How Birdseed CEO Drew Sheahan grew Birdseed to $597.9K revenue with a 3 person team in 2024.

hello everyone my guest today is drew sheehan he is the founder of a company called birdseed in 2010 he started a gps sleep tracking business from his upstairs bedroom that would eventually rank number 126 on the 2014 inc 500 list he sold that company in 2016 to pursue solving the number one issue he encountered while scaling a business that generates website leads that business has become bird seed dot io drew you ready to take us to the top i sure am all right break it down what does birdseed do and are you a sas company we are absolutely sass everything we do is all about a recurring revenue model the story of birdseed really came from that previous business you just mentioned um the majority of our customers found us online and that was how they became a customer of ours and uh you know we were typically using back in the early 2000s 2010 2011 most of our business came to us through pay-per-click but as things evolved obviously it became more of social media and social media ads content forums and just different ways that people would find us but we were always driving potential customers or that would become clients to our own web properties so our own website our own landing pages we didn't really have funnels early on but that type of thing and we were really good at driving qualified traffic to our website and once they made contact with us we were really good at closing or winning the business but we had this constant battle of just a drop off of whether it was 95 96 whatever it might be you know the majority of the people just wouldn't contact us and we couldn't figure out why because they found something interesting about us but they didn't you know move forward in in the relationship you're talking you're talking about your first company correct yeah yeah so i think everyone gets this problem because there's a lot of companies now addressing it and they're right company so walk me through where you see birdseed fitting into the intercoms the drifts of the world absolutely yeah so i mean what we did was we basically took all the different tools that the different types of visitors that would come to your website would need so we look at like categorically uh you know your early stage people who are still just trying to find information gathering information uh those that really are trying to qualify you versus other people those that want to contact you just have different preferences for how they do so and then the biggest challenge being that the average small business who we cater to um they want to contact you but frankly if you're open 40 hours a week the majority of the time you're not available and even when you are available during those business hours it's very tough for a small business to support live chat and so my point is in reference to the intercoms and the drifts of the world who do a wonderful job of building just a phenomenal product i think for most small businesses the challenge they have is yeah but what if i can't respond live to someone and you see drift who's gone the direction of the chat bots you see interconnected staffing and the biggest issue is actually staffing a live chat 24 7. drift is now doing this automated via chat bots yeah absolutely yeah so how are you fitting into the picture right so we take all those tools and instead of trying to hide them in different places or or put them in different place in your website we build all those different tools into one button and you can customize which tools you use based upon your availability you'll show different tools but ultimately i think where we win or where we potentially stand out is on forefront uh the first one is is that we're easy to set up within about 15 minutes you can get a number of tools live on your website uh it's easier to support as i mentioned even if you're not there to support you know responding to someone with a live chat they can schedule a meeting with you they can look through testimonials they can do a whole bunch of different things and still be engaged no matter when they visit your website so how much have you put into the business so far because you're pre-revenue today right we are pre-revenue and have you invested so i would say somewhere around four 450 000 okay that's amazing your product is fully built and that is my own money correct okay and so people are wondering where to get this money from and you're you got this from the sale of your past company right correct yeah on uh the sale of i was able to exit that business successfully yep okay and did you have any did you did that company raise any capital or no i did not um i you know as you mentioned grew out of my upstairs bedroom grew it relatively slowly which is ironic about the being 500 since it's based on you know quick growth but um yeah i mean i didn't i think we just were very fortunate and did a lot of the right things at the right time to be strategic in terms of as we grew um you know be able to do the right things to continue to bring in new customers mm-hmm um interesting okay so 450 000 bucks into the company so far how what's the team size how many people you have working on the code small i mean the majority of them are our developers uh mostly you know we have one main developer i've been working with for about seven years um how many total probably five developers okay and total team is what six including you know we probably have seven someone who handles a lot of the social media um in in-house um in the office um one support person full-time but it's not a matter of uh you know not being able to it's just making sure that we have the right staff to support the business as it scales yeah well so here's my big like here's my big thing with you right like we met in new york i know you're a really smart guy you sold the last company for a lot of money um the product is actually a really good product but it does so many things it makes it difficult for you to deliver a message a mouse trap right that will get you flocks of new users so like what is the one sentence mousetrap you hope to go to market with to