SaaS Interviews with CEOs, Startups, Founders
Reamaze Breaks $3m ARR Helping ECommerce Brands with HelpDesk Tool
02 Nov 2020
Chapter 1: What is the main topic discussed in this episode?
I think we're doing about 100 per logo. So we're doing, because we're in the $3 million revenue range right now. So that's about 2,500 times the 100 per logo.
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My guest today is Lou Wang. He's building a company that's helping folks do multi-channel support, especially in the e-commerce space. It's called reamaze.com. He's also a serious entrepreneur with a lot of experience in helping small businesses. Lou, you ready to take us to the top?
Hey, yeah, I certainly am. And how are you doing?
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Chapter 2: What is Reamaze and how does it support e-commerce brands?
Uh, yep, exactly. We're in the, yeah, we're in that ballpark range. We're actually 250, 260. Okay.
Yeah. Two 50 times 12. Again, that puts you right at that 3 million run rate, which is great. I mean, that's almost doubling, uh, since the last time we spoke, where's most of the growth come from?
Um, you know, most of our growth, uh, I think the last time we talked, uh, characteristically speaking, we do growth both in terms of new logos, but also in terms of the number of seats. Right. And so we've seen growth both in our existing base in terms of staff users added. We've also seen growth, obviously, from new businesses.
I think part of it, again, as I mentioned, new companies coming online for the first time, mom and pop shops, certainly, for the first time. But we're also seeing a lot of growth from non-organic sales, meaning sales where we're going out and looking for businesses that would be a good match for our value proposition. So that's something new that we probably weren't doing two years ago. You know,
proactively looking for businesses that we can have a relationship with.
And just so we can understand how much of the growth came in 2020, do you remember what run rate you finished 2019 at?
You know, I don't have that number off the top of my head, but I will say 2020 has been a pretty crazy year for us.
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Chapter 3: How has the pandemic influenced e-commerce businesses?
Certainly faster than 2019. So it would be fair to characterize most of the growth having happened in the last six months or so.
Do you know how much revenue you did in December of 2019, MRR?
Yeah, I don't have that number off the top of my head. I would imagine it was probably... This is a guess, by the way. I don't have this number, but it's probably around $200,000, less than $200,000.
Got it. So you've added about $75,000 in new MRR over the past 10 months.
I think that would be fair. Now, I mean, don't quote me on that, but Yeah, it certainly seems, you know, back of the envelope calculation would probably put us there.
And remind everyone what year you started.
2016 is when we went with revenue, like middle of 2016. So we've done, we're about four years in now.
Do you remember what you finished 2017 with in terms of total revenue?
It was tiny. Like how small? Yeah, I mean, it's... Well, certainly less than a million because I think we were at just a million ballpark when we talked to you two years ago. So even a year before that, we were way under that number. Those are the days that we put way behind us. And it's actually funny. I don't really revisit... where we were those days.
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Chapter 4: What percentage of Reamaze's customers are in the e-commerce space?
some substantial revenue coming in and, you know, more than raising money for the sake of the money aspect. Like we're not, we're not on a burn right now where we have to worry about spend. How much are you burning per month? Oh, significantly less than the revenue actually. So we're, we're right now looking to grow our team. We're looking to reinvest the money that we're making.
You're profitable per month right now. You're making money.
Yeah, we are. Yeah. We are profitable and we're running a very efficient team right now. So, I forgot what the numbers were last time when I visited you, but our team hasn't grown that much since then. We've hired a couple of engineers here. How many people today? We're right under 20. I think I just did a headcount recently this month, and we were at 18 at the time.
And how many engineers?
That's over eight engineers.
And any quota-carrying sales reps or no?
We actually just hired one sales rep a few months ago.
That's a big hire, Lou.
That is, that's like, uh, well, we used to do like the founders and myself, we would actually go on calls and do those sales calls. So quote unquote, we had salespeople. You're one of the founders though, right? I am. Yeah. And one of the founders, but, uh, so what do you say?
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Chapter 5: How has Reamaze's average revenue per user (ARPU) changed over time?
Um, so yeah, that's a good question. You asked about churn on a dollar basis. Cause that's how exactly how we measure it because of the way we do accounts, both, you know, existing accounts plus new accounts. Um, it's really hard to track churn in two dimensions. So we do it on a dollar basis. We're about 3% net churn under a 3% net churn on a monthly basis. And,
Growth on top of that is... Hold on, hold on.
Net or gross churn per month?
Sorry. It's gross churn. And then net growth on top of the churn is going to be anywhere from 4% to 7%. So we're looking at a gross growth of somewhere between 7% and 10% monthly.
Yeah, so just to multiply those out annually, you're basically seeing something like 36% revenue churn annually, but 72% expansion on that same cohort. So net revenue retention is around 130.
Yep, exactly.
Yeah, no, it's obviously healthy economics. Now, have you found sort of an arbitrage way to get new customers? It sounds like the app exchanges do this for you, but what's your CAC for a new customer?
I don't have those numbers off the top of my head. We are focusing heavily on ad spend in those platforms because those platforms both have an organic component to it as well as an ad spend component.
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Chapter 6: What is the current customer base size for Reamaze?
We're spending a significant amount of ad spend there. We're doing channels like Quora as well. We're seeing some pretty interesting dynamics on Quora, especially with promoted questions. We're doing things like Facebook. We're also doing things like Google, which are pretty traditional.
How much did you spend last month total in ad spend across all the platforms?
Yeah, that's a good question. We have a budget that's in the five digits per month. Okay. I don't know the exact number because we have marketing folks who take care of that now. And we started to take a look at it in aggregate and you know, how effective it is. I will tell you though, obviously channel specific spend is the most effective.
So in our case, Shopify ad revenue or ad spend is, is the most effective one that we have.
Now, because so many Shopify customers come from Shopify on your $3 million run rate, does a third of that go to Shopify 30%?
No, not all of it. So yes, of the leads that come to us from Shopify, we do pay them 30%. And if you think about it, we're also paying them ad spend. So clearly, we're contributing to Shopify's bottom line here. But we also do have channels like organic channels. Again, like I mentioned, we do bring in people from Google, Facebook, Quora, where we're doing ad spend.
And in those cases, we don't have to give anybody a revenue share.
And so if you do think about raising capital, you're growing nicely here, how much would you target to raise?
That's a good question. I think what we would think about is more than the money is the relationship that we would have. If we were to raise, again, we're profitable, so we're not too concerned about the monetary aspects. It's more about what... you know, if an investor coming in, what other benefits can they get us? What can they do to be a partner in the growth of our business going forward?
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