SaaS Interviews with CEOs, Startups, Founders
PlusThis Does $85k in Profit Every Month Selling Marketing Tools to 3,000 SMB's
30 Sep 2020
Chapter 1: What updates did Plus This have since the last interview?
We've continued to make changes. 2019 was a stellar year for us. We broke 2 million in revenue, so we did 2.1 in revenue.
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Now look, I never want money to be the reason you can't listen to episodes. On the checkout page, you'll see an option to request free access. I grant 100% of those requests no questions asked. Hello, everyone. My guest today is Dave Lee. He founded a company called Plus This back in 2012, which is a marketing automation and campaign toolkit. Dave, are you ready to take us to the top? I am.
Thank you. Thanks for having me. You bet, man. So give us a quick update on the company. Last time you came on, I believe, was January of 2019. Product still the same or have you made changes?
We've continued to make changes. 2019 was a stellar year for us. We broke $2 million in revenue. So we did $2.1 in revenue. almost half of which was profit, which we've been very intentional about growing a profitable SaaS company. And we feel a little out of place with the rest of our SaaS brothers and sisters out there, but it's what we're doing.
We had a great year, tons of new product improvements. So it was a really, really good year for us.
And before we dive more into what the product does, tease us a little bit. What was MRR last month?
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Chapter 2: How much revenue and profit does Plus This generate monthly?
Um, but that is very rare. I mean, as, as a CEO, you always worry about introducing a new pricing model. And I was scared to death that we would have an exodus of customers moving from a mid tier plan or a high tier plan to a lower tier plan. And that was just not the case. We had very, very little downstream movement.
Well, because it's tied to usage, right?
The question is... Tied to usage and also features that they didn't want to give up or grandfathered thresholds.
So are you measuring expansion revenue monthly? What is that typically? Yeah.
Uh, honestly, we don't do a good job measuring the expansion revenue. We should, we should do that. But I'd say, um, of, of the monthly MRR growth, I would say 20% of it is at least 20% is expansion revenue.
Yep. Yep. So yeah, yeah, that makes sense. So if you grow by 10 grand in a month, what you're saying is, you know, do you measure churn?
We do measure churn. Um, churn churn was brutal. It end of March, April and into may, um, our average, just the world that we live in, in small business, our, when we started the company churn used to be monthly churn used to be about 9.8%. And we worked for years to get that down and we got it down to about four and a half percent monthly churn. Um,
And that went up to probably 6%, 7% during the initial parts of COVID. We had an exodus of customers who just knee-jerk reaction. But then things came roaring back out of nowhere. I mean, we started to hit Zoom really hard, which was a big need out there. And our churn now is down to 2.9%, which is, we've never seen it that low. So we've seen a 36% decrease in churn.
Yeah, 2.9 or 3% per month times 12 is about 36% revenue churn on a run rate basis. You have some expansion in there, but net revenue retention, it sounds like you're flirting with maybe 100%, something like 95, 90%, something like that. Yeah, interesting. Very cool. How about getting new customers? Where are you finding these folks?
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Chapter 3: What features does the Plus This product offer to small businesses?
Uh, It's probably, no, that's about right. It's about 250, 250, 251. 250, okay.
Okay, so you're getting paid back there in, you know, three, four months.
Yeah, about three months, three and a half months, yeah.
Yeah, not too bad there at all. Okay, interesting. And then you bootstrapped the company, correct? Yes. Any plans to raise? No. Interesting. So why do you do it? Are you sort of happy with the lifestyle? It's making cash for yourself. It feels really good and you love your customers?
Yeah. I've, I've, uh, so a few things, the, the, the addressable market is not the general small business market. Our addressable market is actually a fraction of that because they have to be on one of those platforms that I mentioned. So that shrinks the addressable size. So we don't need a ton of capital to go attack that. So it's kind of like a, you know, it's just a constant monthly, uh,
you know, go for it. And we don't need a ton of capital. And we've intentionally wanted to create a very profitable business. I've been in both. And on this gig, it's, you know, let's just keep growing at a steady pace. Let's have a great pace for the employees and amazing culture. And let's just drive profits. And it's worked. It's worked really well for us. Now,
There are other ventures that we're doing and in the process of launching that could be a capital raise scenario, but plus this is not that. What are one of those, the other ones? We will find out very soon.
Are there other companies?
We're not ready to announce yet. It'll be in the next couple months, though.
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Chapter 4: How does Plus This's pricing model work for customers?
Do you pay that out and reinvest it in real estate or other things to diversify? Do you leave it in the company and reinvest it? How do you think about capital allocation as a founder that's cashflow positive?
Yeah, I look at it as an asset that needs to be diversified, and it goes across a number of different things. Personal investments, real estate, the market, EFTs. I do a lot of charity stuff, so I give away a significant chunk of it. We do fund things for the employees. But another big chunk is allocated towards funding the development of new products and companies.
So it's like a mini incubator.
Makes sense, Dave. Let's wrap up here with the famous five. Number one, favorite business book?
Oh, right now, The Fearless Mind by Dr. Craig Manning.
Number two, is there a CEO you're following or studying?
I continue to follow Branson. Dude's a stud.
You guys are a machine. Richard, right?
Yes.
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