SaaS Interviews with CEOs, Startups, Founders
776: TextingBase Shares Margins, Cap Table, Valuation, More
08 Sep 2017
Chapter 1: What is the main topic discussed in this episode?
He launched texting base. He's now up to almost 500 customers, each paying 50 bucks a month.
Chapter 2: What is Texting Base and how does it operate?
So about 25 grand in monthly recurring revenue. He's managed to get his churn down to 3% per month. His CAC is only 18 bucks, which is great. So they're growing. His gross margin is 78%, even considering that he has to pay messaging fees, 0.06 cents to his text messaging providers. Again, focused on helping these customers do text message marketing at 60%. scale.
He still owns 50.1% of the company.
Chapter 3: How does Texting Base generate revenue?
The rest of the cap table split up among employees and a portion of it, 20% to the next capital raise. They've raised 262 grand so far. This is The Top, where I interview entrepreneurs who are number one or number two in their industry in terms of revenue or customer base. You'll learn how much revenue they're making, what their marketing funnel looks like, and how many customers they have.
I'm now at $20,000 per talk. Five and six million. He is hell bent on global domination. We just broke our 100,000 unit soul mark. And I'm your host, Nathan Latka. Many of you listening right now don't have time to listen to every B2B SaaS CEO that I've interviewed. If you want to get access to the database I've
created with year-over-year growth rates, customer accounts, margins, and many, many other data metrics and data points, you can go to getlatka.com. Here's the thing, though. This database, I keep it to myself. It's so freaking valuable.
Chapter 4: What is the current customer acquisition cost for Texting Base?
And to preserve the quality of the data and make sure that the people that have access to it have a true advantage, I'm only letting 10 companies on each month. So we're full this month, but you can go to getlatka.com to get on the waiting list for next month. And look, there's big people on the waiting list. I mean, the biggest VCs you've ever heard of. You've probably heard of them.
They're big, private equity, billions and billions under management. So it's an impressive waiting list. Go get on now at getlatka.com. This is episode 776. Coming up tomorrow morning, I interview Masterclass founder, David.
Chapter 5: What strategies did Texting Base use to reduce churn?
And I asked simply, David, will you win the online course wars? Hello, everyone. My guest today is Eric Beans. He is the CEO of Texting Base. Before that, he was the CEO of a company called AppUIX. He was also the former co-founder of Premier Mortgage Capital, along with author of Changing the World Through Texting Software. He's also done production.
He was the producer and writer for LA Style Magazine. Chief Beans on daytime. Eric, are you ready to take us to the top?
Yes, sir. Thank you for having me. I really appreciate it.
Yeah, of course. What does Chief Beans on Daytime mean?
Chapter 6: How did Eric Beans fund the growth of Texting Base?
It's Chef Beans. I was actually a chef on a show that aired in 98 markets.
That's very cool. Okay, so why go from cooking to texting-based, which I assume is texting software?
Yeah, well, I was never really a chef. The person who ran that show, I made food for her at about 12 at night, and I think her taste buds may have been a little bit inflated at that particular moment in time. So she invited me on the show. I did it, and it was a lot of fun.
That's very cool. So what is texting based, and how do you make money?
Chapter 7: What are the gross margins for Texting Base?
Textingbase is a personalized mass communication platform for texting. It's actually very similar to what you do on the email side. So we schedule messages, create groups, and reach out to people from local numbers. So the magic of our system is it will seem like you wrote messages personally to a lot of people, assuming you write it the right way, and then it becomes a bidirectional chat.
We make money by charging people a subscription. And they get a certain amount of messages per month for that subscription to use the product. So it's a pure SAS model.
So it's a good SAS model there. And what do people pay on average per month?
50 is our minimum plan. And people pay up to thousands, depending on whatever usage they have to do.
On average, though, what would you say across your customer base is? 50?
Our mean is 50. Yeah, most people go with the min plan and build up from there when they need it.
And how many customers are you serving currently?
We're approaching 500. So we're growing pretty quickly and trying to keep on going in that direction. So all is well right now, knock on wood.
And I mean, can I do the math?
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Chapter 8: How has Eric Beans built his team and what is their structure?
500 times 50, assume you're doing about 20, 25,000 bucks a month in recurring revenue.
It's in that area. That's a very solid Virginia Tech math.
There you go, man. Yeah, another hokey on the show. That's good. Now, Eric, have you bootstrapped this or have you raised capital?
Both. I started bootstrapping and got the MVP out, raised capital, and it's been a combination of self-grind and a little bit of money on the outside.
How much have you raised to date total?
$262,000.
It's very specific, right? Is this a friends and family round? Grandma wanted to put an extra 200, two grand. So that's where you get the 62 from.
I wish my family has the ability, but I didn't go to them. I actually went to, um, uh, friends, people that had worked with them business. And then a couple outside investors, you know, we have the former COO of AOL, um, is, is one of our investors, Kimberly Partol. Uh, and then we have a former VP of HSN and we have, uh,
A guy, Brett Kingstone, who was a former CEO of a publicly traded company, is one of the investors. So we've got a nice potpourri of people from different niches that we can leverage to help get us where we're going.
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