How Everlance CEO Alex Marlantes grew Everlance to $18.6M revenue and 100K customers in 2024.

hello everyone my guest today is Alex Marlantes he's got a you went to UCLA and got a BS in complex systems in was at Goldman Sachs as an investment banking analyst than investor at valiant Capital Stanford graduate school business MBA and most recently ever Lance co-founder and CEO we're gonna dive into that today Alex are you ready to take us to the top you bet what does ever Lance do and how do you make money ever Lance is an automatic mileage and expense tracking app so it's pretty simple one way to think about it is if you're self-employed and you need to keep track of your business expenses for taxes a lot of people might do that using a shoebox receipts or paper mileage log ever Lance automates at all he's doing a smartphone app and now we also have employees using that same tool for reimbursement that's interesting so I've seen these apps and my tax accountant back in the day was always like Nathan you should be tracking this I'm like do I look like the kind of guy that's gonna keep a post a note on my dashboard in my car and record starting miles and ending miles and then add it up at the end of the year there's no chance I'm doing that so they would say well install the Intuit app or install apps like this and I just had never got addicted to them so how are you imagine you thought a lot about onboarding how do you get people addicted to this thing right away yeah it's a great question you know one of the things that actually helped us a lot is you probably have seen ads for you might have seen ads for my like you or QuickBooks self-employed those are two competitors and actually they do a lot of sort of like broad-based media outreach so you know YouTube ads TV ads radio and so that'll kind of help educate that category and one of the things that they'll say and you know I think it might be helpful for you is you know every thousand miles you track it's worth up to you know five hundred and forty dollars as a deduction and so for a lot of folks mileage could be sort of the most valuable source of their business right offs and they just don't pay attention to it but they really should but to answer your question what we think of that sort of our moment of joy or like when we've hooked people is when the app automatically record something for that so for sort of a directed consumer thing that can be challenging because you've got to move them through the funnel of giving you permissions worth for their location they actually have to go for a drive sort of how that have the tool sort of magically do the work for them and then show them the value and then generally you know if they went for a drive and they see hey drove 20 miles to go visit this client and you know boom that isn't $11 write-off and all I need to do is sort of swipe right one second it's almost like you know kind of like tinder for taxes and claim that value like that feels really good and you know one thing that we've seen is that the orientation is flipped a little bit you know rather than it being sort of like a pain like oh geez like I got to do all the expense tracking it's a little bit like oh man like am i leaving money on the table so that helps so what is it swipe left if it's a business trip swipe right if it was personal exactly that's funny or maybe maybe actually opposite right very good and then and then what about the actual onboarding oh so when people are finding you are you just positioning yourself in the same kind of channels of these other guys are pouring massive amounts of money and just kind of riding the wave yeah pretty similar you know what we've really sort of pride ourselves on is having the best rated app and so a lot of times people will go to the App Store and compare and so you know when someone's educated like oh I should do something like this well the Jews will take out their phone and they'll search for you know a generic search term so like mileage log you also do a lot on the expense side you know tax deductions you know employee reimbursement things like that and then you know really just focus on having an incredible sort of product and good ratings and reviews and then we'll pick up users that way that's interesting and and what's your business model so how to make money yeah so kind of a vanilla SAS business today one way to think about it is similar to Dropbox you want everyone to use the app the more people that use the app that better that sort of Roseau word-of-mouth and then eventually sometimes people will hit up a wall and so what most people pay for is automation and so the way that the app can automate things is around either completely automatic GPS tracking so one way that you can they'll eventually pay that our subscription fee which is either $8 a month or $60 a year is they'll want to tie in their bank and credit card statement and so sort of similar mileage ever lands can pull in your credit card statement and then sort of surface to you what might be a business write-off something to be like hey Nathan we know that you're a screenwriter did you know that Netflix might be a research expense right and so sort of surfacy and that extra deduction is super helpful or if you're a real estate agent maybe Zillow would show as you know a proper deduction and so that's sort of sort of automation is something that the people like and and be still at a value and that's true or false ever Lance is a better mousetrap than other people have built to essentially capture financial data of which you can deliver real utility but there's also many ways you can monetize that yeah totally so you know hope and bigger ambition is that you know if we're become sort of the financial system of record for self-employed people and small businesses that data is super interesting and you know rather than selling the data you know can we use that data to make people's lives you know easier and so eventually we think you know there could be a bunch of follow-on products so give me some of the backstory here when did you launch the product almost two and a half years ago now so met my co-founder Gabriel while we were both in business school and he's a CTO and he was a back in engineer and put in a business for kind of like a Wix or Weebly a a small website builder in Mexico and so he had a lot of passion for that audience and the right skill set so we partnered together and then launched an iOS app in September October of 2015 that's great okay 2015 and then fast-forward to today how many folks are using the app both free and paid yeah so I think the last numbers we've sort of released is a little over 400,000 registered users and then you have that sort of long funnel a lot of folks continue to use that for free it was of course churn and we have a little over the last numbers we reported earlier this year with 30,000 paid subscribers that's great okay good so 30,000 paid subscribers times eight bucks a pop I mean that's the core of a million bucks a month is that generally accurate it's less than that because most people will actually pay for the year at 60 like we like that because it you know I think we will eventually move into paid marketing and so that'll accelerate our cash-on-cash payback period yeah but yeah you're in the ballpark yeah no cash gap so if we just changed 30 grand times five bucks a month it's 150 but again you're pulling all that cash forward yep and what'swhat's growth of like your rear row there's been great so I think around this time last year we were just passed 10,000 paid stops oh great okay good and and same pricing model or obstacle each ange the pricing model same pricing okay good so June 2017 call it you know 10k subscribers or fifty grand a month you you know more than tripled at that point again pulling all this cash Ford sure what about let's see have you gone through full so you have gone through a full cycle you've been around 2 years what does churn look like yeah on fates paid subs because a lot of it's sort of a neuralyzed you know a lot of that churn will happen on month 12 / month 13 but typically we see including that around 2% monthly chart okay that's actually not horrible for this kind of product yeah well we know that the mortality for a lot of freelancers is you know you know they might themselves have churn of 30 percent as a category so really sort of proud of the product market fit there yeah that's great now is that's 2% is that gross logo churn or revenue turn or what it's the same okay got it yeah because you all have one price point is it gross or net though it's that it is net okay so so net monthly churn great and then where are you doing any paid acquisition at all or are you just doing kind of more kind of growth hacks getting in the same channels as these other guys that are pouring money on ads yeah we're doing some paid stuff you know a lot of where it makes most sense like we'll do a little bit on like Apple search adds some retargeting and things like that the general philosophy is we never want to pay for a user that you know has you know ideally we can get sort of like a two-month payback period because of you know they'll do that annual subscription and pay us $60 but we never want to see anything close to you know past 13 months got it so fairness well hold on let me...