Closem Revenue (2024)

[00:00] Hey, folks. My guest today is Richard Miles. He's a serial entrepreneur and executive leader seasoned by Global Experience. Adaptive Controls, which sold to Ingersoll Rand. He was VP of sales at Polaroid and Magnedia and then founder of ReLaunch, which he sold to an investor group. He's author of The Official Software Channel Sales Guidebook, founder of Free Software Club IPO. He's a nonprofit exec CEO of Big Brothers Big Sisters San Francisco area. Very active guy, but now building [00:24] a tool that helps you increase your sales at closemapps.com. That's closem apps, a p p s dot com. Alright. Richard, you ready to take us to the top? Sure. Alright. So what tell us what the company does and maybe give an example of a customer that's using you today. [00:40] >> Okay. Great. So we built closem to, to help, especially small businesses, solopreneurs, entrepreneurs, people who are providing services to people and are usually go from feast to famine. They're hungry. They go out and they hustle and get some business. Then they're busy servicing their clients, then they're hungry again. And we wanted to build a tool that was simple, easy to use, that folks could automate the process of sales follow-up and keeping in contact with all their [01:09] >> leads and prospects and customers and things like that. So that's what closem does. Simple, easy to use tool. It's a contact manager with an automated follow-up messaging platform. [01:21] And so what what do customers on average pay to use this per month? [01:25] >> It's $99 a month. [01:27] Perfect. Simple to the point. We love that. Yeah. When did you when did you start building the platform? Do you remember what year you were at first line of Nothing [01:35] >> like launching in the midst of a global pandemic. [01:39] 2020? [01:40] >> Yeah. But actually launching in a global pandemic was really cool because the [01:44] >> pandemic taught us two things. Taught us how to [01:46] >> get really good at Zoom and it taught us how to use QR codes. Right? [01:52] Are both very true. [01:54] >> Right. So one of the things that closem does is it lets you automate the process of sales follow-up. There's a lot of tools that do that. They send emails, you know, email auto responders. There's some that do SMS, some do SMS and email. We do SMS, email and voice and postal mail. And that's one of the breakthrough things that's really elevated closem for us with our users is the ability to send postal mail with the same [02:18] >> interface that you type an email or type an SMS. It's the same interface, nothing new to learn, no setup fees, no minimums, no hassle. You wanna send somebody a piece of postal mail, you do it. The advantage of postal mail these days is that your inbox is stuffed full and your goal is to get the inbox zero, which means delete, delete, delete, delete, delete. So the average lifespan of an email is seventeen seconds. [02:44] So Richard, sorry, just because we're short on time, closem will also help customers send via an API direct physical mail to users. Where do get the addresses from? What's the database you sync to? [02:55] >> Well, it, it's the customer's database. [02:58] So So they have to bring you the physical address. If they don't have that, you can't help them? No. Okay. Do you verify the addresses you're sending to? Is there a database you're comparing them all to? When your customer gives you [03:09] >> the It's our customer database. So they have their list of leads that they're getting from their Facebook lead ads or their lead funnels or their webinar registrations or whatever they're getting. And so we have built into the system an email verification. So it will, you know [03:26] Richard, I'm talking about the physical mail. So how do you verify the physical addresses before they pay you to send it? [03:35] >> We don't. I mean, if you put an address in that's bad, it's not gonna get delivered. That said, there is an address lookup feature. So, I mean, if you you're sending an address to, someplace that doesn't exist, it won't get sent. But if if it was supposed to go to 13 Pan Oak Street and it went to 1301, there's nothing we can do about that. [03:55] Oh, 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 [04:18] your 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 [04:43] get 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 [05:05] not 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 [05:30] going 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 [05:52] if you wanna check this tool out, if you 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 [06:18] the interview. Yeah. Yeah. Yeah. No. No. Fair. We we ship magazines every month, and so we are billed per magazine shipped. And I send via my LinkedIn ads. I send all the addresses that people that purchase the physical address. And then SmartPress, who I use to print, will tell me which ones are valid, physical addresses versus not valid. And I can and I can go back and do a follow-up to get accurate addresses from people that [06:38] SmartPress told me were not real. [06:40] >> I'm sorry. Yeah. We do have that. [06:42] We do have Okay. Got it. That's what I was asking. [06:44] >> We we bounce it. Yeah. [06:45] Cool. So you get going. You wrote your first line of code in 2020. When did you sign up your first customer? [06:50] >> End of twenty twenty. [06:51] Okay. So