Emailanalytics Revenue & Valuation (2023)

hello everyone my guest today is jason demers he's the ceo of email analytics an app that visualizes employee email activity in gmail and g suite before founding the company founded and ran a marketing agency for nine years and appeared as a frequent columnist and contributor to major online publications jason you ready to take us to the top absolutely let's do it all right so email analytics.com is the company help me understand what you're doing and what your revenue model is yeah absolutely it's a pretty simple revenue model it's just a sas service essentially we are helping to visualize email activity for companies for teams um really uh you know customer service team sales teams who want to know what do my employee activity via email what does it look like how many emails are we sending are we receiving what's our average response time what days of the week are busiest or uh or least busy really things of that nature it's really a productivity analysis tool okay and help me understand on average what companies are paying i don't know per month or per year for this sure so the pricing is uh 15 bucks per connected mailbox per month okay so yeah take me take me to actual customer level right just because i don't want to calculate email boxes per person all that on average that's a company going to pay per year per month yeah well again it just depends on the number of uh of mailboxes um we're seeing an average of right now around uh three to four mailboxes per customer okay um you're talking about 50 bucks a month yeah uh that's what we're that's what we're talking okay and put this on a timeline for me when you launch the company company was launched officially uh february of 2018 so it's uh it's been about a little little under a year and a half and i mean what was going through your head of the point were you forced into entrepreneurship did you hate your boss and want to leave corporate i mean what was going on well actually so i'd been running audience blue my my marketing agency for uh for about nine uh ten years before it and email analytics was born out of necessity because i realized as i was as i was running the agency that i needed more insight into my employee activity because all of my employees were remote and so uh it was really born out of necessity as a tool that i needed that i couldn't find elsewhere and so i decided to build it myself interesting okay and so how many customers have you scaled to today we've got about a 185 paying users as of today that's right now is that mailboxes or companies that's uh that's companies that's not mailbox yeah yeah so i mean i can take 185 times 45 bucks a month about three per per 185 and that means you're doing what eight nine a grand a month right now in revenue yes that's right okay and where were you a year ago just so we can calculate growth yeah um so a year ago we were about uh 3 000 uh mrr sorry uh um yeah mrr yeah so so i mean take me into the back story here how'd you get the first hundred customers yeah first hundred uh really all of the customers actually have come via organic search um it's been 100 organic that's really my specialty uh coming out of the marketing agency um and my personal expertise is in uh seo and so all of our customers are seo so give me a term that you're killing right now that's driving you a lot of traffic um well the term email analytics itself which was kind of my target term i thought that's extremely kind of hold on let me do it email analytics bump up up a bum it's like litmus pops up for me and yeah look at right there you're number two that's impressive yeah we're battling number one and number two we're going back and forth with uh with litmus right now that's very that's very impressive i mean yeah well thank you so how did so now i'm trying to figure out why do you have a unique muscle that helps but where you're beating hubspot you're beating constant contact you're beating male gun you're beating liquid web you're beating shopify for these terms uh are you asking what's my secret sauce well not your secret sauce but i'm trying to understand more of your history like you have clearly developed a muscle here where you are beating people and getting free traffic because of it i'm trying to understand how you develop that muscle yeah well um working as an seo professional for the last 10 years um and not having to deal with a team of you know or bureaucracy that i have to go through i know exactly what needs to be done and i do it um you know a big advantage that i have is obviously my my domain email analytics.com is an exact match domain for that keyword which which certainly helps um and so i paid a a good amount of money to buy that domain knowing that i want hold on what's a good amount you're talking like 100 grand 200 grand more or less okay i actually i i paid five grand for that domain okay that's not it which is pretty which is honestly a steal for for that domain um that was a few years ago yep okay good so that's doing well and now how many clicks does this keyword drive you per month i'm sorry can you repeat that yeah how many clicks does this keyword drive you per month oh gosh yeah that's a good question you know i would say um i think it's around 300 right now okay and then what's the keep taking me down that funnel right so on average uh you know when a click hits your website how many sign up for a trial gosh i i wish i had that information i don't right now have a good way to to measure um traffic visitors to uh you know actually let me take that back um i do have a way and it's about four percent of all of all website traffic converts to trial what i don't have is i don't have a way to see how many trial users are converting to paid and i need a better way to do that currently okay so about four percent are converting so if 300 clicks hit the website 10 would be 30 about half that would be about 15 squat 10 to 15 new customers a month from the email analytics search term sorry new trials per month yeah i would say new trials but not not paying customers but yeah um that that is obviously one of hundreds of keywords that we track it is a it is a great keyword and i would i would imagine that it converts uh well compared to the other ones because it's so targeted so how coming out of that search term for a second your entire business how many clicks per month hits the site about how many trials you sign up yeah so on a on a monthly basis we're signing up uh i would this this is a this is a guess just based on uh the numbers you know that i see coming through my email um i would guess it's around 400 to 500 trials per month uh total and i the problem is i don't