start signing up paid customers yeah i mean i think the key is understanding you know going back to what i was mentioning before is that it's not about you as the business it's about understanding that every quote unquote hit to your website is a different human being that has different things they're looking for especially depending on where they are in the sales cycle and so until someone recognizes that just having a one-size-fits-all approach doesn't work you're kind of missing people and so you know again for us yes you're going to customize it but allowing you to build whatever the right tool is or the right set of tools for your particular business they're into that button so that they can choose how they want to move their relationship forward with you as a business i think that's it is simplicity right i mean we have shorter attention spans as human beings than we've ever had and within the first couple of seconds if you can't find something that that makes sense for you or that intrigues you then you're going to move on and ultimately instead of going through the route of trying to chat with a bot or something else we're going to deliver those things right there within the first couple of seconds for different types of visitors so just be clear if someone installs your widget the job it's a line of javascript on their website from birdseed they're doing live chat are they paying you more or less typically than they pay intercom or drift yeah so it's appreciably less uh we operate on a freemium model um you know our our whole product we give away for free we limit it to two account users but for the majority of our who we believe will be our business which is small to medium sized businesses to account users is probably enough for them um we have two upgrade packages but yeah i mean we use the freemium model as an acquisition strategy not so much as a monetization strategy got it so so when do you turn on revenue when's the paywall going up yeah so you know uh we're talking today and um we do have a um a pretty large opportunity to uh bring on some uh a large uh group of free users for a short period of time um after that point once that that time frame is up we are going to allow people to start choosing one of the upgrade packages okay so probably within the next 60 days got it so you're hoping that people hit that limit they want more than two seats and then that's when you can introduce kind of the paid plans yeah you know it's it's we're we're one of those companies i think has an opportunity um where the freeman model really works for two reasons one mass market i mean there's a lot of websites uh you know in this world and the fact the matter is is that you know the website i think the only way to make freedom work though is p people have you have to be the tip of their tongue when they talk about a space so like drift is branded conversational marketing david's written books on it right um you know intercom is known for its kind of things like freemium will work but you have to get the flywheel going so the question is like what about your flywheel is more or less compelling than intercom or drift right like how are you going to capture the free market yeah no you're absolutely right i mean i think the the key is finding channels where the conversions of uh you know clicks or or seeing us to free users to begin with is very high um you know it's it's you know just a real common need that website owners or people who are marketing online have a website and i do think overall you know we have a better mousetrap so to speak nothing that we're doing is rocket science per se but i think we've made it easier and more efficient for the small business so yeah you're right it's a matter of visibility it's just a matter of do you think you're at a disadvantage that you sold your first company for so much money uh in what sense because you can keep funding this like you don't have to make money so you're not really forcing yourself to think about how to make money i think it's allowed me some opportunities in the sense that i'm not making decisions that are based on short-term uh potential goals um so i'm not forced to do things that would not um really be the right play long term but i do see what you're saying in the sense that it kind of allows me to put off uh making sure that we monetize and that this becomes a a for-profit company um but no i don't because i think you know bigger picture i've seen success i was very fortunate i mean the sale of the company was was you know many millions of dollars and and i think you know the key for a lot of people early on is understanding and believing that when they build that product it's going to be successful so you know yes i think making sure that we find the right audience for our product is key and crucial i just really believe that we'll be able to connect with that audience and you know that's that's name drew name two tests you're going to launch you have some things in your pipeline in terms of paid marketing you're going to try name two of them yeah so you know we just did one um it was with a newsletter called the hustle uh it did you know i think on our part it did pretty well uh frankly it went out to about 670 000 uh people uh we did it on a day that we thought would be the best because we were the only sponsor of the the newsletter and what were the results how many clicks did you get yeah we got about 2500 clicks uh to the website and um our conversion rate was about seven percent so we had seven percent we had about about 160 signups uh within a 24-hour period so 160 from the 2500 click signed up for like a free new free account correct yep a new free count got it so i mean so you're basically and what did you i mean what do you pay for something like that is this a grand or 10 grand or 100 grand or what uh it was around around 10 grand so i think they they estimate i want to say about two cents per send yeah so if i divide 160 which was the number of freezers you signed up into 10 000 that means you paid about 63 bucks to get a new free user are you confident you can convert enough of these freezers to paid to make back that 10 grand