Consumer Fusion Revenue (2024)

[00:00] Hey folks, my guest today is Brynn Gibbs. She's the Founder and Chief Executive Officer of Consumer Fusion, founded in 2013 after she began helping close family friends with fake negative review removal for their businesses. Brynn, ready to take us to the top? [00:13] >> Sure am. Thanks for having me today. [00:15] Very frustrating. It's like that person that just hates you, so they're going to get back to you by posting like this fake bad online review. You help them get rid of that, [00:23] >> So Consumer Fusion specialty niche in the reputation management space is identifying and helping remove inappropriate, illegitimate reviews and photos across different directory review sites and social media platforms. [00:36] I love this. Okay, so who is paying you? Is it companies paying you or is it individuals paying you? [00:41] >> Good question. So our clientele is made up of SMBs and also we're heavy in the franchising space, so brands will hire us to represent their whole system as a whole. [00:53] I see. What are people paying on average to use this tech? [00:56] >> You know, it depends because people have different review volume. You have some businesses who get 20 reviews a year and then you have some who get 20 a day. So it depends on the review volume, but on average, I would say our price point is like $299 a month per location for SMBs. And then brands, of course, the pricing is different because it's representing a whole brand. [01:16] What's the largest customer pay you per year? Don't name them obviously, but the biggest contract. [01:21] >> About 120,000 a year. [01:24] Wow, okay. And so how many reviews and locations are you managing there? [01:28] >> You know, they actually do not have a high volume of reviews, but for their industry, a negative review is so impactful that they have stats on how much money a negative review costs their system overall. And the lifespan of one negative review can impact their franchise location up to $300,000 So they definitely pay top dollar, but it is worth every penny for them. [01:55] And put this on a timeline for me, when did launch the business? [01:58] >> 2013. [02:00] Okay. And how did you get those first, you know, ten, twenty customers? [02:04] >> So I kind of fell into this on accident. I was helping a close family friend who's now a retired dentist. This was when Yelp and Google reviews kind of just became popular and he was attacked online by a vindictive ex employee. So, his new patient drop off numbers were down for several months and someone finally brought this to his attention and I offered to help him clean it up. And that turned into introductions to people in [02:31] >> his local rotary group, was a plastic surgeon and attorney, who were dealing with similar situations, but with like a competitor. So from there, it just was kind of personal referrals, recommendations, and it was a month to month continuing service. So it just kind of snowballed and grew from there. [02:46] How much revenue, consulting revenue did you do in 2013? Do you remember? [02:51] >> Oh gosh. I mean, it was pretty small, but I want to say maybe around like, it was under $100,000 What's the tipping? I was also doing it myself too. [03:02] Yeah. When did you realize, oh my gosh, instead of doing this as a service, I should hire a developer and start building technology here? [03:09] >> Well, so for us, MRR is everything. And I was just seeing the long term picture and realizing, okay, if I want to continue growing the way that we are, I need to have a platform, A, for my backend, but also for my customers to use. And I always had the vision of enterprise level, like so how brands can manage multiple locations at once. So it was pretty quick at the starting point where I knew I needed [03:33] >> software. And I haven't had any outside investments. So we're bootstrap and it's definitely been I've needed to be patient because it's evolved over time and the software has continued to improve year after year. But I would say within the first year and a half, knew that I needed to make moves quickly. [03:53] And how many customers today? [03:56] >> So because we are in franchising and one brand could have hundreds of locations, I can't give you an exact amount, but we have several thousand users on the platform between SMB and franchising. [04:08] How many unique [04:11] brands are using a platform? I know a number of locations or stores, how many brands? [04:16] >> So I would say there's about 40 brands and then the rest are SMBs. [04:21] I see it. I see. Guess, can you name one of the brands and then name one of the SMBs so we can understand the difference? [04:29] >> Yeah, so College