How Closem Reached $30K MRR and 227% Growth with a Bootstrapped Team of 5 (Interview with CEO Richard Miles)

Introduction and Company Overview

Nathan Latka

00:00Hey, 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

00:24a 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.

What Closem Does and Who It Serves

Richard Miles

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.

Nathan Latka

01:21And so what what do customers on average pay to use this per month?

Richard Miles

01:25>> It's $99 a month.

Nathan Latka

01:27Perfect. 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

Richard Miles

01:35>> like launching in the midst of a global pandemic.

Nathan Latka

01:392020?

Richard Miles

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?

Nathan Latka

01:52Are both very true.

Multi-Channel Outreach Including Postal Mail

Richard Miles

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.

Nathan Latka

02:44So 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?

Richard Miles

02:55>> Well, it, it's the customer's database.

Nathan Latka

02:58So 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

Richard Miles

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

Nathan Latka

03:26Richard, I'm talking about the physical mail. So how do you verify the physical addresses before they pay you to send it?

Richard Miles

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.

Nathan Latka

03:55Oh, 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

04:18your 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

04:43get 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

Physical Address Verification

Nathan Latka

05:05not 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

05:30going 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

05:52if 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

06:18the 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

06:38SmartPress told me were not real.

Richard Miles

06:40>> I'm sorry. Yeah. We do have that.

Nathan Latka

06:42We do have Okay. Got it. That's what I was asking.

Richard Miles

06:44>> We we bounce it. Yeah.

Nathan Latka

06:45Cool. So you get going. You wrote your first line of code in 2020. When did you sign up your first customer?

Richard Miles

06:50>> End of twenty twenty.

Nathan Latka

06:51Okay. So pretty quick.

Richard Miles

06:52>> Two years ago. Yeah.

Nathan Latka

06:54Where did you pre sell in those early days? Was it a Facebook group or how'd you get that customer?

Partner Launch and Initial Customer Acquisition

Richard Miles

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.

Nathan Latka

07:20I 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?

Richard Miles

07:27>> No. No. No. She's she she and I are fifty fifty partners.

Nathan Latka

07:29In the in closem?

Richard Miles

07:31>> In closem.

Nathan Latka

07:31I see. Okay. So how many folks were on that list in 2020, the initial send?

Richard Miles

07:36>> I think it was about 30,000.

Nathan Latka

07:38And tell us how it did.

Richard Miles

07:40>> Did great. I mean, we didn't help us. Well, look, we bootstrapped this company. So

Nathan Latka

07:44No. Richard, details. Details. Do you remember open rate, click through rate, number of sales from the first email?

Richard Miles

07:49>> From the first email? I don't remember from the first email. You don't remember

Nathan Latka

07:53the number of sales?

Richard Miles

07:54>> That was an exciting time.

First Email Campaign Results

Richard Miles

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.

Nathan Latka

08:06That'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?

Richard Miles

08:18>> Over 1,200.

Nathan Latka

08:20Wow. Okay. So yeah. How do you go from that initial email to how are you scaling today? How do you add customers?

Richard Miles

08:25>> So we did do a lifetime deal on AppSumo.

AppSumo Lifetime Deal Strategy

Nathan Latka

08:30Ah, okay. Hold on. Are you counting those in that 1,200 number?

Richard Miles

08:34>> Yeah.

Nathan Latka

08:35Okay. Well, they're not paying you anymore. Right? So how many are like paying you on They a monthly

Richard Miles

08:40>> do pay us because we have other product, other in app purchases that they buy.

Nathan Latka

08:46So you've upsold all the lifetime deals into a monthly recurring Not all of them.

Richard Miles

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

Nathan Latka

09:24So how many how many customers today are paying you something monthly?

Richard Miles

09:28>> Several 100.

Nathan Latka

09:30Several 100 you said or 700?

Richard Miles

09:31>> Several 100. Several 100.

Nathan Latka

09:33Okay. So maybe two, three hundred, something like that.

Richard Miles

09:36>> Something like that.

Nathan Latka

09:37What 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

09:55that?

Richard Miles

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.

Nathan Latka

10:39Well, 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,

10:56which becomes a drain on your customer support.

Richard Miles

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.

Nathan Latka

11:10Well, 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.

