SaaS Interviews with CEOs, Startups, Founders
Groupfio Using Resellers to Break $1.3m Bootstrapped
31 Jul 2021
Chapter 1: What is the main focus of Groupfio and its current revenue?
Hey folks, my guest today is Ravi. He's building a great tool called groupfeo.com. It's helping folks understand their analytics, especially related to their CRM solutions. Ravi, you ready to take us to the top? Yes, I am. All right. So listen, I enjoyed having you on. This was back in December, I think, of 2018. You've come on a couple of times since then.
You were doing about 1.2 million in revenue back then. Where are you today? And then let's jump into the product.
Sure. So we wrapped up the year of 1.2 at the end of 2020 in spite of COVID. We're run right now around 1.3 million ARR. We may finish the year at 1.4, 1.45. We have to see how the rest of the year plays out. We've added a couple of suites that have made a difference. So we've now launched up to four products and they all interact with each other.
So most of our clients use one or two of our products. So we're also trying to leverage our customers to use other products that we have as well and also have an independent source of adding new customers.
Mm-hmm.
One thing that I always wondered about the business is you own 100%, right? And it's profitable?
It's profitable. I like to run it in cash flow neutral, but it is profitable if I... If we do it that way right now, we plow a lot back in and always ready for explosive growth if necessary without having to add management. We can always add people, but you can't add management strength.
How do you get that growth? I mean, how do you run tests?
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Chapter 2: How has COVID-19 impacted Groupfio's growth and revenue?
You've been sort of flat the past year. I'm rooting for you. I mean, how are you trying to figure out how to grow faster?
One of the things we're trying to do is our average price points on deals we've been focused on is between $2,500 and $5,000 a month, which is at the higher end of the market. One of the things we're doing is opening a marketplace in Q3 that will allow us to go for that $100 to $500 a month price point where we can get the volume.
I've put the challenge out to our biz dev and marketing teams to go from zero to 1,000 customers in 120 days. How much today do you have? Today, in the higher end, we have about 100 customers, but that's in total. Some of them are the lower end, some are the higher end, and some are actually running a free model. Our expansion is going to come. How many customers are paying you something?
40, 40, 40 customers pay us to build up that revenue stream, right? The growth of the zero to 1000 that we're targeting is going to come through the resale channel and the affiliate channels that we have some experience in working with, but in the lower price point, because we can't go with the direct sales force against those accounts. It's just not economically viable.
So we're changing the model and that's how we're going to expand going forward.
How many resellers today have you recruited where they've actually sold at least one new customer?
Okay, so we have two successful resellers today. one of whom we recruited in the last 30 days. We have two more that are starting in the next 30 days because we have to find them out. And they have five customers each they plan to bring on board in the first 90 days. And what do you pay the resellers when they bring you a customer?
Our model is 30 points on the first year, 15 on the second year, and a trailing five life to date. Okay. And why did you pick that model? because we want to incent them for year one to get a high growth. And then we think second year, you should scale back because the effort's less.
And from third year on, we want to have a residual in play because we want them to be comfortable with what they have. We will play with the model a little bit as we get more experience, but we also don't want to have margin erosion. At the same time, we want to have some retention strategy in the channel so they enjoy having some residual revenue, but the focus is on acquiring new customers.
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Chapter 3: What strategies is Groupfio using to acquire new customers?
and you've considered on your trello board and your sprint timelines spending weeks building a csv importer for certain data sets you're spying right now because you know i'm right and either you do it and you waste engineering time or you don't do it and your customers have a horrible time getting onboarded and listen let's face the facts your ability to give value to your customers sometimes is very dependent on their ability to get you their data once you have the data everything is really smooth
Well, this exact problem probably explains why Flatfile is growing so quick. They've raised over $44 million and they do exactly this. The data onboarding platform for your marketing teams, your engineering teams, they enable you to get usable data faster so you can focus on what matters most to your business.
