SaaS Interviews with CEOs, Startups, Founders
This is how you get customers to pay you $10k/mo
11 Feb 2023
Chapter 1: What is the SaaS Open event and why is it significant?
Guys, SaaS Open is our next big event in New York City. March 16th and 17th, we'll have 1,000 SaaS leaders all sharing how they built their companies. Our keynotes are Henry Shuck, Marie Martins from Tally.sao, Serby from Symbol, Christopher of DocHub, who had a big exit. Again, hundreds of speakers, 1,000 plus attendees.
And we've got folks bringing their entire executive teams because we have stages for founders, founders, heads of product, head of finance and BD, CMOs and CROs, and then people in HR stage. It's going to be special. Prices are increasing every week, so you don't want to wait. Go to sasopen.com right now to see what the ticket price is and lock in your spot today.
Again, that's sasopen.com, March 16th and 17th in New York City. Tickets are almost sold out. 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. Guys, he's 23 years old. He's got $25,000 of revenue last year.
His first company launched it, started out as an agency and said, you know, I like recurring revenue better. So he launched a software company that helps you with robotic process automation, especially clients like e-commerce clients that get hundreds of emails or messages on WhatsApp. He helps you automate those. Hoping to double revenue this year.
Four customers today pay $50 a month for that RPA tool, which he's hoping to scale. Hey folks, my guest today is Hector Jimenez. He helped grow a startup from 50K in USD to 500K in annual revenue in 12 months. He's an agency owner helping startups increase revenue through growth marketing and robotic process automation. The company is called QSEC.com. Hector, you ready to take us to the top?
Yeah, I'm ready. All right. So just to be clear, you are making money on an agency model right now, or are you building any internal software? No, we currently have two models. The first one is the agency. And the second one is robotic process automation, which we sell as a subscription model. But this new branch is basically like 10% of our revenue and 90% comes from agency clients. Yep. Yeah.
Well, great SaaS companies always start with, I mean, usually start with an agency. So you're 90% agency, 10% SaaS today. Tell us what folks are paying you for. Give us an example of a customer. Sure. For example, we have clients who have a community on social media, say TikTok or Instagram, but they're having problems monetizing, right?
So maybe they have a course academy and they have a community, but their hands are filled with a bunch of WhatsApp messages and they're not doing email marketing neither, right? So what we do in QSIC is that we help them see the data that comes to their website and to optimize
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Chapter 2: How did Hector Jimenez transition from an agency to a SaaS model?
their flows, basically. So to give you a very clear example, last year, we worked with a client who was receiving around 500 WhatsApp messages per day. And the CEO was just overwhelmed with that. So we built a WhatsApp chatbot. And in that way, we helped them go from 200 users to 1,200 users in two months. We also did Facebook ads for them. So that's basically what we do.
We're basically a marketing agency, but what we like to do with our clients is follow-up weekly. So on a weekly basis, we analyze all the metrics going from top of the funnel, name, social media, reach, engagement, all the way to the bottom, like retention metrics. So how many people churned, how many people renewed their subscription. And yeah, I guess in a nutshell, that's what we do.
And so Hector, understanding that, how much revenue did you do on the agency side in 2022? In 2022, for me, I did 25K. It's my first year and it was 25K US dollars. So 25,000 bucks last year. And that's the first year you'd launched the agency? True. Yes. When did you start writing code to launch the RPA business? To be honest, I don't do the RPA part. My business partner does it.
He's not even a coder formally. He's taken some courses online and he uses UiPath. So I focus more on like bringing like with the clients that I have. I see the problems they have regarding manual processes. Like for instance, we have a marketing agency that used to lose to invest around one hour of time per week. creating their marketing report.
So a lot of copying and pasting from Facebook to your PowerPoint presentation, from Google Analytics to Canva, you name it. And what we did was that with my business partner, I brought the client and he basically builds the infrastructure code to automate that process. Do you guys split equity? You split it 50-50 or what? Yeah. The RPA part, we do 50-50. I guess I'm getting confused here.
So there's an agency, you're doing some, you say your clients and you say he does RPA, but you say co-founder, but you're not really co-founders. What's the structure here? Is there one company that's split 50-50 and you bring on new clients and he does RPA work? So the company is split in two parts. We have the agency side where it's basically 100% equity for me. And then we have the RPA side.
The RPA side is split 50-50 between this business partner and me. I see. Okay, that makes sense. So how much did you guys do on the RPA side last year?
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Chapter 3: What strategies does Hector use for growth marketing?
On the RPA, really not a lot. Like we currently have a monthly recurring revenue of around $200, $200 per month for clients. So what we're going for, yeah. Because what we're going for right now is basically a low cost model, because what we notice is that here in Mexico, a lot of the companies that do RPA, they usually charge a very high initial fee for the development of the automation.
