SaaS Interviews with CEOs, Startups, Founders
SanityDesk Gets Money From Founderpath, Hits $180k revenue Helping Digital Brands Scale
21 Oct 2020
Chapter 1: What is SanityDesk and who is its founder?
Yeah, I think we're at 12 and a half when you average it out between the 10 or so lower plan users and most of them on the 299 plan. So yeah, 12 and a half, 30,000 MRR. And where were you a year ago? Do you remember? A year ago, we had no revenue. We started selling in, I think we got our first customer end of February and March was really when we started selling in earnest.
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Chapter 2: How has SanityDesk grown its customer base over the past year?
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There, you'll find a private RSS feed that you can add to your favorite podcast listening tool, along with other subscriber-only content. Hello, everyone. My guest today is Sam Kirk. He's a former U.S. Army officer and Russian history teacher who founded Sanity Desk to help experts, authors, and coaches build their entire businesses online.
He lives in Kiev, Ukraine, and his tech team is based in Poland and Ukraine. Sam, are you ready to take us to the top? Ready to go, Nate. All right. So talk to me real quick. What kinds of customers are you selling Sanity Desk to? We're specifically targeting experts, authors, consultants, solopreneurs.
People are just starting their business and are overwhelmed by the tech because the tech monster is really, you know, it stops a lot of people from ever getting started. Especially now with COVID, you can't rely on in-person networking. You really have to have your IT set up. Yep. No, that's absolutely true. And so, I mean, can you name a customer or two that people might know? Yeah.
Peter Sage just signed up. He's got about a 60,000 person audience. He was actually user number one of Sandy Desk five years ago. He just signed up for the SaaS version of it. That was when we were developing our agency. And Marilee Williams, who wrote the book, Change Your Questions, Change Your Life.
And David Babelain, who wrote the book, Primary Colors of Story, PhD, and, you know, film script story consultant. So not everyone have written a book, but everyone wants to write a book. I think generally who we're working with and their individual experts, coaches, consultants on their way. When did you launch the company, Sam? Launched October 31st of 2019.
Literally, I think that was the first day we were in business, according to State of Delaware. And how many customers are you working with today? We have just over 50 customers. I think we have about five subscriptions ending their trial today, tomorrow. So we'll be just crossing north of 50 customer mark right now. That's great.
And what are some of these customers paying you per month on average to use the full tech? Well, we have two plans. We have one that's $99 a month, which I think we have nine or 10 users on that. But we're actually mainly only working with people who are willing to pay for the enterprise version, which is $299 a month. It's up to 10,000 users. It has the smart page technology where you can
create you know thousands tens of thousands variations of every page based on user data and also they get a dedicated tech support rep with that plan because we were using this kind of guided onboarding model uh concierge level support to really work out the onboarding process education and kinks in the tool as we go through the first hundred users so can we multiply 299 a month times 50 you're doing like call it 13 15 000 a month in revenue
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Chapter 3: What types of customers does SanityDesk target?
It has one of the angels that transferred the IP. And then $450,000 of outside money has come in since then. So what percent of Sanity Desk does the agency own? I think at $4.5 million post-money valuation on a safe, that's going to put it at 16%. Now, did you own 100% of the agency? Yeah. So why deal with that at all?
If it's the same owner on both things, why not just say Sam Cooke owns that 17% in Sanity Desk? Well, the one reason was the team at the agency. You know, I am actually putting two managers in the cap table. Plus, we're going to set aside some of the cap table for the team.
So that part of it is to incentivize the team to do work for Sanity Desk at way, way below market rates because the team, their shareholders, the team also had some past invoices to pay off. So even if I wanted to, you know, shut down that company and roll it into Sanity Desk, they're actually handling obligations, which they're winding down on a monthly basis that they owe.
And the new company has no IP or debt, you know, no debt. So that was the cleanest way to make the transition. Brand new company, IP transfer. Yep. That all makes sense. Got it. So 450 raised outside agencies put in 750 K. When did you raise the 450 from outside angels? It's been since August of last year. Uh, we got our first outside angel.
We put in a hundred, um, five or six more in for 25, sorry, five more in for 25, uh, one in for another a hundred, his brother in for 50. And then, I think we got a couple loans. Well, we got a SBA loan, which I call outside capital, but you know, that's not equity. Yep. So I think 4,000 in angel money, to be precise, plus about 50 from the government.
And you've used this obviously reinvest in the team. How many folks on the team today? 14. We have nine in the products. My partner's chief product officer slash CTO. Even though he's not a developer by trade, he's... How many pure developers, pure engineers? Five pure engineers, one QA, two designers. Any quota carrying folks? Quota carrying? Do you have any salespeople with quota? Oh, yeah.
