How Cliently CEO Spencer Farber grew to $457.6K revenue and 80 customers in 2023.

hello everybody my guest today is spencer farber he helps folks engage your prospects with hyper personalized emails video messages postcards handwritten notes and gifs he helps you create automated flows or send instant actions in under 60 seconds using his company cliently.com spencer are you ready to take the top let's do it all right ma'am so um so what's the company doing how do you guys make money so right now we are a sas plus what we call a credits model so what that means is we have a subscription service to automate the process of sending emails and video messages in what we call flows and then you can really put your flows on we like to say on steroids by essentially adding those pieces you just mentioned in our bio handwritten notes postcards and gift cards for an even bigger impact so you have a base price of 39 bucks per user per month it looks like and then you kind of sell credits now are these credits the 49 dollars per month for 50 extra credits can they use this credits across all their seats or it's under 50 bucks per seat on top of the 40. so you hit the nail on the head the first time so exactly they can mix and match these among different team members and they can also mix and match them with how they use those credits so instead of a lot of other applications where okay i have to buy 100 credits for leads or 100 credits for postcards etc you get to mix and match them as you need them and spread them among your team as they need them as well and what is a credit so i've seen these credit models fail miserably if it's not crystal clear what a credit is so i will say that we are still trying to find a way to better educate our clients on the credits because the long and short of it is that it's actually better for our clients that they can use them for all for everything but it also confuses the process so as far as the credits it is essentially a dollar to a dollar but we do give discounts based on the number they buy so if you see in our plans we've got ones that are 49 99 and 199 and also on annual as well where you're getting additional discounts up to 20 on your credit the more that you buy yeah it's it's um i mean it's confusing pretty confusing to me because like 50 bucks says like accept like 83 leads send 50 postcards and send 100 notes i'm like well where does 83 leads come from that seems like random as hell but what it like like is like one lead or one postcard or one hand written note or one gift card are all of those four things essentially one credit they're not so if you scroll down a little bit on that page that you're probably looking on yeah and i should probably have you come meet me so we can go for pricing and we can get it right but that's a part of that we've been struggling to make it crystal clear clear to our clients so at the end of the day we know it benefits them but we know it's a little confusing until we explain it so we need to find a better way on that for sure that's and yeah man see what i remember when i first hired you on i was so impressed because i'm going i need to do this stuff like i always try and have follow-up sequences for when i have ceos on my show and they go from like sending a magazine to a note to a an email to a postcard but it's it's very difficult to get it all working so yeah i love the tech but uh pricing holy mackerel you guys probably run experiments every every two weeks on this thing we're getting there we're getting there i think what we're probably going to do in the near future is just have our pricing plans 39 49 as we add new features and then let our clients buy bolt on credits however they want yeah so it's not necessarily attached to the plan but yeah it's something that's still a work in progress okay so let's not go down to every cohort here so simplify this for me on average what's the customer who pays you what are they paying you per month all in 200 bucks right now so we and that's another point that i want to segue to is that we're specifically working with small businesses we're really getting into the same space as let's say a sales loft or an outreach and while they focus specifically on salesforce type of clients we want to focus on clients in pipe drive space maybe hub hubspot as well because we have extremely tight integrations that allow you to engage clients directly from the interface within the pipedrive crm as well as being able to see where they are on the flow being able to edit a flow which makes that really interesting and so we want to help small businesses that's really where we want to focus we almost want to be the outreach or sales loft for businesses that are you know in the smb space okay interesting so 200 bucks a month and then put this stuff on a timeline for me when you launch okay so we've gone on a few pivots we've launched you know all the way back in i don't know may 2016 uh we had issues with our tech people loved what we were doing right away but we just couldn't get the implementation right we had a new cto finally come on in early 2018. we've spent the last 10 or 11 months literally building rebuilding the back end you're talking about huey right i'm talking about you yeah yeah yep um we've spent really the last 10 11 months rebuilding the back end of our product the things that no clients can see it's not sexy it doesn't feel like we've done anything but now we have a stable app that really works and with that came some new funding from active capital and that allowed us to get to the point where we've basically started to sell our product again as of march my background is in sales it's in marketing so i've been chomping at the bit for a year uh and finally over the last two months we've had the opportunity to put our product out there uh to a wide audience again and and remind everyone so how much have you raised to date and how how much is the last round from active so the last round from active was five hundred thousand dollars uh and to date we've raised about a million dollars it's come in little ebbs and flows but overall it's we've converted about a million dollars okay very good and i should probably disclose this i don't i don't research legal all the time but i'm i am an lp in active capital so by nature i guess i am a investor and client it's funny i always tell pat i'm like pat listen