How Billyapp CEO Joshua Waldman grew Billyapp to $84K revenue and 700 customers in 2019.

hello everybody my guest today is josh waldman he started a career advice blog in early 2009 and turned it into a six-figure business in 2016 he founded billy a cutting-edge accounting software offered uh him the ceo role uh once he decided to take that on he now moved to portland lives in portland enjoys the ukulele meditating and cooking vegan food with his wife josh ready to take us to the top yeah nathan absolutely so just be clear this was not your thing you launched from scratch you were brought in as the ceo correct yeah billy was in dire straits i wasn't doing so well as a business about two years ago okay um and uh so i approached the ceo or the current owner and i said look i think i could do better give me the reins for a month if i can get us back on our feet i'm the guy for the job if not find someone else so he uh he took that offer why would you do it i mean did you have a do you have equity or he paid you a lot of money or why do this i ended up with equity yeah but you know i believed in the product i i really liked what they were doing like their vision i think they were solving a problem that i had as an entrepreneur and i thought we could make the world a better place with it and when you say dire straits i mean you didn't have access to their financials how'd you know it was in dire straits um it was not going to be in business anymore basically their funding had completely dried up and they had maybe seven paying customers how much had they raised the founder put in about uh three hundred thousand dollars to translate yeah together sebastian uh toki toki okay got it so okay so he put in the money they were almost out of capital um they sent out a thing that said hey we're basically shutting down you said wait let me try to turn this thing around yeah exactly i had actually been working with the previous executives uh in a marketing consulting role i see really interesting okay so and what year was that 2016 you said yeah yeah okay and you said back then they only had about seven customers so basically no revenue yeah they they had attempted to use a freemium model but hadn't figured out a way to monetize tens of thousands of free users so that's a problem right yeah that's a problem okay good and i mean literally were they doing what seven times 20 bucks a month they're doing like 140 bucks a month back then yeah that's probably about what they were making interesting okay what's the for people not familiar with the app what's it do so billy is an accounting software platform it's a quickbooks alternative most small businesses get really confused when they try to use quickbooks um or xero it's it's a way of creating really simple bookkeeping and accounting for you know uh one to two people businesses and what do you charge for it now per month on average so the range is between nine and fifteen dollars right now maybe say ten bucks is a good average something like that yeah and and 2016 is when you really started going full time yeah that's right and what i mean so if you're only asking you go on for a month it does well i mean how much equity did you end up with uh i ended up with five percent of the company this is that's like nothing why would you that you're like a turnaround artist you only get five percent why why are you valuing your time so little yeah um there are things i can't quite disclose right now but um that actually is going to end up being about double okay okay even still let's say 10 still this thing is failing it's going out of business why wouldn't you just go launch another one yourself own 100 and grow it yeah i don't know i mean i got asked that question a lot by a lot of different people you know you're crazy to keep doing this for i didn't take a salary for almost six months um just to get us back on our feet i was willing to sacrifice a lot yeah why though i believed in the product you're just a good guy who wants to donate his time i felt like it was going to go somewhere and it is okay um talk to me about customers what do you say in terms of total customers uh so right now we're about 7 000 users um 700 of which are paying okay good so 10 conversion from free to paid how did you figure out that that nut how'd you crack it yeah so our biggest deal was with appsimo we approached these guys [Music] okay keep going so it so what what'd you do so we needed the cash right and i needed to find a way to get back into our operating budget as quickly as possible so we did an absolute deal in 2016 in july selling lifetime plans i imagine we sold lifetime plans we up sold into onboarding services we upselled into an educational program so we were able to monetize that plus there was a groundswell so as we had all these kind of free basically free users coming on board we started to get really good reviews on capterra g2 crowd we started getting ranked on gartner quadrant and as those free users just kept talking about us we we started uh increasing regular paid subscribers so today there's 700 paying at 10 bucks a month so seven grand a month about yeah that's right okay and and the 700 none of those came from appsumo correct because the absolute people were just they paid one time that's correct yeah the absolute people are either going to upsell into a service or they're not going to pay again yeah yeah yeah okay interesting okay so seven grand a month is where you're today have you raised additional capital or it's all been bootstrapped it's all bootstrapped all boots dropped and how many people on the team today um five people five people so profitable or no um not not yet not yet profitable yeah i'll just say if you have five people you're only doing seven grand a month i think you're probably burning what are you burning like 10 20 grand a month something like that uh not that bad um i think we're probably burning to between two and five depending on the month it's kind of a seasonal business so what's next i mean you've been doing this for two years you only own five percent of a company that's doing about 70 grand a year i mean you're basically giving away your time what's going to happen over the next 12 months so we're looking for investors or acquisition we think that with the right team behind us we can do a lot more than what we're currently able to do so if i wanted to buy this from you right now what would you sell it for um i would sell it for uh 500 to 750. okay and how do you get into those numbers uh looking at forward projections yeah but who the hell cares about ford project i mean you can protect whatever the hell you want right why would you use that as a basis to value it well you have to compare all these different things so if you look at four projections compared with what would it cost to build this yourself um so billy billy comes from denmark it's it was developed five years before it came to america um the owners put in millions of dollars in development costs to to get a user interface that's just really easy to use well maybe they were really shitty at finding developers that could get work done so they wasted a bunch of money why would i now pay for that um actually one of the founders now works at google he's he's not a slacker okay i mean by the way if founder was doing it uh he wouldn't have been paying himself millions of dollars to do it it would have been sweat equity uh i don't quite catch you you just said one of the founders is now at google and my counter there was if they paid developers millions of dollars to build it uh then maybe the developers weren't that great why was the pounder founder paying himself millions of dollars to build his own product i know he had people working for him but yeah at some point that's my point though right so it's like so so so why why put all this complexity into a product that clearly the market's not valuing right i mean it is to an extent seven grand a month but was this the traditional kind of over developed thing um so keep in mind that billy is actually a danish company and the software is was built for danish market um billy is currently valued at 40 million dollars in denmark so they they did something right they're they're one of the top three danish owned uh uh accounting com software companies i don't understand i don't understand so so yeah these are two separate entities yeah there's two separate entities okay when were you going to tell me that yeah so just to be clear i only want to talk about what you're running what you're on the cap table of i want to talk about capital and that company and yeah that story so we license we license their core code right okay so it's a licensing for zero dollars and then we build our feature set on top of that so that we're more user-friendly for the us and canadian markets okay got that have you put millions of dollars into customizing that code for the us market no no we have not okay so talking back to the valuation question and so are you just now wanting to you're looking at potentially selling just the us portion uh correct yes okay um why doesn't the danish company just roll that up and buy it um they're just really focused on europe they don't want to get into other markets okay um walk me through again...