I got one sales rep, one customer support rep, one hiring officer, one finance person. But they don't all have quota, just the salesperson? Just salesperson and I'm the other salesperson. Yeah. So besides you, the other salesperson with quota, what do you set their quota at annually? Well, he's on a base plus commission.
So basically, he's on a base, a $1,000 base plus $150 per new signup, inbound leads, and then $250 if he finds them himself. What do you want him, though, to be closing monthly in terms of the new monthly recurring revenue? What's his quota target? 20, 20 per customer, 20 per sales rep. That's one deal a working day. We're also looking for new sales reps to kind of increase that. Got it.
So 20 per day at whatever, $300. I've got 20 per month, one deal a day. As right now per rep, you know, if they speak to three or four people. Yeah, I understand. I understand. So yeah, 20 new customers. This one guy who's doing sales for you now, you want him to close 20 new deals per month at about $300 per month. Yeah, exactly.
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Chapter 4: What pricing models does SanityDesk offer to its customers?
It really just depends on optimizing our Facebook ads. and getting the money in. So I think Facebook ads could definitely scale up. I mean, we're taking a global approach. We got a customer from Italy in, we got a customer from the UK in, we're really not even touching the US market right now to the election spending. We have a large global audience we're used to working with.
Some South African customers spoke to someone from Bangladesh. I think easily we could probably go 50,000 to 100,000 a month in Facebook ad spend. But I want to scale it up as we make sure, as we scale, that we're maintaining that customer acquisition cost.
I launched FounderPath specifically to help founders like you, early stage SaaS companies, get capital they need without having to sell equity. You chose to do a little deal in there the other day. I saw the approval go through. Explain to me sort of how it works and why you did it and what you hope you can do with FounderPath in the future.
Yeah, well, look, I know with the $6,000, I think I sold two of my customers. I got an advance for two customers, their ARR, annual revenue. That $6,000, I know that I just upped my ad budget. So this month, we're going to spend $10,000 on ads versus a more conservative spend of $4,000 or $5,000. Because I know that the way we're operating right now, we can get those customers in.
We get $4.99 right away and $2.99 another seven days later. So really, within 30 days, actually, if I have two payments at $2.99, we're almost 150 shy of breakeven. So I view it as just a way to buy additional customers. I know our onboarding process is very low churn because it's guided right now.
We're systematizing our onboarding so we can open up a $99 plan to people who don't afford the $299, start selling that without a sales rep. But we really want to make sure these first customers have a great experience so they can be evangelists, case studies, and then I think we're really ready to scale ad spend. Yeah, you took two customers paying $300 a month, so $600 a month in MRR.
You said, founder path, give me $6,000 for those folks up front. We said, boom, approved. And now if you can take that $6,000 and spend it and hold your CAC at $1,250, which means you get five, six new customers. with the $6,000 that you got from FounderPath, it becomes basically arbitrage for you. You go back in FounderPath. I watched your credit score. Your credit score will go up.
You'll unlock cheaper capital and more capital over time. And hopefully, IPO is still owning 90% of your company, right? Yeah. I mean, you look at the history of startups, even a company like Facebook that did it all right and had no down rounds, there's huge dilution. So I think what you're doing...
You know, once a founder like me who's got a direct response marketing background proves that they can buy customers and I've spent a lot of money on ads for clients and have that experience, you know, yeah, it just becomes a game of math. Yep. Sam, on that note, let's wrap up here with the famous five. Number one, favorite business book. Favorite business book?
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Chapter 5: How does SanityDesk acquire new customers?
I am single. No kids. No kids. All right. Salmon, how old are you? I'm 42. 42. Last question. What's something you wish you knew when you were 20? Um, I wish I knew when I was 20, uh, the value of, um, you know, I think, I think exercise and sleep, I, I, for 20 years in the army, we used to say sleep when you're dead and sleep is for the week. And I've really learned that lesson.
The last three, four months hiring a fitness coach and seeing the power of actually focusing on your sleep and your fitness for productivity. Guys, sanitydesk.com just passed 50 customers, about $180,000 in terms of ARR. They raised $450,000 to do this. Also used FounderPath money to start scaling some of their ad spend. Hopefully grow the company over time without taking a bunch of dilution.
14 people on the team, five engineers, one quote-carrying sales rep. Again, helping brands like Peter Sage, right, grow their businesses without having to go put and staple a bunch of online tools together. Sanity Desk does it all. Sam, thanks for taking us to the top. Thanks, Nathan.