SaaS Interviews with CEOs, Startups, Founders

EP 527: Proposify Hits 3200 Customers and $150k in MRR with CEO Kyle Racki

02 Jan 2017

24 min

4931 words

2 speakers

02 Jan 2017

Audio

Description

Kyle Racki, co-founder and CEO of Proposify. He's passionate about design, SaaS, and marketing. He loves jamming out to 90s covers/tunes at open mic nights, and also has the unique ability to work in perfectly, cromulent Simpsons' references to any conversation. Famous Five: Favorite Book? – Lean Analytics What CEO do you follow? – Alex Turnbull Favorite online tool? — Heap Analytics Do you get 8 hours of sleep?— Sometimes If you could let your 20-year old self, know one thing, what would it be? – "That it's all going to be okay and…I'm going to give myself a hug" Time Stamped Show Notes: 01:40 – Nathan introduces Kyle to the show 02:24 – Proposify is a SaaS business and it helps people streamline their sales and close more deals 02:40 – Average customer pay per month is $40-$50 02:53 – Current number of customers 03:10 – Average MRR 03:25 – Proposify was launched in 2013 03:35 – Proposify had less than $1000 MRR for 17 months 04:03 – Kyle and his co-founder had an agency 04:22 – Kyle raised $250K in seed capital from a local investor 04:39 – Kyle and his team's pay is around $60K a month during that time 05:40 – Team size is 15 and are located in Halifax, Canada 06:20 – Kyle shares how the startup market is in Halifax 06:50 – Known startup companies from Halifax 07:24 – Kyle does weekly phone calls with customers to check in on them 07:50 – Kyle shares how one of their customers beat VaynerMedia in a proposal 09:15 – How Proposify creates proposals in a flash 09:40 – Proposify's competition 10:04 – Proposify is more focused on the digital agency space 11:25 – Average number of new customers per month 11:50 – Proposify has a free and no-credit card sign-up 12:00 – Proposify does inbound sales, but organic search is the biggest source of traffic 12:43 – Best podcast that drives Proposify's traffic 13:05 – Proposify has a general marketing budget 13:28 - $10K for paid marketing 13:45 – CAC is quite low 14:18 – LTV 14:40 – Gross monthly customer churn 15:00 – Proposify currently has 2 sales people 15:35 – Other system Kyle uses for business intelligence is Heap Analytics 16:16 – Total 2015 revenue is $551K 17:11 – Proposify is profitable and continually growing 18:30 – "We'll always entertain acquisition offers if it makes sense" 19:00 – The process Kyle will go through if there's a possible acquisition 19:47 – Number of Proposify's developers 20:00 – Connect with Kyle through their website and help Kyle look for Proposify.com's owner and he'll pay you 22:00 – The Famous Five 3 Key Points: There's a temptation to spend VC money; be decisive when you want to raise capital and stick to your goals. Organic traffic is good, but getting paid marketing can still drive more traffic and customers. There are a lot of things to consider in an acquisition – it should match your personal goals, be a cultural fit, and the numbers need to make sense. Resources Mentioned: Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments Drip – Nathan uses Drip's email automation platform and visual campaign builder to build his sales funnel Toptal – Nathan found his development team using Toptal for his new business Send Later. He was able to keep 100% equity and didn't have to hire a co-founder due to the quality of Toptal Host Gator – The site Nathan uses to buy his domain names and hosting for the cheapest price possible. Audible – Nathan uses Audible when he's driving from Austin to San Antonio (1.5-hour drive) to listen to audio books. The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens and follow-up with email sequences Proposify.biz – Kyle's business website Show Notes provided by Mallard Creatives

Chapters

1. What is the main topic discussed in this episode? 2. What is Proposify and how does it help businesses? 3. How did Proposify achieve $150k in MRR? 4. What challenges did Proposify face in its early days?

Featured

Nathan Latka

Kyle Racki

Transcription

Chapter 1: What is the main topic discussed in this episode?

0.031 - 15.793 Nathan Latka

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.

Chapter 2: What is Proposify and how does it help businesses?

16.273 - 44.837 Nathan Latka

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 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.

44.817 - 71.428 Nathan Latka

For you guys' chance to win $100 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. 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 on the schedule, you want to use Acuity Scheduling.

71.468 - 93.167 Nathan Latka

It's what I use for 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. This is episode 527. Coming up tomorrow morning, you're going to learn from ConvertKit's CEO, Nathan Berry, how they hit $480,000 in monthly recurring revenue by helping 10,000 professional bloggers grow their email list.