Hunks Hauling Junk is one of our brands in the franchising space. Then an SMB is anything from a local attorney, dentist, plastic surgeon, auto repair. We're in all verticals. [04:41] So how many SMBs? Know, College Hunks Hauling Junk is in your 40 brands. How many SMBs use it? [04:48] >> About 3,000. [04:49] Oh, wow. Okay. Got it. So you've got like 3,040 paying customers effectively. [04:54] Can I take that 3,000 number times that $300 a month price point to back into your MRR, which would be like 1,000,000 a month? [05:00] >> So, no, because they're not all at that price. [05:03] Okay, so that's not an average? [05:05] >> An average, yeah. [05:07] Well, but if that's an average, that would be an average across what if it's not an average across 3,000? [05:12] >> Well, that would be average for the SMBs, but not necessarily in the franchising space. [05:17] Okay, but you just mentioned there's 3,000 SMBs that are paying, right? [05:21] >> Yes. [05:21] So can I take that 3,000 SMBs times the $299 a month price point? Is that the right average for those SMBs? [05:27] >> You know what? No, it's not. If I'm being honest, it's not. [05:32] What would you So what is MRR today? We can go backwards from there. [05:38] >> I'd prefer not to get into those specifics if that's okay, but we're profitable and bootstrap. [05:43] Okay. Can you give me a range if you're not comfortable sharing a specific, like under 1,000,000 revenue, more than a million revenue? [05:48] >> Under 1,000,000 in revenue, yes. [05:50] Okay, got it. Why is there such a big So I guess, are those 3,000 you're quoting, are those free users? Like that's a big gap between like 3,000 paying $300 a month versus not? [06:00] >> So a lot of it is just sometimes they don't need our services to a certain extent and their price points can change and we'll do what we can to retain the client on a monthly basis. So it's just more so like, say they're part of a spam attack and we have to put a lot of effort into the account at one point, but then things kind of like tame down a little bit. It's just we see [06:26] >> a lot of movement that way. [06:27] So, but are all 3,000 like paying per month right now or some of them are not paying, but they're still using your free tools? [06:36] >> So some of them are, we like to get our foot in the door, we'll do free pilots to help earn their future business. Some people do temporarily go on hold. I don't know the exact number right now for how many are not paying, but the majority are paying. [06:51] Okay, got it. So if we take 3,000 like paying, right, and you're under a million revenue, let's just assume you're a million in run rate, that would be 3,000 $80,000 a month. They're paying on average something closer to like $25 a month. [07:03] >> That in the franchising space, that is the [07:08] >> right number per month, per location. [07:11] $300 a month per location. [07:13] >> No, no. You said 25 per location. [07:16] Correct. So in the franchising space that you mentioned, so you used two words. You used the word brands, like College Hunks Hauling Junk, was 40 of those, and you used the word SMB, like dentists. And you said there are 3,000 dentists, like SMBs. What I'm doing is just, you said you're under a million revenue, I'm just taking 3,000 customers divided by a million dollar run rate, paying on average $25 per month. Would that be about accurate? [07:39] >> I would have to look into that further for you. I don't have those numbers. [07:43] Many Brynn, do you know how many just like paying customers you have? I mean, I assume that's when you track pretty darn close. [07:48] >> Yeah. No, absolutely. It's just when you look at it from a brand level and an SMB, it's different. [07:56] Okay, but there's only 40 brands and there's 3,000 SMBs, right? So the majority of revenue is coming from those 3,000 SMBs if all of those SMBs Absolutely. Are [08:05] Got it. Okay, cool. Let's get more sort of the backstory here. So you've managed to bootstrap this, which is incredible. Tell me more about the team that you've built. How many folks full time? [08:12] >> So 22 team members. [08:14] Okay, 22 and how many engineers? [08:17] >> Six. And so we outsource that. Our development team is over in Belarus and they have been with us since day one. They're fantastic. [08:23] Wow, how did you find them? Are you using a firm like Coditas to find them or are you just, they're individual people you found? [08:28] >> So the company is called Oxagile. We were connected through a colleague several years ago and they have just continued to grow with us. [08:37] Interesting. So they're still like a dev shop? [08:39] >> Yeah. [08:40] And are you paying sort of, you know, most