How Convertri Reached $1.5M ARR with Affiliates and Zero Raised Capital (Interview with CEO Andy Fletcher)

Introduction and Fastest Funnel Builder Claim

Nathan Latka

00:00Hey folks, my guest today is Andy Fletcher. He's building convertri.com. It's the fastest funnel builder out there. So he says, let's test it out. Andy, you ready to take us to the top?

Andy Fletcher

00:09>> Let's do it.

Nathan Latka

00:10How do you quantify that fastest funnel builder? What's that mean?

Andy Fletcher

00:13>> So to us, it's two key factors. One is like how fast can you build the thing yourself? And we're all about free form editing. So with most of our competitors are blocky based, which means you lay your page out in rows and columns and sections, which is great until you want to do something unusual, or even for most people just like moving their logo from the top left to the top right, that's effort. Whereas with ours,

00:38>> you just literally drag it across the screen and it's in its new location. And the other half is being like page load speed and we're still the fastest loading pages. Like, I think you can beat us like we're at one agency beat us, but they spend like $10 on a single page. But anything short of that, you can't beat our page load speeds, which is getting more and more important.

Technology Behind Page Load Speed

Nathan Latka

01:00What makes you so fast technology wise? You have on your homepage that you loaded under five eighteen milliseconds, everyone else is above one point four one seconds. Why are you so fast? Why can't they copy you?

Andy Fletcher

01:10>> Because everything is built from the ground up to be like 100% pre calculated, completely cached, the result. Like Why can't every

Nathan Latka

01:19people do that though? Like what's unique about your background where you can do that and others can't?

Andy Fletcher

01:23>> So two parts to that. One, like a lot of the legacy competitors we have, like it was just never designed to work that way and making it work that way is just a lot of efforts. And for a lot of the newer competitors, truthfully, I don't think they've tried. Like, I mean, I've got a computer science degree. I've spent four years at this. Like I've got a heavy technology experience, but like caching's not exactly new. So

01:48>> like other people could do this, I'm sure, but they don't seem to do it or don't seem to get it right. I can't really tell you why they don't do it.

Competitive Landscape: ClickFunnels, Instapage, Unbounce

Nathan Latka

01:55Who would you consider your major competitors?

Andy Fletcher

01:59>> So kind of in two directions, there's sort of the more like digital marketing focused guys who like ClickFunnels, for example, who are certainly outselling us a boatload. Russell Brunson is a phenomenal marketer and business owner. He's a machine. And then in the more sort of like page builder specific direction is guys like Instapage and Unbounce.

Nathan Latka

02:22And so which side do you wanna go win? Which side do you see yourself competing on?

Andy Fletcher

02:27>> So we generally compete on the like better individual page builder. So people that want to do like best of breed stack, whereas for example, so against Instapage and Unbounce, whereas ClickFunnels are like more of an all in one and each component is worse than a best of breed. Which I don't think is a like, you know, it's not like one way is right and one way is wrong. Like a smaller company getting started might be better

02:55>> off with that all in one thing. Certainly once you get any kind of scale going, people tend to need the best of breed features quite quickly we think.

Nathan Latka

03:03So, I mean, know that because you look at, you just look at your sales. Do you see people switching to you from ClickFunnels and can you quantify it?

Andy Fletcher

03:13>> I mean, definitely. Like we built a page importer specifically for that. Like we get tons of people come over, like we can, you can point the Convertri page importer at just about any page on the internet and it'll import it in. You can start editing it, which really helps people transfer over from these other sections.

Nathan Latka

03:28I don't have an idea. Where can, what's the link for that? Where can people see that?

Andy Fletcher

03:33>> I mean, it's one of many features, probably too many on convertri.com. There's a demo of it, which should be on the site somewhere. I can't even remember where.

Nathan Latka

03:42Sorry, but like, why isn't this like convertri.com slash import page, like website greater of HubSpot? This is like a brilliant marketing thing. Why wouldn't you put that like front and center on its own landing page?

Andy Fletcher

03:53>> Because you're better at my job than I am.

Nathan Latka

03:57Well, I don't believe that. Seriously, is there no easy way for my audience to go use that? Like right now they have to sign up for an account and do a bunch of work?

Andy Fletcher

04:05>> What do you mean by Sorry.

Nathan Latka

04:09I'm trying to help you out, brother. If there's someone listening right now using ClickFunnels, and they're frustrated because ClickFunnels limits them to a box and they want to import their ClickFunnels instantly into Convertri, what's the link they can go to to paste in the ClickFunnels link and convert it instantly into Convertri?

Andy Fletcher

04:23>> I mean, is inside the account. So you have to create one plus.

