Brand Overflow Revenue & Valuation (2024)

hello everyone my guest today is ahmed qureshi he quit his job to start a martech sas sharp and then survived the kobet recession and raised funds without selling any equity went from two features to 11 within four months and raised enough funds to fund their future without the need of any investors the companies called brand overflow.com an all-in-one seo platform i'm eddie ready to take us to the top yeah sure we started out in 2019. and how much capital did you raise and how did you do this about selling any equity okay uh i raised around 250 000 uh a little over 250 000 uh dollars in 2020. how did you do that without selling any equity by creating future debt uh we sold lifetime deals to our software product okay but doesn't that kill your ability to upsell customers in the future if you let them pay one time for their whole life definitely that's why we created it uh we created the deal in a very isolated environment so that we can uh try to get those super early beta testers that can really uh support our vision because we were we were in a really saturated market we were already up against really big companies that were already dominating that kind of space we needed to create space for ourselves so what was the lifetime deal how much did you charge we charged we had several packages the regular package cost around 299. 299 for for life and how many did you sell we sold around we had several packages so the prices prices may vary we sold around 400 to 500 deals a week okay and which platform like how did you sell 400 how did you get traffic the first uh thing we did we was we went to stack social uh everybody goes to stack solution for the lifetime deals we generate a little bit of everything from there and then we move to isolated facebook groups where there are like hardcore uh sas users b2b users agency owners they're looking for way they were looking for ways to cut down on their costs and there we were so can you name one or two of those groups yeah definitely one of them is digital think okay and what's another one uh alstom elston anthony he was one of the first people that kind of introduced us to these lifetime groups allison anthony's group what's another what's another group give me another example martech martech wise uh one of those yeah i would say these are the three of the biggest groups that i'm so digital digital think martech wise and what was the third one alston anthony it's his actual name yeah that's his actual name so his group was based around him reviewing these uh lifetime products okay so you sold you sold a total of 250 000 worth of the product and lifetime deals yep and how much do you get to keep versus how much do you have to give the group owners or stack social okay this 250 50 000 uh does include the commissions and removing that we are at around 220 to 200 000 so we didn't do it too bad so why do these group owners promote this if you're only paying them i mean less than a 10 commission okay uh well the group owners uh like appsumo charge a lot more they charge a lot more to run these lifetime deals group owners have lower reach than appsumo so they charges way way lesser well but they still have some reach they helped you get 400 customers the point is if they have a niche community why are they why are they i mean why didn't they ask you for a 40 50 cut instead of only a 10 cut because they're up against appsumo they're also competing for better deals to come to them instead of going to appsumo so there's a little bit of exclusivity there as well yeah but now that's a huge difference appsumo takes like 60 percent so they could have came in just underwrapped sumo why go all the way down to 10 because if i go to appszoom i could have generated over a million dollars and out of that i would have paid a lot more and that's just by one deal i'm talking about multiple deals that i've been running throughout 2020 not just one deal at appsumo at appsumo i would have had i would have had a lot more users to take care of with a lot less money what uh well i know that's that's building my point though ahmed that's my exact point is you don't want to pay attention all that money so you go negotiate one-on-one deals with group owners you want that too so so i'm just curious how you convince them to only take a 10 cut when appsumo takes 70 60 cut i did not convince them they are actually trying to get deals into these facebook groups mo the regular cuts there are 10 to 20 percent at most the affiliate cut at normal what absolute pays their own affiliates is around 25 or 20 the most so they act as affiliates they take those small cuts and they boost the deal by themselves they review it themselves they do the live streams themselves they do everything themselves and we have i've done several live streams my youtube channel is uh it's not that big but uh i've uploaded all my live streams there and they have been interviewing me asking me about the product we've been gone deep into every single feature that i have released got it and how many how so ignoring the lifetime i understand how he got up front cash to invest in growing the company um how many cu ignore all those customers for a second how many customers do you have that are paying you something monthly okay that number is really really low like how long that number between 20 and 50. okay and what they pay what they pay per month yeah we never had any money to invest into marketing or get those mri customers i mean how much how much do the 20 customers pay per month they pay around 69 to 150 a month okay got it so so that's something