How Boardable CEO Jeff Middlesworth grew Boardable to $2M revenue and 1.2K customers in 2024.

hello everyone my guest today is jeb banner he's the founder and ceo of portable a non-profit board management software provider he's also the founder of two nonprofits the speakeasy and musical family tree as well as a board member of united way of central indiana and proact jeb is based again in indianapolis indiana where he's building this company jeb you're ready to take us to the top absolutely all right no one ever wants to work with non-profits because people just assume they have no budgets so so what gets you excited about building software in the space yeah they do have budgets there's 10 million 10 million worldwide 1.5 million in the u.s two-thirds are grassroots so that's under a million in revenue but even those still need help particularly managing the leadership side of the organization the board's a critical piece to any non-profit but most of these non-profits are not using anything they're using email dropbox google drive we call it digital duct tape so there's a lot of opportunity to solve problems and at this point we're in 25 countries and this is a this is a global growing market so again help me understand then generally speaking when when a nonprofit signs up to use your technology on average what are they going to pay you per year to use the tech our most popular package is 99 a month so around 1200 uh and so we're very much product led marketing driven uh self-service getting the product trial uh conversion stripe integration so that's that's the basic dna of the product okay and when you say board management solution is it like it sounds that mean you're literally helping them put together their board deck manage communication with investors things like that well remember there's no investors with non-profits yeah yeah yeah uh no they're they're yeah it's all about managing the board relationship so the board you know uh we have some customers with hundreds of board members uh across all their committees their sub boards uh it's not unusual for for there to be you know 20 40 60 board members in even smaller organizations so there's a lot of logistical scheduling meetings documents like you said agendas minutes voting uh so that's pretty much the board management piece and as we go forward we'll focus more on the board engagement piece which is really moving the needle on the behavior of the board member to drive the outcomes the organization needs interesting okay put this on a timeline for me when you launch officially february 2017 and when was the first line of code written uh this in 2016 so we built the product as a beta with a customer in town that had specked it out for us a little bit and then we gave it to a bunch of non-profits got feedback got good uh product market fit validation and we scrapped the whole thing and rebuilt it so our first customers our first customers were early 2017. okay so do you remember how much you spent in cash on that mvp before the first dollar revenue it's hard to say because it was being incubated out of another business so it the the uh the salaries were being paid for myself and my other co-founder and there was not a lot of like separation at that point um they were operating separately but the uh we haven't done the numbers on exactly what that was we began raising money in early 17 and uh and then by the end of 2017 early 18 uh i'd gone full time with boardable at that point and left my other business okay so how much total raised to date in the company uh 2.35 and were you able to get it were you able to so you know transitioning an incubated idea inside of a bigger corporation out in terms of cap your own capital management stuff can sometimes be tricky so is it truly an independent business now and how much if so how much of the current cap table is represented by the former company that incubated it well the former company was was to the co-founders myself and joe and and so that investment's reflected in our our cap table then there's four founders total so it actually was a side business that spun out a small box by other business so as a side business building product for companies and then we recognized that we had runway to go after our own product and that product became boardable but then we shuttered that business and created a whole new entity uh for portable okay this is your this is the very traditional model i see with a lot of successful assassins you essentially had an agency you saw a big need and you said oh my gosh we could build code around this the margins are better at scales more we can help more people let's go all in on the code yeah it had to be completely outside the agency like i've learned you can you can't serve two masters yeah no my point is though you learn via the agency and with those learnings you build the tech and you use the cash flow to support the early endings of the tech that's right yeah we were in the problem space because of the agency we and i and having started two non-profits i knew the problem as well yeah interesting okay what's team size today how many people 12 full-time okay now do you kind of break those down for me how many are engineers and do you have any quota carrying sales folks or no we've got uh let's see our team we have two full-time engineers we have four in the product team total we have two sales reps we we carry a team quota not an individual quota oh okay that's an interesting that's an interesting angle here how do you so incentive plans can be dangerous or if they're done wrong or very powerful if they're done correctly so why did you decide to go to the team quarter route versus individual quota route well because we're uh we're product led we're not sales led so a product led business we always want to be focused on having the um the product be the closer so that's been that's been our our key the whole way through so the sales team has to be collaborative with the product team and we don't want to incentivize too much short-term thinking and so we focus more on getting us to like a team bonus and there is some some local commit some individual commission as well yeah that's interesting okay good so uh that's that's working that's how sales are coming in now once sales come in obviously you want these non-profits to stick you gotta on board and make them sticky when you look at the past 12 months uh revenue churn where's that at and how do you drive that down yeah our net churn is very very low it's almost zero um when you look at gross it's in the one to two percent range okay um annually or monthly monthly monthly okay so 24 annually max right max net is more like 0.25 so you've got about 24 expansion as well it makes up the churnhole right right so expansion upgrades etc reactivations we see that people will come use it come back um that's not uncommon i imagine you maybe see that because board meetings or maybe once a year or once a quarter or once every six months how do you incentivize sticky behavior in between board meetings well that's a great question we do a lot of annual contracts so that sort of helps fill those gaps so they're not like activating and deactivating uh that's that's a good majority of our accounts um we have a customer success manager we just hired a director of customer success we do a lot of educational content webinars uh we really really focus on that administrative assistant staying engaged with us during those times because we want to make sure they're thinking ahead making sure they're getting other meetings in there but most nonprofits have committees that are meeting there's usually a meeting happening really at least once a month probably every other week i see it okay oh absolutely yeah yeah okay good uh the two essential gear is 2.3 to date when was the last raise we just did the high alpha round uh million from high alpha three months ago three months okay so you're very much in like in the mode now okay we said in the in the deck where we were raising we're gonna kind of scale burn to this to drive growth how do you how do you think about burn when you raise a million are you comfortable going up to 50 grand a month or 100 grand a month or where's your where's your breaking point there well yeah net income's really important to manage at this point so um it's it's it's part art and our part part science you get the right hires that come along that could be strategic for you they could open up doors you're willing to kind of lean out a little bit uh we were experimenting with multi-year deals right now that extends our runway that that decreases our burn uh more cash up front so we're playing with some of these variables right now and actually i have a i have board meetings this week uh meetings with a bunch of folks so i'm i am literally in prep mode of putting together my thinking around how we manage our cash reserves when we raise uh package pricing product roadmap so all this is very much in my mind and nothing is concrete at this point because i'm trying to get a lot of inputs before we make the call when you look at actually what you what you have done over the past you know one or two months what has burned been or are you basically break even no we're burning uh i can't share the specifics on it but um i will say that this past month our um our uh our revenue our built revenue equaled our uh total compensation for our team so we're getting where we're narrowing that um that that gap yeah and by the way when you raise um i mean you'd expect that to actually not be narrowed because you're going to invest in growth so i'm not saying...