SaaS Interviews with CEOs, Startups, Founders
894 SaaS: How Broadly Got SMB Churn Sub 2%, 5m+ ARR
04 Jan 2018
Chapter 1: What inspired Josh Melick to start Broadly?
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 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.
Chapter 2: How does Broadly help small businesses grow their online reputation?
Hello, everyone. My guest today is Josh Mellick. He is the CEO and co-founder of Broadly.com, a review generation platform focused on local businesses' online reputation. Before founding Broadly, he was director of product at DemandForce, which was acquired by Intuit in 2012. He also held leadership roles with Ingenio, which was purchased by AT&T in 2007.
Josh, are you ready to take us to the top? Let's do it. Let's kick some ass. Yeah, so the DemandForce acquisition was a good one. I remember reading about that.
Chapter 3: What is the average revenue per customer at Broadly?
Why not stay with Intuit and keep learning there? You know, it was a good one. I stayed for a year. They give you some bonuses at a year, I guess. But I did leave plenty on the table. And I just still believed in the real opportunity. The story behind the acquisition was every small business needs software like DemandForce. Agreed with that, except for one part.
I was director of product at DemandForce. I didn't think the software was quite right.
Chapter 4: How did Josh Melick bootstrap Broadly in its early days?
Um, and software is hard to do and you got to get it right. And, uh, it felt like to start over was a better, it was a better plan. Were you on the founding team at, at demand force? I mean, did you have a front row seat to the acquisition or no? Um, I wasn't on the founding team, but I was in the, you know, executive team.
So, so certainly was part of those plans certainly was, you know, pitching Brad Smith and the top guys that into it and all that kind of stuff and what the plans were. And we just kind of had a little different views on where to go. Did you get to meet Brad Campbell before he passed? Bill Campbell. Bill, sorry, yeah.
Chapter 5: What strategies does Broadly use to acquire customers?
Yeah, I had dinner with them and got to hang out with them a little bit. Everything true about what we read, genius? You know, so I was super nervous. We were supposed to meet for dinner the first time. I'd met him in person real quick before, but I go to this restaurant. He just walks up to me. I don't know if I can swear here. Yes, you can. Just straight up grabs my hand.
It's the biggest handshake.
Chapter 6: What is Broadly's current customer churn rate?
I just, how the fuck are you? And like, whoa. And like, you know, the people at the restaurant knew him. He's like, snapped his fingers, bring him my favorite wine, steaks, and just like. I mean, he just had a presence, and it was quite remarkable. That's amazing. Okay, let's get into your story here. So broadly, what year did you launch it, and what's the company do? How do you make money?
Yeah, so we launched the company in 2014.
Chapter 7: How does Broadly measure customer lifetime value?
You kind of covered it, but I'll say it again. We help local small businesses grow their online word of mouth, things like reviews, referrals, social mentions. And it's a subscription SaaS play. It's a couple hundred bucks a month. And we help take care of it.
Just because I'm sure you have loads of different cohorts and I don't want to get into every cohort, but what's the average customer pay you per month, would you say? A little over 200 bucks a month. Okay, about 200 bucks. Cool, and then help us, make this tactile for us. Tell me about a customer currently paying you and how they're using you.
Chapter 8: What are Josh Melick's final thoughts on the future of Broadly?
Yeah, I should say, so our retail price is 250 a month. All in across all the customers of multiple channels is around 200, so I should point that out. Because you have volume discounts, things like that. That's right, yeah. But don't wanna... you know, someone to hear a pitch and hear two 50 and things. If you buy 20,000 seats, he'll give you a $200 seat price. There you go. There you go.
Uh, what was the question though? Like, yeah, the question was, give me like a real example of a customer using you and how they've deployed your, your tech. Yeah. Um, think, think, uh, think little auto shop. Um, you know, you take your car in, you get that oil changed, um, and they want to follow up with you or, Um, and, uh, you know, how, how to go, how was the experience? Tell me about it.
Anyone you'd recommend or anything we could have done better. You know, this was technician. Bob was, was the guy that worked on your car. How'd he do? Um, one I love to love to talk about as well as is something like a carpet cleaner. I got, I got small little kids at home.
Uh, you know, if I'm going to let some, some, some dude into my house with my wife and my kids, you know, I want to make sure that they're, uh, they're legit. So I'm going to see, maybe they did my neighbor's house. Maybe they've, you know, there's good stories called the social proof online word of mouth. You know, businesses love to say, oh, I, you know, word of mouth.
And we say like, yeah, absolutely right. But word of mouth is online now. And guess what? This is powerful. Me and you talking right now, me and Nathan, like we're having a conversation, but why is this more powerful? Because a thousand people or a million people or 4 million people might hear it afterwards.
And so that's the difference between old school word of mouth and online word of mouth and businesses need that. Makes sense. Now, have you bootstrapped this out of kind of what you made from demand force or have you decided to raise capital? Yeah, no, we've raised, we've, we've raised, um, uh, almost $11 million to date, but we did bootstrap almost that first year. Um, you know, it's like
It's one of those things where you kind of make this decision to quit your job, and it's a cushy job. My co-founder and I were both making good money, and then we quit. You're really excited. Josh, sorry. I want people to really get in your head there. Can we say just more than $200,000 a year is good money? I would call that good money. Okay, good. And then some. Yeah.
Uh, but, but yeah, you quit your job and then, and then you're all excited and you want to tell people about it. And the first thing they say is like, cool. Well, like come show me when you got a product or like, let's talk when you got, you know, um, a hundred thousand MRR is kind of the new bar. So come on back. And it's like, you're sitting there and you're like, holy shit.
Like, you know, uh, I remember looking at my Stripe revenue graph in the early days and like, you know, I saw, I saw a break to $1,000 mark and it's like an MRR. Yeah, exactly. And I'm like, okay, I can buy beer for the team now, but I still don't know how I get paid or I can pay any of these people. Do you remember December, that first year, 2014, what was MRR?
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