Coschedule Revenue & Funding (2024)

hello everybody my guest today is garrett moon he's the ceo and co-founder of coast schedule the web's most popular marketing calendar and the fastest growing startup in north dakota as a thought leader he's been blogging and speaking about content marketing social media marketing and startup business for more than seven years garrett are you ready to take us to the top yeah i can't wait all right yeah so okay you can't come on my show and say you're the fastest growing in kansas without backing that up somehow how do you know you're the fastest growing uh well the fastest growing in north dakota and uh north dakota you know we have less than a million people in our state total so we kind of know everybody we know what's going on uh so you know it's just by proxy and um you know understand the area but uh yeah it's great to be on and um so we should so we should rephrase it you're the only software company in north dakota that i wouldn't say that i definitely wouldn't say actually uh our fargo uh is you know fargo north dakota has a great startup ecosystem and it's growing every year so we're really excited about about the entrepreneurial economy in bismarck but and in north dakota but yeah all right so tell us about the company tell us what the company does and what's your revenue model how do you make money yeah so co-schedule is your standard sas b2b company so uh you know our model is pretty well understood out there we build a marketing calendar um and marketing uh management tool for companies that are managing marketing for agencies uh that are managing you know a lot of different projects for different clients um that goes to you know content blog posts social media email marketing uh we really provide a tool where they can do it all in one place save a ton of time improve their teams communication and efficiency and all those uh sorts of things and what's the average customer paying you per month would you say uh so our plans range you know about about forty dollars a month up to about six seven hundred dollars a month um you know and then up past that and some higher plans so you know it's uh you know average customers probably between 50 and 150 bucks okay a month or so so we'll call it kind of maybe 75-ish range but that helps us kind of get dialed in now the obvious question listeners are me going is nathan why would i do this i could just use my like google calendar right so help us understand tell us a story a real story of a customer using you guys yeah so i think that's the exact problem right is that you could use a google calendar but you're also going to need uh some additional tools for actually content creation so you're going to bring in word processors you're going to need publishing tools uh your website your blog or places where it's going plus social media plus email marketing there's a lot of moving pieces once you get into marketing and there's more and more channels that we have to care about every single year so our customers really come to us and what they're looking for is saying hey we have all of these this is always called the marketing stack this broad marketing stack and everything's disconnected it's disorganized there's no clear communication with my team and we're really allowing them to start bringing all that in-house so we so you know on top of your google calendar we're adding an entire project management layer uh and task management layer communication center for your team we're also adding publish step syncing we call it so when you actually create a blog post or something on our calendar we're actually going to publish that make it go live on wordpress and then we can start to automate things from there like your social media or email marketing or different aspects of what you're doing so could the audience maybe think of this almost like a marketing version of base camp or trello yeah absolutely i think you think about it like that except for with marketing we're really about the marketing schedule so the calendar becomes really the center point for what they're doing um and then we're adding those direct integrations with the marketing tools that they're using every day got it okay give us some of the back story here uh when did you launch the company uh we launched late 2013 and uh really got off the ground uh in 2014 after we took our first round of funding um and you know again to live in our backstory my my co-founder and i were running a marketing agency we were doing website design and some customer development and we were doing all of our own marketing you know our own blog posts our own social and it was working really well for us to gain clients but you started you know we were able to kind of get a firsthand look at some of the problems that were inherent in the workflow in the industry so that was 2013. he said he really hit the ground running in 2014 but do you remember what first do you remember what first year revenue was in 2013. how low was it gosh uh you know what we probably closed the year with almost 100 customers actually in just a couple months we launched towards the end of september and probably two or three months you're probably just around 90 customers um you know so like you know a thousand bucks 1500 bucks an mrr or something like that pretty low so maybe four or five grand in total that first year and then you said you raised in in 2014 how much did you raise in 2014 and how much total have you raised to date we raised half a million dollars in 2014. total raise to date is about 2.7 2.7 million and and was that second round or third round that you did was it priced or are you still doing convertible notes uh no both both of our rounds actually were priced and you know a lot of that just has to do with the investor community in our state um and angels that were here and what they were used to seeing and the types of deals that we could put together so we never really did the convertible note round uh so most of the price rounds and pretty simple uh clean clean equity rounds so 2013 i guess that was what four or five years ago give us an update today how many customers are you serving yeah we're serving more than 8 000 customers you know 100 plus countries and growing very quickly and you know we don't really talk about revenue and stuff at this point but uh you can kind of do some you know head math yeah let me let me do some head mats to get a general range here if i take 8 000 customers times a generally we'll do a minimum so we know you're definitely above this right you said the low end of the of the rpu range was 50 bucks you're somewhat you're north of 400 grand in mrr at this point right around there yeah around there okay got it now is that because some of those are early customers maybe legacy at lower price points absolutely yeah you i mean in four years of business you always have a variety of customers and price points you always try to do your best to kind of