SaaS Interviews with CEOs, Startups, Founders
$30k in MRR but wouldn't sell for $750k, would you?
09 Sep 2022
Chapter 1: What is the current revenue and customer count for CloseM?
I mean, if you have 300 customers today paying 99 bucks a month, you're doing about $30,000 a month in monthly recurring revenue. Is that about right? Yeah, about right. Okay. And where were you exactly a year ago? So we can calculate growth. Do you remember?
Yeah. So we're about 227% ahead of last year.
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 Richard Miles. He's a serial entrepreneur and executive leader seasoned by global experience. Adaptive Controls, which sold to Ingersoll Rand.
He was VP of sales at Polaroid and MagMedia and then founder of Relaunch, which he sold to an investor group. He's author of Official Software Channel Sales Guidebook, founder of Free Software Club IPO. He's a nonprofit exec, CEO of Big Brothers, sister San Francisco area. Very active guy, but now building a tool that helps you increase your sales at CloseEmApps.com.
Chapter 2: How did CloseM evolve from its initial launch in 2020?
That's Close... maps, M-A-P-P-S dot com. All right, Richard, you ready to take us to the top? Sure. All right. So tell us what the company does and maybe give an example of a customer that's using you today.
Okay, great. So we built CloseEm to help especially small businesses, solopreneurs, entrepreneurs, people who are providing services to people and usually go from feast to famine. They're hungry, they go out and they hustle and get some business, then they're busy servicing their clients, then they're hungry again.
We wanted to build a tool that was simple, easy to use, that folks could automate the process of sales follow-up and keeping in contact with all their leads and prospects and customers and things like that. So that's what CloseM does. Simple, easy-to-use tool. It's a contact manager with an automated follow-up messaging platform.
And so what do customers on average pay to use this per month? It's $99 a month. Perfect. Simple. To the point. We love that. When did you... When did you start building the platform? Do you remember what year you wrote the first line of code?
Nothing like launching in the midst of a global pandemic. 2020? Yeah, but actually launching in a global pandemic was really cool because the pandemic taught us two things. It taught us how to get really good at Zoom, and it taught us how to use QR codes. Those are both very true. Right. So one of the things that CloseM does is it lets you automate the process of sales follow-up.
There's a lot of tools that do that.
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Chapter 3: What unique features does CloseM offer to automate sales follow-up?
They send emails, email autoresponders. There's some that do SMS. Some do SMS and email. We do SMS, email, and voice, and postal mail. And that's one of the breakthrough things that's really elevated. close them for us with our users is the ability to send postal mail with the same interface that you type of an email or type an SMS.
It's the same interface, nothing new to learn, no setup fees, no minimums, no hassle. You want to send somebody a piece of postal mail, you do it. The advantage to postal mail these days is that your inbox is stuffed full. And your goal is to get the inbox zero, which means delete, delete, delete, delete, delete. So the average lifespan of an email is 17 seconds.
Sir Richard, sorry, just because we're short on time. CloseM will also help customers send via an API direct physical mail to users. Absolutely. Where do you get the addresses from? What's the database you sync to? Well, it's the customer's database. So they have to bring you the physical address. If they don't have that, you can't help them. No. Okay.
How do you verify the addresses you're sending to? Is there a database you're comparing them all to when your customer gives you the list?
It's our customer database. So they have their list of leads that they're getting from their Facebook lead ads or their lead funnels or their webinar registrations or whatever they're getting. And so we have built into the system an email verification.
Richard, I'm talking about the physical mail. So how do you verify the physical addresses before they pay you to send it?
We don't. I mean, if you put an address in that's bad, it's not going to get delivered. That said, there is an address lookup feature. So, I mean, if you're sending an address to someplace that doesn't exist, it won't get sent. But if it was supposed to go to 13 Pan Oak Street and it went to 1301, There's nothing we can do about that.
Yeah, yeah, yeah. No, no. We ship magazines every month. And so we are billed per magazine shipped. And I send via my LinkedIn ads. I send all the addresses of people that purchase the physical address. And then SmartPress, who I use to print, will tell me which ones are valid physical addresses versus not valid.
And I can go back and do a follow-up to get accurate addresses from people that SmartPress told me were not real. I'm sorry.
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Chapter 4: How does CloseM integrate physical mail into its services?
So you get going, you write the first line of code in 2020. When did you sign up your first customer? End of 2020. Okay, so pretty quick. Two years ago, yeah. Where did you pre-sell in those early days? Was it a Facebook group or how'd you get that customer?
So I have a partner. Her name is Laura Betterly. She and I have known each other since the 90s. She's a very innovative entrepreneur. She developed a course called Mobile Local Fusion. She has about 30,000 followers who bought her course and learned how to do local marketing. And so we soft launched the product to her list.
I see. And so how did people never understand? They go soft launch affiliates. How's it work? So when you say partner, what was it an affiliate agreement or she own equity?
No, no, no.
She's she, she and I are 50, 50 partners in the, in close them and close them. I see. Okay. So how many folks were on that list in 2020, the initial send?
Hmm. I think it was about 30,000. And tell us how it did. Did great. I mean, help us.
