SaaS Interviews with CEOs, Startups, Founders
ZenBusiness Breaks 70k Side Hustle Customers, "Easy path" to $30m ARR Next 12 Months
07 Oct 2020
Chapter 1: What explosive growth has ZenBusiness experienced recently?
We are, you know, in the tens of millions in revenue. So revenue has grown explosively also.
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We got to grow faster. Minimum is 100% over the past several years.
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My guest today is Ross Berdorf. He's built a great company in Zen business. If you missed the episode back mid-2019, what you would have heard is they're helping the world create new businesses. And when he says the world, he communicated that had over 6,000 customers at that point. I think they've grown a lot. They've made a major acquisition. We're going to dive into it all today.
Ross, you ready to take us to the top? Hey, you bet. Thanks so much. Excited to be here today. You bet. All right. So if people did miss that first episode, give us the quick Cliff Notes version. Why are people paying you money to use Zen Business?
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Chapter 2: How does ZenBusiness support service industry entrepreneurs?
Well, yeah, the reason I ask is... We're, yeah.
Go ahead.
No, we're in the, we are... you know, in the tens of millions in revenue. So revenue has grown explosively also.
Yep. Yep. Yep. Have you, I mean, I guess from a trend perspective, have you generally increased ARPU and gone upstream over the past? Okay. Yes. Got it.
So we continue to see LTV expansion and the platform can use to expand, you know, our website product is leading the way. You wanted to talk about the joust acquisition. I love that. Yeah, so the Joust acquisition, which was someone we were going to partner with and really made more sense for us to purchase the company. So we did that.
Joust was squarely focused at this service industry, which is where we're focused also with invoicing, invoice factoring, CRM. merchant accounts. And so this was a perfect merge for us. We've rebranded it as Zen Business Money. You want to think about Joust as the fintech solution on our platform. So everything fintech and we'll roll that out.
It's been a rebrand and we'll roll that out in Q4 and Q1 of next year, feature by feature. So it just makes a perfect perfect solution. And you know, when you think about it is, you know, that that has to be fintech payments has to be a part of any platform that provides a solution in this area.
I mean, a lot of people were asked, we'll see other tools in space and go, that's a perfect fit. But I could never get that company because they've raised too much, or they're way bigger than us or things of that nature. I mean, when you look up just I mean, I think they raised 11 million bucks. Now you're not a small company, but you're not 100 million in ARR either.
I mean, how did you make that deal go down?
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Chapter 3: What is the significance of the Joust acquisition for ZenBusiness?
I'd invest... you know, more in operations to scale the business. So, you know, we can use more money. That's for sure. We can put it, there's no, there's no like, you know, let's risk some more money and figure out what products our customers want. I mean, we could just simply build those.
Yep. If you raise no more money and you do become profitable next fall and you keep growing at the growth rate you're growing, you said you're north of 10 million in ARR at this point. I mean, do you think you can break 30 million at that same time when you hit profitability?
Oh, yes.
Okay, very good. So that was a very confident oh, yes, meaning maybe that's a goal you crushed this year.
Yeah, that's very easy to hit that number next year.
We love that. All right, very cool. What about, do you have quota carrying sales reps at this price point? Pardon? Do you have quota carrying sales reps at this low price point?
No, man, this is all digital business. And that's what, you know, I think that's why you end up with those margins. And then, you know, I don't, we are firm believers in that brand equals trust. And we are firm believers on having, you know, world-class customer service. And that's just something that we invest in. We don't build shitty products that customers have problems with.
We just support the hell out of it. which is what this segment wants. You know, I mean, yeah.
Ross, before we wrap up here with the famous five, last critical thing about any SaaS company, especially at this price point is churn. What's monthly churn look like?
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Chapter 4: How does ZenBusiness ensure customer satisfaction and retention?
Three. Wow. Okay. And how old are you? 57. 57 years young. Last question. What's something you wish you knew when you were 20? Oh, man. Were you a computer science degree back then or no?
Yeah, I got a computer science degree. I wish when I knew I was 20. Oh, take more risk.
take more risk guys zen business they are really the software for the side hustle especially during pandemic when everyone's launching this they make it really easy to get your business up and going they've exploded 6 000 customers about 18 months ago now over 70 000 customers using the platform all paying north of 17 per month but you can get on and get your business formed totally free they then upsell you great additional features like getting critical business formation docs set up and going they're doing north of 10 million dollars per year in revenue he says quote
Really easy to break 30 million next fall when they hope to hit profitability. They've raised 19.5 million bucks to do it. 140 people on the team, a lot of services folks, but it's high margin services and 20 engineers with world-class churn, less than 12% gross revenue churn annually.