Nathan Latka

04:28Pull it out. Gosh, pull that thing out. That would be huge. That'd be a hit. Awesome. Thank you. Okay. So if I log in, where do I go?

Andy Fletcher

04:37>> So if you log in, then go to like inside of any funnel, click import page and you'll have a box. You can stick a page link in.

Nathan Latka

04:48This reminds me a lot, there's a lot of free Chrome extensions where you can convert any website into a Figma file. And those things kill it for Figma, for their onboarding, for their new users. Gosh, I feel like there's a massive play for you there.

Andy Fletcher

05:02>> Super. Thank you very much.

Revenue Update: $1.3M to $1.5M ARR

Nathan Latka

05:04So how's it going during COVID? Last time we spoke was back early last year, and I think you said you had just passed 1,700 customers. Where are you today?

Andy Fletcher

05:12>> So we track, we have a bunch of different like deal plans because of our affiliate background. I tend not to pay attention to customer numbers. I should have had that one ready for you and I don't. We're up, we're what, about 1.3 mil ARR time we spoke? And we're at 1.5 now. We're about, we're 20% bigger than we were last time we spoke.

Growth Drivers: Word-of-Mouth, Affiliates, Resellers

Nathan Latka

05:34Where did most of the growth come from? Is it still the affiliate model?

Andy Fletcher

05:39>> Honestly, it's even more than before. It's now word-of-mouth. Like we still, like paid traffic never seems to quite take, but people love it. They keep talking about it. We've got like reseller deals ramping up really well. ClickBank are now pushing us like in their membership area, which is really exciting. That's the big source of new accounts. We got really helped out by Ryan Levesque did a big thing about his ask model and like beaved up quiz

06:08>> software. We sell a one time fee piece of software called Quizatri, which is like lead gen into Convertri. We sell like Quizatri low price front end, $67 one time, and then people buy that and we introduce them to Convertri on the back end of that.

Nathan Latka

06:21How did you convince Ryan to do that?

Andy Fletcher

06:23>> What was Oh, sorry. Was, he didn't do anything to do with us. He was promoting his own, like his Ask Method course. And I think it's bucket.io, which is like more expensive monthly than we are one time. It's clearly like, you know, it's no competition, that's way better software, but we've got a one time price point. Lots of people take a look at bucket.io go, Oh, I don't know about that. That's maybe that's a bit expensive.

06:47>> Come and buy Quizatree and that gives us like phenomenal lead gen.

Nathan Latka

06:51How do they know to, how do they go from bucket IO to Quizatree? Are you mentioned somewhere or you're saying that Google search keywords

Andy Fletcher

06:57>> or They how they just search for Quiz Builders and they kind

Nathan Latka

07:00Okay, so Quiz Builders is the link there, that's the search term.

Andy Fletcher

07:02>> Yeah, definitely. And so it's not like he was, you know, they were bigging up Convertri Quizetry at all, but like they just made a big thing out of quiz builders. So demand for quiz builders happened.

Nathan Latka

07:14And you just went and capital. I love that. You just went and cap eyes on that traffic.

Andy Fletcher

07:17>> I would love to say that like, you know, we did anything intentional there. We already had this thing and we noticed sales just started going up. We were like, Hey, what happened?

Nathan Latka

07:26Interesting. Okay, so you, and this is weird. So you don't know how many customers you have? I guess I'm confused why you wouldn't know that number. Mean, that's something I look at like obsessively if I was the founder of a SaaS company.

July 2016 Lifetime Deal: $750,000 in Six Days

Andy Fletcher

07:37>> Because it's, like we have a bunch of legacy plans that have all kinds of, so for example, back in July 2016, we sold the one and only lifetime deal for Convertri we've ever done. That was the original launch. We sold like 0.75 of million dollars of it in six days.

Nathan Latka

07:54Sorry, when was that?

Andy Fletcher

07:56>> So July 2016.

Nathan Latka

07:58And you sold how much in how many days?

Andy Fletcher

08:00>> We sold $750,000 worth of it in six days.

Nathan Latka

08:04And did you use AppSumo for that?

Andy Fletcher

08:06>> No. That was affiliates.

08:11>> AppSumo's deal terms are terrible if you can get your own affiliates. If you can't, then it's probably a good play. If you can, it's not great terms.

Nathan Latka

08:19And remind everyone how you lined up all these affiliates because I remember this being really impressive. But you told me like last time the majority of your revenue to get going up to a million bucks in revenue came from affiliate marketing.