Well, look, we bootstrapped this company. So, uh, Richard details, details. You remember open rate, click through rate, number of sales from the first email.
From the first email, I don't remember from the first email.
You don't remember the number of sales? That was an exciting time.
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Chapter 5: What strategies did CloseM use to acquire its first customers?
Ah, okay. Hold on. Are you counting those in that 1,200 number? Yeah. Okay. Well, they're not paying you anymore, right? So how many are paying you on a monthly basis?
They do pay us because we have other products. in-app purchases that they buy.
So you've upsold all the lifetime deals into a monthly recurring plan?
And the AppSumo users are, a lot of people are just, they buy it, it's fear of missing out. They buy it, they park it, and they don't use it. They have a lot of active users from there though. And it was a good launch strategy for us because it gave us a lot of really good, very quick, hard
uh feedback about hey it ought to do this and it ought to do this and it ought to do this um that really helped us iterate and get to the state that we're in today um now we're doing uh we're we're not on that platform we don't do lifetime deals anymore um we do so how many how many customers today are paying you something monthly uh several hundred several hundred you said or seven hundred several hundred several hundred okay so maybe two three hundred something like that something like that
Thank you so much for watching. We have over 253 deals that went down over the past 30 days, all the revenue numbers, all the valuations, and the multiplier. That way you can go filter the data, find companies that are your same size, what they sold or raised for or at, and then use those as comparables in your decks to argue and debate and get.
a higher valuation and less dilution, which is the name of the game, less dilution. Check it out today at founderpath.com forward slash products. That's plural forward slash valuations. Again, both plural founderpath.com forward slash products forward slash valuations. What did you use?
Because I interviewed a lot of people that do AppSumo and they always struggle with how to move a one-time lifetime deal. Someone who loves a deal, by the way, right? These are coupons, right? They want discounts. That's why they do it. They really struggle moving them to a monthly recurring plan that actually helps you build a real business, right? That doesn't just drain your support, right?
So how did you do that?
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Chapter 6: How does CloseM handle customer address verification?
Well, not get it to work.
You phrase this in such a negative way. There are plenty of very successful companies with 150% net dollar retention where they give you a lot for free. People pay a lot of money for the free thing. And once you hit a usage metric, you pay more because you get a lot of great value.
Yeah. No, I agree.
Do you know what that is? What is that value metric for you? That's really what I'm getting at.
I'm not sure what you mean. What's our value metric? How do we get people?
What's your value metrics? For Snowflake, it's amount of storage. For Pendo, it's MAUs per month. For HubSpot, it's number of contacts.
Oh, well, we offer an unlimited plan. So what we've done is where we make money outside of selling the software is you pay for postal mail. Um, email is unlimited and is free included. Um, we used to charge for SMS, but we've gotten out of that and you set up your own SMS account. Um, and you pay for postal mail and, uh, we make a little bit of margin on the postal mail.
How much on postal?
Well, a first class postcards, 90 cents or a hundred. We don't care. Um, we make a little bit of money on that. Um, we've just offered a new product called Lincoln, which is a short code, you know, turns long URLs into short links that are trackable, creates QR codes.
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Chapter 7: What challenges does CloseM face with its product offerings?
Like, it's very specific.
Yeah, I hear you. One of the things that I say is, you know, the good news about CloseM is anybody can use it. The bad news about CloseM is anybody can use it.
Fair enough. On that point, you are still bootstrapped, right? Absolutely. We love that. If someone came to you today, you're doing $360,000 a year in revenue. If someone came to you today and offered you $700,000 all cash upfront, would you sell? No. You said that quickly.
No. Look, again, this is not my first rodeo. The value of this company is not what it's worth today. The value of this company is what it's worth over the next couple of years. Which is what? Well, I think we're going to build this into something that's worth multimillion dollars. Just multi-million. Yeah. No, we're not going to be the next billion-dollar thing.
What we do is we service a really nice niche of small businesses to medium-sized businesses. We're not trying to compete with HubSpot in terms of you can do anything no matter the size of your team.
But you just described it as that. You literally said the good news is that you can do anything. You said anyone can use it and you can do anything.
A lot of our users come to us from HubSpot because it's too complicated and too expensive. And so our thing is satisfying the needs that we have from the feedback that we have from the customers that we have.
On that point, let's wrap up with the famous five. Number one, favorite business book.
Favorite business book is Good to Great. And also, wait, there's two. Also, Ideas That Stick.
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Chapter 8: Why did CloseM choose not to sell despite its growth?
And how old are you? How old am I? Yeah. I'm old school, man. I've been around for a long time. Okay. Well, I ask because then we can do the math and I can say, take us back X number of years to when you were 20. What's something you wish you knew when you were 20?
That I'm not as smart as I thought I was at 20.
Guys, there you have it. CloseM.ai helps you close leads faster. Really meant for SMBs, right? They can do all your direct marketing, postal, text, email. They've got you covered. Did $10,000 a month exactly a year ago. Now up to about $30,000 a month. Nice growth here. They've got 300 customers paying on average $99 a month. Totally bootstrapped with a team of five, which we love.
Richard, thanks for taking us to the top.
Hey, man. Thanks a lot.
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