And the fastest growing companies like my friend ClickUp, Zeb, multi-billion dollar valuation, they all use Flatfile. Now flat file reached out. They wanted to sponsor. I said, you got a good deal for us. And they do for anyone listening, any, anyone that's part of the top entrepreneurs community or get Latka.
You can get a deal now to get started today at Nathan Latka.com forward slash flat file. And they make it so easy by the way, their onboarding is beautiful. You don't have to commit to a bunch of stuff. You can actually see a demo live instantly right now. Check it out. Nathan Latka.com forward slash flat file. So how many engineers today and what things are they exploring?
Okay, so today we have a total of 15 engineers. Three of them are dedicated. In fact, two of them are focused intensely on just brand new stuff, just creative stuff, right? So they would play around with Python with high performance, with going after big data sets, going after open source, allowing them to be more creative.
The rest of them are just focusing on feature development within the application. And we're also changing our architectures and sort of using a lot of source code management with GitHub and branches. We're trying to go to much more into feature management and feature development. So it's a much more efficient method of delivery. So they're trying to experiment with that and get that done right.
And what's the total team size today? Total team size across the entire company is 40. And we're split in three countries.
Yeah. Yeah.
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Chapter 4: How does Groupfio plan to leverage resellers for growth?
I mean, you've sort of been flirting with it. I mean, even when you came back on first in December of 2018, right, you had about 40 people on the team, 1.2 in revenue, declined a little during COVID. Now you're recovering from COVID.
I'm just curious, you know, for you, I mean, if someone came to you and offered you something like 2 million bucks, all cash upfront, I mean, do you sell the business?
No, I wouldn't because we're underperforming. So that means there's opportunity as far as I'm concerned. So I'm going to keep this for the next 18 to 24 months and demonstrate that we can get a 40, 50% growth rate and have a 20% EBITDA at least. And I think we can both set to do that.
But you've been trying to do that since 2018 and you will always be optimists about the future. So you will always think that you'll grow it. Absolutely. When does it run out? When do you say, if I don't hit this growth rate by this date, I'm selling?
Okay. So I've set that price point for 2.5 to three years from now. If I don't make this break, I'm going to hand the reins to somebody else and say, here's what I've built. Obviously, we're making some mistakes. Come in and do what you can with it.
So when I interview you in 2023, if you're still doing about a million a year in revenue, you'll say, Nathan, help me sell it two or three million bucks. I'm moving on.
Actually, if I'm still doing that in April of next year, I'll be coming to you and saying, let's go find someone. I don't intend to stay at this level.
Interesting. And so let's brainstorm for a second. Let's say you did exit. You have $2 million. Now, you own 100%. So you have $2 million cash now in the bank post-tax. Maybe it's one point, whatever, $4 million. What do you do next?
Open another firm, and I'll go into pure analytics AI with less overhead, but focus specifically on pincer hit. applications that are going to generate revenue and value. But very focused. Pinch8 is a very focused, targeted area. Right now, our ICR platform is very broad. It's for retail, SMB, and it's a very broad platform.
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Chapter 5: What is the commission model for Groupfio's resellers?
Interesting what they have executed.
Number four, how many hours of sleep do you get every night?
I get six and a half. On the weekends, I get eight.
That's great. And situation, married, single kids?
Oh, married with four lovely kids and all of them do great.
Oh, that's great. And how old are you, Ravi?
I'm 59. 59, the big six. It's going to be 16, two weeks. That's exciting. Happy early birthday. Coming up in two weeks. Thank you very much. Appreciate it, Mason.
What's something you wish you knew when you were 20?
I was always going to be a pilot. I wanted to be an astronaut. And maybe with Brent and finishing what he's doing, it's one of the incentives to sell is to take that rocket ship up there.
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Chapter 6: How does Groupfio ensure customer retention and satisfaction?
Robbie, thanks for taking us to the top.
Thank you, Nathan. Appreciate it.