Andy Fletcher

08:29>> I would love to tell you like, I mean, I can tell you some of the techniques I use to recruit new people, but honestly, a big part of it is I've been in the industry a decade. I used to run an affiliate network. I know everyone and I realized that's not exactly replicable for someone else listening, but that's

Affiliate Commission Structure and Monthly Payouts

Nathan Latka

08:45What display network did you run?

Andy Fletcher

08:47>> It was called DigiResults. It was built on PayPal's instant pay network, which did well for us, but we eventually got killed by what became JVZoo. Because they were, that was my first like proper business and the guys that ran JVZoo were way better at it than I was.

Nathan Latka

09:05Yep, yep, yep. So now month of your current revenue, you're doing about 125, 130,000 a month in revenue. How much are you paying out to affiliates every month?

Andy Fletcher

09:13>> Now, not that much. So

09:18>> of the like 1.5 mil, we're probably doing between a $100,000 and $150,000. So probably about 10% of the revenue goes out in affiliate commissions.

Nathan Latka

09:29Okay, and you pay that out annually or every month?

Andy Fletcher

09:31>> Sorry, we pay it out monthly. The number I think about in my head is annual rather than monthly. Last

Nathan Latka

09:39month you were like a $13,000 checkout to affiliates, something like that, 10%.

Andy Fletcher

09:42>> Yeah, something in that region probably.

Nathan Latka

09:44Yeah, yeah, interesting. And so their first year commission's higher, then it goes off over time. So your margins actually increase the longer you build the business?

Andy Fletcher

09:50>> I know, it's 30% life of the account.

Nathan Latka

09:53Okay, then why is it, why would it be lower today than it was a year ago if more affiliates are driving more sales?

Andy Fletcher

10:02>> So two reasons for that. One, we get more like percentage wise, we get more word-of-mouth, like non affiliates, just like, hey, I love this software, you should go and use it, but it's not an affiliate link referral. We don't know why people do that. There is an affiliate link like right there in their account, all they've got to do is copy and paste it, but they still love us enough

Nathan Latka

10:19to refer us anyway.

Reseller Model Explained

Andy Fletcher

10:21>> And the other one is that we've got more resellers rather than affiliates, which is a slightly different moderates. So with an affiliate, let's say you're my affiliates, you send someone to me, I collect the money and I pay you a commission.

Nathan Latka

10:3630% per month for life.

Andy Fletcher

10:39>> Yep. If you're the reseller, then you sell it to your audience as like a co brand. It still has to be like, it's still Convertri. Everyone knows it's Convertri because, yeah, they're gonna log in at convertri.com. They're gonna email supportconvertri dot com. They're gonna go to help.convertri.com for the knowledge base, etcetera, etcetera. But you get to present it to your audience. You collect the money so you can like, one of our biggest resellers packages it, like

11:05>> access with a bigger course he sells. Another one, it's like built into his funnel. So it's like the third upsell everyone sees. They've got pretty much freedom to sell it however they like. And then on the first of the month, we bill people x dollars per every active account. And I can't tell you what x is because that's NDA with each person. Sorry.

Nathan Latka

11:27What what why couldn't a reseller just charge way less than you and then you get no customers yourself because the affiliate just is cheaper than you or the reseller is cheaper than you.

Andy Fletcher

11:37>> So they've got to, I mean, they're paying us like an amount per account per month where they're not gonna be able to like cut that much off it without not making any money themselves.

Nathan Latka

11:51So They're packaging it with something else. Let's say I package Nathan's Convertri co branded thing into a thing where I'm selling a PDF, my book, and a bunch of other stuff for $300 but the Convertri thing is essentially free, right? Because the other stuff pays for it. Couldn't I just undercut you when everyone comes sign up with me instead of you in that case?

Andy Fletcher

12:14>> I mean, sure, but I still get my money off you rather than them, so I'm fine.

Nathan Latka

12:19Correct. But it could be at a much lower price point than what you charge on your web, you know, the $50 a month that you charge.

Andy Fletcher

12:24>> It can't be that much lower than we charge because you would bet you'd be paying me more money than you're getting in. Like, the fact that the need to make a profit on it is what, like, stops you undercutting me that much.

Nathan Latka

12:38Alright. I guess what I'm saying is what prevents people from using you as a loss leader if they're packaging you and selling you with other things? They could very easily do that.

Andy Fletcher

12:45>> Sure, but I still get my money every month, so I don't care.

Nathan Latka

12:51How do you Okay, are resellers getting a discount off what you list on your own site?

Andy Fletcher

12:56>> Yeah, absolutely.

Nathan Latka

13:00Got it. I guess that's what I'm trying to figure out, right? Is if you're giving them a discount, why can't they just charge at cost, pay you your cut, but but arbitrage all the people paying you, you're going direct to Convertri fifty bucks a month or $60 a month?

