How Blue Stream Analytics Generated $4M in Deal Volume for Its Founder in 2022 (Interview with CEO Maureen McGarry)

Host Intro and Company Overview

Nathan Latka

00:00She's a top broker in Minnesota already. Her secret power is the software she built for herself. Blue Stream Analytics generate over $4,000,000 in deal value for her in 2022 of which she keeps 3% up. So call it $120,000 there of commission. Now she has been frustrated investing over a $100,000 of her own money in the engineering on our third iteration, but you know what? Now it's working. It's paying for itself. And the only question is,

00:21who should she start selling this to? She wants to sell it to other folks, other brokerages, but also doesn't wanna lose the advantage it brings her. We'll see what she does next. Hey, folks. My guest today is Maureen McGarry. She is the she's a realtor and broker since 1995, passionate about working with investors and developed Blue Stream Analytics for software companies. Proprietary software that pinpoints investments and delivers analytics quickly. As a market leader in residential investing,

From Brokerage to Software: The Origin Story

Nathan Latka

00:44she's eager to help investors succeed in reaching their goals. Maureen, you ready to take us to the top? Sure. Absolutely. So so how do you decide to go from, you know, making 6% commissions to you going, you know what? I want I want software margins instead. Let me build software.

Frustration with Spreadsheets Sparks the Idea

Maureen McGarry

00:57>> That's a good question. It was pure frustration, you know, trying to find investment property for my clients and sitting there with spreadsheets punching numbers, you know, after a few hours of that, you start pulling your hair out. And when you have clients sitting there with hundreds of thousands of dollars saying, find me something and you can't get through the properties fast enough, I literally just one day said, has to be a faster way to do this.

01:24>> And that's where the idea was born. So I never intended to be a software developer, but that's that's what happened.

Nathan Latka

01:31Now is Blue Stream does it have customers or are you the only customer? You use it to support your customers?

Maureen McGarry

01:37>> Right. So I developed it to support my customers, but then the word got out. And so now we're we're working to, spread it around to other parts of the country and, get it out there to other realtors and eventually other investors so that they can use it too.

Nathan Latka

01:54But right now, just you?

Maureen McGarry

01:55>> Just us. Yes.

Nathan Latka

01:56Okay. Alright. Help me understand a little bit about sort of when you made a decision to start writing the code. So you you got into sort of this space in 1995. When did you write the first line of code for Blue Stream?

Maureen McGarry

02:07>> So we started the the initial code probably let's see. I have to think, like, to COVID.

Nathan Latka

02:212020?

Maureen McGarry

02:22>> No. It was probably 2017.

Nathan Latka

02:252017.

Maureen McGarry

02:26>> 2017. Yeah. So we you do?

Nathan Latka

02:29Did you code it yourself? You learn how to code or you hired No.

First Line of Code and Founding Year

Maureen McGarry

02:32>> No. I I learned the hard way how to get your ideas out of your head to a developer. You know, I had to go through that whole process of learning how to explain to a developer exactly what I wanted to do. And so we had a software that was working for us but it didn't really have a user interface. And so then I learned what a user interface was. Yeah. So that's where we started and

Nathan Latka

02:55Who'd hire? I mean, how did you find a first engineer?

Maureen McGarry

02:59>> Well, interviewed a lot of engineers and security was a big thing for us because as it turned out, obviously, we couldn't find anybody else that was doing this. So we wanted to make sure we had somebody we could trust and that was not as easy as we thought.

03:14>> So we ended up hiring somebody that was related to me and that was great because I 100% trusted him and we worked with him for a couple of years until he had some health issues and then we went with another recommendation that we had that we're working with now.

Nathan Latka

03:31So you source these folks directly yourself? You went on LinkedIn, etcetera?

Maureen McGarry

03:35>> Right. Right. Yeah.

Nathan Latka

03:36Okay. My husband wanted to learn software world.

Maureen McGarry

03:39>> So he helped and he he kinda guided me too.

Nathan Latka

03:43Well, learned You said your husband is from the software world and sort of helped you find the first engineers?

Hiring Engineers and Early Development Challenges

Maureen McGarry

03:48>> Yeah. Kind of kind of I could talk through, you know, what to look for, what questions to ask, that kind of thing. If I had specific questions on what, you know, what I needed to to be aware of. Yeah. That helped a lot.

