How Aisleplanner Reached 8,000 to 10,000 Paying Customers and 100% Annual Growth with a 7-Person Team (Interview with CEO Rob Farrow)

Introduction and Background

Nathan Latka

00:00Hello everybody. My guest today is Rob Farrow. He's got twenty five plus years of experience in building, designing and implementing strategic marketing programs and is a firm believer in asking why in challenging norms. Throughout his career, he's been fortunate to have worked with several great companies in tech, consumer product, automotive, hospitality, entertainment sectors with a unique set of demands and needs. He's taken this collective experience into his role as CEO of his current company, Aisle Planner, where

00:23his focus has been on creating a solid corporate foundation, developing their brand DNA and developing the highest quality customer experience through best in class product. Rob, are you ready to take us to the top?

Rob Farrow

00:35>> Yeah. Let's see what we can do here. Hopefully, give you something entertaining and enlightening.

What Aisleplanner Does and How It Makes Money

Nathan Latka

00:38Alright. What's the company do and and what's the revenue model? How do you make money?

Rob Farrow

00:43>> So we're a platform as a service. First of all, we're targeting wedding and event industry. We've been at it for about four plus years. We saw a large demand in that space to basically upgrade the technology platforms that were currently available. It was largely an antiquated and ignored field, but it makes up a incredible $100,000,000,000 worth of annual sales in The US and about $330,000,000,000 globally. And our majority of our team included my co founder came

01:09>> from the wedding industry. So it was something we knew very well and we're very intimate with and we wanted to make a change and make difference.

Nathan Latka

01:15Okay. So wedding planning tools, what's the revenue model here? Is it a one time fee or is it SaaS or what?

Subscription Model and Pricing

Rob Farrow

01:22>> It's SaaS, it's a monthly subscription fee based on the volume of weddings you plan on the platform.

Nathan Latka

01:26Okay. Yeah. Was gonna say, so it's not the actual kind of, you know, folks getting married because that's a one time thing. It's the wedding planners paying a subscription fee.

Rob Farrow

01:35>> Yeah. We are... We target the back office. So we're basically a hybrid between the Microsoft Office slash QuickBooks of the wedding industry.

Nathan Latka

01:42Interesting. Okay. And so what will an average wedding planner pay you guys per month to get access to the tech?

Rob Farrow

01:48>> Average is about $40 a month right now. And that provides you a laundry list of services, a very impressive list. I'll say we provide our marketing solutions in the way of a front end marketplace listing And the mid side of it would do a CRM lead generation tool set, which includes everything from payment processing, electronic signatures,

02:08>> lead intake, lead management communication.

Nathan Latka

02:11When you say leads, you're talking about people about to get married. You're helping them get customers. Interesting. We

Rob Farrow

02:17>> actually create a way for you to embed a snippet of code in any type of marketing platform you're currently working with that if they fill out their information, it comes directly into our platform and allows them to process that communication with that potential lead and convert that lead into a client.

Nathan Latka

02:32Are you actually bringing them leads? They pay you for leads or no? Do you just help them manage leads that they're getting?

Rob Farrow

02:37>> We just help them manage. We don't wanna charge them any more than we have to. They've got their tentacles out all over the place. And most of the... The wedding industry is very unique and that word-of-mouth is still a very powerful tool. So discovery is done by referral or by, usually visual discovery.

Nathan Latka

02:50Yep.

Rob Farrow

02:50>> So we want that once they're discovered, we wanna find a way to convert that individual that's discovered them and interested in them into a conversation and ultimately into a client.

Customer Base and Platform Scale

Nathan Latka

02:58Yeah, you've got a lot of inspiration on the website. I got a sense that that might be a big kind of driver for you guys. How many customers have you scaled to since I guess you launched in 2014?

Rob Farrow

03:06>> We launched in 2014. We've done, gosh, I couldn't give you a number, but I can say it's been the hundreds of thousands when it comes to weddings that have been planned on our platform. Wow. So it's been pretty impressive. And one of the other unique features of our site is we're not wedding specific. We're event agnostic as we like to say. Seen a lot of wedding planners are very unique, because a lot of them do more

03:26>> than just weddings. They'll do social events, they'll do product launches, they'll do corporate events. Whereas conversely, a corporate event planner will very rarely do a wedding. So we're seeing about 15 to 18% of the events on our platform right now are non wedding events. Oh, great. Including product launches for some pretty high profile brands that we were humbled and honored by. We had a little customer service call. We value our customer's privacy extremely. So we rarely

03:52>> look into the accounts unless there's an issue. And one of our clients has to look in and we realized the clients they had were like, wow, is it okay if we share that? They're like, yeah, that's fine. But it was amazing.