dev shops like Symform Coding has like $35 an hour for development talent. Is that sort of what you're paying? [08:46] >> It's a little bit higher than that. Lately, there is just heavy need for developers. So we have seen the rates increase, but it is cheaper for us to have them overseas than domestic. [08:59] And are all these 22 folks full time? Because what I'm trying into is, are any of them working for free? Because if you're under a million revenue paying 22 full time salaries would be a lot. [09:11] >> So a lot of it is entry level positions, but everyone here is full time. Yes. [09:18] I see. Got it. So 22 full time plus another six who are outsourced engineers, but they're on your full time. [09:25] >> The engineers are all not necessarily full time. That's just depending on the workload and the projects that we're rolling out. [09:32] I see, got it. So tell me more about like growth. I mean, signing up 3,000 dentists is not easy. How did you sign all these folks up? Well, what's that mean? [09:39] >> Yeah, well, so they're not all dentists. We're in all, you know, verticals. So [09:44] Signing up 3,000 SMBs is How do you do that? [09:48] >> So, we used to attend a lot of conventions like veterinarian shows, practice surgeon shows, dental shows, but the biggest way the last few years has been through partnerships. So, our service is complimentary to digital marketing agencies, social media agencies. And so we will work with them and partner and represent either the brand or just kind of like an affiliate agreement with them. And that's been the quickest way for us to see this growth. [10:18] So if there's a brand in Los Angeles who works with dentists as a marketing agency, you'll sell some marketing agency and the agency will sell directly through to dentists. [10:28] >> Yeah. [10:29] I see. So these 3,000 SMBs you quoted, you might not own the direct relationship to them. You might own the relationship just directly to the marketing agency that touches a 100 SMBs. [10:38] >> Exactly. So sometimes we have the direct relationship, others we go through our partner. It just depends, I case by [10:45] thought these numbers earlier when I was asking you, it's a little harder to talk about. It's because there's different kinds of relationships. [10:50] >> Exactly. Sorry, I should have been more clear about that upfront. [10:53] Because otherwise people are listening going, Brynn doesn't know our numbers. This makes total sense now. It's Some of them are direct relationships and a lot of times you're going through marketing agencies. So help me understand, that's an impressive model. How do you incentivize marketing agency to sell your product? Do you give them a kickback? [11:08] >> So it depends and it is all case by case, but a lot of it is they see value in our service. So when we are cleaning up businesses online reputation, when we're improving their star rating, helping them generate more reviews, they rank higher in Google. So they see the value there for their clients. So sometimes they cover our expense on behalf of their clients. Other times they do mark it up. It's case by case with each [11:31] >> one. We kind of customize our approach with all of our different partners. It just kind of depends on their wants and needs. [11:39] But are you paying like, if they sign up customers, either their customers or them themselves are paying you some amount revenue every month to get those seats unlocked, are they paying you or are you paying them a kickback of 30% like per contract, like per per month, per, like, forever? Or is it something different? [11:57] >> So it depends. Some is like a straight percentage based off of the dollar amount. Some are we just give them our tiered pricing, and then they mark it up accordingly. Our biggest partner pretty much just doubles what our cost is. [12:13] I see. [12:14] >> So, but again, it does differ. [12:16] That makes perfect sense. Interesting. Okay, cool. That's a great way to boost up a business because all those, like, these would be like sales reps you'd usually have to hire and put on your profit loss full time. Now it's a marketing relationship with an affiliate. [12:26] >> And not just that too, but the account management side too because we are not necessarily having to communicate directly to the client as well. [12:34] Yeah, interesting. Okay, so I want you to grow fast. I want to see you guys kill it. When can you break a million dollar run rate, do you think? That'd be $80,000 a month in revenue. [12:43] >> I mean, I think that next year is going to be very big for Consumer Fusion. We have some recent partnership that we're in like the final stages of rolling out. So I think by like mid next