Eleapsoftware Revenue (2018)

hello everyone my guest today is don wilbon he's the founder and president of telania technology software as a service company based in louisville kentucky he specializes in helping organizations solve tough challenges through e-learning technology leaves of absence management solutions and sales channel management his premier product is a company called e leap don are you ready to take us to the top yes sir i am all right what does e-leap do and what's your revenue model how do you make money uh so e-leap is a system that helps companies essentially translate what they've been doing for a long time into more efficient ways to basically train people get more performance out of employees and the way we make money is from a recurring revenue model it's a subscription model software as a service so they pay us every month every quarter every year depending on the contract that negotiated with us we also have an e-commerce channel so folks that don't have employees but want to create content and market i can use our system to do that and so we essentially have those two major tracks a third track is where you have consultants right they work with companies for staff and purposes or whatever and sometimes a client can come in and say well we want to have a solution for training do you know anybody so they will essentially be able to set up your client using our system as a white label and push out the system to the client got it very cool and i don't want to talk about kind of every different customer cohort but on average what's the customer pay you per month for this uh on average we have about a thousand uh per month we start off at the low end of 25 employees which is 125 a month but uh sweet spot is is about a thousand a month okay and that's per kind of company yes okay yes and put this on a timeline for me when you launch uh we launched in october of 2005. 2005. very good and then fast forward to today how many customers are you working with uh we have right now actives 1035 uh active companies okay and those are just to be clear they're actually those are paying customers yes sir okay and so can i multiply that times an average of a thousand bucks a month that would mean you're doing about a million bucks per month right now uh right about that right about but i mean we we obviously um have plans that have negotiated different price points with us so yeah so what sorry so what is your actual run rate today what are you doing per month uh for per month um because we've got the two revenue channels just sas just sas yes the software uh we do about 600 or so a month that's pretty that's that's still that's a healthy sas company there um so 600 000 bucks per month divided by you know 1035 you know teams basically means the average one pays you 580 bucks per month or something around there something yes and what's that sas this part of the company growing at so a year ago today what were you doing per month oh a year ago so we went through a dip with seo issues we were pretty much um holding tight i think a year ago we're at right about four well four or five hundred a month i mean basically we went through we we grew real fast and then we had issues with seo stuff we dipped and then we are coming back what's what's the seo what was the seo issue well a competitor basically um sent a bunch of fake links to us and then turned around and reported us to google and so they looked at it and they're like well you guys have a bunch of bad links and so we're going to manually demo your rankings and we worked with them to remove rank and i mean links and clean up all kinds of stuff and went back to them and said hey we've done our work how did you do that i can imagine if it happened to one of my listeners they would go who at google do i even reach out to to try and solve this ah dude that was it was painful uh i think i went through about three companies before we finally got one that worked out for us um you mean they use you use them to help you get connected to google to fix it yeah yeah so essentially the issue was look you need to go clean up and so it was a manual process and so the issue was who is a reputable company to work with and of course who can actually at the end of the day guarantee that you've done the work and when google takes a look they'll be you know okay with it and so the first company said yeah well i think we paid them it was right about a thousand a month actually to help us do this and then about six months later it didn't happen so we kicked them out got another company uh and then the third one eventually i got involved the process which is really where i started i you know since 2001 i've been in e-commerce in some fashion i worked with go to before google adwords and all that stuff and so i knew about web marketing but so who was what's the name just in case someone else wants to use them what's the name of the final company you work with when they did a good job you know not off the top of my head i can get it for you okay that's okay and uh talk to me about funding so have you have you bootstrapped the company or did you decide to raise um bootstrapped i had initial investors um that essentially just put a little bit in there and and helped us uh get out how much don uh gosh it was very little it was less than a hundred thousand okay so less than a hundred thousand bucks and um and uh okay so you use that money what to build up the initial platform yeah building initial platform marketing sales that kind of thing um but then it be it's been just plowed back um we're able to eventually buy out uh outside uh investors and and essentially you know so you own a hundred percent of the company now uh my wife and i own 100 oh good i love that husband and wife team that's great and talk to me you know churn is critical in a sas business so what's yours just churned today uh tron is i'm looking at my numbers here i think we're looking at about five percent okay that's five percent logo churn or revenue churn per month uh this is this is actual revenue return per month um i'm just looking at my numbers real quick i wanted to make sure i get some reports before i call and you knew what to expect huh i i i've checked a few videos before so do you like the format of the show it's fun right it is great it was fast paced it's good information i'm like i don't want to make a complete edit oh my god i think you're doing great so five percent revenue churn per month which means multiply by 12 that's about 60 percent of revenue churn per year or do you have any expansion revenue um yeah i mean we've we've basically been um saving uh a lot of cash so the reason why is because as a small business we have to be able to take advantage of opportunities so we actually are right now in the middle of the v5 uh belt of uh e-leap system uh version five and that means we're plowing in lots of money into ux and ui and all that good stuff do you have though don when i talk about expansion revenue what i mean is if you look at all the customers that signed up exactly one year ago when their contracts go up to renew do you upsell them anything do you have additional things you expand their revenue to or no yes we do uh so we have content uh also and content model is basically a partnership with our content firm so that we can bring them content that we license um and so