SaaS Interviews with CEOs, Startups, Founders
912 SaaS: Internet Hacker Builds Bootstrapped Productivity Tool, Passes $2.4m in ARR
22 Jan 2018
Chapter 1: How did Rob transition from medicine to entrepreneurship?
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. Hello, everyone.
My guest today is Rob Ross, and he's a former medical doctor turned internet entrepreneur who is now running timedoctor.com and staff.com. He's from Sydney, Australia, and has grown to love all things SaaS. Rob, are you ready to take us to the top? Absolutely. Absolutely. All right. So we, first off, how did you find, we got connected via Gitlatka, my database.
How did you find the database out of curiosity? So I actually have a friend who's been listening to your podcast and I'm an avid podcast listener. I've got about 70 on my podcast list.
Chapter 2: What were the early challenges Rob faced with Time Doctor?
So I just thought, oh, another SaaS podcast. I'm going to, I'm going to add you to my list. What do you think? Have you listened to a few? What do you think? Yeah, it's very, very rapid fire. And it's actually a very different style to other podcasts. So I like the fact that you get into the data. And I think a lot of people would like that as well.
Well, speaking of that, so what was your MRR last month? 210,000, 207 around then. That's impressive growth. And now take us back to 2015 in December. What was MRR then? Do you remember? What's that? Two years ago. Yep. I have to... I'll read them because you gave... We had about 50% growth last year. Yeah. I'll read these off because you gave them to me already.
So December 2015, MRR was about 100,000 with 2,300 customers. Forward a year, December 26, MRR was about 157,000 in MRR. up to 3,400 customers. You just articulated to me, you're at 210,000 in MR last month, right? Yep. And then gross logo churn last month was about what? It's about 3%. Yep. And then net revenue churn or expansion each month? It's... On average, it's about zero. Yep.
Negative 0.35%. Obviously, if you multiply that times 12, it's healthy. Your gross margin is way up there. 95%, right? Typical SaaS business. Yeah. I'm not sure if I calculated that right, to be honest. How'd you do it? I'm not exactly sure. Uh, whatever. I think, I think basically just anything that's really absolutely fixed costs.
Um, I think if you include hosting, I'm not sure if he was, but actually I really don't know how to calculate it. You're high for a SaaS company, but all, all, all people typically include above the line, unless you're some, have a weird element to your company is processing fees on your revenue.
So on your 210,000, it's probably two, 3% there plus hosting fees, anything that's like 100% required for the business to run. Right. Yeah. Right. Yeah. So it probably actually is a little bit lower than that. I might not have included all of the hosting and so on. All right. And team size to date? Yeah, we have over 50 people in 28 countries all working from home. So it's completely distributed.
Yep. I love that. And you said you've passed 4,300 customers. That's what's obviously driven the $210,000 in MRR. And here's what I love. Rob, how much capital have you raised? Well, zero. Zero. It's beautiful. It's beautiful. More people should be like Rob, okay? The Time Doctor. It's good stuff. You're spending about, I'm just going to read these off real quick before we get into your story.
You're spending about 237 bucks to acquire a new customer. Last month, you spent about seven grand just on pure paid spend. The average customer pays you for about 34 months and the lifetime value on that is about 1600 bucks.
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Chapter 3: How did Rob achieve significant growth in MRR?
That's timedoctor.com. So when did you launch this company and tell everyone what it does, Rob? So we had it as a paid company in 2012, but I was tinkering before that as a free product. I actually originally built it for myself because I had a team in the Philippines and I wanted to get rid of the office and have everyone work from home. But I wanted to make sure that I know
making sure that remote teams that we know if they're productive or not. So you can evaluate the productivity of remote teams. Sometimes if people in our team with 28 countries, I want to know conclusively, like, is this person actually working today? Were they on Facebook all day? What was going on? And that was back in 2012, you said? Yes. Okay. Yeah.
What we're moving towards is kind of like artificial intelligence to actually understand productivity in a deeper way. That's like our future direction. But currently, we've got a variety of features to look at productivity, to look at work activity and time tracking, basically. It's all based around tracking your time. Your UI really reminds me a lot of Upwork's backend.