year. [12:56] Mid next year, interesting. And what has your growth rate been over the past twelve months? [13:01] >> So COVID did hit us pretty hard, but we had 200% growth the last three years. [13:07] Okay. Like each year or over the [13:10] >> three No, no, like the combined. [13:12] It. So you went from like, I'm making this about $20 a month up to like $40 a month over the three years? Yeah. Something like that. Okay, interesting. And what would you have to grow over the next twelve months to break a million dollar run rate by the middle of next year? [13:26] >> Can you say that again? Sorry. [13:28] Yeah. So if you look at your revenue today, how much would you have to grow that to break a million dollar, like to break $80,000 a month within a year? [13:34] >> So we already do the $80,000 a month. I thought you were asking a million a month. [13:39] Well, no, $80,000 a month would be a million dollar run rate, $80,000 times 12. So you already do more than $80,000 a month in revenue? [13:45] >> Yes. [13:46] Oh, great. Okay. Well, so you already passed a million dollar run rate then. What's your next big revenue goal? [13:52] >> Well, I mean, like in the next three years, I'd like to do $10,000,000 a year. [13:57] Okay, got it. So that would be getting up to like $800,000 a month in revenue. And can you do that with your current product line or are you developing new products? [14:03] >> So, we can. We just rolled out a new AI tool that's going to help us be more efficient in identifying the types of content that can quickly be removed. So it absolutely is doable. [14:17] And if you're at like north, you know, $80,000 a month or north of that today in revenue, where were you exactly a year ago in the middle of COVID? Do you remember? [14:24] >> We had like twenty five percent of our accounts go on hold. So COVID was definitely, it impacted us, but we were able to retain all of our employees and we actually started working for the twenty five percent of our accounts who needed to go on hold for free just because we wanted to help support them through those challenging times and be sure that they knew we were there for them during those hard times to where when [14:47] >> they were able to operate again, they would quickly pick back up with us. [14:51] Very well, and you've done that, you've earned their trust with them for a long time, that will drive up your LTV, which will be great. How do you think about the business today? Would you raise capital or you process of raising capital or you're staying bootstrapped? [15:01] >> I'm gonna stay bootstrapped. [15:02] Yeah, that's great. Now, if you get someone came to an offer to you $3,000,000 all cash up front to sell a business today, do you exit? No. Well, you said that quick. What's the number? [15:14] >> It would have to be a lot more than that. I put a lot of sweat and tears into this business, but yeah. I mean, I think we're gonna hit just under 4,000,000, and so [15:26] Brynn, you're so shy when you say these numbers, but I'm like trying to root you on. You should be so proud of these things. Should just [15:31] >> I know, I just, I don't like to boast. I don't know. I also don't like people knowing all of our business. [15:36] You're not bragging. You're not bragging. I'm pulling it out of you. So you think you'll break 4, I mean, you will break $4,000,000 in revenue this year? [15:43] >> We'll be right under that. We're projecting that. [15:45] I mean, Brynn, that's incredible. So like during COVID, like last year, I guess it was a tough time, but you were like under 3,000,000 that year, I guess? [15:52] >> Yeah, 2.9. [15:53] Yeah, but you retained everybody, which is incredible. This is incredible. You bootstrapped business doing 4,000,000 in a very committed review space. Round of applause, this is great. [16:02] >> Thanks. Thank you. So cool. [16:05] Okay, what's the next product you guys are working on? [16:08] >> So it's the AI tool that I mentioned. So we have years'worth of data. So every time we would work on disputing and getting a negative review removed, we logged the directory it was from, the reason why it was successfully removed. And after eight years, we finally had enough data compiled to where we could develop an AI tool, did heavy machine learning so we can plug in the content of a review through our backend. Like when [16:31] >> we pull in our clients'new reviews, it'll automatically go through there and it will put out a rating of the percentage of the review likelihood that it's able to get removed. Anything above 50% has a good chance at being removed. So now, this will quickly identify which reviews our team needs to target versus ones that would be more of a waste of