SaaS Interviews with CEOs, Startups, Founders
883 SaaS: What To Do When Your Lead Developer Quits
24 Dec 2017
Chapter 1: What is the main topic discussed in this episode?
Happy Christmas Eve to all of you that celebrate the great holiday. I'm out here in Colorado and I will probably spend most of the day hiking in the mountains out here on Sylvan Dale Dude Ranch where my mom lives. So I want to say thank you to all of you for listening to the show and my gift to you is all the B2B SaaS data. I work so hard to get these CEOs to give up on the show.
It's really not easy. These are tough numbers to get. But you can get them all now in a big, beautiful spreadsheet at getlatka.com. That's G-E-T-L-A-T-K-A dot com. Go there today to check it out before I take it down. This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn.
Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple of hundred thousand dollars to 2.7 million. I had no money when I started the company. It was $160 million, which is the size of many IPOs. We're a bit strapped. We have like 22,000 customers.
With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everyone. My guest today is Badass Kalfala. He is a 25-year-old French entrepreneur.
He turned a grad school side hustle into a $20,000 per month, monthly recurring business in just a few months. That company is called LeadGuru.io to stop B2B companies from spending hours building bad, boring, low-yielding, cold emailing campaigns. He came in to pump up their cold emailing capacities to the next level, and they just sit and watch hot leads flood into their inbox.
Badass, are you ready to take us to the top? Yeah, let's go. Let's do that. All right, so leadguru.io. Tell us what it does. I think the bio did a good job, but tell us what it does and how you make money. What's your business model? So the business model is very simple. We basically outsource all the cold emailing activity for B2B companies.
So we really do that for them from A to Z. So from building contact lists to writing the copy for the emails, and we actually operate the campaigns as well on a monthly basis. So we have two business models. The first one is a subscription. So it's a monthly fee. It's a flat fee. depending on how many contacts the company wants to reach out to.
What's that on average right now, if you had to average across your customer base? You mean on pricing or on the contact? Just the flat monthly fee per month, yeah. $1,000 to contact 500 people. So on average, that's what your customers are paying currently? No, it's not an average. It's a new price. On average, it's $800. Okay, got it.
So again, not looking at your new pricing or looking forward, but if you just see your current customer base, the average customer pays about $800 a month. Yeah, exactly. Got it. And we have a second business model, which is we just launched it and it's working great. It's a cost per click model. So we only build per unique click on the campaign. And the cost there is $40.
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Chapter 2: How did the guest turn a side hustle into a successful business?
No, we actually, so here's the thing. Lead Guru, we do a little bit of tech, but I think we're more of a service and a consulting firm than specifically a tech company because all the emailing is handled by our partner, Reply.io. I don't know if you know this company. They have a great tool. So actually, our clients are on reply.io. I mean, not all of them right now.
We're transferring them because anyways, we used to have our own platform. Now we're transferring everything to Reply. So yeah, we use Reply. Why? Why are you transferring? Here's the thing. As an entrepreneur and CEO... Did you get blacklisted? No, we didn't. Not yet. Okay. We're careful with that. It's actually, you know, I didn't want to spend my life building products and tech products.
I think it's not a fit for everyone. I love the service. I love the sales. You know, I love helping clients. I love working on marketing. And I didn't want to spend, you know, thousands of dollars and so much time working on product development. And something else happened as well is that we actually I used to work with a CTO who was working with me and, you know, he dropped out of the company.
He left the company recently. So that was that was a change there. And I need to take action.
Chapter 3: What unique services does LeadGuru.io offer to B2B companies?
So I said, OK, let's let's cut for now the all the emailing platform development and go with a partner and. it's actually working great. What year did you launch the company in? So I started, I started this in September, 2016. So I just, I just got in the grad program at HEC Paris. And so I started there and I was doing this as a side hustle.
So I was just, actually, I was contacting clients from my, you know, student email and just saying, Hey, I'm from HEC and I, So I should say you have to know in France, it's like, it's a very well-known school. So it's like, it's like a Harvard business school of, you know, France. So people trust you on that. I can't challenge you because I don't know. You can Google it.
So I actually, I was emailing them from my student email and, and they were actually, you know, very happy to talk to me. And I was, I started like billing them and, and that's how I got the idea of, of building this, this premium, premium service and, where you don't, we don't just sell like scrapper, you know, to do it yourself. And, and, and yeah, I get that.