grandfather them in and um lots of lots of war wounds and lessons learned there but um you know it's just the way it goes so give me a story about a marketing kind of tactic or thing you did where you thought the cohort that you brought in from that tactic was going to perform very well but it surprised you and lifetime return was way higher than your usual cohort or something crazy happened [Music] well i think you know even one not too long ago we we launched a not really good great feature called re-cue and re-cue is an automation tool so a lot of people are scheduling social messages inside of our tool they have been for years they have tons of blog content there req allowed them to start recycling some of those messages and reusing them to fill gaps in their social schedule so it's a really cool feature it uses a lot of the intelligence of their social stream to figure out when the best time to publish is uh to give them more traffic and uh what we love about it is obviously it's kind of one of those those great features where it's very sticky the more you more time the user invests into it the more value they're going to see over time and as they build up that content library it really sticks with them really well and i think you know the lesson learned is we had we had great user adoption right away and within the first couple months you started to see issues with user adopting the tool and that's really something that comes with every feature it's one of those for us with req where one of the lessons that we've learned is actually we made it too smart in the beginning and we've actually had to add some features to allow more manually scheduling for our users and i think you know it goes it goes into that you know age-old lesson for entrepreneurship like you really have to listen to your customer and sometimes you get moving very quickly particularly as you get larger and you you you have the ability to ship quickly you get something out there and you learn a couple months we kind of have to rebuild this this just isn't isn't what we thought it was going to be we ended up having to kind of go back fix the feature a little before we put it back out there you were number three on product on back in on april 9th 2017. you got a pretty healthy number of upvotes with 510 what how did that cohort perform how many new website visits new trials and new paid customers uh you know i don't even know um and there may have been a bump there may not have been i think one of the things that a lot of those types of events you know you could feature an entrepreneur.com or inc or those types of things we've had we've had all those things happen and frequently they bring bump in traffic uh frequently they don't result in a lot of mrr and i think it'll be very i think if you're a consumer-based product a b2c more based product i think those types of things can do really well for us we're serving a really direct niche we're looking at professional marketing teams so those those things tend to be a blip in terms of traffic um a lot of times we don't even see them come through anymore but not always are our best places for conversions okay we're talking about negative stuff here let's flip the script here what's the weirdest thing you've done to acquire good customers um come on you're in north dakota you have to be scrappy give me something besides paid traffic and inbound marketing we're really good at inbound marketing no that's that's what everyone does traffic give me something weird they do with that legacy account where the the the the lead comes in and and it says team size 300 and you're doing the math in your hand you go oh my gosh this is like a 50 000 acv what's you're like i gotta do whatever i gotta do close this i mean what's the there must be some story something weird you've done before uh well there's lots of customers like that i think where they came in through self-serve channels and i think what's amazing is that they just kind of like jumped into our app we didn't necessarily know how they got there right away um and so you you know you certainly want to try and close that account but realistically a lot of times early days you can't you can only push acv so high so how did they use that you said you don't know how they found you in the beginning i mean obviously you have to figure that out to know where you want to double down your marketing where do those kinds of customers come from which got larger customers well yeah the one you're just the ones you're just talking about yeah our customer is so we we really focused heavily on inbound marketing we actually so the weirdest thing we did is we actually started doing inbound marketing long before we even had written code uh we actually started with marketing for our entire product so we launched our site we started our blog and we started talking about the topic that we were building which is something that a lot of people are doing doing more so now they didn't do a lot of that in 2013. so um you know i've actually published and wrote blog posts taking away from development time every single week to build our email list and so one of the cool piece of that was when we launched we had over 10 000 people in our email list already interested in the product that we were launching so 10k on email list content marketing before code writing yeah now i i was hoping what i was hoping you would go with this is to talk more i agree with you you've done some really cool things in terms of inbound marketing it reminds me of what hubspot has done and and uh some others with like the website greater right so you've got some of these kinds of tools you have the headline analyzer and one other one the social media optimizer how are these working for you really good headline analyzer that is a weird one because we actually started looking at this mass amount of data that we had in our tool set right people are adding blog posts and they're scheduling social messages so we had this really great correlation between the headlines that they were writing and the social messages they were sending and how well those those messages were performing um so we started analyzing that so like literally sifting through excel files of headlines and breaking them out and trying to get hints as to what types of headlines were performing well was a very long tail piece of marketing that has paid off for us for multiple years headline analyzer has brought in thousands to our email list thousands of lead thousands of customers i mean it's been a huge huge win social message optimizer is the same is the same type of thing right we're starting to look at the data millions of messages that we've sent and try to understand what separates the good ones from the not so good ones and you know we have some more things in store for that as well but those are definitely the types of things where they're weird in that they're they're a heavy upfront investment uh and oftentimes they