Nathan Latka

04:01I mean, the the thing with a lot of folks make mistakes here because it's just you're speaking a different language. So you end up spending a bunch of money on a spec that isn't what you need, then you have to fire that person, and the next person needs to start from scratch because they have know, they wanna build on Python instead of SQL or whatever. Right? It's a whole different set. I mean, how did you go

04:17through these iterations? And, I mean, I don't wanna ask this question. I hope it's no dollars, but how much money do you feel like you wasted sort of before you figured it out?

Cost of Failed Iterations

Maureen McGarry

04:25>> We're on the third revision of this software. I I would say we probably have a 100,000 into it that was a waste.

Nathan Latka

04:34Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 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 Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect

04:58your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna

05:22get a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna 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

05:44not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna 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

06:10going out right now and you're raising your seed round. We'll 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 dataset of SaaS 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

06:32if you wanna check this tool out, you if wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. 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. Alright. Let's jump back into

06:58the interview. Yeah. Yeah. But, I mean, look, it's a waste, but also you sorta needed to do that to learn. Right?

Maureen McGarry

07:03>> Right. Yeah. It's it was it was a process. Because of what we're doing and how we're doing it, it it was tricky to put it together too. Mhmm. Mhmm.

Nathan Latka

07:13Yeah. So what percent of your time last year was spent on the traditional brokerage business versus trying to build software company?

Time Split Between Brokerage and Software

Maureen McGarry

07:21>> I would say

07:25>> probably a third of my time was just on software. And a lot of that was just making contacts, finding data. Because expanding it nationwide means finding the right data to do that. And that took a while. And then I also but I also used

Nathan Latka

07:41some What does that mean? You're identifying sources for the engineer to build into the tool?

Maureen McGarry

07:46>> Yes. Yes. Okay. One of the one of the pieces that I use here in Minnesota, which is where I am and by the way, today is a snow day, so I'm working from home because we got this much snow. The

MLS Data Integration and Market Expansion Challenges

Maureen McGarry

07:58>> we have a direct feed of the MLS coming into our system. So if you've ever worked with the MLS, which I don't know that you have, there's I think 500 or 600 MLSs in the country. And you can't just go in and sign up for that and get that data feed. You have to be licensed in that area. You have to jump through all kinds of hoops. It's not easy to do. So tracking that source down

08:21>> and figuring out how to expand to multiple markets is not easy. Yeah. So that was spent a lot of time on what pieces do I need to put all this together so that when we roll it out into other markets, we're ready to go.

Nathan Latka

08:35Well, so how do you do that? I mean, don't you you either have to sort of figure a way to scrape it or have a local contact in every area who's got all the certifications to get you direct access. And in that case, why do they need Blue Stream? Why don't they just use the the the the MLS?

Maureen McGarry

08:48>> Well, the first to answer that question, the MLS doesn't analyze anything. It just you just punch in how many bedrooms, how many bathrooms, blah blah blah do I want. What our software is doing is what an investor wants. They want to know what their cap rate. They want a specific cap rate out of a property. They want a property that's going to be a good rental. They want to know what the rental rate is going to

09:07>> be. They want to know what their net income is going to be after they pay their expenses. You know, they want a vacancy rate built in. That's what our software does. So it's it's it's much more advanced than anything you're gonna get out of the MLS.

Nathan Latka

09:20How would you compare yourself to some of these tools that are using Airbnb and VRBO data as their data source to get to cap rate around to Arabic and see rate? You know, tools like AirDNA for example.

How the Software Works vs. Competitors Like AirDNA

Maureen McGarry

09:31>> Well, AirDNA is is a really cool tool if you wanna do short term rental, know, because it because you can go in and you can look around kinda like Zillow, what's going on. But what ours does is it says, Okay, here's all the properties that are for sale in the market. And let's say you want to buy a rental. And this is your budget, this is how much you're putting down, this is your interest rate, this

09:53>> is the kind of return you want. These are your goals as an investor. That's what I'm putting in to it. It's going out and it's looking at 10,000 properties and it's saying, here are the best eight properties for you. These are the ones that will produce the best return based on what you want. These will meet your criteria. So it's not you're not going in and sorting through hundreds of properties. It's doing all that for you

10:19>> in a matter of seconds. So for an investor to be so for a realtor, for instance, to be able to go into a market and find a property, find properties like that for investors, there's nothing like that out there. It's a game changer.

