SaaS Interviews with CEOs, Startups, Founders
I love these guys. 3 co-Founders bootstrap to $2m in ARR. Beautiful business.
30 Jul 2022
Chapter 1: What is the revenue model for Missive?
2,000 customers at a hundred bucks a month. You guys are doing about $200,000 per month right now in revenue, right? Roughly like 2 million a year. You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
We've published thousands of these interviews, and if you want to sort through them quickly by revenue or churn, CAC, valuation, or other metrics, the easiest way to do that is to go to getlatka.com and use our filtering tool. It's like a big Excel sheet for all of these podcast interviews. Check it out right now at getlatka.com. Hey, folks. My guest today is Rafael Mason.
Chapter 2: How does Missive differentiate itself from competitors?
He's first and foremost a failed musician. He found solace in building beautiful and viable software instead. He spent his teenage years playing guitar, then wrote code for all of his career, and still really enjoys it. Also developed a love for delivering stellar customer support, and he would blog if time allowed it, says every founder ever. Rafael, you ready to take us to the top? Sure.
Absolutely. Yeah. All right. So I love this.
Chapter 3: What is the story behind the co-founders of Missive?
We had your co-founder on back in the day, about a year and a half ago at missive app.com. You guys are team inbox chat and tasks, right? Yep. That's correct. All right. So tell us here competing, obviously very competitive space. Are you similar to sort of front app and hybrid IQ HQ, these kinds of tools? Yes, we are definitely similar. Front is probably the one we are closest to.
And we had some discussions with Front. They tried our product, we tried theirs, and there was some inspiration from both sides. And we have a good relationship with them. But yeah, yes, it's very similar. Have they offered, Matilda and the team, have they offered to buy you guys? And you said, no, we want more. I don't think I can tell whether this happened or not. Fair enough. Fair enough.
Well, I love that you guys are, at least you were bootstrapped a year and a half ago. Are you still bootstrapped today?
Chapter 4: How has Missive's customer base evolved over time?
We are still, yes. I love this. Okay, I love this. And it was great because when your co-founder came on, he told me in 2020, you guys were doing about $45,000 a month in revenue. You doubled to $90,000 a month in revenue. I don't want to ask right now how much you're doing because I want to leave that as an open hook. So for people that have not heard of Missive before, tell us what you're doing.
Yes, so Missive is a shared inbox with chat and tasks for productive teams. It's first and foremost a full-featured email client where you can chat with your teammates, just like in Slack, but within each email thread, you get a separate thread to chat, so it keeps things organized and organized. with the right context. And what else?
I mean, so you don't have to switch between your email app and Slack. And on top of that, you can easily enable a dedicated team inbox flow with triaging and assignment like you would expect in a help desk. And we also support SMS, Twitter, Facebook, Instagram, WhatsApp. You can manage these channels collaboratively the same way you manage email all within the same app.
So if you're listening right now and you have a team of three, you have an SDR, maybe you have an AE or BDR, and then you have the founder of the company. And when someone signs up for your application, you always send out an onboarding email.
You could create a shared inbox where replies to that onboarding email goes into a box where the BDR, the AE, and the founder can all interact together, decide on a discount, reply to the email, all that stuff. Exactly. You would typically have a company with a info app, which lands in the sales or customer success teams. You may have sales app, you may have support app, these classic stuff.
And of course, a manager, a team of founders, they can always look into things. If each team is doing their job and you can track work being done. Very cool. I love this. Okay. So, um, so I guess dive in here. It's kind of cool. We're getting the second half of the company on. So did you guys, were you there sort of day one?
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Chapter 5: What strategies does Missive use for customer acquisition?
You guys are co-founders, right? Correct. Yeah. We are three of you guys. Yes. Okay. And did you guys just say, you know what? We love each other. It's just going to be 30%, 30%, 30%, or do you split it differently? It's split differently for kind of a, historical reason. Miss Evita is the second product we built together. We started another business, which is conferencebadge.com.
It's for event organizers to build and to design and print name badges for their attendees. Conferencebadge.com? Yes, correct. And it's still on. We need that, by the way. We have a big event coming up in September. And I just challenged my team. I said, guys, figure out a solution to print name badges for our event.