Andy Fletcher

13:14>> Sure, but I mean, if they're, I mean, nobody has, it's not that big a discount.

Nathan Latka

13:20Okay, so you compete with people reselling your product on like CPC, Google search results and things like that. They can't market against you if they're selling your own product.

Andy Fletcher

13:29>> No, like I said, so that it's got to be like, it doesn't have to be like backend, backend, but nobody's selling this, like nobody's just selling Convertri this way. They're not allowed to do that. It's gotta be like packaged with something or like, you know, the upsell number two, upsell number three in a funnel, or like part of their webinar package or something like that.

Nathan Latka

13:50Okay, how many resellers do you have today that make at least, I don't know, that pay at least a thousand dollars a month?

Andy Fletcher

13:56>> It's got three big ones and

Bootstrapped and Ownership Structure

Andy Fletcher

13:58>> a fourth one coming online next month.

Nathan Latka

13:59Interesting. And I guess these are probably all people that are like in the marketing space, maybe other software companies, but that don't have a funnel builder?

Andy Fletcher

14:07>> Yeah, yes. Two, well, like an affiliate network, one software company, and one like info training company, and it's another software company next month.

Nathan Latka

14:18Yeah, very cool. What about your business? Still bootstrapped, hope, or did you raise?

Andy Fletcher

14:22>> Nope, still completely 100% bootstrapped, still like eating what we hunt.

Nathan Latka

14:27Have you taken your 100 out? You told me in 2016, you put in $100 and get it going. Is that still in the business?

Andy Fletcher

14:32>> Oh, no, no, I got that back early on and we get a salary now. It pays me money every month.

Nathan Latka

14:39Who's we? How many folks?

Team Size and Engineers

Andy Fletcher

14:41>> So whole company, 20 people.

Nathan Latka

14:43How many folks like that own it?

Andy Fletcher

14:46>> I own 75%. My business partner Neil owns 25.

Nathan Latka

14:50Yep, yep. That's the same as it was about a year and a half ago. And how many engineers?

Andy Fletcher

14:55>> Engineers, look, five engineers, one DevOps engineer.

Acquisition Offer Scenarios and Valuation Thinking

Nathan Latka

14:59Okay, interesting. And how do you think about the business? How does this blend in with your lifestyle? Other words, if someone came and offered you, I don't know, $20,000,000 all cash upfront to sell it, do you take the deal?

Andy Fletcher

15:10>> 20,000,000, yeah, definitely. That's a big enough multiple. Like I'm not, it's growing nice. Like, we're not like unicorn growth rates, but we're growing, we've been bigger every month for like, I think we had the last down month over a year ago. Like we get bigger every month, it runs itself more and more. Like I'm not, yeah, I'm not stressed out by it, I'm not desperate to sell, but I'm also not stupid. If someone offers me a

15:35>> decent multiple, I'm going to take it.

Nathan Latka

15:36Well, obviously there's some level where it gets exciting for you versus if you should keep running it. What is that multiple for you? It's like five X would you consider really high you'd have to look at or is 10 X the minimum?

Andy Fletcher

15:47>> Five X ARR, definitely. Yeah. I would five x ARR, I would take it. Like, it would also depend how long they want me to stay around for. So if it's like, if somebody wants to like invest at like a and like I've got to stay around and run it, Like, the number's just higher than like, it's a buyout and I'm done in say three months. Like, I'm not just gonna go, here you go and run off

16:14>> into the sunset, but I'm not hanging around forever for that kind of money.

Nathan Latka

16:19So if someone offered you 5x of your 1,500,000 run rate today or 7,500,000 total sort of cash upfront and you stuck around for three months of the transition and then could go off and do your next thing, that's something you'd seriously entertain.

Andy Fletcher

16:32>> Yeah, I would do that deal tomorrow.

Nathan Latka

16:34Yeah, well guys, there you have it. There's a bunch of you listening right now, and I think your inbox might blow up. So we'll see what happens, Andy. Let's keep going forward here, the churn, do people stick?

Churn Segmentation and Retention Insights

Andy Fletcher

16:44>> Yeah, in fact, we applied your, you know, same thing as I thought about with the page importer from earlier. Last time we were on the call, you were like, dude, just segment your churn. And I was like, whoop whoop. And you're like, okay, let me teach you things. So yeah, we segmented our churn. There's this really interesting thing where at the three month mark, it's after people have been on for three months, they stick super, super

17:06>> well. And up to the three month mark, they're basically paying us to extend their trial. What is what we've discovered. So we look at that churn post the three month mark and it's low, low percent, low single digits. Whereas

Nathan Latka

17:23It would be for more than three months, that cohort, you know, over 90% will still be active a year after their first three month anniversary.