we we sell them it's not as as aggressive as i would like it to be um on hold i'll say it's less than two percent yeah okay very interesting and then what about acquiring new customers what do you pay to acquire new customers uh so a model has been traditionally uh we tried to keep it less than 20 cost um acquisition less than 20 of what first year value first year revenue yes sir okay so if your first year revenue is about seven grand on these customers what you're saying is you're willing to spend up to what does that number come out to about 1300 bucks something like that to acquire them yeah right about that yeah and where are you spending that typically uh we're spending that the bulk of it in outbound sales calls uh seo obviously but in my in my experience with just this industry it's been so complicated and well not complicated it's more competitive is what i want to say in terms of seo so we figured out the best approach for us in terms of revenue and just being efficient is to actually do outbound calls um so we're kind of going back to the old-fashioned way doing business and the sas model which wasn't where i wanted to be but we found that this was the most effective way for us to get new revenue so we just call set appointments do demos walk them through the system um close that kind of thing don tell me how you have the structure though so what's the total team size today we are a small company we have 15 people one five how many of them are doing outbound calls uh we've got 10 of them doing about calls wow okay that's a big chunk of doing outbound calls okay and how many calls they make per day would you say oh we've got about or the corporate hour 400 i'm just doing the math in my head actually talk out loud because it's valuable i'm i'm doing the math in my head real quick um each one does about 400 calls um per what in a week in a week and huh okay so about 400. that's fine each one does 400 calls in a week so you're doing 4 000 in a week yeah yeah who are they calling um so a business model is more for small to medium size we find that we can get easier decisions made that way uh so we're talking about anybody from 300 employees to about lower thousands i mean we're talking less than a thousand um we typically can get them to make decisions fairly quickly yep and then your your website it's e-leap software right yes sir and is this basically that you know if they they will buy your product so that they can teach their internal team members more about the business faster is that right yeah they buy the product and they they have to do trainings on all kinds of things so but most of my point is it's internal it's not to their customers it's internal yes essential now our e-commerce model has some of our customers essentially using some of the internal content that they create to sell to basically suppliers and others so they can use our system to sell content to like sell some of their internal processes out to other people yes over there that's actually that's actually super interesting um okay very cool and then uh so 15 people total and where's everybody based uh majority of our team is based here in kentucky we have folks in europe and then we have folks in the philippines and so with this kind of model like if i start paying you for this and i start putting my processes in your system like i don't want to churn because then i lose all my processes all the documentation why is your i mean 60 per year is pretty high why do so many churn um so this industry has got um traditionally it's it's upwards of ninety percent of people are not happy with their with the lms sometimes it's an issue of we just outgrew the system if you will we needed to interface with our hris system to interface with some external system and so on and so forth um so so that you know tends to be a tough tough thing now if we do our job properly they do keep their their business with us uh you know four or five years so what do you know you have to get them to do in the first month of paying to make them super sticky we have to get them using the system they have so what does that mean well create content deploy content be able to begin to get tracking reporting in the system and essentially if it's an hr person be able to go to the stakeholders and say look here's what i basically promised you guys that we're going to be able to do we're not spending as much time on consultants coming in we're not spending time on people traveling to headquarters we've cut back on xyz now because we're training field they need to show some change in behavior some performance metric uh and but that doesn't come in in the first month so what we would now try to do is go back to them pretty much every quarter and say what can we do to help you basically be better in your job what what what can we train you on what are some of the new things that we can show you that you can then take to your boss and say this is what this thing is doing for us we've not done that very well in the past we used to kind of just hope that they will do it themselves and that's that's been part of the issue yeah um who owns more of the company you're your wife i do don you're supposed to say she has 51 i know well you know listen are you still married oh yeah okay it's working then right yeah it's work it's tough but you know we've got opportunities that have come in that basically like women-owned you know minority companies that's great check check and i'm like yeah can't go there all right don uh talk to me here let's wrap up with the famous five what's your favorite business book favorite business book wow uh ex uh execute um i'm sorry execution gary something i forget the name of the guy um but i ready when i was doing my mba and it's been it stuck with me um i actually like crush it too um from gary uh both good number two is there a ceo you're following or studying right now um i like richard branson a lot i like his style i like the fact that he's always tried to be as laid back as he can be and and so i just i like to model him number three what's your favorite online tool favorite online tool wow that's a tough one i've got several of them um believe it or not it's uh it's google drive that's a good one number four how many hours of sleep to get every night honestly yeah uh six okay that's not horrible that's pretty good and what's your situ obviously you're married um any kiddos uh yeah two two boys two well and how old are you uh i'm 44 44. last question don what do you wish your 20 year old self knew dude uh go out and just do it reiterate go ahead and do it guys there you have it go out there do it get it started they're in kentucky just past 600 grand per month in revenue a solution that helps enterprise teams build processes and document them internally so they can teach other team members faster currently over a thousand customers paying 500 600 bucks per month they're growing oh call it 20 30 year over year up from 450 grand a month just about a year ago raised very little capital less than 100 grand and they bought those investors out so fully owned by don and his wife founded in 2005 team of 15 people mainly in kentucky 10 of them are doing outbound calls 4 000 a week that's their prime channel spending 1300 bucks to acquire customers so it's a three-month payback period don thank you for taking us to the top thank you so much