I don't want us stuck where people have to handwrite on their name badge or the permanent marker at the admission desk. Well, there you have it. It's what you need, exactly. So yeah, we built the conference badge first. We met, Phil had started building, my co-founder, CEO at Missive, he started building conference badge all by himself back in 2013. And we joined him.
And since he started the product, he had more equity. And it's while running and building Conference Badge that we found the need to communicate, to deal more efficiently with customer support.
Chapter 6: What is the significance of the free plan in Missive's growth?
And we started building Missive. So Conference Badge is what allowed Missive to be built, to pay the bills and So it's two companies, but since one funded the other, the equity remained the same. So in Missive, Phil owns about 50%, and then you two split the other 50%, something like that. Something like that, yeah. Yeah, very, very cool. Okay, so talk to me about growth.
I think when we last chatted, you guys were just flirting with 2,000 customers, I think. What are you guys at today? Flirting with 2,000? Well, sorry, the question. Yeah, the question. Yeah, I understand. But I believe because I looked at the numbers to be kind of prepared for this interview. And I believe this was more like users, including free users. I see. I see.
Because we are at close to 2000 paid customers right now. And how many free today? Free users total. Something like 1,000. I have my numbers. It's like 1,600, I think. So you have 1,600 free users and then another 2,000 unpaid? Correct. Yeah. So I guess, usually people have more free users and they convert a percent of those to paid. Do you not let your free users stick around?
They have to choose at the end of a trial or something? We do let them stick around.
Chapter 7: How does Missive plan to enhance its product offerings?
The free plan is unlimited in time, but you only keep access to your 15 last latest emails or chat history, 15 days. So you quickly kind of get the need. to pay, to have more history? Raphael, this is super rare. I've done almost 3,500 of these interviews.
I've never had someone come on with a product-led growth model and a free plan where their free plan is like where your upsell is so compelling. You have less people on the free plan, 1,600, than you do on the paid plan, 2,000. I guess that makes sense because I was about to say if you don't upgrade to a paid plan, it's because we probably don't want you as a customer.
You're probably a solo user who's just shopping around for the best email client. They tried them all. They tried Polymail and whatnot and maybe Superhuman, but they stick with us. And they don't use email professionally because any professional using email needs to go further back then. But do you have a free option? Like on your pricing page, I only see Start, Productive, and Enterprise.
Do you have a free option people can keep using or no? Yeah, absolutely. We're going to tweak this design because it's confusing to some. Oh, you're right. It is confusing. Now I look down and I see the free plan.
Chapter 8: What lessons can other founders learn from Missive's journey?
We didn't write $0 in the header, but whatever. Okay. It's clear to me now. Got it. This makes sense. Okay. Well, this is very impressive that you convert so much into paid plans. Now there's obviously 14 a month, 18 months, 26 a month, and these are per seat. So people probably sign multiple seats at once. What's the average business paying you per month to use the tool?
The invoice they get per month? Yeah, like on average, what's the company paying you to use the tool? A hundred bucks. It's very, like we have solo users. We have companies over a hundred seats. So it's very, it's very variable. Remote teams are all the rage right now. In fact, many companies want to stay this way, even post-pandemic. And the reasoning's obvious.
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Oh, it's something like... Let me just make it times 12. 50,000. 5,000? Yes. That's impressive. 50,000. 5,000 or 1,500? 5,000. Yeah, yeah, yeah. 50,000. Yeah. Now, that's impressive. So you guys do... There is a clear sort of enterprise sales motion here then, huh? You mean an enterprise... What do you mean exactly?
Whenever I talk to a founder that has sort of a lower price plan under $100 a month, but then they have a customer that's paying something like $50,000 a year, to me, that's a signal that there's an opportunity to upsell all their other customers eventually to $50,000 a year. Well, definitely. Well, it helps that we recently introduced the enterprise plan that you see like over...
80% of our users are on the productive. But we recently introduced the enterprise, and it does help a lot that this biggest customer is the biggest in terms of seat, and they are on the enterprise plan. So you can do the math. It helps a lot. And well, enterprise users, we're not even scratching the enterprise market. We want to get there eventually.
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