like you're doing like 1400 a month in true recurring revenue okay so how do you make this business sustainable because you've just promised 400 people you're going to be around forever because you sold them a lifetime deal but this business is not sustainable at 1400 a month in rent total revenue coming in at some point what happens all right that's the best part of it we stopped working on getting new mrr customers around february of march 2020 that's when we started pushing out these lifetime deals so it's been around a year since we stopped in that time we started focusing completely lifetime deals get that cash first with the cash that i have right now i have a runway of around two years with my current team that i hired how many how many people are on the team uh four people plus me and and what's your total headcount expenses per month uh it's around a thousand to two thousand dollars a month to pay five people yeah how are people surviving on on i mean you're paying for people on average 450 bucks a month to work for you full time yeah including myself that's what i earn that's what i keep for myself as well where are these people where are they living in the world okay got it so this is trying to make sense right so so if you're living in pakistan you pay them 400 bucks 500 bucks a month where are you living in pakistan i'm in you're also in pakistan got it our living costs are really really low um fair enough the the question then we'll we'll that people will bring up will say well how high quality product can you build with engineers who can only command a 400 a month salary many people would say well maybe they're not great engineers okay then that would go to me i'm the cto i built 99 of the core tech behind this product uh we are comparable to we're almost comparable to hrs and sem rush judging by the reviews that i get by the customers themselves we compare our data with airdrops and semrush we've been featured in hubspot just recently organically completely organic and then why then why do you have then why do you have to do gimmicky lifetime deals to bring in upfront cash why don't just you just close people on monthly recurring revenue or annual upfront cash payments this core technology took time to build and do everything like we finished building our technology back in uh november 2020 so all that time what do we do how do we survive that that was main question all of my emails all of my marketing tactics just failed as soon as code had hit everybody just went into silent mode nobody wanted uh recurring uh subscriptions to seo tools that would like just offer monitoring and keyword research and all those things they wanted to get out of all those recurring expenses it was a very tough time for everybody and how do you do 100 equity in the business yeah okay so what about like osama khan and usmangani and siddharth joffrey on your website you don't give them any equity okay interesting um so what's the next step i mean how do you scale this how do you scale monthly recurring revenue starting february 1st we started working on our mrr cold out cold emails outreach marketing reddit uh advertising new website everything we're working across the board on every single thing that we ignored for the last year my team was hired around six months ago until then i was i was just flying solo okay so how are you going to get a thousand customers paying 70 a month do you think reddit threads are going to do the trick uh it's a starting point it's better than not i'm not doing anything at all uh the first thing that i'm going to do is reach out to all the business owners that have been contacting me during the lifetime deal during the lifetime deal that they did not want access to those lifetime deals at the moment they were just considering it about the core tech first they wanted good data instead of getting a lifetime deal earlier and with the promise of better data later on i have a list of over 200 or 300 interested businesses over the last year that i have to build upon but if you couldn't sentence them if you couldn't convince them to pay you a one-time discounted lifetime fee what makes you believe you're gonna be able to pay them it convince them to pay you 70 bucks a month or 840 a year that's because most of the lifetime deals they come out with big promises but they never deliver we just rolled out our seventh seventh update in the last six months we have a very good reputation at the moment just because of word of mouth we say something and we get it done with it by the end of the month [Music] how do you measure success are people using the platform yes they are we are increasing our daily usage of the tool uh day by day yeah okay well that's not very helpful what does that mean how what do you consider a daily active user okay uh okay uh we have 11 tools i'm going to give you stats on one of the tools we have a rank tracker where you enter a keyword and you track the rankings of your own website so we are tracking around 50 000 keywords a day and these are from active users okay well what if i give you a list of 100 words to track and i don't log in for two months but it's not very useful uh okay then i can give you daily uh daily active users we have around 500 daily active users out of a 4 000 total registered yo what what does daily active user mean are they actually logging into the platform view their reports do some keyword research active users as in people using the web app and okay got it and so 500 out of 4 000 you sold 400 on lifetime deals of the 400 that bought lifetime deals how many of them have logged on at least you know once