How AutoForward SMS CEO Norbert Hüthmayr grew AutoForward SMS to $144K revenue and 992 customers in 2023.

hey folks my guest today is norbert houth meyer he is a software developer and online entrepreneur looking to buy and scale off-beat internet businesses norbert you ready to take us to the top yes i am all right why why buy and sell instead of build from scratch um i find it i find it interesting um to pick something that already has traction and uh because it's the hardest part quite frankly to find the product market fit is probably the most difficult part and if you can shortcut it yeah why not so tell me about the last company you bought and how you found it um so i started in uh 20 early 2021 and i was just you know i wanted to to buy something and and and see if i can scale it and i did a search through all the internet marketplaces mostlyflipper.com back then and just you know looked at as many listings that i could get my hands on and talk to the to the owners and then i found autoforward sms and yeah just bought that one okay and so which network did you find that that website on flippa that was flippa yes okay and what was the listing price it was pretty cheap i think the original listing price was about 12 grand for i think 600 usd mrr back then so by all right 4 600 monthly uh six six six hundred six hundred years yeah it was in in australian dollars so i don't i don't remind exactly but yeah okay so it was asking 12 grand and it was doing 600 600 per month or 7200 per year so about a 2x multiple um and what'd you end up buying it for i bought it for seven and a half grand i think because the owner had the deal lined up but the guy who bought it bef like bought it before me never sent the money never did the transfer and so the the owner reached out to me like hey i have fell through you can have it i was like yeah i like it but uh i'm only paying this amount it was like yeah here uh take it and so i got it for a really good multiplayer um very cheap by today's standards you mean look a lot of people think you go list on these marketplaces and some of the owners of the marketplaces are guilty of saying oh you build a 100 a month app you can sell it for 10 million dollars on our marketplace and it's frankly just not true i mean the most the deals are the ones like what you did right there for like 1x or sometimes 1.5 x is usually what happens but i guess why did the founder want to sell why was he a motivated seller so in this case it was an old australian lady she had a bunch of businesses in the sms space and she said she wants to work less and she was just selling off part of her assets and this app and this android app was one of the assets and um yeah i mean i had no reason to not believe her she was very forthcoming very open which is always a good sign when you're dealing with uh owners so that's why she sold it and i was quite lucky to get my hands on to be to be honest so you buy the company any surprises once you took it over in the code base or the finances or customers or anything um not a surprise but a little difficulty that i did not foresee so her company was registered with stripe in australia and i am based in the u.s so i had to transfer the account which stripe doesn't do for you so i needed to code like the transfer of the accounts the credit card information and they kind of help you but it was still i was still worried that i might break something and that the subscriptions wouldn't renew everything turned out really well but i was i was sweating i was just test migrating like five times oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 interviews i've done manually saves you a lot of time well we've done this we've built it into the beautiful interface inside of founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're going to see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're going to get a different valuation a vc is going to pay a different valuation private equity firm is different if you're going to do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when i hover over here right so the teal is what a vc would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on youtube all these datas are built from real-time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raised they sold 22 percent of their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of sas valuations than what you can get now inside of founderpath and we're thrilled to bring it to you all right we're gonna go back to the youtube video here in a second but if you wanna check this tool out if you wanna jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your valuation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform i hope to see you there all right let's jump back into the interview and what is my what is the monthly recurring revenue today on the app uh it's just a little bit more than 10 10k usd per month or per year per month oh wow so you've really grown it a lot over the past 12 months yeah so how'd you do it so um part of the reason why i found it interesting in the first place was that i i saw something um like i would call it maybe an error pricing mistake the previous owner had a very neat feature that was totally for free so in her mind it was like yeah um if you forward text messages to um like an api let's say it doesn't cost me anything so it shouldn't cost the user anything and so um the power users i want to say that use the app the most basically got it for free like they paid 99 cents and when i took over the app i restructured the pricing and i said well this is a feature that helps you so i should be earning and i made it a paid feature essentially and that was the best thing that i could do um because so it was it was free and now what did you charge for it how much so it's it's in tears so if you want to forward like 500 messages a month it's like i think a dollar 30 if you have between 500 and 5 000 it's like five dollars a month and it the top tier is like a hundred thousand forwards per month and that's uh 22 dollars how many forwards across your entire user base are you doing per month i have no way to track that because i advertise it as some like as a taking care of their privacy so i have no way to see what they are forwarding or how much they how do you know what to build them well i'm i'm tracking it but the app tracks it so the app it's it's a counter inside the app and i have no stat i know how much a certain user is forwarding but i don't know how much all of them in total what is your what is your largest user forward per month like hundreds of thousands uh no it's like the limit would be 100 000 and i've never had anyone complain that he needs more typically people text me when they reach like a tier limit and say hey i need more but i've never had anyone saying that he needs more than a hundred thousand so needs to be below that and how many customers are paying something monthly right now um 992 so i'm really expecting to bridge the 1000 paying customer threshold i don't know maybe early next month something like that so on average with 10 000 an mrr each one's paying about 10 dollars per month yeah even though it's highly scattered like yeah i have a large amount of people that have on the highest tier and yeah this is a great story i mean so is that really what it was it was just that one pricing change is there anything else you changed to go from 600 a month in revenue to 10 grand a month in revenue under 12 months um so that was definitely the biggest thing the app has had steady organic growth that's what the previous owner told me and so i was...