SaaS Interviews with CEOs, Startups, Founders
950 How Clickfunnels Grew From $14m to $60m in ARR in 18 Months
01 Mar 2018
Chapter 1: What is the main topic discussed in this episode?
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.
Chapter 2: What is ClickFunnels and how does it operate?
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 Russell Brunson and Todd, who works with them at ClickFunnels.
Chapter 3: How did Russell Brunson and Todd Dickerson meet?
And over the past 10 years, Russell's built a following of over a million entrepreneurs, sold hundreds of thousands of copies of his books, popularized the concept of sales funnels, and co-founded a software company called ClickFunnels that helps tens of thousands of entrepreneurs quickly get their message out to the marketplace. Russell, Todd, are you ready to take it to the top? I'm ready.
All right. So, Russell, kick us off here. For the folks that have not heard about ClickFunnels, what do you do and what's your business model?
Chapter 4: What were the initial challenges in building ClickFunnels?
How do you make money?
Yeah. So, Todd is my co-founder in ClickFunnels. He's the genius and the brains that actually built it. And I'm the guy who gets to talk about it all day long. And basically, it's software that helps people build their online sales funnels. We're at almost 55,000 active members right now who pay anywhere from $100 to $300 a month. And that's kind of what we do.
You said $100 to $300 a month? Yeah, that's great. And so, Todd, quick question here. This is right off the bat. There are a lot of guys out there that are like very, very, very many versions of Russell. They're the business guy with like an idea. And they're like, I just can't convince a technical person to build this thing. It's going to be a billion dollar business.
I can't convince the technical guy. What did Russell do to make you go, OK, I'm going to ride this guy. I'm going all in.
Chapter 5: What strategies contributed to ClickFunnels' rapid growth?
Uh, well, I've been doing marketing stuff for awhile, doing some, uh, online tools and whatnot. And I met Russell years ago and just immediately was like, he was looking for a partner on a project and immediately jumped in and was super excited to work with him. He was obviously a very genuine person and someone that. really knew what he was talking about when it came to the marketing side.
And I effectively worked for him for free for a year and ended up just deciding to dive all in and build what we could and make a difference in the world.
And Russell, when you first created this, did this come from your own problem? You built it for yourself, I imagine?
Yeah. In fact, the time that Todd was working for free for me, he was building site after site after site. And then one day, he lives in Atlanta. I live in Boise. He'd flown out for the week And he's probably tired of me having him do so much stuff. He's like, we should just build software that does this whole thing. I'm like, dude, everyone has tried that. It's not a unique idea.
It's just not possible. And he's like, I think we could do it. So we sat in front of a whiteboard for an entire week and mapped out what we wanted ClickFunnels to be.
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Chapter 6: How does ClickFunnels manage customer acquisition costs?
And it was cool because Todd's like, no, we can't do that. But yes, we could do that. We could do that. We could do that. And then he was bringing his own ideas in. And then he went back home and built it. And obviously, he did an amazing job.
And let's fast forward. So first off, when was launch year? See, we've been alive just over three years. What was that? So 2015. Yeah. And bootstrapped or have you guys raised capital? I'm completely bootstrapped. Russell, you get a total high off of seeing the email in your inbox of, you know, you know, New York based VC interested in a chat.
Chapter 7: What is the significance of customer churn for SaaS businesses?
And you just must love either clicking delete immediately or writing back and saying we don't need the money.
I always forward them to Dave, actually. I'm like, yeah, Dave, talk to these guys. It's been fun because, like, everyone grows businesses based on that. And it's like when we started, we didn't have anyone who wanted to give us money. And then we were profitable from day one. And we've become extremely profitable since then.
And it's just, you know, it's fun because, like, we use our software to sell our software. And because of that, it's profitable. And it's ā yeah, I've never had to look that direction. It's always fun hearing, though, what they ā entertaining just to find out what they think we're worth and all that kind of stuff, which is kind of fun.
No, it is interesting. So about, this would have been, the last time we came on the show would have been about 18 months ago. When you shared at that point, you were at about 10,000 customers paying an average revenue per month of about 120 bucks. So you were about, you know, over 1.2 million bucks in MRR and obviously well over 14 million bucks in ARR.
I think what you just shared with me is you've basically 5X that, at least in terms of customer count, right? Up to 55,000, that's paying, right?
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Chapter 8: How does ClickFunnels ensure customer retention?
Yeah.
Yep. Okay. 55,000. Yeah.
Or 54,000, 54,000.
And so Todd, that, that comes out to what about 5.5 million bucks per month. And then obviously we can multiply 12 to get about, you know, six, what is that? 60 million annually.
Right at it. And that doesn't include a lot of the one-off sales. We do a lot of coaching programs and whatnot on the backend as well. But when it comes to just directly from the software, yep.
Russell, tell me how you manage the one-off stuff. So most people that are doing SaaS, they obviously notice 87, 89% gross margin. It's sexy. There's no refund rates, right? On one-time big sales. Why even do the one-time stuff?
Um, honestly, the biggest reason is it keeps me sharp and helps me understand what our customers want. Like with that many customers, we can't serve them all. So we have really high end coaching programs and bring the top level students in. And, uh, I have a chance to work on them one-on-one daily and I get to understand their frustrations or problems. Things are good.
What's happening, like all the innovations, like we're always on the cutting edge of all marketing and sales because we've got a hundred entrepreneurs working like one-on-one with me. And so I'm able to see like, Oh wow. In the dental industry, this is what's happening. And I don't know this industry is what's happening in supplements. What's happening in
We're able to keep the software three or four steps ahead of whatever else is doing because of that. So it gives us a really like it's just a really neat insight that we get. I don't think anybody else typically gets with their with their customer base.
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