But what we want to do is more like win money long term. So basically, our business is retaining clients at a low cost. And basically that's the business model. So what's the plan for this year? What do you want to grow revenue to? In the agency side, we want to get to... Let me translate it to dollars because I have it very clear in Mexican pesos.
But this year we want to close at... Basically, we want to double our revenue from last year, which if I was... Give me a second. So we want to reach 50K this year for the agency side and for RPA, 50K this year. And for the RPA side, we want to reach at least 100k in Mexico and pesos 100k.
But Hector, how do you I mean, look, you look like a young guy, these are the best years of your life, you have the most energy, you can hustle the hardest, you can sleep the least. You know, everyone has to start at 10k a month in revenues. I'm not giving you a hard time for that. But like, these do not seem like ambitious goals.
I mean, how do you go from 25k to how do you to half a million in revenue in a year? Uh, I'm sorry. I didn't understand the question. This is not this. Why do you get excited about going from 25,000 a year in revenue to 50,000 a year in revenue?
I mean, why, why not set, why not go after and go build a million, a half a million a year business or million dollar a year business and challenge yourself to think about how you would get to that? Yeah. I think that would be a more interesting approach probably. Yeah. Well, I mean, but don't just agree with me. You've chosen to go a different route.
So why didn't you, I mean, why are you choosing to not be aggressive? The thing is, like, I've tried to I've had a lot of trouble with the part of delegation. So I think that that's something that's more like personal, like limiting belief that I have to break, which I'm working on. So, yeah, basically, I guess that's that's basically the like the root of why I haven't been more aggressive.
Like, I really want to have higher goals. But yeah, basically, that's what's been holding me back. But it's something I'm working on. Well, it seems like you have a high degree of empathy. So take us through a story where you try to delegate something. It didn't work. And now you're nervous to do it again. Yeah.
So basically last year, um, as, as you said, in the introduction, we helped the client go from selling, um, like it was 1 million of 1 million pesos a month, which is 5k, 5k dollars to 500 K. So it was basically a 10 X 10 X growth. Right. And the thing that happened was that we got so into the operation of the business that I basically left the acquisition side. I forgot about it.
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Chapter 4: How does Hector utilize robotic process automation for client success?
See, I had to do this early on in my career. I'm like, man, it's so nerve-wracking asking for someone to pay me 10 grand a month. I've never made that. This is 10, 10 years ago. Then you look in the mirror, you do it over and over.
And once you can say it with confidence, and then you say it on the phone to a prospect or on a Zoom call, then they believe you because you say it with so much authority. And before you know it, you've got a Freshworks invoice coming into your bank or a wire coming in for $50,000, your annual contract, and boom, you're off to the races. Yeah. Great.
How did you come up with your pricing structure today? So basically, at the beginning, since it's been a year, it's been a lot of trial and error, right? And basically, what we did at first was we charged a low ticket, but where our where we won was the commission part and that kind of worked.
But as I told you, like last year, it wasn't sustainable because since we had so much skin in the game, because like the real money was in making our client grow, uh, we started to invest a lot of time growing the client instead of growing the agency and basically our pricing structure. I guess it's not really clear. We basically try to negotiate with the client a price that seems fair.
And I think that's also why I'm not charging as much as I would like to. So you would tell a customer, hey, we get to keep 5% of whatever new revenue we drive you. We're not going to charge you an upfront fee. Not that extreme, but we do a really low... For instance, right now, the average ticket price is like... I guess $500 a month. And we get a 5% commission fee on additional revenue.
And then it's just so hard, though. Every month, you're having to debate with your clients if you drove new revenue or not. And then you have to go chase and calculate the 5% and chase it, right? Um, it's, it's not that hard to calculate it because fortunately we have like, uh, we track everything. So everything we do like email marketing and everything, we have the.
The links to track traffic and revenue from that. Well, sure. But you send out an email blast and you drive $10,000 of revenue for one of your customers. And they say, well, yeah, Hector, you wrote the email, but we did all the work on the landing page. We did all the work on calls to close the leads. No, we're not giving you credit for the full 10,000 of sales.
I mean, I imagine you debate that stuff all the time. Yeah. Fortunately, that has not been a problem so far. Interesting. Well... I'm bringing it up because it doesn't seem... You have $25,000 in total revenue for the year. You can't build an empire around that. So whether it's working or not, the proof is in the pudding here.
I know a lot of founders who start off trying to charge a percent of upside they drive and you just end up in endless debates about attribution. So look, we'll see where you pivot over the next year. I hope you obviously grow. I hope the RPA business also takes off. But for now, we're out of time. Let's wrap up here with the famous 5. Favorite book, The Cold Start Problem by, what's his name?
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