Nathan Latka

04:02So who was it?

Rob Farrow

04:04>> Can't share it publicly. Can share it around the office.

Nathan Latka

04:06Oh, got it. Okay. Got it. So wait, so how many customers have you scaled today? How many folks are paying you? Whether they're event planners or just product launch planners?

Rob Farrow

04:13>> Oh, we've got, gosh, between about eight and ten thousand total on the system right now.

Nathan Latka

04:17And that's free and paid or just paid?

Rob Farrow

04:20>> That's just paid.

Nathan Latka

04:21Okay.

Rob Farrow

04:21>> That's It

04:23>> ebb and flows. So there's businesses and then there's customers. Businesses can represent several customers. Planner sometimes have multiple planners work organization. So we've got all kinds of different, I think you call it levels of customers.

Churn Rate and Retention

Nathan Latka

04:39Yeah. But just to be clear, you have a, you call it 8,000 customers or businesses, whatever the verbiage is either that you want to use, you know, paying call it $40, $50, $60 a month, something like that. Yes. That's great. Talk to me about churn. Obviously, it's critical in any SaaS company. What's your churn and how do you manage it?

Rob Farrow

04:54>> So our churn is is incredibly low. We manage it by creating a very sticky product. Obviously, that's the ultimate Wait, Rob. How low? How low? For... Little over 4% right now.

Nathan Latka

05:04Monthly or annually?

Rob Farrow

05:06>> Annually.

Nathan Latka

05:07Logo or revenue?

Rob Farrow

05:09>> What's the first part? Sorry.

Nathan Latka

05:10Bumped Like, number of, like, logos lost or actual revenue the logos make up lost?

Rob Farrow

05:15>> Actual, I guess not familiar with that term. I'd say companies that have churned out. Okay. What what what kind do that volunteer?

Nathan Latka

05:21In other words, there are sometimes businesses like yours have customers that pay a grand a month. And if you lose that customer, it's really high revenue churn, but really low logo churn.

Rob Farrow

05:34>> Oh, okay. This is a revenue churn. We don't have any annual size subscription. Every subscription is monthly. So all of our revenue is being recognized on a cash flow basis. We did that for several reasons. So our churn is really due to companies that are bowing out, or that have gone down into their slow period and they leave for three, four months and then come back.

Growth Drivers and Customer Acquisition

Nathan Latka

05:52Okay, got it. So 4% of revenue churn per year. Yes. That's healthy. How are you getting, I mean, I think you're gonna say like some form of content marketing or visual inspiration, but specifically, I mean, how are you getting so many customers so quickly?

Rob Farrow

06:06>> So a lot of it is basically honestly driven by the origins of wedding industry marketing 101. It's sort of now. The site itself is very viral in nature. If you look at the story views of which you're looking at right now, and the inspirations, let's say you click on a story, you'll see that the other participants in that event were listed on there. So every time we publish a story, they get notified they've been published

06:28>> on Aisle Planner, and therefore they get to, experience and discover the brand. That's one aspect of it. Conversely, our platform is very collaborative. So anytime you're planning an event on average is between ten and twelve other vendors that go into an event planning cycle, the event, the account admin will invite these other partners into the planning process and they'll work collaboratively in the Aisle Planner environment and get introduced to Aisle Planner that way. So there's several sort of feeds

06:56>> that connect with the industry or our customer base. So our growth has been largely powered by that sort of type of organic viral engagement. Did sort of math for simplicity terms. Yeah. And then content marketing has been a big part of it because we try to showcase the beauty of the industry and get our customers' customers excited about wedding planning and finding things. So we've put a lot of time and effort into building a really amazing

07:19>> content base.

Team Size and Structure

Nathan Latka

07:20How many people are on the team? Your team?

Rob Farrow

07:23>> Seven right now.