When you can look at the, when the work is done, it takes a screenshot. I mean, I like your UI too. It looks like you do something very similar. Yeah, we do have a screenshot feature similar to Upwork and that's great. But I don't actually feel like that's the future. Like I say, I think the artificial intelligence part is the future because you can more accurately determine
what's actually going on. Because it's actually hundreds of different factors that contribute to a person's productivity. A person might take a lot of breaks, they might work less hours, they could still be productive. But if you combine together 100 factors into one measurement, that could be really powerful. So that's what I'm working on. But I guess I'm excited about the future. That's good.
Now, are you focused exclusively on Time Doctor or is staff.com taking a lot of your time too? It takes, it takes a bit of our time. Staff.com is more aimed at enterprise and it's at an earlier stage. And it's, it's basically more, more aimed at people in an office environment because it has, it's not specifically designed for remote teams. Now, now let me ask you a question.
Why don't, I mean, why not consider selling one of these? You can go all in on one of them or do they compliment each other really well? That's a good, that's a deep question. I think I could sell. It is good to focus. They do complement each other to an extent, like some customers who might want one would want the other. It's a whole evolution as to how I got here.
I can't really say for sure whether it's the right strategy. Focus is always good, but I'm not particularly focusing as much as I could. How old are you today? I'm 44. Okay. Now, are these two companies your first kind of stab at entrepreneurship, or is this something you've done your whole life?
No, I was a medical doctor, actually, and then I was always entrepreneurial, so I did a bunch of different stuff. So even in medical school, I took a year off to do ā
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Chapter 4: What strategies does Time Doctor use for customer acquisition?
And then Google AdSense. So it was like Google AdSense arbitrage. I don't know if you heard about that in the day. It was a huge strategy, actually, that some people that made... multiple millions of dollars. And it's not really possible anymore because Google kind of doesn't like it. But it was very, very scalable.
So you could spend 100 grand and you could make 200 grand and the next month you do it again and you accelerate it. And I mean, I was doing it as much as I possibly could. How are you getting track? Cause you only are spending seven grand a month on, on paid stuff. How are you getting your free traffic to time doctor.com? We're doing a lot of content marketing. That's a huge thing.
Referrals over time, people looking at the product, referring it to friends. Uh, then we are doing some, the paid is helping a little bit, but I think the content is, is a huge thing. And then also integrations with Asana base camp. Those, those are the main methods. Um, I really would love to get paid and be able to scale it, but it's quite hard.
As I'm traveling the world on planes, trains, and automobiles, you guys hear it, I'm closing loads of different deals, whether it's buying a company, closing a new account for getlatka.com, you name it, I've got to do it. And part of my issue is signing documents while I'm on the road.
Chapter 5: Why does Rob choose to operate without external funding?
So I just found this new tool. I'm using it pretty aggressively. It's called SignEasy. So you can get started for free at getsigneasy.com forward slash sign. podcasts. You'll see contracts that I've signed there and boy, oh boy, are they big and they work and the app is so easy to use. Get started today at getsigneasy.com forward slash podcast.
Your number one traffic driver, according to SimilarWeb, is actually Todoist. There's a support article on Todoist that says, how do I use Todoist with Time Doctor? And that's driving you a ton of traffic. Did you have to work really hard to get that thing into Todoist's help docs or did it happen naturally? Oh, I think if you do an integration, it gets in there very easily. It's not a problem.
Interesting. Tell me about the most effective piece of content you've created yourself and you had to work really hard to get it in whatever the channel is you wanted to get it on.
well i did a bunch of content pieces on transferring money between so for example how to transfer money to the philippines so that was reasonably effective but we just tried to do content that was really related to our market so we do content about upwork we do content about things like that like fiverr you know fiverr um so anyone who's kind of interested in that then they may be hiring a remote team
Um, we actually just did our Facebook affinity audiences and we found out that we're, we're, we're actually have a lot of affinity with internet marketers, which, um, horrified some of my team. Like, no, we're not affiliated with, um, internet marketers, but yeah, I think that's the truth. A lot of internet marketers or people who, who like internet marketers have small businesses.
They have like two, three, four people. And, um, so that's a, a But we do also have like much larger customers as well. But it's all small, medium, really. Yeah. Now, your second biggest traffic driver is, from what I can tell, is with Payoneer, which is, again, payments. And it's the same strategy here.
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Chapter 6: How does Time Doctor's product evaluate productivity?
