SaaS Interviews with CEOs, Startups, Founders
Utm.io Hits 100 Customers, $75k Invested From Agency Biz, Now SaaS Focus
25 Jul 2020
Chapter 1: What is UTM.io and how does it help with campaign tracking?
So we're probably investing around $9,000 a month. Our current MRR is 3,400.
Okay. Got it. Yeah. So call it five, $6,000 and burn 3,400 or cost a hundred customers. So on average, they're paying you about 34 bucks a month.
I would say so. And that's dragged down dramatically because of those $7 a month users, which we of course are trying to do everything in our power to get away from.
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He's building a company called UTM.io. UTM.io is the internet's most loved UTM link builder. It's widely used by the best companies and enables teams of all sizes to get better campaign tracking data. Dan, you ready to take us to the top? Absolutely. Many people go, UTM, that's such a simple way of tracking.
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Chapter 2: How much investment has gone into UTM.io and what are its current financials?
So the tool is really designed to keep your UTM campaign metrics consistent across all of these different types of users and even across departments or locations.
And help me understand, you have a lot of different price points on your site. The average customer pays you kind of what per month to use the tech, would you say?
Yeah, great question. So we definitely have a lot of pricing testing that's going on right now to understand the market. I would have to say our most popular customers are spending more than $59 a month. And a lot of our new customers are much more focused on the enterprise level, which are paying more than $1,500 a year. And they have all custom plans. That's really our big target right now.
Okay, but when you look at your current customer base, right, would you say a fair average is 59 or it's much higher?
I would have to say it's a really, really good question. Honestly, I would have to say our largest user base is our $7 a month users. And that's something we deprecated probably about eight months ago.
How many people are on that one?
Probably about 80 people on that plan right now.
Okay, that's deprecated now. And what percent of your total customers does that make up? How many customers today?
So good question. I don't have that off the top of my head. I would probably have to say it makes up probably about 60 to 75% of our total customer base because we're much more focused not on quantity, but actually bigger deal sizes.
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Chapter 3: Who are the typical customers for UTM.io and what do they pay?
Have you ever heard of the slicing pie model?
Nope.
So basically, it's sort of like you would have as a fund, but it tracks the amount of hours and as well as the amount of costs that we all contribute. And then the equity amount ultimately is changing depending on who's putting the most effort or money into the company.
Yeah, but you just measured effort by time. That's a ridiculous measure of effort. One hour of every person's time is definitely not equal.
Absolutely. All of us have hourly rates that are stated inside of our contracts. Those cost rates, of course, will get changed during time. As an example, I received a very large increase in compensation in the past 12 months. So that was obviously changing the way that model works. But we do look at a cost basis.
And since we all track ourselves hourly due to our agencies at the same time, it makes it really easy to track.
Is it fair to say when you did this whole UTM deal, there was not something like $50,000 in cash going out of your pocket? It was more like, let's do equity here and upside here kind of thing?
Yeah, absolutely. So I would have to say that at the moment in time, we were roughly about $75,000 into the project at the time that we decided to do this deal. And that, of course, built out our percentage interest whenever we combined the two amounts to it. There was a certain amount of funds that my co-founder, of course, considered as his previous work in this.
And we took that into consideration with that.
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Chapter 4: What challenges does UTM.io face with customer churn?
You're basically pulling it out of the agency, sticking it into the software product. Now, how many people are purely dedicated to UTM?
Uh, there's three people on that team right now, two full-time developers, a full-time product manager. I would say my co-founder and I are both focused, of course, on this as a part-time investment. And then of course, like the company kind of runs itself. And that's the reason why we're making this new hire. So before effective October 7th.
Okay. So how much is the business burning right now? The UTM side of the business?
Yeah, great question. So we're probably investing around $9,000 a month. Our current MRR is $3,400.
Okay, got it. Yeah. So call it $5,000, $6,000 and burn. $3,400 will cost 100 customers. So on average, they're paying you about $34 a month?