Nathan Latka

07:24Okay. And where's everyone based?

Rob Farrow

07:26>> All here in San Diego.

Nathan Latka

07:27And how many of them are only doing content or marketing or sales?

Rob Farrow

07:32>> Three of them.

Nathan Latka

07:33And what do the rest do?

Rob Farrow

07:35>> Three in development, three in content, and yours truly trying to keep the wheels on the bus.

Bootstrapping and Early Funding

Nathan Latka

07:40That's great. And are you bootstrapped or have you raised capital?

Rob Farrow

07:44>> We are bootstrapped and proud of it. We sold the wedding planning business to start this business, and we took the funds from sale that into this company. We do have some friends and family investors, interestingly enough, most of the employees are also investors in this company. They put their own money into watch it grow.

Nathan Latka

08:00That's great. Do you mind me asking the first money you put in? Mean, was that sale price on that first company? Are we talking millions or hundreds of millions or a thousand bucks?

Rob Farrow

08:07>> God, wish it was hundreds of millions. It would be a different conversation right now. Hundreds of thousands.

Nathan Latka

08:12Okay.

Rob Farrow

08:12>> But it was enough as a small family, that was a big nut.

Nathan Latka

08:15That's totally meaningful. Yeah.

08:18Yeah, that's great. And then fast forwarding today, so 40, you said 8 to 10,000, we'll do minimum 8,000 of folks paying $40 a month. That puts it about $320K a month in revenue. Is that accurate?

Rob Farrow

08:31>> We keep that big, but yes, it's around there. We'll just say that I don't like to discuss our numbers because we're a private company and we're pretty, you know, we own, I just like we have big competitors.

Nathan Latka

08:41Yeah, no, no, get that. But I'm just those are two numbers that you disclosed, 8,000 and 40. So multiplying them should give me an accurate revenue number or at least generally Yeah,

Rob Farrow

08:51>> you're generally correct.

Nathan Latka

08:52Okay, fair enough. And then help me understand growth rates. So if you're at, you know, $320K, $300K-ish today, where were you about a year ago?

Rob Farrow

08:59>> Gosh, a year ago, we were about half of that. So we've been doubling in size on an annual basis.

Nathan Latka

09:04That's healthy, especially for a bootstrapped company. And again, all just word-of-mouth?

Rob Farrow

09:10>> All word-of-mouth, some light duty advertising. It's been a struggle.

Nathan Latka

09:15What's light advertising?

Rob Farrow

09:17>> We've been doing some stuff on Facebook, some social advertising. We've done some

09:24>> inner industry advertising and some inner industry trade shows. We're pro centric, so we focus on the pros. So we don't do a lot in the way of consumer marketing. Everything is really done towards the industry. Well, I mean,

Nathan Latka

09:34but what would you spend in a given month on Facebook ads?

Rob Farrow

09:38>> What do I have? It depends what I've left in my pocket.

Nathan Latka

09:40Okay, so we're not talking like tens of thousands. We're talking like maybe 1,000 here, thousand there.

Rob Farrow

09:44>> Yeah, we're spending a few thousand a month.

Nathan Latka

09:46Yeah, yeah.

Rob Farrow

09:47>> I apologize. It seems like our local refuse company knew we were doing an interview so I thought they'd show up right now and back their truck up. So I apologize.

Nathan Latka

09:53That's okay. Wasn't sure if it was an ice cream truck or a fire siren. Either one are both, they're both exciting, I guess. So

Customer Acquisition Cost

Nathan Latka

10:02when you do spend money to acquire a new $40 a month customer, how much will you spend on them fully weighted?

Rob Farrow

10:11>> You know, that's the customer acquisition costs all have been an interesting conversation because there's no one trigger or one conversion metric that'll give us that accurate dollar amount. So it's sort of an aggregate. And we do a, you know, we do a thirty day free trial onboarding. We do commit like, and I'm gonna sound vague on this and I apologize because we're still trying to figure out how we fit in like our onboarding team. Because they're

10:33>> a cost center to us and they're part of that acquisition cost. And it's something we haven't truly,

10:39>> I guess figured out yet. But I would say on average, it's probably about a $100 is probably a realistic number right now.

Nathan Latka

10:47So three month payback. That is not bad.