actually have a number of of trials to paid conversion rate for you um yeah that's the number do you know how many customers you signed up last month um we signed up no i i don't i don't want to just throw you a guess because i'm actually not sure but jason how do you not know that that's like a critical like anyone building a business you're looking at revenue and customers why do you not know your customer auditions i know nathan it's because i'm actually focusing on two other things right now so email analytics is essentially kind of an open beta right now as a project so it was launched a year ago however i sold my agency audience bloom in january of this year which means it's only been about five months that i've been working on this project full time um during that time i've been focusing on having the app rebuilt essentially refactored from the ground up and so my resources and my my attention are really going into rebuilding the app right now rather than gathering the metrics that that that i granted admit that i need to know and so that's really the uh the reason why i don't have that yeah um audience bloom what was it it was a traditional marketing agency yeah it's uh so i sold it in january it's been rebranded to seo dot co uh but that is the if you you know if you visit either either audienceboom.com it'll redirect to seo.com and that that agency i mean give me a general sense of scale you built that to before you sold it um yeah so let's see um you know as a matter of fact i'm i'm trying to remember we were in the uh two million revenue range uh per year when when the agency sold yep and then typically agencies are valued on like some multiple of ebitda margin right usually it's somewhere between like one and three x were you in that range yes we were in that range yeah okay um and what is typical profit margin on an agency well typical profit margin is uh lower than what we were doing um we were we were pro we had a pretty healthy profit margin compared to other agencies in our space and it was uh it was in the 30 to 40 percent range okay so let's be conservative at 30 that's caught 600 grand uh to the bottom line annually if you sold for between 1 and 3x that people can do their own math but that put some cash in your pocket which is what you're now using to reinvest in this product that's exactly right so this is 100 uh self-funded from from the proceeds of the sale how much have you stuck in so far oh i don't even want to tell you um but uh it's it's in the realm of six hundred thousand and where is i mean what's your team size today how many people it's just myself uh my offshore developer team and then i've got a cto here stateside and uh that's it okay so the full-time people are you your cto stateside who manages the offshore dev team that's correct okay and so i mean if i asked you right now how much you're burning per month what would the answer be again this is a this is a painful question to answer um it's it's in the realm of 19 000. so i guess the reason i'm asking is like how much pain and cuts do you let yourself go through before you force yourself to drive more revenue you know i have to continue to essentially go through the pain in the cuts until until we get version 2.0 uh launched which is uh expected to be launched at the end of july um and at that point i will hit the pedal to the metal on the marketing engine yeah yeah makes good sense what about churn i mean you have a good sense of what churn looks like today yeah we're looking at about five percent per month okay so 60 annually and you have any way to drive expansion revenue besides adding additional mailboxes yes um we do plan on on uh enabling customers to do uh various upsells such as one-time reports uh on right now nothing no no if i look in the past 12 months no expansion revenue on historical cohorts that's correct right now nothing we've got plans but right now the only revenue model is the 15 bucks per ml box per month yeah and then in terms of your your fully weighted cac i mean it's really your seo genius right i mean that's it that's it it's just uh all marketing all awareness is just right on on the back of of my seo expertise and that's it no paid ads or anything else of course i've got plans for marketing i've got a whole marketing plan written up but i'm waiting for the release of 2.0 before i start marketing this thing i want it to be as good as it can possibly be yeah that makes good sense let's uh let's wrap up here jason with the famous five number one what's your favorite business book you know nathan i don't read that much um however i will reference the four-hour work week by tim ferriss as it has been recommended to me countless times by many entrepreneurs and i read probably the first hundred pages before i burned out that's not to say that i don't didn't like the book it's just to say that i'm just not much of a reader number two is there a ceo you're following or studying um again it's kind of the same answer not really i do admire elon musk though i must say number four how many are number three what's your favorite online tool for building your company i like agency analytics uh which is a great tool for uh tracking organic search rankings uh really anything related to online marketing you can contribute analytics that's right agencyanalytics.com number four how many hours i sleep to get every night i get seven to eight and what's your situation married single kids married no kids okay and how old are you 33 33 last question what do you wish your 20 year old self knew learn to code i wish i could do this coding myself rather than outsourcing it guys he sold his agency for you know somewhere between 600 and 1.8 million dollars recently then about a year ago launched email analytics.com to help people visualize their email usage 185 customers paying on average 45 bucks a month so call it eight grand a month in revenue or nine grand a month almost 100 grand in total arr all the inbound has come from seo he ranks number two for the search term email analytics that drives about 300 clicks to his website per month each month he's signing up about 500 new trials and adding some portions obviously into paid accounts burning 19 000 a month put in 600 grand of his own money today team of three as he looks to scale and do this uh last rewrite jason thanks for taking us to the top of course thank you very much nathan one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas 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 central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 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 sas world whether it's an 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