pretty quick. [06:52] >> Two years ago. Yeah. [06:54] Where did you pre sell in those early days? Was it a Facebook group or how'd you get that customer? [06:58] >> So I have a partner. Her name is Laura Betterly. She's been she and I have known each other since the nineties. She's a very innovative entrepreneur. She developed a course called mobile local fusion. She has about 37,000 followers who bought her course and learned how to do local marketing. And so we soft launched the product to her list. [07:20] I see. And so how did people never understand? They go soft launch, affiliates, how does it work? So when you say partner, what was it? An affiliate agreement or she own equity? [07:27] >> No. No. No. She's she she and I are fifty fifty partners. [07:29] In the in closem? [07:31] >> In closem. [07:31] I see. Okay. So how many folks were on that list in 2020, the initial send? [07:36] >> I think it was about 30,000. [07:38] And tell us how it did. [07:40] >> Did great. I mean, we didn't help us. Well, look, we bootstrapped this company. So [07:44] No. Richard, details. Details. Do you remember open rate, click through rate, number of sales from the first email? [07:49] >> From the first email? I don't remember from the first email. You don't remember [07:53] the number of sales? [07:54] >> That was an exciting time. [07:56] >> Yeah. We did it well, we we gave it at a really steep discount. I think we generated about, I don't know, somewhere around $25,000 to $30,000 in sales. [08:06] That's awesome from that one email. Yeah. That's amazing. Okay. So how do you go from a partner with distribution, one shot, sign up a bunch of people, you're selling to how many customers do have today? [08:18] >> Over 1,200. [08:20] Wow. Okay. So yeah. How do you go from that initial email to how are you scaling today? How do you add customers? [08:25] >> So we did do a lifetime deal on AppSumo. [08:30] Ah, okay. Hold on. Are you counting those in that 1,200 number? [08:34] >> Yeah. [08:35] Okay. Well, they're not paying you anymore. Right? So how many are like paying you on They a monthly [08:40] >> do pay us because we have other product, other in app purchases that they buy. [08:46] So you've upsold all the lifetime deals into a monthly recurring Not all of them. [08:50] >> The AppSumo users are, a lot of people are just, they buy it, it's fear of missing out. They buy it, they park it and they don't use it. We have a lot of active users from there though. It was a good launch strategy for us because it gave us a lot of really good, very quick, hard feedback about, hey, it ought to do this and it ought to do this and it ought to do this. That [09:13] >> really helped us iterate and get to the state that we're in today. Now we're doing, not on that platform. We don't do lifetime deals anymore. [09:23] >> We do [09:24] So how many how many customers today are paying you something monthly? [09:28] >> Several 100. [09:30] Several 100 you said or 700? [09:31] >> Several 100. Several 100. [09:33] Okay. So maybe two, three hundred, something like that. [09:36] >> Something like that. [09:37] What did you use? Because at the end of your life, people do AppSumo, they always struggle with how to move a one time lifetime deal. Someone who loves a deal, by the way. Right? These are coupons. Right? They they want discounts. That's why they do it. They really struggle moving them to a monthly recurring plan that actually helps you build a real business. Right? That doesn't just drain your support. Right? So how did you do [09:55] that? [09:57] >> I can't say that we succeeded massively at moving the all of the lifetime guys. I mean, there's just a whole cadre of people that are just like, we want a lifetime deal. We don't wanna pay for software and you're like, but you want me to be here to support you, don't you? You want me to be here to keep innovating and to keep offering products. So, [10:18] >> those people that, that, some of them are still really active users and they've referred other people to us and they've been, they've been, you know, it's been a good user base. Can can you, you know, I don't have a secret sauce that says, here's how you move that guy that, that is completely deal based, wanted to pay once for software and never pay for it again into paying you monthly. [10:39] Well, the trick is you have to understand what your software, what the activation metric is. So if it's number of leads reached out to per month, the lifetime deal closes down once they hit a 100 and then you upsell once they break a 100. But if you've got a bunch of people buying a lifetime deal that then sit on the sidelines and never activate, they're never gonna hit that usage metric to allow you to upsell them, [10:56] which becomes a drain on your customer support. [10:58] >> I I know. We we we offered it as with unlimited And, we didn't have this sort of like tier that was like, yeah, here's this really great lifetime deal, but it really kinda sucks and you gotta pay us more money to get it. [11:10] Well, does it have to suck if you have a cap on it? You make it sound like and if you're gonna have a cap on something, has to suck. [11:15] >> No, but it is sometimes it's it's, you know, lot of these deals are here's $37 lifetime, but then it's really $297 to get it to work and then another $500 and then the [11:27] Well, get it to work, Not get it to you make