Seasonality and Revenue Mix

Rob Farrow

10:50>> All in. But then, you know, the challenge we have is we're in a cyclical industry that's seasonal. So we see ebb and flows in our customer base. Like right now we're at a lower customer time and we'll ramp up again at the end of this year when booking season starts, and then it's kind of a trickle down. So the way our business has been designed is really we try to layer in additional business models along the

11:11>> way. That's why we consider those a platform as a service. So we're not solely dependent upon the SaaS model for our revenue generation. There's all kinds of different, from the transaction model to the CRM subscription base, to the marketplace listings, to ad revenue. There's all kinds of things peppered into the system.

Nathan Latka

11:26Yeah. But you just be clear, your SaaS revenue we talked about earlier, 40, you know, times 8,000, that's pure SaaS, $320K a month.

Rob Farrow

11:34>> That's not pure SaaS, that's partial SaaS. I want to clarify that. It's a little bit of everything.

Nathan Latka

11:38Oh, didn't know that.

Rob Farrow

11:38>> You're bumping on. Yeah, yeah, yeah. So I want to clarify because I think it comes across that we're way... That sounds way higher than it is. The revenues are there, but it's a combination of everything. So I wanna... I feel like I'm backpedaling on that, but that is a... I'm just... As you're thinking, I'm throwing the number. I'm off. We already be held accountable just on basic subscriptions. It's not all subscriptions. It's a it's a combination

11:57>> of everything.

Nathan Latka

11:58Yeah. Yeah. No. I'm... By the way, I'm glad you're fixing it. Sometimes I go through the questions fast. So thanks for fixing that. What... Alright.

Rob Farrow

12:05>> I'm like trying to do the math in my head. I'm like, okay, what did he say exactly? And how am I saying this exactly?

Nathan Latka

12:09Yeah. Yeah. Well, again, so what you're saying is when these folks pay you $40 a month, that's not always just subscription.

Rob Farrow

12:17>> No, it's a combination of all facets of that user divided by the revenue.

Nathan Latka

12:22I see what you're saying. I see what you're saying. Okay. So if you look at like last twelve months and your revenue kind of pie, I mean, portion of that would you say is pure SaaS? Is it the majority?

Rob Farrow

12:31>> It's definitely the majority of our revenue. It's not the majority of our income. It's the majority of our revenue. And because we do transactions, we have pass through as well.

Nathan Latka

12:40Yeah, yeah, yeah. Got it. Got it.

Rob Farrow

12:41>> Sorry, these are questions that I'm not on because we don't talk about this publicly on a regular basis. So that's why I'm

Nathan Latka

12:48No, no, it's fair. I appreciate it. So I definitely appreciate it. So, okay, good. That's helpful to understand. Now, obviously you're also bootstrapped. So obviously you're running the business at cash flow positive, correct? You're not plowing more money in of your own money every month?

Path to Profitability and Debt

Rob Farrow

12:59>> No, we're finally turned the corner about a year ago. So it's kind of nice. We're starting to pay back some debt and get ahead of schedule and things.

Nathan Latka

13:05Oh, how much debt have you raised? Was it like venture debt or just like bank debt?

Rob Farrow

13:09>> Private debt, it was friends and family convertible note debt.

Nathan Latka

13:12Oh, I see. I see.

Rob Farrow

13:13>> Yeah, So you run a business for five years, you run negative for three and a half years, you accrue debt along the path. We were fortunate enough to be able to find ways to service that debt, whether through deferment or partial payments. Now we're at a point where we're actually able to turn that corner.

Nathan Latka

13:26That's great. Are you gonna pay it all back out though, not convert it to equity?

Rob Farrow

13:32>> To be determined.

Nathan Latka

13:33You don't really?

Rob Farrow

13:34>> Really depends on what as far as fundraising goes. And if we decide to raise that through our money or not, we're entertaining offers and opportunities along there.

Lighter Capital Partnership

Nathan Latka

13:42Would you consider... It sounds like you did kind of friend and family and bank debt, but, you know, venture debt's becoming very popular as a non dilutive kind of source of capital. Would you consider venture debt?

Rob Farrow

13:53>> Oh, absolutely. We actually did a round of revenue funding with Lighter Capital a while back and I couldn't have been more happy.