Andy Fletcher

17:32>> 90% might be a bit high for a year later, but it's high. Whereas like trial to paid churn is 50%.

Nathan Latka

17:43Yep, yep, very cool. And is CAC still around that like $40, $50 mark?

Andy Fletcher

17:49>> Yes and no. I mean, like we're, because of how we find people, which is again, like resellers, word-of-mouth, affiliates, any number I give you for customer acquisition cost is utterly meaningless because you can't give me a dollar and then I spend it to make $2 We continue to like not make those levers work Cause we suck. Well,

Nathan Latka

18:09I don't know about that. Yeah, you have a lot of stuff working for you. How big is your email list right now? Just people that have signed up for a free trial that's just sitting there.

Email List and Reactivation Campaigns

Andy Fletcher

18:17>> Tend to like about 30,000, I think, 35.

Nathan Latka

18:20You do anything with that list?

Andy Fletcher

18:23>> Yeah, so we run like frequent reactivation campaigns and so on. We go back and forth on whether we should like hit the, like say, you know, after you've been churned for three months, you've had a reactivation campaign. Like we've tried a bunch of stuff. Like, should we be dumping people out onto sort of more aggressive, just like, here's some interesting affiliate offers, but it never feels like it's gonna make enough money to be worth the time

18:49>> and effort to

Nathan Latka

18:50get Or like a a tomorrow at 3PM, four secret changes the top performing funnel makers make that you should copy tomorrow and then invite your list and then sell Mike Hell on the webinar. Obviously that's not your style, that's more of a Russell Brunson thing, but I feel you're I just mean,

Andy Fletcher

19:05>> you say that, but my current webinar's called How to Get to 100 Bucks a Day with No Ad Budget. No, Mike, like we've all got one.

Nathan Latka

19:12Can you fill that up with a 35 ks list? I mean, you market the webinar to the list?

Andy Fletcher

19:17>> In fact, we haven't run that webinar to the list yet. That's on the experiment list for the next month or so.

Nathan Latka

19:24Very cool, Andy. Well, this is exciting stuff. Let's wrap up with the famous five. Number one, favorite book.

Famous Five Rapid Fire Questions

Andy Fletcher

19:28>> Favorite book is, oh, oh, okay. So last time it was High Output Management by Andy Grove. And I would say that got surpassed a week ago when I read Alex, I can't remember his surname, begins with an H, his $100,000,000 offers book.

19:47>> Yeah, no, that's a good one.

Nathan Latka

19:48Number two, is there a CEO you're following or studying?

Andy Fletcher

19:51>> I mean, honestly, the moment, probably Russell Brunson, like the guy, yeah, we're kind of in competition, but the guy's amazing. Like I have much respect.

Nathan Latka

19:58Number three, what's your favorite online tool for building a business?

Andy Fletcher

20:02>> Oh, clearly Convertri.

Nathan Latka

20:03You can emphasize your own.

Andy Fletcher

20:07>> In fact, this will be a good one to answer.

20:11>> Currently Jira, we're hoping like maybe the answer will be ActiveCampaign in like a few months'time. We're so sick of Mailchimp, we cannot deal with their bullshit anymore. So we're moving to ActiveCampaign.

Nathan Latka

20:22I love ActiveCampaigns, check them out. Number four, how many hours of sleep do get every night?

Andy Fletcher

20:27>> Eight.

Nathan Latka

20:28And what's your situation? Married, single, kids?

Andy Fletcher

20:31>> Long term partner, never married.

Nathan Latka

20:33No kids?

Andy Fletcher

20:34>> No kids.

Nathan Latka

20:35Okay. And how old are you?

Andy Fletcher

20:37>> I'm 38.

Nathan Latka

20:3838, last question. Something you wish you knew when you were 20.

Andy Fletcher

20:42>> Take more risks, do more stuff, like nobody knows anything. Do stuff, it'll be fine.

Nathan Latka

20:48Guys, Convertri launched in 2015, the quickest funnel builder out there. They did their first $750,000 in sales over six days with affiliates. That's because Andy, the founder comes from running an affiliate network. That's what got those affiliates. Today they're selling with reseller partners, three big ones who white label the tool and then sell it themselves in packages.

Andy Fletcher

21:04>> No white label. That's really important.

Nathan Latka

21:07Co branded. They're doing $1,500,000 in AR today, up from 1,300,000 just about a year ago. Andy, thanks for taking us to the top.

Andy Fletcher

21:15>> Thanks, Nathan. Great to be here.

Nathan Latka

21:19One 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 one

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