time. [16:53] Interesting. I think it makes everything more efficient. Now, are you operating right now at breakeven or is the company, like, super profitable? [16:59] >> Not super profitable, but we are profitable. [17:01] Okay. Interesting. [17:01] >> Because we have put a lot into our dev. [17:05] You're reinvesting a ton. [17:07] >> Yeah. And I think that's the reason for our long term success is back when we were very, very profitable, I wasn't out spending a lot of money. Was pushing it into the software development. [17:17] Brynn, do you still own 100% of the business? [17:20] >> So I gave my executive team some equity just because when we were first starting, I couldn't give them the higher salaries that they deserved. And I think it was a smart play because they are so vested. We're like a work family. We are all so tight. We've worked together for years. But they have pride of ownership and they want Consumer Fusion to grow as much as possible. Together, we are just super strong. So, I'm very happy that [17:45] >> they have the ownership of Consumer Fusion as well. [17:49] For other founders in your shoes, how much do you recommend they give to their executive team? Are they safe for their executive team? [17:55] >> So I think it depends on, you know, each individual person and their role and what they can contribute. But I, let's see, I gave up 23%. Okay. Those four players. [18:06] That's great. And you then kept, I guess, 77? Something like that? [18:09] >> Mhmm. [18:10] That's great. Are you the sole founder? [18:12] >> Yes. [18:13] This is such a rare story. Never hear about sole founders bootstrapping. This is great. Congratulations. [18:17] >> And I was a female under 30. I like there are not there's not much female representation in this industry. So anything I can do to help that, I'm all for it. [18:26] You tell I want you on. And you know, it's so funny, not to get like too political, when I have females on the show, I never have females on because they're female. I have them on because they're great SaaS founders. And then they happen to also be female. But it's so funny because when I get someone like you on, it's like I have to pull so hard to get you to brag about your story with the [18:43] metrics, just like we just went through. With the guys, come on, and they're like telling me numbers that are like exaggerated and way above what they should be, and I got to bring them back down to earth. You're like the opposite. Why is that? [18:54] >> I'm not really sure. I'm a private person in general, and I just don't want it to come across as being braggiocious. I don't know. [19:02] No, I don't think you're at any risk of that. I've really enjoyed this. Let's wrap up here with the famous vibe, Brynn. Number one, favorite book. [19:09] >> Confidence Creator. [19:11] Number two, is there a CEO you're following or studying? [19:14] >> There's not, but I'm going put that on my to do list. [19:16] No, no, no. That's okay. Number three, what's your favorite online tool for building the business? [19:21] >> Oh gosh, I'm not sure. [19:24] Number four, how many hours of sleep do you get every night? [19:26] >> Five. [19:27] Five, okay. And what's your situation? Married, single kiddos? [19:30] >> Married, three kids. [19:31] Oh my gosh, you are busy. [19:34] Can I ask you how old you are? [19:36] >> 35. [19:37] 35, last question. What's something you wish you knew when you were 20? [19:43] >> That I would have a successful SaaS business. When I was 20, I had no idea what I wanted to do with my life. [19:49] Guys, you have it. Heck of a story here, helping mitigate negative online reviews. Consumerfusion.com. They've grown nicely, $2,900,000 last year. They'll finish this year, you know, well above $4,000,000. She's growing and doing this all bootstrapped with her team of 22. She's really got everyone working the same drum, incentivize her whole executive team with some equity shirts, they can all grow together as they continue to serve their over 3,000 SMBs and brands they work with. Brynn, thank [20:14] you so much for taking us to this op. [20:15] >> Thank you. Appreciate your time. [20:18] 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 alive. It is fun to watch every Thursday one [20:43] p. M. Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at two 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 SaaS world, whether it's [21:04] 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 wanna 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 [21:26] are saying. Sign 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 [21:46] counter those people. We got to push them away. 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