it see, you you phrase this in such a negative way. There are plenty of very successful companies with a 150% net dollar retention where they give you a lot for free. People pay a lot of money for the free thing. And once you hit a usage metric, you pay more because you get a lot of great value. [11:40] >> Yeah. No. I agree. [11:41] What that is. What is that value metric for you? That's really what I'm getting at. [11:46] >> I'm not sure what you mean. What's our value metric? How do we get [11:49] No. What's your value metrics? For Snowflake, it's amount of storage. For Pendo, it's MAUs per month. For HubSpot, it's number of contacts. [11:56] >> Oh, well, we offer an unlimited plan. So what we've done is where we make money outside of selling the software is you pay for postal mail. [12:11] >> Email is unlimited and is free included. We used to charge for SMS, but we've gotten out of that and you set up your own SMS account and you pay for postal mail. And we make a little bit of margin on the postal mail. [12:24] How much on postal? [12:26] >> Well, a first class postcard's 90¢. [12:29] Is that what they're a 100? [12:30] >> We don't care. [12:31] >> We make a little bit of money on that. We've just offered a new product called Linkum, which is a short code, you know, turns long URLs into short links that are trackable, creates QR codes, that we both offer as a standalone product, but is also, completely integrated inside closem so that if you're typing an email or you're typing a text message and you want a short link, you can create it right there and it's trackable. Or [12:55] >> if you're creating postal mail and you wanna drop a QR code into it, you can create it right there. And again, it's trackable and customizable and put your logo in and stuff like that. That's extra. [13:06] >> You know, part of our model moving forward is offering extras. We're about to offer a product called Book them, which we're a few weeks away from taking the wraps off of, which is a calendar integration thing. So built into closem is obviously in terms of the follow-up is you wanna set an appointment with somebody or you want a reminder to follow-up somebody. So we've built this whole calendar integration. [13:27] So Richard, sorry, before we keep going on new product stuff, mean, if you have 300 customers today paying $99 a month, you're doing about $30,000 a month in monthly recurring revenue. Is that about right? [13:36] >> Yeah. About right. [13:37] Okay. And where were you exactly a year ago so we can calculate growth? Do you remember? [13:41] >> Yeah. So we're about 227% ahead of last year. [13:47] Okay. So you were doing what about $10,000 a month this time last year? [13:51] >> Something like that. A little bit less. [13:53] Okay. And and I guess so how do you make and actually, maybe it's because of how you've set up your engineering team. So let me ask that first. How many folks are full time at the company, and who's doing the coding? [14:02] >> We have [14:05] >> we have four, five five and a half people. [14:09] Okay. Five people. And are you one of the engineers? [14:12] >> Nope. Nope. Neither my partner and I are technical. We have two two great developers. Outsourced, yeah. Those are full time. We've outsourced when we needed to, but we've got a really good team, and they're handing out good stuff. [14:27] Mhmm. How do you I mean, there might be some people listening right now that argue that you don't yet have product market fit. Right? At $10.10 you know, $30K a month is a lot of revenue, but you just mentioned three, four, five new other products and add ons and extras. How do I mean, you only have two engineers. How can they build a best in class product when they're building four different things? [14:46] >> Know, software's magic. What can I say? [14:49] Software's what? [14:50] >> Magic. I don't know about that. [14:52] You have to make the magic happen. [14:55] How can two engineers work on postal API, calendar API, email API. Because [15:01] >> we don't have to do everything. Like, I I don't have I don't have printing presses and, you know, the whole infrastructure. It's it's it's via a service partner. You know, I don't have a, you know, a massive text messaging back end that I need to maintain that people use Twilio. So we have to build the front end functionality and part of our core user experience is to make it just super easy to use for anybody. But [15:30] >> I I don't you know, we don't have to maintain smokestacks full of of of code. [15:36] I mean, just for context, you have 20 integrations listed on your integrations page. Many people have for 20 integrations, you've got at least a full time engineer dedicated just to keeping the integrations working full time. All these platforms change their API endpoints. You've gotta keep them updated every month. [15:49] >> Yeah. But so that's via Zapier. [15:54] Okay. So when I see Google Sheets, Google Forms, LinkedIn, Facebook Ads, ClickFunnels, Leadpages, none of these are actual integrations. They're all just basically going through Zap they're connected to Zapier. Connected to Zapier. [16:02] >> Yeah. Or I see. Integrately or KonnectzIT or Pabbly. [16:07] >> There's a bunch [16:08] >> of folks who have been building integrations for our product and you know, you can hook it up to anything. I, we do have a couple direct integrations. We, we have [16:19] >> a direct