Nathan Latka

14:00What made you happy with it?

Rob Farrow

14:02>> One, the ease of working with them. They were a very open and earnest company. They basically were opening up our books and then they're looking at us and they're basically betting on our success, not...

14:14>> The investment isn't predicated on opportunity, it's predicated on performance. So it made really good sense for us. We didn't need a lot of capital. We needed a small amount to do a sprint that we wanted to kind of, push ahead some product. And we were just short on our ability to cover the cost. And that arrangement was very fair and equitable to us.

Nathan Latka

14:36Yeah, Rob, I want to just be clear. I want to dig deeper here because I think it says a lot about Lighter. So I'm very familiar with venture debt, you know, there's a bunch of different terms. Lighter is typically they will go down to the smallest companies, you got to be north of about $15K a month for them to work with you. They'll typically lend you anywhere between three and kind of five x your current monthly

14:54recurring revenues. And they typically look for like a three to four year repayment period with like a one to three to 1.5 repayment cap. Now, what they'll always say when they work with new entrepreneurs is, if for any reason at the end of that time frame, you're in trouble, we'll never like be aggressive and shut the company down. We'll always do like a recap. We'll just renegotiate. Am I hearing you accurately? You fell into that. You

15:15didn't grow as fast as possible, but they were really friendly in helping renegotiate?

Rob Farrow

15:19>> We actually grew right on path and we actually were able to go back for a second tranche as needed. We didn't need it initially, but we got offered it. We went back and we're able to take more money when we needed it. They've been a great partner. I've never, we've never missed on any of our milestones with them. So I've been very, very stoked. I can't speak to someone who has missed on that side. Our relationship

15:42>> has been nothing but open and communicative. We talked to them about once a month in a social capacity. If they ask us for referrals from time to time to other companies, because we've been sort of one of their, would say probably better customers down here, I guess. I couldn't say for sure. I don't know the other customer base they have. But yeah, I mean, it's been thing but easy and very positive.

Famous Five Rapid Fire

Nathan Latka

16:05Good. All right. We're out of time. Let's wrap up quickly with the famous five. Number one, what's your favorite business book?

Rob Farrow

16:11>> Oh, that's a good one. Pass.

Nathan Latka

16:15Number two, is there a CEO you're following or studying?

Rob Farrow

16:19>> I used to be enamored with Jack Ma because I thought it was really neat how he was bringing Alibaba to the forefront and I liked his personality. I have not really been too engaged lately with anybody else other than our own business.

Nathan Latka

16:30Number three, what billing tool do you use?

Rob Farrow

16:35>> Billing tool, we built our own.

Nathan Latka

16:37Okay. Number four, how many hours of sleep do get every night?

Rob Farrow

16:42>> Five and a half to six.

Nathan Latka

16:43And what's your situation? Married, single, kids?

Rob Farrow

16:46>> Married, father, Uber driver for the child, and, support team for volleyball and surfing every day.

Nathan Latka

16:54Wait. So any kids or no?

Rob Farrow

16:57>> One, we have a 13 year old.

Nathan Latka

16:58Okay, wasn't sure. Okay, one kid and how old are you?

Rob Farrow

17:01>> 50.

Nathan Latka

17:0150, last question. What do wish your 20 year old self knew?

Rob Farrow

17:05>> Everything I knew today.

Nathan Latka

17:07One thing.

Rob Farrow

17:09>> One thing,

17:12>> just trust in yourself and breathe.

Nathan Latka

17:15Yep. Guys, trust in your instincts, breathe. Sold his first wedding company for, call it, a couple hundred thousand. He used all that money to plow it into his new idea, Aisle Planner. Selling into really the wedding planning industry. However, 15% of his user base or paid customer base actually are doing other things like product launches. So they're expanding a bit now doing about $320K a month in revenue up from $150K about a year ago. Healthy growth, bootstrap.

17:37They've used venture debt and they've it sounds like used it very effectively serving over 8,000 of these planners today. They've got a team size of seven based in San Diego, 4% revenue churn annually. That's obviously on a gross basis. When they do spend money, they spend a $100 to get a new $40 a month customer for a three month payback period. Rob, thank you so much for taking us to the top.

Rob Farrow

17:56>> My pleasure. Thank you so much.