SaaS Interviews with CEOs, Startups, Founders
EP 105: He did $35k in October and is building to sell with David Abrams
06 Nov 2015
Chapter 1: What is the main topic discussed in this episode?
This is The Top, where I interview entrepreneurs who are number one or number two in their industry in terms of revenue or customer base. You'll learn how much revenue they're making, what their marketing funnel looks like, and how many customers they have. I'm now at $20,000 per top. Five and six million. He is hell-bent on global domination. We just broke our 100,000 unit sold mark.
And I'm your host, Nathan Latka. Okay, Top Tribe, every Monday I give one of you 100 bucks to invest in your idea and get to the top. To enter for your chance to win 100 bucks, simply subscribe to the podcast on iTunes right now and then text the word Nathan to 33444 to prove that you did it. This week's winner was Matt Wolfe in Chicago at the DDB Agency.
Coming up tomorrow morning, you are going to hear how a 28-year-old in Poland is going to try and negotiate for a $20 million valuation in his next round. Okay, Top Tribe, good morning. I hope your morning's off to a good start. You're jogging or you're driving to work, and you're going to love our guest today. His name is David.
Now, David is a cutting-edge marketing strategist who works to create highly profitable funnels, traffic generation, and marketing campaigns for some of the top companies in the world. His expertise reigns from funnels to new marketing strategy to business development, and he is currently the founder of Systemize.ly and Demio. David, are you ready to take us to the top?
All right, man, let's do this. So first things first, describe to us what Systemize.ly does.
Yeah, so Systemize.ly is a systems and marketing automation agency. Really, we focus on strategic funnels and systems consulting. We build high-end, like done-for-you funnels, so actually building out a funnel for me from scratch, like just meeting with you, brainstorming on it, and then building it out. And then we also have three smaller automation-based softwares that we built out in 2015.
But most of our time is really focused on consulting and done-for-you.
Okay, great. So walk us through Systemize, and you pronounce it Systemize Lee instead of Systemize.ly? Yeah, Systemize Lee. Okay. Okay. So walk me through, I want to pay you. How much do I pay you and then what do I get for that?
Yeah, absolutely. So we actually base these funnels on what you need. So it's a custom package built from $5,000 all the way up to $20,000. It's a high-end service, obviously, the customization that goes into it. But if you pay us, we'll sit down and kind of figure out what you need for your business, like what type of funnel we can build for you, how big it needs to be.
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Chapter 2: How does David describe the services offered by Systemize.ly?
Got it. And Top Tribe, I want you to actually go look at David's stuff. Look at Systemizely. Look at Demio so you can reverse Engineer's Funnel and learn from him. And you can get the links to those websites in the show notes at NathanLatka.com forward slash the top 105. Again, forward slash the top 105.
So, David, I want to go back to the eight employees that you have on Systemizely, which did $35,000 in October last year.
help me don't don't break out individual salaries but all together what is your total headcount costs per month on average yeah it's such a good question and it's something that you know as a business owner i try to keep literally my finger on like every month really understand it so that i know what to price and i think for professional services it's so important to know your pricing model so i try to keep costs around 40 percent of revenue so uh i give myself about a six
60% margin there for actual revenue into the company. And the reason that I have to do that and I always try to pad extra and I'll like charge more for services if I have to is because with professional services, you're always going to witness like time expenditures, like things, projects expanding larger than you want them to or unknown costs or problems here or there.
You have to bring in a special consultant to figure out like one piece that's not going right. So give yourself that extra margin so you have... have the markup ready for yourself. But yeah, I try to keep it around there. And that's why I like to have some contractors and some full-time because the full-time people, those are the integral people that need to be in every day helping on projects.
And then the other people we pull in as we need them. And that way when new projects come in, we can kind of have that markup there ready.
Got it. So I want one last question on money stuff. And then I want to talk about how you're getting new customers. So let's go back to October 35 grand top line. If you're optimizing for 40% cost, that's about 14 grand in costs. So you're netting, you know, before like other expenses, you've got about 20k coming out. Is that go is that all profit? Or what are some of your other expenses?
Yeah, so it is profit, but I'll tell you what, for 2014, 2015, I really didn't want to take money out of the company and put it into my pocket. I really am seeing, for myself, what I've decided is professional services is a stepping stone to building passive income streams in software and other ways to just make recurring income. I see them as assets that I want to build.
So what I really try to do is just take out what I need, bare minimum what I need for food and bills and all that kind of stuff, And then I reinvest pretty much everything else, excuse me, everything else into software, into Demio, into other projects that I know will have a long term scalable and passive way to make money.
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Chapter 3: What was the revenue breakdown for David's business in October?
I'm very approachable. I always try to answer people's questions and stuff. So happy to help.
Okay, Top Tribe, don't forget, for your chance to win $100 right here on the podcast every Monday, you simply have to subscribe to the show on iTunes. Do that now and then text me that you've done that to 703-431-2709. Again, subscribe on iTunes now, then text me that you've done it at 703-431-2709. Very good. Okay, David, we're about to get into my favorite part of the show.
Do you know what's next? What's next? Come on, dude. It's time for the famous five. Are you ready? I'm ready. All right, number one. What's your favorite business book?
Okay, so you're going to hit me, but I have two, okay? Hit me. The Lean... Startup is my favorite one for SaaS.
David, I freaking hate that book. Because I feel like Eric Ries, he publishes this book and anyone who reads it, anyone on earth thinks that they're just magically going to be able to become an entrepreneur if they print off a little spreadsheet and stick some post-it notes in the sheet.
Oh, see, I didn't take it that way. I took, I really looked at it as like, there's, there's ways to get software out faster and you need to think about it in a different way. And that's like the whole Demio thing. You asked me like, why did it take so long? I read that book halfway through and I was like, all right, we screwed up.
You know, like there's, there was things about it that I really learned from, but I get what you're saying. Okay. Fair enough. What's number two? I probably, hopefully I like this one better. You're The Millionaire Fastlane by MJ DeMarco. Okay, not so bad. Yeah, I read that one a while ago, but I really revert back to it all the time.
I think that's a fantastic book for anyone looking to break out of their job or just try to get into the entrepreneurial mindset. I thought it was just so amazing. It's such an amazing book.
All right, there you go. Number two, David, of the famous five. Is there a CEO that you're following or studying right now?
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Chapter 4: What challenges does David face with professional services versus recurring revenue?
Take a couple of traction methods to get you there. And then every day, just review them and get yourself there.
David, I think that's so important, and I've never heard shiny strategy syndrome before. I love that. Well, guys, there you have it. From his creative writing degree back in college to his own web agency to launching Systemizely in 2014 and doing over $35,000 in October. David, thank you for taking us to the top. Thanks. Talk to you soon.
Okay, Top Tribe, I'll see you bright and early tomorrow morning. And don't forget, before you go listen to other episodes, subscribe to the show on iTunes right now for your chance to win $100 next Monday. This week's winner was Matt Wolfe from DDB Agency in Chicago. Yesterday, you heard exactly how you can invest $1.5 million in 40 different companies with our guest, Amal Sarbaa.