How did you build the initial product? Where'd you get the funding from? Um, you know, from the money I earned in internships, uh, I, so I just actually, I, I paid, uh, I paid for a sort of MVP was $800. Okay. Uh, did it with a freelancer and yeah, that's it. And how did you find that freelancer? Frankly, I love working with Upwork. I don't know if you know that.
I think it's a great platform when you know how to use it. So, yeah, that's how I do. And then you said you brought on a CTO. So two questions. Today, what's your team size? So actually, you know. Just you? Yeah. Beautiful. So I had a CTO, then a classmate, Joe and me, Guillaume, just, you know. Shout out to Guillaume.
He's a friend of mine and he worked with me and he actually left as well at some point. So you own 100% of the company, right? Almost, almost, yeah. Where's the not almost? It's my family. I have a small investment from them. how much total have you raised? Actually not much 30, 30 K euros. Okay. Uh, it's not like I, I, I started actually, you know, pitching to investors and, and going that way.
And then I realized I prefer to build a good business before raising any money. But I think I'll start doing that again in December. Um, this year, uh, I think pitching investors, I'm sorry. Yeah. How much do you want or would you raise in an ideal world?
Frankly, I haven't thought about it, but it depends on how good the sales are still and how much money do I need to keep going and to scale the process, scale the business. What would you spend the money on? Probably staffing. Probably staffing. No, I mean, in my business right now, I would need more people managing the clients, more people selling, being on the phone with the clients.
probably some support team as well, people managing the data for the clients. So that's something I need to pay for. Okay, Top Tribe, many of you ask me all the time, how did I get my website up so fast, so quickly, and why is it doing so well?
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Chapter 4: What are the pricing models used by LeadGuru.io?
The answer is simple. I use HostGator.com to keep the thing cranking along. They've got a 45-day money-back guarantee, which is great. I used their free website builder to get this site up because it's ideal for WordPress. It's just what I use. They've got 4,500 templates and a free e-commerce plugin as well. And 24 seven support, which we love, right? We love that. I bug the hell out of them.
They always get back to me. So I've got you 30% off along with $100 in free AdWords credit. To grab it, just go to HostGator.com forward slash Nathan. But you got to do it now. Again, HostGator.com forward slash Nathan. Is the revenue growth predictable? So you're at 24 clients paying $800 a month. That's about $19,000 in MRR. Was it like $15,000 last month and $10,000 the month before that?
Or has it been kind of up and down because people cancel and then re-sign up, etc.? It's up and down. And this is the reason why. The reason is that I've been testing so much stuff. I just like to test. I even try to test a model where basically I only bill the clients if they receive a positive answer from a prospect. Um, you know, it didn't work out.
So actually we're going to, we're going to change that. Um, and also I haven't put in place any engagement plan zero. So this year, so far this year, how much total revenue have you done? Um, you know, probably around 45 K. Okay. Okay. 45 K. Okay, great.
So if, I mean, if I take 45 grand and we're what, eight months in right now, I mean, you've averaged, I mean, people can do the average there and figure that out. So last month, like right now you say you're at 20 grand, but that's not really MRR. I mean, that's going up and down pretty drastically. Up and down. The reason is, um, I think, I think we need to set up engagement plans.
Uh, you know, it's, it's, uh, actually I'm surprised, you know, customers are surprised when I tell them there is no engagement. What do you mean by there's no engagement? You're not touching the customers? I think 100% of my competitors, they ask for three months engagement beforehand before starting anything. They ask you to pay three months in advance or six months or one year.
Who do you consider your competitor? For the competitors, I think in the US, there's probably Ample Market, Lead Genius, but they are much more expensive than me. A new company called Outbound Works. Apparently they're doing a great job, but they're billing as well a lot. What about like Hunter, Anymail, Finder, Viola, Norbert, Tufer?
I don't think they are a competitor because they don't talk to the same customer. I'm talking to a startup that is scaling, that has raised money, or I'm talking to a big SME that wants to scale that process to operate it in a much more efficient way. And you can't sell these guys a Hunter scrapper or Hunter APIs and stuff. That's not what they're looking for.
They're looking for an all-inclusive solution. I'll disagree with you there because I know many startups that have raised capital scaling quickly that do pay for those platforms and it works really, really well for them. So what is the asset that you actually... I think you can do both. I think it's, uh, you can absolutely do both.
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