Launch Timeline and Paying Customer Plans

Nathan Latka

10:33Yeah. So so when do you think that you will be able to release this to the market and start signing up paid paid paid customers?

Maureen McGarry

10:40>> I'm hoping by this summer. Mhmm.

Nathan Latka

10:42Mhmm. And I guess why have you you know, learning when to sort of quit is also just as valuable as learning when not to quit. Right? So, like, how much time and budget have you given yourself before you say, you know what? I'm gonna go back to making whatever you make at the brokerage and just focus on that.

Maureen McGarry

10:58>> When am I gonna quit? I'm I don't know. I'm I Right now, I think I'm at the age where I just want to see if

Nathan Latka

11:04I can do it. I like that. You like a challenge?

Maureen McGarry

11:07>> Everybody that I show it to I have a coach that I'm working with who's great. His name is Carl Gould. And Carl, he said, alright, go out and show it to, you know, do 10 sales calls, do 10 Zoom calls, whatever. And I did like, I don't know, ten, fifteen, 20 of them. Every single person was like, how do I sign up? Mhmm. And I finally had called my I can't You try and get him to sign

11:30>> up?

Nathan Latka

11:31Do you send him an invoice to sign up?

Maureen McGarry

11:32>> But I'm not in their market yet.

11:34>> You know? So I Well, yeah.

Nathan Latka

11:35But why look. Your friends are all gonna say yes. I mean, why not?

Maureen McGarry

11:38>> These were friends. These were people in other markets.

Nathan Latka

11:41But my my point is why not, like, lock them in? Right? If they're saying yes on a Zoom call, why not follow-up with an invoice and say, here, pre commit to paying?

Maureen McGarry

11:48>> Right. Right. Right. Right. We can do that. We can do that. But my point was everybody that sees it.

Nathan Latka

11:53I have yes. I have a list

Maureen McGarry

11:54>> of people that want it. Absolutely.

Demo Calls, Waitlist, and Sales Validation

Nathan Latka

11:56No. But my point is though is, like, when we do these user research calls, people will say yes to your face on Zoom. When you follow-up with an invoice and ask them to sign committing to $200 a month for twelve months, then pedal goes to the metal. They tell you the real truth. Have you gotten people to sign invoices?

Maureen McGarry

12:10>> I have not got them to sign invoices. No. No. But I have a list of people that want it when they when we're in their market. Right.

Nathan Latka

12:16How did you decide who to get on the phone call to sort of show it to?

Maureen McGarry

12:21>> Different connections. I I I had different realtors that I knew and then they referred me to other people. I reached out to different markets. I asked different people I know in different I know a lot of entrepreneurs so I would ask different entrepreneurs in different markets. I have clients in different states. So

Nathan Latka

12:38And and what's your burn? I just wanna understand how much like how much pain you're feeling here, but until you get it released to the market. I mean, are you spending per month right now in engineering cost to keep building this thing?

Current Burn Rate and Engineering Costs

Maureen McGarry

12:48>> Well, right now we're not spending much until we get ready to expand it to the different markets. I think to keep it going in our market, it's not much. It's maybe 1,000 a month. Okay. But we use it within our brokerage. Yep. Once we get it out to the other markets, then it will depend on which markets we're in and what data we're pulling and that type of thing. Yep. We need need more than that.

Deal Volume the Software Generated for the Brokerage

Nathan Latka

13:13To increase revenue at the brokerage? Like, can you quantify how much sale can you quantify how much sales last year came from the software the software identified?

Maureen McGarry

13:22>> I had yeah. I had so just working part time on sales, I had almost 4,000,000 from the software.

Nathan Latka

13:31In closed deals?

Maureen McGarry

13:32>> Yes. Of which

Nathan Latka

13:33you would make, what, 3% of or 6% of?

Maureen McGarry

13:36>> Well, I I figure 3% on those. Yeah.

Nathan Latka

13:40Okay. Got it. Got it. You could say the software generated a $120,000 of revenue for you last year, 3% of 4,000,000.

Maureen McGarry

13:46>> Right. Right.

Nathan Latka

13:47Okay. So maybe it's maybe you've actually already recouped everything you've spent on this on the software.

