home a hundred thousand bucks in terms of just revenue from a challenge.
How many leads is that usually from?
Because of the way that we teach how to market in real estate, it's a lot different than the traditional norm. A lot of times they have to get 75 or so leads to get one deal. And a lot of times it might only be $7,000 to $10,000 on a deal. The way that we educate, we teach people how to find the 1% of the 4% of people who might want to sell to you right now.
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Chapter 4: What is the current churn rate and how has it changed?
How many customers are you serving now today?
Um, right now I actually had it opened up, um, here we have, um, Active customers, about 1,300. Okay.
1,300. So that would put you at what? About 130,000 bucks in revenue right now?
About 140.
Yeah. 140. Okay. Very cool. And where were you exactly a year ago?
Exactly a year ago. Let me go back. I'll tell you exactly. It was probably like maybe 40 or so, maybe.
Okay. 40,000. And then go back to 2019, where you had like four or five grand a month in revenue back then.
So what are we in? We're in November right now. So July, September, October, November of 2020, we were at 38. And in November of 2019, we were at 3,754. Very cool.
All right. So with this skill, have you bootstrapped or did you raise capital?
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Chapter 5: What pricing plans does REI SIFT offer to its customers?
How many folks are on the team today?
This year, we'll have 10 full-time, five of which are USW2s and the rest are contractors.
What credit card should I use? You guys have heard this. If you're scaling with 10, 20 employees, you know that your lead developer needed your credit card data to sign up for Jira or Trello. Your head of marketing needed the credit card to sign up for Facebook ads.
Or your head of HR needed a credit card or your credit card data to sign up for that Delta trip you need to take to that next conference. Nobody understands or understood how to track this up officially and effectively until Ramp came along. Create virtual or physical cards for everybody on your team as you grow and build your SaaS company.
Quickly log into Ramp and see where there are discounts you might be able to get that you didn't know about. For example, maybe you save a hundred bucks a month on Trello or 20 bucks a month in your email marketing provider. Ramp has all these listed in their platform and you can assign a credit card, both virtual or and physical to every employee and set limits.
That way you can quickly see if your dev tool spend is going up or you're spending more on Trello or Facebook ads increasing too fast. Or are you spending too much on travel? It's incredible the amount of insight you can see inside the ramp dashboard. I got a look the other day and I was blown away. I said, I've got a partner with these guys.
Check it out today at nathanlaca.com forward slash ramp. That's nathanlaca.com forward slash ramp. I'm not going to tell you about the special bonus you'll see, but once you go to the landing page, you'll see there's a big with two zeros bonus on this page, nathanlaca.com forward slash ramp. Check it out today because time is money and I want you to save both. Okay.
And so if you look at total headcount expense in November, it's December 8th, they were recording this. What'd you spend on just people at last month?
So salaries, we spent about 40,000 on the dev team, product and dev team, and then another 12,000 on, no, closer to 16,000 in W2. Our total company expenses monthly is about 60,000.
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Chapter 6: How did Tyler acquire his first customers for REI SIFT?
So same question, right? So you did 220,000 last month. Your total expense are 60K, right? So what are you doing with the 160,000 bucks personally as a bootstrap founder? This is where you want to be a lot of profits. What do you do?
I put about 40% of it in my tax account and then I distribute the rest.
A lot of bootstrap founders want to incent their team, but they don't know how to set up a distribution plan.
Yeah. So there's a few things. So this year I've kind of looked at my teams across the board and I've decided to do raises on everybody in the company in general, 5% minimum raises. And then outside of that, I distribute most of it to me personally because of my objective and where I want to go with the company and me and my own investments in the real estate side.
Um, so, uh, basically the way that I look at it is, is, uh, you know, I want to incentivize the team. I want to make sure that they're, they're feeling committed in there that they want it. Um, but what I've also started to do is, um, gave everybody a tech budget now too, as well. So we didn't have that originally.
So everybody has a $5,000 tech budget that they can use for their home offices and everything else. Um, and then in addition to that, um, we're trying to, uh, create other bonus programs like holding back 2% of our revenue monthly as well for at the end of the year doing something bigger for the whole team and stuff like that. So we're trying to really build that out.
We just hired a head of people ops to really focus on a lot of that core culture because we have a really good product culture. But we were kind of lacking on internal company culture. So we're really trying to focus on that right now.
So if you hold back 2% per month, I mean, that's like 5K a month or about $60,000 per year, right? What do you think you might do with that next December? How would you split that among your team members? Do people in Brazil get some of that or just the 5W2s?
Yeah, no, people in Brazil will as well. So part of it is our in-person. So we're working to really try. It's been kind of hard with the whole global... situation we've had going on the last two years, but they were just here in the US. We brought other developers in the US. We do a mastermind twice a year. A lot of our users come in, they pay money. They come to our office and we mastermind.
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Chapter 7: What is the auto lead gen challenge and how does it work?
Your personal net worth is really split mainly amongst those two things.
Yeah. My personal net worth is split on building that personal expenses and passive income from real estate above that so that all those distributions that I get from my real estate company and my software company.
Cause I still do a lot, you know, flips and I still do real estate myself, not just buy deals, but mostly now, um, it's, you know, taking all that revenue, getting that passive income and then, and then taking that, uh, distributions to be able to, you know, have to dissipate out there.
I put a lot of money in whole life policies now, uh, index funds, regular stock market, you know, 5% into crypto. And then, um, And so I have a whole diversification that I like to try to do. But most of it, about 40% of my revenue goes into real estate.
Very cool. I mean, this is the life, man. People hit founders like you all the time. They go, well, Tyler's not VC-backed. He's not on TechCrunch. And I go, you know what? Look how happy Tyler looks. You want to be like Tyler.
Tyler, it's way easier and less risky to build a $5 million SaaS company than it is to go try and raise $500 million and build a billion-dollar business that you own like 1% of at the time you try an IPO. Yeah. So kudos to you and what you've done. How have you resisted? I'm sure you get outbound all the time or inbound all the time.
So not many people know about RISF, even in the real estate space. I mean, we're slowly, people are hearing about it. Are you talking about with offers, like getting offers?
Yeah, there's VCs wanting to invest. Yeah.
Yeah. So I've had people looking to invest. I am looking now to put on probably an advisor. And so I, and my core dev team, the guys in Brazil, I am looking at right now doing and giving them some equity to maintain them long-term. And, you know, we want to build other projects together. So, but as far as like receiving revenue, it's just, it's not something I technically need.
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