SaaS Interviews with CEOs, Startups, Founders
EP 517: $3.5M Raised, 6m Users Helping 47k Customers Sign Documents with HelloSign CEO Joseph Walla
23 Dec 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. 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, this week's winner of the 100 bucks is Rhett Gillins. He's in the restaurant industry and he feels stuck. He wants to start his own software business. So congratulations, Rhett, for your guys' chance to win 100 bucks every Monday morning.
Simply subscribe to the podcast on iTunes now in order to enter and then text the word Nathan to 33444 to prove that you subscribed. Guys, if you want an easy tool to use to book your meetings back to back, to batch your calls, to make sure people actually show up when they schedule, you want to use Acuity Scheduling.
It's what I use for all my podcast interviews at NathanLatka.com forward slash schedule. I'll tell you more about how I use it later on in the episode. Nathan Latke here. I know all you youngsters and everyone else is getting excited to be home with your family for the holidays, drinking coffee.
And as you're cuddled up on that couch, throw in your headphones and listen to a little bit of the top entrepreneurs that'll get you inspired even when you're taking some time off for the holidays. Tomorrow morning's no different. We have Dinesh coming on. He sees 20 deals annually and invests in about two of them, between 75 and 150 grand each.
He does pre-seed deals and likes B2B SaaS for investments. So what's his secret and what was his biggest hit? You'll learn tomorrow. Tint, it has to do with the publicly traded company.
what's up guys nathan latke here our guest today is joseph wallah he is the ceo and co-founder of san francisco-based startup hello sign the company launched in 2012 and provides the easiest way for businesses to sign and collect legally binding documents online the idea behind hello sign was sparked by joseph's first successful product alongside his co-founder neil omaro hello fax hello fax launched in 2010 after attending the prestigious startup accelerator y combinator joseph are you ready to take us to the top
Absolutely.
Thanks for having me. You bet, man. Okay. HelloSign. Tell us real quick, what does it do and how do you make money?
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Chapter 2: What business problem does HelloSign aim to solve?
I mean, this is like public stuff, right? I mean, you can go look at any kinds of kind of things that look at tech average tech stars in the valley, and you can see that a CTO on average makes two hundred twenty K. I'm just asking. You're much better than an aggregated data source because you're actually doing it right.
You know, the average kind of kind of developer salary in the in the valley, whether it's at your company or just on average, is what based off your perspective?
Yeah, I mean, this is something I mean, if you go look at I mean, it's really it's really hard for me to say because it really depends on the state of the company. And I think what you'll notice is that, you know, salaries are different from, say, if you work at Google versus like a startup company or different stages of the company and different equity versus salary mixes.
So I think it would really be hard for me to give like a salary number. And I think that generally what you do is, um, you know, we use software like pay scale and other software in order to like figure out on a per person basis, you know, based on their experience, um, how much, how much we offer. Yeah, exactly.
Let me ask you differently. So it doesn't actually make it kind of per person. If you just add up your entire kind of headcount expenses per month, right. What are those?
Yeah. So generally what you do is as like a rule of thumb, you calculate, you know, 10 to 20 K per person per month. And that's like a fully loaded cost. And so that includes people's salaries, you know, health insurance, office costs, snacks, you know, software, everything. And, you know, 10 to 20 K per person. per month is a pretty good rule of thumb.
I've heard that a lot from investors, but it's pretty on point when you talk to a lot of companies in the Valley.
Hey, that's really helpful. I haven't heard a metric like that before. So that makes kind of easy math for anyone that wants to compare. So with 60 employees, if you kind of average a total monthly expense of between 10 and 20 K, let's just assume 10 K on the low end times 60 employees, that's a minimum of 600 grand per month, just on headcount expenses. And you guys are cashflow positives.
Is it fair to say you're doing more than 600 grand in MRR?
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Chapter 3: How does HelloSign generate revenue through its pricing model?
Yeah. I think I'll hold off on that, but I, um, let's switch to economics then just since you want to stay away from that kind of stuff. Talk to us. Churn is really important and you have the beautiful luxury of having a large sample size. So you have 47,000 paying customers. What's your growth monthly customer churn?
Yeah, so also something that I can give some broad strokes on without talking about specific numbers. I think in general, with a lot of SaaS products, on your pro plans, the churn is a lot higher. And then as you get into larger and larger companies, the churn goes down substantially.
I see this happen. I mean, a good way to kind of measure this is based off ARPU size, right? Like if it's less than, you know, $50 per month in ARPU, you know, that's generally a small business space.
If it's greater than a thousand bucks, which is like a team that has, you know, 10 seats on your platform or it's fully integrated into their onboarding process for new hires and everything, your churn goes way, way down. Right. Are you like 20% small business, 80% enterprise? Can you give us any kind of relationship there?
I think in terms of like how are you, are you like, are you mostly small business or mostly enterprise or? Yeah. So we, you know, we're mainly in the SMB admin market space. So we do have some larger customers. I think, I think this is what you'll find a lot with a lot of tech companies. So they start a lot on the low end of the market on like the pro plans.
And then gradually as they build out more sophistication in their products and their offers, and they understand the market more and they like bring on a sales team, they gradually move up market.
And so, um, that's kind of the, that is the path that we've been taking over the last couple of years is that if you look at your pro plans and you look at the churn rate on the pro plans, the revenue per customer, you realize that, you know, you can't continue along that path with say like a sales team and you do hit, um, real quick.
I just want to make it when you say pro plans, you're talking about your $13 kind of very low R poop original plan, right?
Yeah.
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Chapter 4: What strategies did HelloSign use to achieve cash flow positivity?
The three to one LTV to CAC ratio. Exactly. But you won't share any kind of range for us to better understand the document signing space. Right. Okay. Even a big range. Like you can be as vague as you want. By the way, why are you scared of this? You're like, I mean, you're doing well. I mean, there's several others in your space, right?
You know, the Panda Docs, the PDF Filler, the Seamless Docs, SignEasy Doc. I mean, there's a bunch of kind of people in the space. Why does this scare you to talk about? What worries you?
Yeah, I think that there isn't a lot of upside in sharing really core metrics publicly. I think there are a couple of metrics that we talk about sharing with the public. But I think apart from that, it doesn't make a lot of sense.
What if I told you that my listeners are more likely to go use HelloSign when they kind of get more data from transparent CEOs?
Yeah, I mean, it's still... doesn't really, I mean, it's hard to quantify that versus like sharing a lot of public information.
It's super risky, right? It doesn't make sense for you. Right. Yeah. It makes good sense. Well, Hey, let's move forward. Uh, uh, uh, Joseph, we're going to get into the famous five here in a second. Before I do that, where's the best place for people to connect with you online if they want to follow you as you build a business?
Yeah. LinkedIn is great. I'm following me on Twitter is good as well. Um, yeah. Happy. If people want to shoot me a note, happy to connect.
All right, guys, I talked about this earlier, but I schedule like so many meetings that would blow your mind. I mean, all my podcast interviews, right? Hundreds of entrepreneurs I talk to monthly. I schedule and you know what? I do it so efficiently. I get them all to agree to my calendar. So all the calls are back to back to back. That means I'm not switching in between tasks all day long.
I get them to batch so that I can be very efficient. It's so critical. And I use a tool called Acuity Scheduling to do this at NathanLacka.com forward slash schedule. It eliminates back and forth between me and people I'm trying to meet with. It makes it very simple. And most importantly, they help me keep my no-show rate very low because they send out reminders. Helps you look very professional.
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