SaaS Interviews with CEOs, Startups, Founders
EP 354: $1.3M in Monthly Revenue to Get You Leads with Alex Berman of Inspired Beats
13 Jul 2016
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.
Chapter 2: What is Inspire Beats and how does it generate revenue?
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 soul mark.
Chapter 3: How does Inspire Beats differentiate itself from competitors?
And I'm your host, Nathan Latka. Okay, Top Tribe, this week's winner of the 100 bucks that I give away every Monday is Kim Dust. She's in the entertainment industry and is currently working a full-time day job and doing her side hustle on the side. Kim, congrats.
Chapter 4: What is the customer acquisition cost for Inspire Beats?
For you guys' chance to win 100 bucks every Monday, simply subscribe to the podcast on iTunes now and then text the word Nathan to 33444 to officially enter. Again, text the word Nathan to 33444 after you've subscribed. Okay, Top Tribe, this episode is brought to you by FreshBooks, the invoicing tool that I use to make sure I collect all my money in an efficient manner.
To claim your free month, go to NathanLatke.com forward slash FreshBooks and enter the top in the How Did You Hear About Us section. This is episode 354. Coming up tomorrow morning, you'll hear from Ryan Levesque and why he spent over a million dollars to sell 55,000 copies of his book, Asked. Top Tribe, good morning.
Our guest today is Alex Berman, and he is the chief marketing sumo for Inspire Beats and is responsible for generating over $20 million in B2B leads this year alone. He and the team at Inspire Beats have sent over 1 million cold emails to funded startups and software as a service companies in the last two years alone. Alex, are you ready to take us to the top?
Chapter 5: How does Inspire Beats achieve its monthly revenue growth?
Let's do it. All right. Okay. First things first, what is Inspire Beats and how do you make money? Sure. So InspireBeats is a B2B lead generation company. So what we do is we make lists of potential customers, and then we also have a team that sends targeted cold emails, basically to warm up deals and book appointments for mainly SaaS startups. Okay. And you left the most important part.
How do we make money? So it's a software as a service productized service model. Basically, customers will pay us monthly either for access to lists of leads or they'll pay us monthly for us to actually do the emailing on their behalf. Okay. And what does some on your website right now? Give me an example of the last customer that went through you. Maybe how form stack uses you. Sure.
So Formstack is kind of a weird example, but basically the last customer that I was talking to, what they'll do most of the time, they were a Russian quality assurance company. Basically they had a decent market share in Russia, but every time they would try to email American clients, people would be turned off for some reason.
We dug into it a little bit and found out it was because the emails were too long.
Chapter 6: What is the importance of cold emailing in lead generation?
And then also because they weren't speaking like English in a native way. That causes emails to get turned off. So what we did for them is now we're basically writing emails on their behalf and doing lead lists. They started on, it was a scale package. So $8.99 a month for 300 leads.
And the goal, basically they're 90 day minimums on the packages, but the way that we set it up with them, it's going to start with $8.99. And then I'm hoping to have them jump up to that $18.99 rocket package within 30 days. So now you see the quality.
leads you've got a nice little pricing kind of experiment going on where they have just pure sass no touch versus like sass plus professional service which is the little toggle leads only versus with outreach right yeah and we actually when we started we used to do full sass no service at all and we had to actually end the sass platform because all of our customers wanted the service so that was another experiment okay okay that's interesting let's get down in a second walk me through kind of unit economics how many current customers are you working with
Chapter 7: What is the customer churn rate for Inspire Beats?
We've got over 700 clients right now. A little over 60% of them do leads only and they're more large companies. And then the smaller companies, about 40% do with outreach. Okay. And what are they paying you on average per month? So our typical customer ends up on the rocket package after about 30 to 45 days. So how much is that per month? $1,899 a month for the rocket.
Let's talk about that because you have so many pricing options. Let's just take a weighted average. So if I multiplied 700 customers times 1,800, that'll give me your MRR? Is that accurate? It should be around that. Yeah. Somewhere around there. Yeah. Some of our clients are a lot larger and then some are just testing us out and they're a lot smaller.
So yeah, I'd say that's a good, so it's fair to say you're doing about 1.3 million per month. Yeah. When you line it up like that.
Chapter 8: How does Inspire Beats plan to scale its operations?
Well, that's the number. That's why I want to get the average, right? So I think it's actually probably lower than that, but you have 700 customers paying you on average. What amount? Well, let's just go backwards. What are you guys doing in, what was May, 2016 revenue monthly? So I don't have those numbers lined up in front of me, but yeah. Oh, come on, Alex. You're the CEO of a SaaS company.
How do you not know the monthly revenue? I'm the chief marketing officer, third co-founder. But yeah, you're right. Oh, come on. I don't believe you for two seconds. Give me a range if you're not comfortable saying it for competitive reasons. The number you said is about right. Okay. So you are doing about 1.3 million per month. Yeah. Why would you not like shut that from the rooftops?
That's amazing. That's just going to get you more clients, right? I don't know. Actually, what are you scared of? Who's going to beat you? So we've actually in the lead gen space, there are over a hundred, hundreds, probably thousands of companies that all try to do the same thing. Who's your biggest competitor? Uh, lead genius, probably our biggest competitor right now.
And they've raised, uh, I think over 20 million in venture funding, maybe a little, you know, someone can check the numbers on that, but yeah, we, we bootstrapped basically over the last two and a half years, um, to be about their size or maybe even a little bit bigger than theirs. You're bigger than them. Yeah. I mean, I had him on, right.
So, so he came on now, this data I'm about to give you is from a few months ago, but they raised, they've raised 8 million and they're only doing 700 gate per month in MRR. So, so you're not, why are you, who else are you worried about? So they're probably the big ones. And then there's a bunch of smaller lead generation companies popping up every day.
And, you know, I'm always scared of the smaller guys coming in and like trying to take in your lunch. Yeah. Because that's kind of what we did to lead genius, right? We came in lead geniuses models based a lot on having Filipinos do the lead generation and like people offshore. And we came in with an all American model and a lot more automation.
We were able to take a lot of their customers because of that. Yeah. That's interesting. How do you, When you take that approach, I mean, how do you communicate that advantage when you're kind of trying to take customers to you? Like when someone asks you on a sales call, well, why should I use you over lead genius? Do you just say they like you should do American, not Filipino?
No, I say the one, the quality of leads matters more. So basically the way that we do automated lead generation, we're able to generate leads that are more consistent. And then, yeah, having an American that actually understands the business model of each client run through each lead specifically helps.
you're going to get a lot more higher quality leads than you would, you know, having a Filipino that's reviewing a list pulled from, you know, some database like lead genius does. Interesting.
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