require you to take development resources away from product i have to have engineers go up and sift data and help me kind of comb through some of those things i have to help have them help me build analyzers uh so i'm a product guy so it's always hard to take away from our product team uh but you know dedicating them to marketing pays off big time yeah but it is definitely like a high utilization kind of thing right it's kind of like it's kind of like the app that you install in movie theaters when you're watching the movie it tells you the best time to go take a bathroom break like in the moment when you're the perfect customer's looking for it boom it's right there and they find you yeah absolutely yeah and look at their they're highly targeted to our to our product niche totally what are yet today in terms of total employees uh our head counts around 65. okay and what's the breakdown on that like versus sales versus engineering uh yeah i mean about 50 percent is going to be product uh for us and then from there about 10 10 each way in terms of success sales uh marketing and uh admin awesome makes good sense now obviously with a lot of uh kind of social media marketing tools that i run into churn is a real issue because there's so many options what is your logo churn or if you want to do a flip retention like annually so with churn i think one of the advantages that we have is that the social media marketing industry social media tools industry is definitely sort of a race to the bottom in many ways and we really approach it more as we really see ourselves as content plus social social and rather than a social tool so we definitely provide a high level of value in terms of the social features we have but really we're much more focused on how our customers are putting content and social together or how they're using social as part of their overall marketing campaign uh so i think that helps us that helps us insurance and keeps us down into the uh you know below average in terms of what we're seeing from a lot of the the other teams so what garrett what is the number i mean what are you at retention-wise annually i probably won't share that okay well when you say what is i mean when someone says they don't want to share something usually i'm like okay is it maybe not as good as they say i mean when you say better than average in the industry what do you consider average in the industry uh well you know you have a lot of people out there i think with social you see anything between four and seven you know in four of a b2c social tool right so uh you know we always look at that and we want to stay on the way low side of that or below those not in that range that's just to be clear that's four percent in logo churn monthly got it what about have you been uh built a predictable method of driving expansion revenue on these contracts year over year or is it a kind of the asp or the rpo on that too low to really make that predictable uh yeah so we have um so we've experimented with a few different things in terms of pricing but you know expansion revenue we do right now is primarily through tier we're moving people up based on a fee a set of features uh and you know one of the things we find is we're working on some things where we can do do more of that by just driving up per seat per social profile which is something that is sort of something that's more new to us as i think as we've gone up market a little bit it becomes more more obvious so uh expansion revenue for us in the early days was really tough i mean we kind of had this one product we just didn't have enough product to tier properly so it took a couple years to really get enough there enough tool and enough development behind it to where you could start to your lifestyle features but we've done a lot of things where we built what we call the ptuf which we call the plan trial upgrade flow which has allowed users to trial a feature set in a plan above theirs for 30 days and then we'll move them uh into that plan after that time so you know expansion revenue has been been able to be driven by some of those types of efforts and up front initially on average what are you paying to acquire these customers uh cost acquisition is really low i mean if you look 700 in almost every single case is that fully weighted does that include marketing sales salaries or is that just paid spend well so until just until last november we had we've had no paid uh paid sales so we've done everything inbound self-serve so you have a small content marketing team um and then the occasional borrowed engineering resources are those costs don't included in the hundred bucks that was my question uh marketing team would be absolutely we should not figure in development resources into that no no yeah most people don't know just curious if included marketing and sales salary so the answer there is it sounds like it is and you're just now starting some paid spend experiments yeah we do more and more paid spend we can do more targeting that way all right garrett let's wrap up here with the famous five these are one word answers number one what's your favorite business book uh let's go with high output management andy grove number two is there a ceo you're following or studying i'm going to go back to the intel i'm reading a book the intel trinity so bob noyce would be be the one right now bob noyce yeah robert noyce yep number three details see you yep number three is there a uh oh this might be it is there a favorite online tool you have beside your own like acuity scheduling um i would have to go to evernote i mean i just use it all the time every day number four how many hours of sleep to get every night i shoot for seven uh six and a half is maybe the best i do all right and then what's your situation married single do you have kiddos uh married three kids wow okay and how old are you i'm 35. 35 all right last question take us back 15 years what do you wish your 20 year old self knew uh well i guess 20 years in college when i say finished my business degree in college i did half of it and i didn't finish and i always think i just should have done it why why do i want to finish it yeah you're doing great i did an art degree instead and so you know it just seemed like business was probably the better fit for where i ended up my career uh and then i want to be like take risks sooner like just um you know like particularly your first job coming out of school like you can make 50 000 bucks a year doing anything so do something else there you guys have it from garrett north dakota launch the company in 2013 co schedule it is the all-in-one marketing and content calendar they are up around 65 folks on their team 2.7 million dollars raised serving 8 000 customers doing around 400 000 bucks in monthly recurring revenue healthy logo churn monthly and obviously super healthy lifetime value to cake ratio room for you garrett thank you so much for taking us to the top [Music]