How Expresspigeon CEO Igor Polevoy grew Expresspigeon to $9.3M revenue and 200 customers in 2024.

hello everyone my guest today is igor povoy he is the president of a company called express pigeon the easiest way to send professional email he's got a passion for developing high quality software you can find him all over the internet he's also the creator of open source project javalite.io he leads large i.t products at abm walters kluwer sears groupon and a handful of other large companies but now doing his own thing which i love igor are you ready to take us to the top i'm here all right express pigeon talk to me what's it doing how do you make money um well the the business model is really simple um basically it was pioneered by any um software as a service company that sends email such as constant contact mailchimp sendgrid and others so express pigeon is one of the players on the um on the same kind of uh playing field got it what are people paying you per month on average would you say are you like an enterprise or an smb kind of model we are kind of all over the place uh would like to hit like the sweet spot in the middle a small to medium enterprise and kind of built a number of advanced tools that mailchimp and constant contact lack um specifically to target those people since i was in the receiving end running large projects that integrated with external email providers i kind of um know how painful it is to integrate and ask for a specific feature or data back so what would you say the average customer today is paying you per month uh about 500 to 1000. okay got it so between 500 1 000 and give me more of the back story here when did you launch the company uh the company was launched a few years ago basically we were kind of uh running in a stealth mode for a couple of years one year though it was launch it was launched in 2013. okay 2013 and then you were installed for a few years before charging for a couple well we started charging a little bit at the end of 2013 i believe but we also had quite a number of customers that were just using for free and giving us feedback okay and uh so that was kind of uh the the model at the time we weren't sure what we were so the original system was built to compete head-to-head with mailchimp but um we quickly realized that that's that was a bad idea for a number of reasons and uh we kind of pivoted away from that model uh more towards professional and have you bootstrapped to date or have you raised capital oh raised a little bit of from friends and family uh that's that's private but it's not a lot of money like are we talking under 500 grand uh yes or around somewhere around there less than a million yes then less than 500 grand got it okay good less than 500 grand and that was all obviously just friends and family convertible note or was it actually priced equity uh price to equity it was priced okay good how did you price the company i mean especially when you're dealing with you know relationships that are family it was uh i i don't think it was fair to my friends and family at the time but i just uh painted the number in the sky and they convinced them to give me money that's funny okay good so so no institutional capital but about less than 500 raised from friends and family and then what have you scaled to today in terms of total customers using the platform we have about 20 000 registered users we have over a thousand users that uh use us regularly and that would be a non-disclosed information okay but but we i don't really care about how many users you have because people can brag about that all day long you can go out of business with a bunch of free users how many though are actually paying i mean give me a range we have less than a thousand paying customers okay but can we say more than 800 we could say you know less than 800 and i would like to leave it at that well i mean put a bottom on it though i don't want people to think you have zero customers just put some no no wait we're we're profitable we're paying for themselves we're making some profit and we're growing in other words we have a healthy team and uh we we are not going broke or you know close the doors because we we have no paying customers got it but usually when people give me that answer they say we have at least this many they don't say we have less than which is an interesting way to phrase it that's what i'm trying to get at so just put some i mean do you have more between 100 and 800 is that fair to say oh yeah oh yeah okay that's fair i just don't want to i want to give you credit i mean it's hard to get a new car we certainly have more than 100 paying customers i mean you can put whatever minimum you want i'm just you're giving me nothing so i'm making something up all right so so we'll say between 100 we'll say between 200 800-ish customers okay that's helpful to understand one of the tricky parts about a business like this is churn how are you managing churn we are managing churn by uh providing uh the services that other companies do not um so our target customer uh we don't it's not to say that every customer is a target customer you know some some customers have been with us for three four years four years ever since the inception and they've been very happy i'm not talking about um flower shops that sell that you know send their newsletters about flowers i'm talking about professional corporation that send let's say hundreds of thousands of transactional emails per month and they depend on us for their business so um we provide high quality of service our system is rock solid our system has a lot of features that a lot of competing companies just do not have so what is all this is great but ultimately it comes down to the number i mean what what is churn how many companies are you churning every month we uh we do not turn large customers pretty much at all churn right so constant contact mailchimp they all have logo churn three four five six percent per month what's your logo term per month we probably have less than that oh so less than four percent per month less than four percent per month you got it now what yeah if if a customer leaves us it's it's a big you know five uh five uh five star alarm and we're kind of going to know like why why this happened you know can we bring it back um does anybody does any one customer make up more than 10 of your revenue uh yes we have a couple of large number large customers that actually go over that and that's troubling got it yeah yeah so so so you're very much well let me ask you your team size what are you at today we have less than 10 people on the team how many of them are dedicated to handholding those enterprise clients uh we all are they all oh so you don't have any just only engineers or only i mean do you have are you talking about like like uh account managers yeah like who are the sales people how many sales people on that team oh sales people we have one sales person okay got it so they manage all those enterprise accounts now if there's a technical issue obviously it goes to you but they manage the accounts yeah here's the first line of defense and then then it's me and then the team behind me okay got it i mean house i'm curious how skewed this is for you guys i mean do you have like if i add up your top five most paying customers do they make up more than 70 of your revenue is it that skewed or no no it's probably less than that it's it's certainly it's probably less than 50 got it i mean and this makes sense i mean you came from companies like groupon right which would be enterprise accounts if they were using a solution like this yeah i'd be florida if they you know but they they would never use express pitch and they'd probably just hey let's acquire express pigeon and use it as a product or a project yeah yeah so how are you how are you acquiring customers what are you spending to acquire them we uh basically we're uh we're using zoom info uh we do a lot of calls uh we use salesforce uh we've tried a number of different advertisements uh we do a lot of uh you know what's the scale of that like in the largest month how much did you do in paid spend just as a test uh in the largest month we only did like maybe three four thousand dollars okay so now so we haven't we haven't really been uh serious about that uh we cannot outspend companies that are in this space so we have to be a little smarter so what does it cost you to acquire these customers uh the the we do not acquire good quality customers like uh small customers come and go sometimes you know they pay the 10 15 you know 50 100 we don't really pay much attention but uh larger ones uh there sometimes takes uh a long time to acquire so for instance a local chicago company fuda i ever heard of fooda.com they're they're they're uh they were uh they're funded by light bank just like groupon and their camera of their incubator about five years ago and they've been growing um they just raised like 25 million dollars and they uh they're in the business of uh scheduling lunch food to professional buildings and they're operating in every metropolitan area today so they send hundreds of thousands of uh so did you close them how long did it take you to close them a year and a half oh wow okay...