I would say so. And that's dragged down dramatically because of those $7 a month users, which we, of course, are trying to do everything in our power to get away from. And then our initial funding, of course, was fueled by FN Amazing and as well as my co-founder's company, Marketlytics.
However, that being said, we also did an app sumo, say three months after we kind of, or six months after we kind of launched, one that helped drive a lot of our customer feedback. And then as well as give us like, I think we made about 45 grand off that deal.
Yeah. But how many of them are now paying you more than $2,000 a year?
I have no idea. We actually decided that we don't want to pay attention to those users. Unfortunately, we felt that that was the wrong product market fit. They weren't the right type of users. So we kind of don't really pay attention to what's going on with those users.
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Chapter 5: What strategies is UTM.io implementing for growth and customer retention?
And we're actually looking at potentially increasing the cost per plan again, once again, by about 10x. So even the entry price would be potentially $300 a month.
Yeah, I mean, you can just copy Superhuman, right? They put touch on every $30 a month sale. They sit down with a 30-minute demo to get you using their inbox before they close. You have very similar economics, besides the fact that they've raised $18 million from Andreessen.
Yeah, and we have no interest in going the VC route. So we're all about debt financing, keeping equity ourselves, slow and grow. And then that way we can obviously capture all the proceeds at the end.
How much debt have you raised?
So we haven't raised anything for this product right now. So FN Amazing does have some debt financing. I'm not interested in disclosing those metrics. But UTM.io will continue to focus on its MRR growth. FN will keep funding it out of our current customer pool. And then at a certain point when we spin UTM completely off of the company, we might raise some debt for that one as well.
Well, you don't have to tell me the numbers, but what's the financial instrument you use to raise debt inside of an agency? You know, in the SaaS world, you have things like RBFs, revenue-based financing, term loans, et cetera, but those are all valued based off ARR strings, which agencies don't have. So what's the vehicle you use to raise debt in the agency?
Yeah. So typically the debt starts with a personal loan from myself. So I'm obviously able to take out debt across myself. I then will apply that loan back to the company. So the company will then borrow the money from me. So this way I'm able to control all of the levers and as well as make sure that it all makes sense for both people involved. But it is at an arm's length.
So as you can understand, it's not me just putting money in, putting money out. It's literally a contract between me and FN Amazing. And FN Amazing, of course, pays that debt back to me. And if I want to take out more debt or use my own personal savings, I'll make that decision at the time.
Got it. Okay. And then business-wise, so UTM doing $3,400 a month today. What was it doing a year ago? Do you remember?
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Chapter 6: How is the team structured at UTM.io and what roles are critical?
Number two, is there a CEO you're following or studying right now?
I would say no. I don't have anybody specific that I'm following right now, no.
Number three, what's your favorite online tool for building your business besides your own?
Trello, probably. I love Trello and Butler. You have to use Butler with Trello and then it is a godsend.
Number four, how many hours of sleep do you get every night? Probably around eight to 10. I love to sleep.
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Chapter 7: What are the future plans for UTM.io regarding funding and business model?
That's good. And situation, married, single kids? I'm married. I have three kids. I got 14, eight, and five.
We're all over the place. We're having a great time.
How old are you, Dan?
I'm 35.
Last question. What do you wish your 20-year-old self knew?
Oh, um... Be more patient.
Guys, be more patient. His agency, FN Amazing, did $1.2 million last year.
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Chapter 8: What lessons does the guest share about patience in business growth?
He used that to start subsidizing this internal software tool he built called UTM.io to make UTM tracking easier. Now over 100 customers paying for that. It caught $34 on average per month for $3,400 a month in revenue, up from $560 a month just a year ago. So now they're dedicating resources to it.
Three people on the team focused on scaling this tool while he manages to continue to drive the agency revenue, which allows him, again, to generate cash flow to reinvest in the software. Not a churn problem, but he's going to work on solving that. Dan, thanks for taking us to the top. Thanks so much.