integration with Groove, which is a, you know, great online funnel, platform and shopping cart platform. [16:25] >> And that's direct. So, they can, you know, people right in there, there's no Zapier integration. And we're building some others as we go. [16:36] >> Yeah, I mean, it's funny, I've been around for a really long time. This is not my partner or I, this is not our first rodeo. And many years ago when I had ReLaunch, one of my clients was Computer Associates and they would acquire a company and people would come in and say like, We need more engineers. And Charles Wong, the Founder, would say like, No, we need to cut the number of engineers in half. We'll get [17:01] >> twice as much work done that way. [17:02] No, Richard, what I'm arguing is you're doing too many things with two engineers. I mean, look in your if I look in your footer, automate follow-up, text messaging, email messaging, voice messaging, post mail, message campaigns, manage contacts, message templates, QR codes, complete system with two engineers, but you're stuck at mean, you're at thirty you're three years in. You're thirty six months in with $30,000 in MRR, which by the way is commendable and great and bootstrapped. I'm [17:24] just trying to get a sense of what's your product focus gonna look like moving forward. [17:28] >> Well, our product focus moving forward is to have a complete suite of tools that people can use to boost their sales. [17:36] That's that is just so, so, so generic though. Right? What you just said could be the definition of HubSpot versus if you said we are specifically built for ClickFunnels people to when they get someone sent on ClickFunnels to send a direct piece of mail to someone in The United States. Like, it's very specific. [17:51] >> Yeah. I hear you. One of the things that, that I say is, you know, the good news about closem is anybody can use it. The bad news about closem is anybody can use it. [18:00] Fair enough. On that point, you are still bootstrapped. Right? [18:03] >> Absolutely. [18:04] We love that. If someone came to you today, you're doing $360,000 a year in revenue about it. Someone came to today and offered you 700,000 all cash upfront, would you sell? [18:12] >> No. [18:13] You said that quickly. [18:14] >> No. We think the value Again, this is not my first rodeo. Okay? The value of this company is not what it's worth today. It it, the value of this company is what it's worth over the next couple of years and where we're gonna Well, I think it's, we're gonna build this into something that's worth multimillion dollars. [18:32] Just multimillion. [18:34] >> Mhmm. Yeah. No. I this we're not gonna be the next billion dollar thing. What we do is we service a a really nice niche of of small businesses, you know, to medium sized businesses. We're we're, you know, we're not trying to compete with HubSpot in terms of, you know, you can do anything and no matter the size of your team. [18:52] But you just described it as that. You literally said the good news is that is anybody can use it. And and lot can use it and you can do anything. [18:59] >> A lot of our users come to us from HubSpot because it's too complicated and too expensive. And so our our our thing is is satisfying the needs that we have from the feedback that we have from the customers that we have. [19:13] Fair enough. On that point, let's wrap up with the famous five. Number one, favorite business book. [19:18] >> Favorite business book is Good to Great. [19:21] Numbers. [19:22] >> And also, wait, there's two, also Ideas That Stick. [19:25] Number two, is there a CEO you're following or studying? [19:29] >> No. [19:30] Number three, what's your favorite online tool for building closem? [19:35] >> Well, we use Slack and I really like Slack to be honest. [19:39] Number four, how many hours of sleep do get every night? [19:41] >> I try to get eight. [19:43] Okay. And what's your situation? Married, single, kids? [19:46] >> Married. Kiddos? Grandkids. [19:49] Grand grand how many kids do you have? [19:51] >> I have I have two children, and I have one grandchild. [19:55] Oh, that's amazing. Okay. And how old are you? [19:57] >> How old am I? Yeah. I'm old school, man. I've been around for a long time. [20:02] Okay. Well, I ask because then we can do the math and I can say, take us back x number of years to when you were 20. What's something you wish you knew when you were 20? [20:11] >> That I'm not as smart as I thought I was at 20. [20:15] Guys, there you have it. Closem.ai helps you close leads faster. Really meant for for SMBs. Right? That you wanna do direct marketing, postal, text, email. They've got you covered. Did $10,000 a month exactly a year ago, now up to about 30,000 a month. Nice growth here. They've got 300 customers paying on average $99 a month, totally bootstrapped with a team of five, which we love. Richard, thanks for taking us to top. [20:35] >> Hey, man. Thanks a lot. [20:38] One 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 [21:03] Central. 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 [21:25] 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 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 [21:47] up 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, but I do it so that we can all learn. We have to counter those people. [22:06] We got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments. See you. Hey.