spencer is like killer sales guy the tech is interesting but the pricing is so freaking confusing like just figure out a way to figure a way to help them simplify simplify simplify um so so it sounds like you're doing that which is nice what so now that the tech is rocking and rolling are you doing i mean is it a high-touch sale on a 200 per month plan it depends on the client so we have two different types of clients right now that we figured out one is very very small businesses that need everything that we do including the lead database that we have so they can literally create some lead generation all the way from finding the contact to throwing into one of our funnels those are a little bit more high touch the other side we have clients that are those 10 15 20 user accounts those are not as high touch because you know they understand sas they have the leads already it's just having something that interacts with in this case hubspot which are the three that we tightly integrate with interesting okay and then since 2016 today how many customers are you now working with so i don't even want to talk about 2016 or 2017 i will talk about what we have going forward in 2019 uh we've added about 50 new clients in the last two and a half months and we've you know basically quadrupled our growth in the last two and a half months because we were literally in a uh just in a hibernation stat for about six months because what activecapital came in and did is they said look we know you guys have a great uh vision but you need to get the product right and so it gave us a chance to stop really pushing our product to the market get the product right which is where we were as of march 1st 2019. okay and so how many customers today are using you uh we have about 80. okay about 80 good okay good yes you've added 50 the past two months up you know 80 total that tells you a lot uh very good now can i take 80 times 200 bucks a month you're doing 16 grand a month right now in revenue we've got a couple outliers out there so we're actually at about 26 26 k right now fair enough yeah yeah the rpoo question is always tricky because it really is an average across your base but you typically do see outliers right you know higher or lower right we have a couple literally i think two in there i removed those when we talked about our mrr because it just they're good but they throw it out of whack yeah okay so about 20 you said 26 per month right now and then help me understand growth so like a year ago where were you so a year ago we were at probably you know 60 or 70 or 80k even but it was a big portion of that was services yeah yeah just give me the sash just give me the sass i mean it's sas if you go back to that period i'd have to look back but i would guess you know 5 000 or so yeah yeah really been sort of in that pivot until we got our product right i remember when you came on that was probably two years ago at this point or a year and a half that was our big thing is i was like dude like you're killing it but like this is like this is stressful as hell this is revenue you have to resell every month it's professional services stuff and it's not it's hard to like get unaddicted from that it sounds like with the cash cushion from active capital and the raise you've been able to refocus on sas and now you're growing that nicely exactly so when your your background is in engineering and if i was the cto of my own company we'd have the development right but we'd struggle with the sales here we had the opposite until we brought in ue about a year ago and an ex-team of google engineers that have helped us with our integration so what's the team what's team size today then we have a team size our core is five people but then we also have what we basically call partners ex google engineers that have done 100 of our integrations um with salesforce hubspot and pipedrive that's about another four or five team members okay how have you motivated those folks if they're not full-time employees they are technically full-time their partners and they also are equity vested with us as well i see so i'm going to translate that youtube if i'm accurate you've saved a little bit of your cash flow annually by giving them a little equity upside so they took cheaper salaries a little bit less expensive but here it was definitely more quality over quantity but the equity was more so to make sure that they were fully vested in what we were doing so that it wasn't just okay we're taking you know getting a check every month but we want to make sure that if this grows we're going to end up breathing some of those benefits so so where are you at today in terms of burn and i mean do you have break even in your sights you think or no that's still a couple years out no absolutely not so right now in our burn we're about 30 you know it's very quickly changing every month as we're growing but burns about 35 40 a month okay our goal is to basically get burned down to almost nothing in about three four months and so you know my background is pushing revenue and we have a product that finally works and our goal is that we will be there you know we're going to keep quadrupling our mrr over the next three four months and hit 100k uh by the end of august or september so how are you doing that how are you closing i mean walk me through this this process you're doing how are you finding customers how are you closing them so we use this application it's called cliently and we use our leads we throw them in there every day and right now we've only been doing you know 100 to 200 new leads a day uh because you know we want to use it like as our clients but also really because we want to optimize the process which is how i teach clients use it too you don't throw everything at it until you've optimized and so we're doing that we're doing a few thousand dollars of google facebook et cetera adwords uh and that's about it uh and so that's how we've you know gotten the growth that we have over the last two months and then we're looking at a few specific initiatives where are you getting started where are you getting those leads from that you're putting into cliently about 100 a day so and maybe we didn't discuss this part but cliently has a lead database as well and that was really where we were going at the beginning of our idea three years ago was to help very small clients that needed