SaaS Interviews with CEOs, Startups, Founders
941 From Affiliate Marketer to $150k MRR SaaS Entrepreneur
20 Feb 2018
Chapter 1: What led Jimmy Kim to create Sendlane?
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.
Chapter 2: How does Sendlane's business model work?
Hello everyone, my guest today is Jimmy Kim. He's the CEO and co-founder of a company called SendLane, an email automation company. Over the past eight years as a digital marketer, his need for a reliable platform that understands digital marketers led him to build his own platform just four years ago.
Since opening the doors in just two years, he's helped over 30,000 businesses and entrepreneurs deliver their messages to their subscribers and followers with heavy focus on digital marketers, e-commerce owners, and affiliate marketers. Jimmy, are you ready to take us to the top? Absolutely. Thanks for having me here, Nathan. All right. Tell us what Sendlane does and what's your business model.
How do you make money?
Chapter 3: What has been the growth trajectory of Sendlane?
Sure. Sendlane is an email automation company, as you said. We focus on helping people deliver their messages, businesses, mostly affiliate marketers, digital marketers. and e-commerce marketers automate and deliver their messages. We are a SaaS model, so we are 100% subscription-based company. We charge anywhere from $9 all the way up to $19.99 a month based on the number of contacts.
What's the average, would you say, someone pays per month? Right now, it's $23. God, you know it off the top of your head. I love it.
Chapter 4: What strategies is Sendlane using to reduce churn?
I know it, man. I've been watching your show, man. I got this stuff down. Uh-oh. Why do you listen? You enjoy it? You know, actually, I'll tell you, it's a funny story. So I was introduced to you through a mutual friend on Facebook. And I personally did not six months ago. If I look back six months ago, I didn't know my numbers, man.
Chapter 5: How does Sendlane differentiate itself from competitors?
I really didn't know any of this stuff. I was just throwing a business to make money. And that was number one thing. Amen, brother. Yeah. And someone said, you should listen to this and blah, blah, blah. And one thing led to another. And man, I've been into like a geeking into data and understanding this stuff. And Now I'm into meetings going, man, we got to fix this churn rate.
Chapter 6: What challenges has Jimmy faced as a SaaS entrepreneur?
We got to fix this. We got to fix our MMR. You know, you know, just everything. I just realized that, you know, no matter how much work and effort I put into marketing, which is my forte, if we can't continue to get them to pay. It's not a business. So that's where we started to really pick up. Well, I love that. I'll never forget my first software company.
We were going through an acquisition process and somebody asked us, Nathan, where's ARPU? And I said, oh, we don't have an ARPU on the team.
Chapter 7: What insights does Jimmy have about customer acquisition costs?
There's no ARPU. I mean, I thought ARPU was like a person or something. Right. And I are average revenue per user. So we're learning together. I'm glad you're enjoying it. Twenty three bucks. The average customer pays you per month. Let's get more of the backstory here. What years you launched the company in?
Chapter 8: What advice does Jimmy give to aspiring entrepreneurs?
We started developing the platform in 2013, and we did not take their first customer until January 2015. Basically, from 2013 to 2015, we were developing it for ourselves just to have an internal platform. And in 2014, people started to notice what we're using, started asking us questions. What is that? Can we use it? Can we get on there? And we were like, light bulb.
Well, let's go ahead and start something. Let's open the doors and see what happens. And You know, until August of this year, so just a couple months ago, I actually didn't take it serious. Probably 20% of my time just growing the company and just working on it and having a team that built it and people managing it. And I personally was not heavily involved in the company.
And what do you, so when you say we, by the way, how many founders were there? We have three founders. Okay, and how many teammates today? We have, including the founders, we have 18. Okay. 18 total. And where are you based? San Diego. I'm so jealous. 75 degrees and a slight breeze every day. Yeah. Actually, it's been a little, little cold lately. It's been like 65. So, you know. Okay. All right.
Good, good, good. Good. Now, have you guys bootstrapped the thing or have you raised? 100% bootstrapped from the day we started. I love that. Just with equity or did you guys write checks early on to cover salaries? No, we put our money in initially to build the platform out. And the moment we started hiring people, we were actually profitable from almost the first month in. That's great.
And how many customers today? Active customers, we have 6,500 right now. You were really specific when you said active. Why? Because... it's, you know, there's active and there's total number of customers, right? Total number of customers doesn't mean anything.
Back when I, before I started listening to your podcast, I used to think that it meant something, but really that 30,000 number doesn't really mean as much as that 6,500 that's actually paying me, pulling out their credit card and giving me money. So you've got 30,000 kind of on your freemium tool, 6,500 have converted. Correct. Got it.
And 6,500 times 23, you guys are doing about 150 grand in MRR currently? Correct. That's great. This space is known for high churn rates just because it's so competitive. What's your churn look like annually? Uh, it's about a little over 6% right now and coming down. Uh, yes. Monthly. Okay, good. How are you? Okay. So walk me through tactically how you're trying to drive that down.
Uh, so what we're doing a couple of things, we started putting together smarter help centers, smarter onboarding systems, making sure our automation is stronger as far as a follow-up and so forth. And right now we're testing a customer success team right now where we're basically calling customers and talking to them and getting them in the process because we recognize if someone's
Set up just like a website or anything. If they're set up and they feel like they've got something tangible, they start realizing they want to pay for it. So we're trying to do different things to try to get people more active and engaged with it because the type of businesses we deal with more that started, you know. The solo entrepreneur, the new digital marketer, new affiliate marketer.
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