It's in their help docs, how to send and request payment with Payoneer and Time Doctor. Yes, yes. So you wrote this piece of content and got it in here. Yeah, we have a partnership guy and then we work with Payoneer and we do an integration with them and we chat with them. And it's like a relationship with Payoneer. I love that. All right.
Last few questions here before we wrap up with the famous five. I love how you do your homepage. It's it's unique because you land on time doctor dot com and it says select. It doesn't ask you, do you want a demo? It just says select how to start the demo, test it myself, invite my team or just continue. You're obviously testing this aggressively, right? Is this converting? Well, is it working?
It has worked. Yeah, we've tested a few times because Obviously, some people don't like that because the only thing they can do is click. They can't actually... They can scroll down. No, if you go to the first page, if you delete your cookies and you go to time.com, then you actually literally, the only thing you can do is click yes or no. There's no other option. Ah, yes, you're right.
Okay, tell me. It's like a hidden sign-in link on the top right, but you can hardly see it. Oh, yeah, okay, I love this. Yeah, here, I just got it with my incognito window. So the headline is answer three questions to see if Time Doctor is right for you. Number one, do you manage other people? I'm gonna click yes. Okay, if 1,000 people hit this, Rob, how many will click click yes or no?
Out of 1,000 people, people that are hitting it, around 50% are actually clicking yes or no. So 50% are engaging. 40, 50% are not doing anything, but those sort of people, a lot of them are bots or not actually real people. Okay. Now, does it matter if I click yes or no? They probably both go to the same page, don't they? Eventually, yeah, it just goes to the same page, yeah.
All right, I'm gonna click yes. Number two, do you think your people could be more productive? Now, there's two questions here. How many of the 50% from the 1,000, so we're at 500 now hitting this page, of those 500, how many click yes or no?
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Chapter 7: What role does artificial intelligence play in Time Doctor's future?
So yes or no to manage other people, it's about like 60% say they manage other people. and 10% say, you know, screw you. You guys are just trying to play with me. I'll just say no, because I don't. Okay, but who cares? They're not your customers anyway. So number three, I've hit yes twice. The third question is, would you like to demo Time Doctor?
Time Doctor will show you exactly how much time is spent in your company and boost productivity. And I click yes or no. How many people click yes on this? It's around 90% as well. Okay. So go from top of the bottom to the top of the funnel to bottom. If a thousand people hit the site, how many click yes on this last question to schedule a demo? It's around, so 50 minus minus 80.
So it's around, if you count both the yes that I manage or don't manage people, then it's going right down only to about 35%. So 35% have said yes, that they want to do a demo. So they get through all three. We don't get 35% actually doing the demo, obviously. Yeah, of course. So, so 350 people out of a thousand say, yes, they want to do the demo.
Now, do you actually set them up in person with a demo? No, no, that's actually just, they actually sign up with their email address. It's just like on, it's just like engineered onboarding, right? Yes. Yes. That's so funny. Okay. I'm going to hit yes. I love this. Okay. So next is no credit card required. Select how to start the demo, invite my team or test it myself or continue.
And then they can scroll down if they want from there. Interesting. Yeah. This is so cool. So, but you, by putting those three questions up front, you're seeing more engagement versus just sending them to this page. Would you like to do the demo? Yeah. My, my theory around that is that people are in this mode of just looking right on Once you start clicking, you're actually engaging.
And then you've done the first three clicks. Well, it's easy to now enter your email address as the next thing. And we've tested it a few times. It does work. I'm not saying is tested to be working. Yeah. So would you sell Time Doctor for the right price? Depends.
I am really passionate about the vision, the long-term vision of being able to really enable remote work because I think a lot of companies don't have remote work because they literally just don't trust that people are working. So I think that having a platform which enables seeing that your team are working will enable remote work. So I'm actually quite passionate about that vision. So,
It depends. I mean, I'm open, but it's not like I'm actually aiming to sell. So let me decode that. I love it. It'd have to be such an irrationally high offer that I have no choice. What is it? What would be an irrationally high offer in your perspective? Tell me something ridiculous that's offensive. I... I don't know if I can come up with a number right now. It's yeah.
I mean, if we back into it, you're doing 200 grand a month. So say you're doing two, what is that? $2.4 million annually and in ARR. So something ridiculous would be, I mean, I would put ridiculous at like, a 10 X multiple. Maybe your version is even higher than that. Would you say? I mean, 10 X is probably not really market price. Market price is probably like five X revenues. Totally.
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