How Facelift CEO Daniel Augsten grew to $25M revenue and 1K customers in 2021.

hello everyone my guest today is taya topher he's building a company called facelift hyphen bbt.com he's making impact on social or enabling you to have an impact on social in the easier ways a married father of four world champion and rowing and an entrepreneur taylor you ready to take to the top yes okay so first off the company website is facelift hyphen bbt.com what are you guys doing what are you building so actually we have a social media management platform system um it's comparable to hootsuite and sprout social so we're in exactly the same space and we're helping companies and larger enterprises to create impact on social very easy and how much are they paying you per month on average to use your technology that depends i was starting we're starting at 1 500 it includes six users and it goes up to whatever 50 000 a month okay do you have customers currently paying 50 000 a month yes we have oh incredible so what's the back story here when did you launch what year yes we launched exactly 10 years ago we last week we had our 10th anniversary and we started bootstrapped we had actually no funding nothing at all nothing from our family and we really started with just a bunch of photoshop files which we showed our client and told them this is our product we love that so 2011 now you use photoshop files but how did you find that first customer where did you find them yeah actually uh we were we were kind of doing um facebook um schoolings yeah for enterprises at that time in germany nobody didn't even know what facebook was in 2011 and facebook in germany had about 5 million users so not the same as today and we talked about engagement on facebook a lot and we found out that our clients actually don't have a clue but they were they ordered at uh agencies for like 50 000 bucks um facebook apps at that time and we thought okay there might be an easier way to save a lot of money so we invented one of the first leading facebook apps um toolbox so that's when we started 10 years this would have been wildfire buddy media this was all space very well thank you very got it okay very good so now did you start off with software in the space or you were selling custom plans agency model no no nothing no agency at all we really started we jumped started with a product and only we were only scaling a product yeah and how many to how many customers are you serving today today we have about a thousand uh clients okay and where were you exactly where were you exactly a year ago do you remember sorry i didn't get that how many customers were you at a year ago a year ago we had about 800 800 wow so can i take a thousand times 1500 a month to back into your revenue you're doing about 1.5 million a month no it's more it's more okay it's more what can you share with us about 20 25 million okay and where were you a year ago yeah a year ago it was about 20. and have you still bootstrapped no no oh certainly not sadly not sadly not how much have you raised no we have raised after after three years three and a half years we have raised 15 million one five one five yeah and then we then we grew up to about 10 million er what year was that 10 million was 2017 okay yeah 26 in 2017 and then we um we got a strategic investor on board it's a one of the largest german media groups called dumont [Music] they were really active in three business sections one was media the other business information then they started with acquiring our our company they started the second the third pillar marketing technology so we were the anchor investment and then we drew it up to this year 25 million now you did the 20 the 15 million raise i believe in 2014 correct yeah right 2014 yeah and what was the valuation you raised at back then do you remember oh yeah i remember but i i think i cannot tell it's a little bit it was it was like it was like that was like eight years ago yeah yeah but i i to be honest i don't know i mean that's a nice investor i guess it was around let's say 40. 40. okay got it and and how have you you know most times once you take a little bit of venture capital you have to take more every like 15 to 20 months but you haven't why no no we were actually managing the cash flow quite well and yeah in germany maybe it's a different game i mean looking at our us competitors they raised more and more and more and grew faster than we did sure but actually we have a very good positioning in europe and we were ranked in forester quite well so that was our decision not to raise more and also from an from entrepreneurs perspective we had a lot of shares when we sold our company i mean both of us we had about uh wait what do you mean when you sold your car what do you mean when you sold the company you know we we our strategic investor is so to say the the owner now and we moved up to the holding structure so my course oh so that 15 million dollar deal they bought a major more than 50 percent of them no no that was the super angel investment we had in back in 2014 and then in 2017 we sold we started selling the company to a strategic investor where we now have a share on the holding structure so we we swapped basically how much do the strategic investor invest or put in uh that i can't tell okay but the evaluation was much higher so for us as a as an entrepreneur we we did a we did a very good deal i have to say um if if my research team digs wouldn't be able to find that data don't you have to disclose that in europe like government filing yeah what about that don't when you do deals like this in europe uh if my what i'm asking is if my research team did couldn't they probably find how much that investor has put in don't you have to you don't have to disclose that in europe we don't have to disclose it why is that [Music] yeah we don't have to disclose it it's not a public listed company so we're not we don't have to disclose it interesting well hey congratulations so what's the advice there for other entrepreneurs that have built a great company right how can they also do what you did and sell a chunk of the business but still staying i mean do you still have control of the business can you do what you want i mean nobody can nobody can really do what you what he wants but still i have to say we have a large chunk of control we are now in the in the group management we are the group management we are now owning so to say or we are part owners of sort of the three other companies and um yeah i mean what what what was our what is an advice for an entrepreneur i mean i think i think from from a european or german perspective we did quite well as i already said and um i mean i if if i look back i think we sold too early yeah or we could have raised more to a fairly good valuation at that time and um back then in 2017 and i think we have grown much we could have grown faster with more um vc money in inside so but at the end we are very happy because actually we have we have on a personal note we have put enough behind the firewall but and and now we still have control and can do entrepreneurial work on a larger basis which is very nice is the company is the company profitable today yes it is it is that that's great how profitable um i mean we have we have around let's say 30 30 um uh 30 margin so you can calculate it yeah that's great so that