Maureen McGarry

13:52>> Oh, absolutely. I have. Yes. Yes. Yeah. If you think about like

Nathan Latka

13:56that your own dog food. We love that.

Maureen McGarry

13:58>> I didn't think of it that way, but, yeah, that's true.

Eating Your Own Dog Food

Nathan Latka

14:01That's the best way to build a software product. Right? I mean, if it's working for you, then the question becomes, well, wait. Do you even want other people to have this, or do you wanna use it just as your secret tool to build your brokerage to be the biggest? You know?

Maureen McGarry

14:11>> Mhmm. Mhmm. Yeah. It works. It it works great. I mean, you know, if you get on a Zoom call with a with an investor, you know, I had one that had to quickly within thirty days buy a $1,500,000 for a $10.31 exchange in single family homes. No brainer. Ten minutes later, we're signing a contract.

Nathan Latka

14:30How do you decide though? I mean, it sounds like this is a powerful tool that's an unfair advantage for you to build the largest brokerage Minnesota? If that was the case, you wouldn't wanna sell this to anybody.

Maureen McGarry

14:41>> There's not a lot of realtors who do investment.

14:46>> The the honestly, there's a lot of education that needs to happen in the real estate world for this to be a great tool. So there's only certain realtors that are going to invest in the time and the energy to to learn how to do this.

Nathan Latka

14:59But my point is if you sell this to a bunch of people in Minnesota, do you lose its advantage? Do you lose the advantage?

Maureen McGarry

15:07>> I think there's plenty of you know, I think we would limit it to different markets, you know, different zip codes and areas. Yeah. I mean, we're not gonna sell it to, you know, everybody that wants it. But Minnesota doesn't have as much rental as a lot of other markets. Don't have as many MLSs here. You know, say Florida, they have like 15 or 20 MLSs. So it's a much bigger much bigger market down there.

Famous Five Rapid Fire Questions

Nathan Latka

15:36Well, Maureen, we're out of time though for today. Let's wrap up here with the famous five. Number one, favorite business book.

Maureen McGarry

15:43>> I'm reading Profit Before People right now. I like that.

Nathan Latka

15:50Number two, is there a CEO you're following or studying?

Maureen McGarry

15:55>> No. But I have a lot of friends that are CEOs, other entrepreneurs. So I I rely on that group a lot.

Nathan Latka

16:02Number three, what's your favorite online tool for building Blue Stream Analytics?

Maureen McGarry

16:08>> No. I'm kind of a numbers geek. I would say Excel.

16:11>> Yep.

Nathan Latka

16:12Number four, how many hours of sleep do you get every night?

Maureen McGarry

16:15>> It ranges from two to eight.

Nathan Latka

16:17Okay. Fair enough. And what's your situation? Married, single, kids?

Maureen McGarry

16:21>> Twenty six years married.

Nathan Latka

16:23Wow.

Maureen McGarry

16:24>> Three kids. Wow. Amazing. One almost 18.

Nathan Latka

16:28That's exciting. And do you mind me asking how old you are?

Maureen McGarry

16:32>> I am 50.

16:33>> 50. Fair enough.

Nathan Latka

16:3450 she's 50 years young, folks. Maureen, last question. What's something you wish you knew when you were 20?

Maureen McGarry

16:42>> Study business and software. Guys,

Nathan Latka

16:46she's a top broker in Minnesota already. Her secret power is the software she built for herself. Blue Stream Analytics generate over $4,000,000 in deal value for her in 2022 of which she keeps 3% up. So call it $120,000 there of commission. Now she has been frustrated investing over a $100,000 of her own money in the engineering on our third iteration, but you know what? Now it's working. It's paying for itself. And the only question is,

17:08who should she start selling this to? She wants to sell it to other folks, other brokerages, but also doesn't wanna lose the advantage it brings her. We'll see what she does next. Maureen, thanks for taking us to the top.

Maureen McGarry

17:16>> Thank you.

Nathan Latka

17:17One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on three hungry buyers. They try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it. And the buyers try and make a deal live. It is fun to watch every Thursday 1PM

17:42Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM Central. To make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big

18:04fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you want to take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign

18:26up for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode. And if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, I do it so that we can all learn. We have to counter those people. We

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