SaaS Interviews with CEOs, Startups, Founders
Flowster Hits $10k MRR After eCommerce Brand Hits $3.1m In Amazon Sales
29 Oct 2020
Chapter 1: What led to the creation of Flowster and its connection to eCommerce?
It was at breakeven for the longest time until we hired the VP of marketing and I gave her a marketing budget. And now we're going to be burning through a fairly decent amount of cash. But thanks to the historical sales of my web's product, I have a reasonably decent war chest of cash and can fund it for long enough to get our unit economics on the new target audience figured out.
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Chapter 2: How did Trent document processes to scale his eCommerce business?
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Chapter 3: What was the revenue of Trent's eCommerce business when it made the Inc. 5000 list?
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Chapter 4: What strategies did Trent use to leverage virtual assistants in his business?
My guest today is Trent Deersmid. He's a serial entrepreneur, husband and father. In addition to hosting the Bright Ideas e-commerce podcast, he's the founder of Flowster.app, a business workflow management application used by thousands of e-commerce businesses around the globe. In 2019, his e-commerce business ranked 254th on the Inc. 5000. All right, Trent, you ready to take us to the top?
You betcha. Let's go for it. So just to be clear, are you also running an e-commerce business and you use Flowster to grow it? Correct.
The e-commerce business was the one that was created first, and then there's a story of how one led to the other, but the short version is that one did lead to the other, and Flowster was created and released to the public in fall of 2018, and the e-commerce business was created in the summer of 16. Okay, so let's start with summer of 16. What was the e-commerce business?
So it's a business that is an Amazon reseller. Nothing particularly unique about it other than the way that we went about it. And the way that I went about it was to take a very process-oriented approach to growth. So we began by documenting every single one of our processes and then we made extensive use of virtual assistants overseas.
That resulted in us being able to basically out-hustle our competitors and that's what led to the company being on the Inc. 5000. Okay, so let's start with the headline and then work backwards to the documentation and the VAs. What was revenue when you guys reported to Inc.? 3.1 million, I think it was. And what year was that revenue? That was 20, well, that was, we got the award in 2019.
So whatever, I think that was the three-year number. Okay, and what were you reselling mainly? What was your best-selling product that year? supplements. Supplements. Interesting. Okay. Now let's work backwards. You out-executed with documentation and cheaper overseas VA talent.
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Chapter 5: How does Flowster assist eCommerce businesses today?
Why were you so good at documentation? For someone listening right now that wants to get good at documentation for hiring VAs, what would you recommend? So not my first rodeo. I built and sold a company before. And very early on in my first journey, I read Michael Gerber's book, The E-Myth, and I was immediately intoxicated with
The idea of documenting processes and delegating because my primary driver, Nathan, is I don't live to work. I work to live. I'm an entrepreneur first and foremost to design a lifestyle that I want. And that lifestyle means that I don't want to be bogged down in minutia every single day, day after day to run my company.
So literally walk me through a process you documented and how you documented it. Are you using Google Docs and then copying that out into a VA system? Like get us into the weeds a little bit here. Sure. So in the beginning, it was very simple. We started with Google Docs. I would simply take my 27-inch monitor and I would take a browser on the left and a browser on the right.
And in the left-hand browser, I would do the thing that I didn't ever want to do again, the process. And then I would just screenshot the hell out of everything that I was doing and I'd write detail instructions. So instead of, if that thing was going to take me 10 minutes, creating the process might take me three hours, but then I don't ever have to do it again.
And in our case, one of the things that we started with was, well, how do we identify competitors on Amazon? How do we research products on Amazon? And that's a, there's a very sequential process to doing that, to finding these profit products that made economic sense for us to carry. It's very laborious. And so that was the first thing that I delegated.
And how did you know that it would be a competitive advantage to document that process and have a VA to do it and the economics associated with paying that VA versus a smart developer coming along and a competitor to you and writing a macro or something to do the same thing? So I suppose a developer could have run a macro and I'm not a developer, so I can't speak to that.
specifically, but I know that in the Amazon reseller space, the vast majority of the competitors are not particularly tech savvy. So I didn't have a bar that high to climb to. I see.
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Chapter 6: What pricing model does Flowster currently use and how is it changing?
What I realized is it's basic B2B sales. The more appointments that I could get with prospective brand partners, the more opportunities I would have to give my pitch and the more times that I would get somebody to say yes. So that's Just really basic stuff. And I thought, well, I just need to send a lot of emails. I need to identify a lot of products.