would be about 6 million to the bottom line every year on 20 million a little bit more yeah that's great so what do you do with that capital do you pay it out as dividends to employees and you know kind of some goes to the investor but now we're back in back on investment mode so last year was a little bit like testing how profitable that can be so now we're back in investing mode and checking out what what possibilities we have in order to buy other companies and and we are growing quite good we are now adopting we are venturing or we are evaluating in terms of product-led growth a lot yeah i think this is a very good concept for us startups um and uh yeah we do a lot of stuff in there how many folks are on the team uh at facelift we're around 180 plus we have an an automated let's say automated agency which are already another 70 so in total we are two 250 how many how many engineers engineers about 60 and any quota carrying sales reps sorry what a quota carrying sales reps uh yes yes yes sure how many uh we have about 35 to 40. and one of the things entrepreneurs struggle with when they're building a sales team is how to set up the quota structure right so how do you incentivize your sales people yeah i mean and i mean this changes um when we when we went for profitability uh for sure it was different than it is now when are back on a r track um they get a quota the the the the the the we call the conversion team they get a quota on the new bill sales and then we have a success team which gets the quota on the renewal and nature and zero as they're our target and um yeah it's about ten percent of the of the of the new sale to be very concrete and uh for for the customer success team it's a bit more complicated if you have more factors uh in giving them um the the share for your top performing account executives what's their quota target this year [Music] how to say i don't know okay and talk to me you mentioned churn just now what's your gross revenue churn over the past 12 months the growth revenue churn um the term was about uh 20 yeah okay and does your expansion make up that hole or no yeah yeah we were net churn nature not really zero but let's say two three percent below so quite quite okay so you've got about 20 churn 17 expansion for about 97 net revenue retention how do i get over 100 sorry how do you get it over 100 cool um strategy wise you mean yes yeah i mean i mean i think i think what we're heading for is we're investing a lot in terms of product led growth i think i think the best is that the customer um or the product is selling itself to the to the customer and we are really what we are doing now is to really if you put the product in the middle and the scalability of the product in terms for us its user seeds or profiles and we are really optimizing our pro pro product towards this these two um uh these two levels in order in order that the client really upsells themselves yeah but it's a but still it's a it's an interesting way we're coming from a sales let approach which is completely different and and and there you do the deals on a different way if you do one-on-one and you really talk to the client negotiate a contract and now if you try to do it more automatically fully automatically it's a different game and taya what are you paying in terms of fully weighted cac to get a new customer paying fifteen hundred dollars per month yeah so um so you mean the customer acquisition costs yes so um it's hard to say if if if you compare it i think our cac 2 clv cag ratio is about three so which is very good i think in the industry compared to others um so you you can calculate what ltv do you do do you put on your customers uh so so it's if it's three it's four thousand five hundred 4 500 is the ltv ltv ratio is three and if the yeah i i guess so yeah i'm very confused yeah i'm i'm too i'm i'm true when a customer signs up for you for 1500 a month is what they're paying you ah sorry no it's much larger it's it's the customer 12 13. let me think i wasn't sorry i was miscalculating it so it's 15 times 12 times three so yeah i don't know the exact exact number but i know the cac the clv cag ratio cl uh clv keck ratio is about three so that can get a lot of founders in trouble though you can have super healthy cacti ltd ratios but if your payback period is really long you get stuck in a cash gap and it kills the business so that's why i'm asking about payback period what is your payback period yeah i i can't tell you what do you spend to get a new customer uh you don't know i i can't tell you this these numbers right now huh interesting i think that will surprise people that you don't that that you don't know what that is off the top of your head or at least a range yeah yeah i'm very sorry i yeah i'm i'm sorry i i don't have the numbers here at hand huh i'm more on the product side i see so who who owns the metrics yeah my my co-founder he owns the metrics in this term so i'm more i'm more on the process and company side i see i see i see which customer are you most proud of and and like i guess what's your the customer that pays you the most would they what do they pay you per year um as i already said the the highest and the highest ar is about fifty thousand yeah is that using that per month though or per year uh sorry that was per month yeah right yeah got it so that that's why yeah so the highest the highest acv is six hundred thousand yeah you're right you're right you're right um yeah and why do they why do they pay so much time i mean what is that what is the utility it's the actual scope of users that's a client it's from the insurance business yeah they have a lot of um agents uh in the field and everyone for them is using our product in terms of um getting the social strategy right on the ground and they have about 30 000 users running live on the system so which makes it which makes it very large yeah taya thanks for sharing all this it's great let's wrap up with the famous five number one what's your favorite business book oh my favorite business book from good to great number two is there a ceo you're following or studying um [Music] good question um i think it's it's uh it's tim cook number three what's your favorite online tool for building facelift oh salesforce number four how many hours of sleep to get every night uh 10 no nine that's good and what's your situation married single kids uh four kids married wow how old are you i'm 45. last question what's something you wish you knew when you were 20 oh if i were 20 [Music] very good question i have no answer on that guys facelift growing from 20 million in ar last year or 25 million dollars in terms of run rate today and up from 10 million back in 2017 nice growth they raised 15 million bucks and then started doing a big secondary in 2017 so they're now basically controlled by a larger partner but they still running the business developing product their biggest customer pay 600 000 per year serving over a thousand customers today they're profitable take about 30 to the bottom line as they reinvest in growth maybe future acquisitions we'll see 250 people on the team 60 engineers 35 sales reps as they keep scaling about 97 net revenue retention tayyip thanks for taking us to the top wow thank you 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 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