a week for the past couple weeks uh past couple weeks almost everybody has loved okay so is there a path to converting some of these 400 lifetime deals to upselling them into other products and if so have you had success upselling any of these guys yet uh not at the moment but i'm working we are just now with others interesting why rely on reddit threads to get a thousand monthly credit revenue customers i mean you have great seo ranking already for such a young company you're an seo tool so that makes sense i mean why aren't you going to use search engine optimization or seo to get new customers okay uh that's the uh that's kind of my my own fault there i didn't focus on seo while building this tool i did not have time to do the seo part the content writing part i never focused on the website itself i focused on the core tech because i was alone as soon as i hired my team i had the confidence that they're gonna start building up the content content is key over here we have been building up content when they were hired they were dropped into a sales frenzy so that they did not have the time and the energy or uh proper training that i had to give them now they do we started doing our seo just recently we started building up our content just recently we needed that breathing room the our sales stopped at the end of december that's when we started working hardcore on content outreach making those connections meeting those people making those calls doing the interviews doing the going everywhere with our product so what keywords are you tracking that you want to rank number one for uh we are not ranking number one for anything yeah which ones are you targeting seo tool keyword rank tracker rank tracker uh rank track easily rank track google google rank track various very uh many variations of the word rank track and why do you feel like you can and why do you feel like you can outrank ahrefs or sem rush for these these keywords okay getting the proper word of mouth getting the proper background getting the proper press is the way to get those rankings if we're not gonna get number one we're gonna get into the top ten we already have all the data we need okay how okay uh there's a tool we released quite recently it's called seo audit where they where you enter your own website your website url and you enter the keyword that you're targeting we have an algo built off of inspired by seo surfer if you've heard of them they have a really good seo audit tool our users wanted us to make something similar so we started creating our own algo we are at a point where we can tell you a few matrices fix these things get these things done get these backlinks and you're gonna be in a better spot to rank in the top 10. do you have a general sense of what it's going to cost you to get a new 70 a month customer uh could you read that question please do you know what your tack is our cost per acquisition is around uh 23 to 68 at the moment it's a very big ballpark and where are you spending that money that is from the last test i did on adwords advertising complete advertising how big was the test how much did you spend total around three thousand 3 500 and how many customers did you get from that around uh 10 to 15 and so then the average kind of uh faded out because a lot of them canceled because we did not have enough features to actually support them so 3 500 in spend divided by 15 new customers is a cac of 240 dollars not 23 yeah that's correct but they they varied in packages some people went up went for the biggest package some people went for the smallest package it kind of varied all over well who cares about the package you spent 300 bucks you got 15 new customers even if they're paying you on the most expensive package 240 acquisition cost for a 70 a month plan and you just said most of them may have been churned so paid acquisition average uh gets freaked out because uh three of those customers went up to the 1500 per month plan which we offered them in a custom basis okay you just told me you're doing a total of 1800 a month in revenue across 20 customers now you're saying some customers pay 1500 a month by themselves faded out of the trial period they came in for a few months and they left okay i mean these numbers are not making any sense also you told me earlier that you have 20 customers paying you 70 a month in revenue and you confirmed your mrr was about hundred dollars or fourteen hundred dollars per month you then just said you have some customers that you paid spend that are paying 1500 bucks a month by themselves you asked me about my cac right this was from my advertising test last year okay most of those customers faded out of the trial period of the one-month period the two-month period two of those or three of those customers were really really big for us we saw the potential in the market we saw everything in the market they stayed with us for one or two months we did not have enough features to support their needs so why aren't they paying now it's a year later you've released 11 new features and 20 new tools i mean why aren't they paying now they uh we have started just contacting them again i see i see we lost a lot of people we went out we said we are doing much better things than other people can we made those big promises but people didn't believe in us in the mrr section they did not believe believe in us there we converted many customers agencies and big companies to join us in the lifetime part we lost a lot of people because they did not have any have any faith in the solo company i was alone you would not have any faith in a kid asking you to use