I need to run them through a set of mathematical filters to create a short list. Then I need to get all the contact information for the correct person at each one of those companies so that I can send them an email with the right message. And I needed to do that hundreds and hundreds and hundreds of times a week. And as you might imagine, that's a fairly laborious process.
And I didn't want to do it because it's really, really mind-numbingly boring work. So I decided I would document every last little minutiae detail of that and then hire a little army of virtual assistants to do it for me. And as the ink plaque on the wall behind me would attest, we actually have two of them now. It worked pretty well. How long was the document, that one process?
Well, what I just described was actually multiple processes. So the first step is finding competitors. And that was really only like a six or seven step process. And then... we have a process for called product extractions and I'm going from memory. I don't have it on the screen in front of me right now, but that was probably a 35 or 40 step process.
And then there's another process after that, which is finding the contact. Well, actually we'd put, then we put all the data into a spreadsheet and the spreadsheet had these macros or pre-made formulas in it. So it would automatically do all the math.
And then for the products, which were one row for each product, everyone that passed muster, then there was another process given to yet another VA and, to go and find the company, find the executive on LinkedIn, find their email address, validate the email address. And then we would have another, then they would all be imported into our HubSpot CRM.
And then we used yet another application to send the email messages out in bulk to those people. And that was repeated week after week. Interesting. I love this.
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Chapter 7: What are the customer acquisition costs associated with Flowster?
Okay. So that's helpful to understand. At some point you did get tech savvy though, because you built a SaaS tool called Flowstrap. When was the first line of code for that written? We started coding in middle of 2017. Okay. And how did you get your, oh, sorry, go ahead.
I was going to say it happened because I was, so as a result of the first year success we'd had with the reseller business, I was invited to speak at a conference with approximately 500 other Amazon resellers in the audience. And I took an hour and I explained what I've explained to you, but obviously in more detail. And I said, hey, everybody, I don't have anything for sale.
I'm literally just going to fire hose you with information. So good luck. And I had no plans to start a software company. I never thought that people would want to buy copies of these procedures. Well, much to my surprise, my assumptions were incorrect. I was inundated with requests after that talk of would I sell copies of all of these procedures that I developed?
And so we thought, well, sure, we'll try it out and see how it goes. Well, we sold $412,000 of them in the first seven days. It was at that moment that I had the light bulb go on and I thought, well, that's going to be a thing. And we want to do more of that. So I immediately called a good buddy of mine who had built and sold his software company. He was the technical guy.
And I said, this is what happened.
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Chapter 8: What insights does Trent share about the future of his business and market trends?
I want to build a software company. And he said, I'm in. And you already had the specs because the specs for the process. Correct. Interesting. OK, so so I think we have an idea. But what does Flowster app do for e-commerce Amazon seller today? So it is twofold. One, you have the application itself, which is a process management application.
So in theory, anybody in any industry could go into the app and they could document their processes for all the things that are known in advance and highly repeatable. And then they can assign them to people on their team and give them due dates and all the things that you would expect. The second layer is the content.
And this is the layer that's really critical to our success in e-commerce and to our desire to build, to get more traction in the e-commerce industry. As you might imagine, creating processes from scratch, it's a lot of work. So we had the benefit of already having created, I think at the time there was about 70 or so of them because we were in that business. We needed them for ourselves.
That took a year to create that first bit of content before it was ever even publicly available. So the big benefit of Flowster for e-commerce now is that you can go and sign up and you can immediately tap into
our Amazon seller playbook, and you can get all of these proven processes and you can add other users from your team and you can literally just say, okay, so this process here is gonna be assigned to Dave and it's gonna be due on Thursday and Dave will get a notification from the software. He'll look at the process. It's so incredibly detailed that there's no additional training provided.
You literally just start doing the things, check, check, check, check, and working your way through the checklist. A lot of you guys will ping me out of the blue asking for help selling your software companies, but I'm not a broker and I'm really focused on founder path right now, not helping folks sell their company.
So I'm always looking for great tools to recommend for you guys to quickly figure out what you could potentially sell your company for and how much cash you could get. That's where Flippa comes in. Now, here's my thing about brokerages, especially for selling your company.
You guys should not have to pay a 10% brokerage fee when you put your blood, sweat, and tears into building your company for years and have a sale. All smart founders know, though, that the best way to maximize price is to have multiple options. So how do you get multiple options, multiple bids on your company without paying a broker 10% or more?
Well, I recommend Flippa because they have the largest list of buyers for these sorts of digital assets, which almost always guarantees a bidding war. I tell my founder friends all the time to try Flippa's valuation calculator to see what their company is worth. And I encourage you guys to do it today.
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