the whole process from finding the contact to then putting into these funnels so it's not as big of our focus anymore it's really more on the side of the engagement but we've still had that lead piece and we've spent a lot of time getting it to work as well as it does now so we do have our own built-in database based on partners that because of ndas we can't disclose but it's built tightly into our system okay so you have a lead database what kinds of leads are you personally pulling from that database because you think they're great cliently customers like what targeting do you use right so right and that's where we were you know figuring out over the last two months where we really want to hone in on and so we figured out is it's very very small companies and then it's companies that are about you know 100 to 250. and because we have those two sectors 250 employees okay not sales reps and because we figured out again we have very small businesses that need us for everything which actually produce bigger mrr than the other ones right now that are 10 to 15 sales reps but those are also our ideal clients so it's to those two sectors companies that are basically five and under employees and companies that are about you know 50 to 250. interesting what um what does trend look like so that's the best part that's what i'm most excited about i mean really even going back six seven months ago when we were last really trying to sell our app before this big push we had like 75 percent churn people loved what we were doing but it simply broke yeah you mean that's the most sas products 25 annually 75 on even you know just over a month-to-month basis okay because the last time we were trying to sell the product it still didn't work and that's where we finally went to the hibernation over the last three months since we put it back onto the market of those you know how many clients did i say we have uh yeah and specifically over the 40 or 50 we've brought in over the last few months i think we had like three of those churn okay so call it and be six percent monthly churn something like that yeah which is you know if you're five percent or lower that's really where you want to be the sample size is so small right now but dynamically it's changed compared to where we were because the product is finally holding up and how aggressive are you being on getting the customer in the first place in terms of fully weighted cac so i mean as far as figuring out what the customer acquisition cost or yeah so like how much are you willing to pay to get a new 200 a month customer so right now i'm honestly just out there just selling selling selling i haven't looked at those costs but i can tell you that we're not spending a lot you know because if you look at the math of we're adding two thousand of our own contacts a month using our own system and we're spending three to five thousand dollars at google adwords we can sort of do the math there if you're looking at a lifetime value of even a year it's very very little but i haven't under what it would be a pure guess nathan like it could be five ten bucks i mean but it's my time right now and obviously i'm not gonna be able to sell so it's definitely under 100 bucks oh my god yeah okay yeah so your payback period then is if it's 200 bucks a month i mean you're getting paid back in like less than a month yes yeah yeah uh very good interesting all right uh very good what so so the pivot happened you've got now eight nine people on how did you manage the team's energy through the pivot that's not always easy so it went back to really focusing on the core team because the team grew to this robust amount especially when we got into services which you know that could be a nightmare in terms of the overhead etc and so i scaled back the team and i brought in about a year plus ago two of my original employees that i brought in very early at panda dock i have my wife who's the head of customer success who she's been with us now for two years full time and thank god and i have exactly customer success is really important when you're struggling uh with the product and then she's like in life a little bit better now and then we brought in huey so as far as keeping everybody up to you know in the right spirits etc we didn't need to we finally had the right core team that knew put our head down get this right and then we would now be at the point where we were about two months ago that we could start aggressively going to market because half those people i've gone to battle with before of helping a sale company from zero to 100 million and they knew the only thing that was failing was the product and as soon as we got there we'd have something that we could go go to battle with all right uh let's wrap up here man with the famous five number one what's your favorite business book you know i've usually said predictable revenue i'll stick with that it's an older book but and i still have been talking about it a lot lately because i still think it works but how it works evolves number two is there a ceo you're following or studying uh right now to be honest there isn't head down just working every day number three what's your favorite online tool for building your company besides cliently um pipedrive number four how many hours of sleep to get every night five and a half and situation sounds like you married any kiddos a puppy puppy okay good how old are you i'm 36 36 last question what do you wish your 20 year old self knew um work smarter not harder guys it worked smarter client we went through a pivot was doing we're doing about 90 grand a month in revenue call it a year ago but a lot of that was services they were only about 5 000 a month in sas revenue a year ago now today 24 grand is sas they raised a million dollars total capital to buy them time to basically get un attached to all the professional services revenue now 80 customers paying about 300 bucks per month for about 24 thousand dollars a month in revenue nice growth burning about 40 thousand dollars per month right now with their team of nine gross churn right now monthly is called six percent uh spending less than 100 bucks to get these new customers so it works as spencer continues to hustle helping people automate their follow-up systems with handwritten notes lead generation things like that spencer thanks for taking us to the top thanks nathan