you as a main seo tool when you have ah you have semrush and all these other big guys with actual companies and big teams 1800 people i'm sorry a thousand plus people convincing people was the hardest part there making people believe was the hardest part well it will always be the hardest it will always be the hardest part always like you the best products don't win the best storytellers win so like everything you just told me is like just sounds like an excuse like you have to tell a better story than other people and that's how you're going to win who cares if your product's better or not maybe it is better maybe it's not it doesn't matter so like i'm curious what story you're going to go to market with what store you're going to market with that gets ahref customers and semrush customers to switch over to brand overflow cost is not going to be my story my main point i know i can do it cheaper than them i run my business better than that my tech stack is faster it's cheaper no that doesn't know ahmed the story the story the story who cares about your costs no your customers don't care about your costs i'm the story what are you going to help your customers do that's going to make them switch to you okay my story has to begin with the data you are not going to believe me if i don't give you the good data am i wrong i have no idea i'm not your customer i don't know my customers care more about data than they care about anything else they believe air trust because they believe in their brand they believe that that they would have the best data in the world they would not believe me unless i show it use cases case studies actual proven points of our data beating everybody else or if not beating it competing against it in the best way possible that's what we're trying to do every day that just isn't that exciting because no one no no one's going to believe the fact that oh a single guy has better data than ahrefs or semrush which just passed a hundred million dollars in revenue can afford to spend money on 100 engineers and no one's going to believe that so you have to sell an emotional story not a rational one like that's what i'm asking like like if i was you if i'm building this company i'm basically saying i built the company from nothing to a 56 000 alexa rank using my own ses oh tool if you're a bootstrap founder in canada and don't use these other tools you should use me too like that's what i'm talking about emotion well okay yeah we built our tools for ourselves as well uh my team is filled with engineers as well as seos that have eight plus years of experience with building out we're training people with our own seo logic and algorithms and the way we learned seo we're gonna use our own tool to rank our own website to the top but i think we're gonna i think you have to do it though like i think the headline you have to figure out how to make true is bootstrapped startup outranks ahrefs for keyword keyword ranking tool and then here's how we and then here's how we did it but like you have to actually be able to do that you know what i mean you have to actually be able to do that so i think that's a big challenge that i should go for well we'll see listen i'm rooting i'm being tough because i want to see you succeed and it's a hot space and it's very tough it's a very tough space so congrats on doing what you've done so far let's wrap them here with the famous five number one favorite business book uh start with why number two number two is there a ceo you're following or studying not at the moment number three what's your favorite online tool beside your own uh ahrefs i love it i love it that feels like a bad answer considering you're trying to beat them i would say we're going to beat the hell out of them and make up a different favorite tool they're good i'm not going to lie they're good i want to beat them i want to i want to be them then i'm going to beat them i like that all right number three and number four how many hours sleep to get every night three four that's not healthy you're gonna die in a week uh i take power naps three hours two hours in the middle i see all right what's your situation married single kids single uh no kids no kids and how old are you i'm 27 27 last question what's something you wish you knew when you were 20. jess javascript javascript earlier on guys he's trying to compete with ahrefs and semrush he launched brand overflows self-funded by selling lifetime deals to his customers to quarter million dollars worth of these sales and facebook groups and things like that kept a big chunk of that revenue now as a team of five six seven eight people as he builds out the technology piece of his business and convinces people to pay monthly recurring fees 20 customers on the mr plans right now doing about 16 000 bucks in ar as he looks to continue to scale ahmed thanks for taking us to the top one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas 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 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m 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 sas world whether it's an acquisition a big fundraise 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 sas 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 up for that at nathan laca dot com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode 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 but i do it so that we can all learn we have to counter those people we gotta push them away click the thumbs up below to counter them and know that i appreciate your guys's support all right i'll be in the comments see ya