in a realistic amount of time yeah you know it is early so in terms of a lot of those numbers um we're trying to figure out exactly what our lifetime client value will be obviously uh but what i would tell you is that what we're estimating is about two years um you know i think in a small business you know space one of the problems you deal with is churn that really is not controllable um you know a lot of those businesses frankly you know they just close up shop and uh so i think you know that's something we have to factor into our churn but you know we have two upgrade packages one's 39 dollars the other one's 99 uh we also offer no one's purchased yet right correct we have i mean honestly we have a number of people that would love to turn it on um frankly we just we've been really hesitant to make sure that we can support the product completely and feel true turn on the money machine baby turn it on yeah well you know we've done that's another story for another conversation but we've done a lot of things to really make sure that you know to your point i think in this world the visibility is going to be the biggest you know the biggest advantage and the biggest disadvantage um i think advantage in the sense that you see this and you go oh my gosh and that's what's happened a lot of times i can't believe no one's done this before you know um and so i want to sign up right now the biggest disadvantages is is that attention is so difficult to come by that i think if you don't put your best foot forward it's easy for someone to dismiss you and go okay you know i've seen them i'm good i've moved on and so you know but you want to start my point is like you want to get the feedback loop started right like you you know what i mean so you're right there anyways look we're running out of time quick last questions here you launched this company in what 2017 uh we read the early 2017. yeah so we're about two years okay so you spent 450 grand over two years building this pre-revenue today how much capital are you burning today very little uh just development at this point like how much probably i mean again it depends on the uh the month but probably about 10 grand a month maybe 12. okay got it and then again revenue coming on in the next kind of four to six months yeah we have a number of ways i mean we have about 700 companies that have signed up overall i think if we were to literally flip the switch tomorrow to say hey you can sign up for this you know uh kind of like loom i think about ten percent of those uh businesses would automatically just say hey i'd love to spend 40 a month to be able to remove branding and add a couple more years so why not do it though that's my thing like you're there dude like why what are you scared but what are you saying you're scared about something what are you scared about i you know for me i think because we're a small team it's a matter of we want to just make sure as an example if i'm going to take 40 a month from you that i can support it well and and i think you know we're very very close truly but you're a caring dude i don't think you'll have any problems supporting them i can't wait for you to turn it on so look let's wrap up here now with the famous five number one what's your favorite business book you know i don't read a ton uh but blinkist was an ad supporter on your podcast i signed up for them i love their product because i love bite size and and give me the key points of things would you do you have kids i have two kids would you recommend my book to your kids well you know that was something we're going to get to uh i think later on about the 20 year old but uh yeah of course i would i think the book's phenomenal and um i think there's a lot of practical tips that even i've got a three-year-old and a seven-year-old which again i'm kind of moving through one of your questions um yeah i mean i think you know right at seven years right around that age i think starting to to think strategically about how can i find a way to carve a niche um so yeah i would and um i think books like yours are the type of things that people these days now that we have all the different you know methods vehicles tools to do something you have to capitalize capitalistbook.com guys check it out drew's one of the first readers number two drew is there an under the radar ceo you're following or studying there really isn't i don't have time that's okay business and the kids number three what's your favorite online tool for building the company you know today i would say slack i think slack's just a phenomenal tool number four how many hours of sleep to get every night the mean and median uh is very different um i would say it probably varies from about four hours depending on what we're doing to eight but probably an average of six okay good and situation married single and two kids right wife 12 years and uh two kids yeah three-year-old i'm 39. last question what do you wish your 20 year old self knew you know going back to kind of what we talked about before i think the first thing is is that you know the whole adage of whether you believe you will or whether you believe you won't you're right i think it's just so crucial as it relates to business um you know if you can't get over the hump of believing that something's gonna be successful no matter how many things get put in front of you it's just not gonna happen um so i think that's the first thing the other thing i'd say is is that don't take on outside investors partners or capital unless you absolutely need it and if you do then then go find it quickly guys team of seven bird seed dot io started building it in 2017 he's put 450 000 of his own money in got that money from his past sale this past company today burning 10 grand per month pre-revenue competing with drift intercom and other conversational marketing platforms hoping to scale his first you know call it 100 660 sign up 700 to date have really come from things like the hustle newsletter sent out to 650 000 people 2500 clicks to the website seven percent converting to a free user uh now the challenge is can he monetize drew thank you for taking us to the top thank you