Richard Miles

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

Nathan Latka

11:27Well, 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.

Richard Miles

11:40>> Yeah. No. I agree.

Nathan Latka

11:41What that is. What is that value metric for you? That's really what I'm getting at.

Richard Miles

11:46>> I'm not sure what you mean. What's our value metric? How do we get

Nathan Latka

11:49No. 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.

Richard Miles

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.

Nathan Latka

12:24How much on postal?

Richard Miles

12:26>> Well, a first class postcard's 90¢.

Nathan Latka

12:29Is that what they're a 100?

Richard Miles

12:30>> We don't care.

Declining a $700K Acquisition Offer

Richard Miles

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.

Nathan Latka

13:27So 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?

Richard Miles

13:36>> Yeah. About right.

Nathan Latka

13:37Okay. And where were you exactly a year ago so we can calculate growth? Do you remember?

Richard Miles

13:41>> Yeah. So we're about 227% ahead of last year.

Nathan Latka

13:47Okay. So you were doing what about $10,000 a month this time last year?

Product Focus and Niche vs. Broad Market

Richard Miles

13:51>> Something like that. A little bit less.

Nathan Latka

13:53Okay. 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?

Richard Miles

14:02>> We have

14:05>> we have four, five five and a half people.

Nathan Latka

14:09Okay. Five people. And are you one of the engineers?

Richard Miles

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.

Nathan Latka

14:27Mhmm. 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?

Richard Miles

14:46>> Know, software's magic. What can I say?

Nathan Latka

14:49Software's what?

Richard Miles

14:50>> Magic. I don't know about that.

Nathan Latka

14:52You have to make the magic happen.

14:55How can two engineers work on postal API, calendar API, email API. Because

Richard Miles

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.

Nathan Latka

15:36I 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.

Richard Miles

15:49>> Yeah. But so that's via Zapier.

Nathan Latka

15:54Okay. 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.

Engineering Team and Product Scope

Richard Miles

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.

Nathan Latka

17:02No, 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

17:24just trying to get a sense of what's your product focus gonna look like moving forward.

Richard Miles

17:28>> Well, our product focus moving forward is to have a complete suite of tools that people can use to boost their sales.

Nathan Latka

17:36That'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.

Target Customer and HubSpot Comparison

Richard Miles

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.

Nathan Latka

18:00Fair enough. On that point, you are still bootstrapped. Right?

Richard Miles

18:03>> Absolutely.

Nathan Latka

18:04We 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?

Richard Miles

18:12>> No.

Nathan Latka

18:13You said that quickly.

Richard Miles

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.

Nathan Latka

18:32Just multimillion.

Richard Miles

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.

Nathan Latka

18:52But 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.

Famous Five Rapid Fire Questions

Richard Miles

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.

Nathan Latka

19:13Fair enough. On that point, let's wrap up with the famous five. Number one, favorite business book.

Richard Miles

19:18>> Favorite business book is Good to Great.

Nathan Latka

19:21Numbers.

Richard Miles

19:22>> And also, wait, there's two, also Ideas That Stick.

Nathan Latka

19:25Number two, is there a CEO you're following or studying?

Richard Miles

19:29>> No.

Nathan Latka

19:30Number three, what's your favorite online tool for building closem?

Richard Miles

19:35>> Well, we use Slack and I really like Slack to be honest.

Nathan Latka

19:39Number four, how many hours of sleep do get every night?

Richard Miles

19:41>> I try to get eight.

Nathan Latka

19:43Okay. And what's your situation? Married, single, kids?

Richard Miles

19:46>> Married. Kiddos? Grandkids.

Nathan Latka

19:49Grand grand how many kids do you have?

Richard Miles

19:51>> I have I have two children, and I have one grandchild.

Nathan Latka

19:55Oh, that's amazing. Okay. And how old are you?

Richard Miles

19:57>> How old am I? Yeah. I'm old school, man. I've been around for a long time.

Nathan Latka

20:02Okay. 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?

Richard Miles

20:11>> That I'm not as smart as I thought I was at 20.

Nathan Latka

20:15Guys, 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.

Closing Summary

Richard Miles

20:35>> Hey, man. Thanks a lot.

Nathan Latka

20:38One 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

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