95.915 - 116.674 Nathan Latka

Nathan Latka here. Good morning, everyone. You're going to enjoy our guest today. His name is Kyle Rackin. He's the co-founder and CEO of Proposeify. Kyle is passionate about design, SaaS, and marketing. He loves jamming out to 90s covers, tunes, and music at open mic night, and also has the unique ability to work a perfectly cromulent Simpsons reference into any conversation.

116.714 - 123.981 Nathan Latka

Kyle, are you ready to take us to the top? I'm ready. I told you before the thing, I said, what is a Simpsons cromulent? And you corrected me. What is it?

124.585 - 141.82 Kyle Racki

It's an inside joke where the people at Springfield on The Simpsons kind of make up words that don't exist. And one character says it's a perfectly cromulent word. All right. Very good. All right. Let's get into the business. Tell us what Proposify does and how you make money. Cool.

141.84 - 168.336 Kyle Racki

So Proposify is a SaaS company and we help people streamline their sales proposal process, close more deals, do it all in the browser and collaborate easier on their sales process. And revenue model. So what are people paying you on average per month? The average customer pays about $40, $50 a month, but we have prices ranging from $25 a month all the way up to about $250 a month.

168.677 - 182.353 Nathan Latka

Okay. And about how many, currently, how many customers are you working with? Um, we're getting close to about 3,200. Okay. That's great. That's really great. And I want to get back in and get kind of start date and kind of the founding story and all that jazz, but let me just keep going down on these for a second.

182.393 - 204.34 Nathan Latka

So in order to just calculate back in the napkin MRR, is it, can I do 40 bucks, a $40 ARPU times 3,200 bucks to get about 128 grand in MRR? Uh, we're close to 150 K MRR. Oh, great. Okay, good. So maybe ARPU is a little higher than, than, than, uh, 40 bucks. Yeah, 47 or so. Oh, got it. Very good. Okay. So take us back to the founding story. So what year did you launch the business in?

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Chapter 3: How did Proposify achieve $150k in MRR?

665.499 - 672.989 Nathan Latka

That's great. That's great. So like I'm on the one right now that is that is Pandadoc versus Proposify. How many uniques would this landing page get per month on average for you guys?

674.311 - 678.597 Kyle Racki

Oh, that's that's one I haven't looked at the analytics for that. I can look that up if you'd like.

678.797 - 688.45 Nathan Latka

No, that's I mean, that's OK. I'm just trying to get a sense. Let me let me kind of go more macro for a second. I bet you know this number. So how many new kind of users are trialing Proposify per month?

Chapter 4: What challenges did Proposify face in its early days?

689.375 - 716.698 Kyle Racki

so when we look at how many people are signing up for trials we're getting about uh between 100 and 150 new signups a day um we tend to close about two or three hundred of those every month each month okay and how are the the trials what is it do you require a credit card uh nope you can sign up without a credit card and uh you only put it in at the end when you're ready to upgrade okay and walk us through kind of this growth how are you finding these customers

718.433 - 735.178 Kyle Racki

Uh, we, we do a number of different things. It's mainly all inbound. We don't really do any outbound marketing. Um, we do have salespeople that are kind of inbound salespeople and follow up with demos and stuff for some of the bigger customers, but mainly right now, uh, organic searches are biggest driver of, uh, of traffic.

735.759 - 741.889 Kyle Racki

And we also use, you know, content blogging podcasts and a little bit of paid media, Facebook retargeting, that kind of stuff.

742.209 - 746.736 Nathan Latka

Are you, you're creating organic content on podcasts or you're, or you're sponsoring podcasts?

748.049 - 758.432 Kyle Racki

We do both. So we sponsor a couple of podcasts and we also have our own one called Agencies Drinking Beer, where we sit down with an agency owner every week and they can kind of share lessons and stories.

758.873 - 765.889 Nathan Latka

I love that. Which podcast sponsorship that you're that you're, you know, right now is performing the best for you in terms of driving the most new customers per month?

766.274 - 776.062 Kyle Racki

Um, we're starting another around with a BOAG world based out of the UK. Um, Paul BOAG hosts that show and that seems to be a really good fit for our audience.

776.082 - 781.718 Nathan Latka

Interesting. And how do you think about what you pay for those sponsorships? Do you just break it down into kind of a customer acquisition cost or what?

782.947 - 796.113 Kyle Racki

I mean, we have a general marketing budget every month that we kind of budget and set aside for it. And we kind of just decide what we want to put it in. So, you know, if we sponsor a podcast, we might take a little bit out of like Facebook advertising that month.