SaaS Interviews with CEOs, Startups, Founders
Trainual Hits $3m ARR, 3x YoY Helping 2500 Customers Document Key Processes
19 Jun 2020
Chapter 1: What is the revenue model of Trainual and how did it start?
We had an interesting trigger in our convertible note where once we hit a certain revenue threshold, the ability for me to pay back went away. So it was investor friendly, but I was good with it because I didn't want to be in a position where we're spending all the investor money and then I don't have the money to pay them back if they demand it.
So it was kind of like they took a flyer and they get the reward for that.
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My guest today is Chris Aranzio. He's the founder and CEO of Trainual, a SaaS platform for entrepreneurs and employees to get their business out of their brain by documenting and delegating the processes in their company. Chris, you ready to take us to the top? Yeah, let's do it. So I thought about you earlier this week because we put out a big piece on GitLab and we had Sid on the show.
And one of the things that he credits to so much of his success for scaling his remote team is his employee handbook, 700 pages worth of stuff. Is this kind of what you're helping companies do, document this stuff?
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Chapter 2: How does Trainual help companies document their processes?
Yeah, I love that. All right. So 24 folks full time. How many engineers? Six. Six. OK. Any quota carrying sales reps at this price point or is it too low for field to field sales?
No, we've got two sales reps, but they're 100% inbound. So it's more about just talking to customers that need extra help. Interesting.
Okay. So ad spend scaling, like a lot of people have this thing where if I just raise, I can just spend a hundred grand a month and it'll work. You're actually are now spending that much per month, but imagine it wasn't just a flick of a switch, right? Talk to me about some of the learning curves on that.
Yeah, so the ramp went up pretty consistently. When I was on here last year, I think we were spending $30,000 or $40,000 a month. And we went up to $50,000 and then $55,000 and then $60,000.
And as we were doing it, we're constantly measuring our acquisition cost, how many signups per week we have, and then making sure that a huge swath of those customers aren't canceling as soon as they get in the app. Because that's a challenge that we saw last fall. We brought in a huge wave where we doubled our customer count in a month.
And then we saw our churn spike because we got a lot of bad customers. So we were a little more careful about how we ramped up. But it's just been swapping out better creative and saying, what messaging resonates with the customers that are staying the longest? And what case studies do we have from, we've got 200 customers doing this particular thing.
Let's make a case study out of it and target our marketing a little more. So It's just gotten a little more sophisticated, I'd say, in the last year.
And so how many customers are you now working with today? We're just over 2,500 now. Okay, that's significant. So we'll end this year. Yeah. I mean, you were at 600 last time you came on the show. Right. It's been a big year. Yeah, it's great. I mean, congratulations. So $2,500 at $100 a month. I mean, that's $250,000 a month in MRR. Is that about right? Yeah, we hit that last month.
That's great. And that's up from, again, about $60,000 exactly a year ago, right? So almost three, well, no, four or five X year over year growth. Yeah.
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Chapter 3: How does Trainual manage its advertising spend and customer acquisition?
All right. I might be sending you a term sheet after this. Just to get the juices going. So churn was 48% gross revenue churn annually about last year, but your cohort size was small because you just launched. What was gross revenue churn over the past 12 months?
So it's gone down a bit, but it's still in the high 30s, low 40s. So what we've saw, though, is that the customers we bring in, if we can get them activated, which means that they've added a few users, create a few things inside Trainual, they stick. Wait, hold on. Be specific. What is create a few things inside? Okay. So four users and four subjects is our metric. Four by four.
We've got posters of like a Jeep driving up a hill all over the office. So if they do four by four, churn is under 1% monthly. It's like 0.7% monthly, which is really where we want to see overall churn trending toward. And so our game is how do we invest enough in customer success to ramp those customers up quickly guarantee their success.
Now, not all of them that sign up are ready for the tool. So part of ramping up our customer success is identifying, hey, this probably isn't a good fit for you yet. Let's not convert you. So we're evaluating that. And what does CAC look like today to get a new $100 a month customer?
$350 to $400. Okay, so that's about the same as what it was last year, about three to four month payback period. Yes. Which is, by the way, there are so many companies, Madwire is a great example of this, playing almost at this exact same price point in the SMB space where their churn is high, even higher than yours, but their payback period is so fast and they're adding so much new.
They know that two customers are going to 10X their price point five years from now from a new cohort of 100 and that's all they need to make the cohort profitable. So it works.
Right. And you get so much great knowledge from the cohort and the ones that are churning. I think one of the things we've done well in the last year is we've gotten scientific about why people cancel and calling customers and having conversations. And it's like free market study research.
They signed up, gave us a month or two or three months of revenue, covered their acquisition costs, and we learned how to get better in the future. So I think it's healthy if the economics work.
makes total sense. Now, are you guys burning cash today to drive growth?
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Chapter 4: What strategies does Trainual use for SEO and content marketing?
My dad always said, do it now growing up. Like, and he meant carry my shoes up the stairs or whatever, but I feel like when I go to a conference and I get a good idea and my brother and I go back to the hotel room and execute that night, that's when we see the biggest results. So I would say just do, do things now.
Tranual, guys, helping brands, small businesses document processes that ultimately are what drive the business growth. Launched the company in 2018, over 2,500 customers today. They're doing $250,000 a month in revenue up from $60,000 a month just a year ago. So over 300% year over year growth.
Their number one engine ad spend, 120,000 bucks spent last month to get new customers, spending about 300 bucks to get a new customer or 400. So about a three to four month
payback period they did raise 750 grand on a convertible note to drive some of that growth now 24 folks on the team six engineers two quota carrying sales reps still about 40 gross revenue churn come down a little bit but look it works with the other unit economics chris man we're rooting for you thanks for taking us to the top thanks nathan