How Flamelink CEO Andrew Mcelroy grew Flamelink to $34.2K revenue and 75 customers in 2019.

hello everyone my guest today is andrew mcelroy he's the co-founder of flame link dot io headless cms for firebase and responsive digital a global digital agency delivering web applications content creation and digital strategy he's a developer at heart passionate about building applications that are fast secure and scalable and believes that the potential of others recognizing no one succeeds alone and dedicated to growing a team that makes life better for others through technology innovation and purpose andrew you ready to take us to the top all right so your business partners here introduce marsh for us real quick yes sir marsha's my prime and we started responsive about eight years ago who's smarter definitely mosh there we go okay very good all right so let's dive into flame link andrew so so first of all what's the company do and is it a pure play sas model yes so basically we built flame link to meter pain point with our customers in responsive so responsive we're building our web application and we worked with a number of cms products and basically we needed to find a solution working with firebase it's got a an interface that is not really built for content managers so that's really the story behind flamelink is we built it to serve our in-house clients and then we realized hey this can actually serve a greater community help people understand what firebase is for those that aren't familiar yeah so it's basically google's platform for mobile applications yep very good and then pricing wise so give me a sense on average what are customers paying to use your technology per month or per year and so i'll jump in there so um it's a software service business model so there's a free tier there'll be a there's a trial as well and the first tier is 25 a month plus an additional nine dollars for a per user after three users i mean there's a second tier which is our inferno plan it's 195 a month a lot more features and then we've got to we're opening up our enterprise model as well 999 dollars plus okay so uh marsh give me a little bit let's focus here just for a second we don't have a ton of time to go on every customer co or on average would you say a customer pays you per per month or per year for the tech so currently because we're really young i mean we pretty much only roll out some features in the last couple of months um we're currently about 34 or 38 average paying customer per month okay and to describe what that team typically looks like is it a team of three users on your 25 a month feature set that's right that's normally the correct one oh it's exactly that three users on your 25 dollar set that's right oh good okay or more than that obviously you know we've just launched the inferno plan so that's a very very few people on that at the moment okay when did you guys launch the company when do you like right first line of code so we basically launched it in at the firebase dev summit 2017. which was september so it's less than two years and then first dollar of revenue was what month uh would have been um january february this year of this year okay so let me ask the painful question how much cash did you guys spend building the mvp uh before your first dollar revenue uh good question um surprisingly not that much because um we were part of a part of a digital agency and we've literally incubated this over the last year or two um so i'd say roughly 200 uh you know slap around 200 thousand dollars okay not bad now is the agency still running today yeah absolutely strong how many folks are in the agency 45 to 50. okay and how many people are dedicated solely to flame link seven in total seven total interesting did those seven all come from the agency yeah absolutely okay and so you built this internally uh you started using it across a bunch of your clients on the agency and said oh we should spin this out as a sas product is that the pattern that's right that's smart and then the 200 000 to build the mvp basically came from the agency paying for salaries and things like that to build the tool that's right we also were able to subsidize it because we used some of our client projects to subsidize it yeah in other words they wanted something custom built out or and you said okay we'll build into flame link great the great thing there was that um a lot of the corporates um they wanted to get things out very quickly and this new um api driven cloud cms is exactly what flame link is and firebase we're allowed to push the firebase technology for them and then allow to get it out very quick and then that was one of the key things we realized our clients needed something to get out to market very quickly and there wasn't something in the markets very cool now have you guys bootstrapped the company or have you raised capital very good i like that are you planning to raise capital yeah i think this is the key game we've released you were releasing uh webhooks and the workflows literally this week and next week so uh that's a game changer it starts opening up the game for us and hopefully we start seeing a lot more incoming uh trials and then off the back of that we can raise what what's it look like right now how many new trials have we gotten over the past 30 days past three days we normally averaging about 300 trials a month okay and how many convert to paid so the paid conversion is around two to five percent depending okay so ten percent would be thirty so maximum you're kind of getting 10 to 15 new customers per month that's right yeah and then judy i think character we've worked out is pretty much how much money you throw in the top funnel to get out the other side and i think it's part of the way of raising a bit of money obviously it's not as easy as that yeah well so what is the math right now to get a new paying customer what are you spending about fully weighted no very good so um cpa on a project created is about 12 which is i think industry average on a paying customer cpa is around 100 so i think we need five so you're spending 100 bucks to get a 38 a month customer you got to pay back there of three four months it's pretty healthy that's right obviously depending how you look at that metric we we haven't included a load of every single thing the external development costs or the costs for developing content marketing material et cetera so there's there's ways of looking at that wait sorry that hundred dollars is fully weighted or it's just direct paid spend that's direct paid spend oh okay so it's not fully weighted with like you're a salesperson or whatever okay very good and now how many total customers are you serving today 75 75 okay very good so walk me through the first couple days i have a feeling i know the answer is going to be but how did you get your first five customers were they all from the agency no i'm i think just running around at the dev summit talking about our product where the t-shirts on people asking us questions and signed up for the trial hey really okay so what was the name of that someone again it's a firebase dev summit okay firebase summit hosted by google yeah okay and you when you go look at your first five customers you just you remember walking up to them randomly at that summit you know convincing over a couple weeks and then them turning into paid yeah i mean obviously we had our own internal clients through the agency that we did a lot of the ux journeys with make sure it makes sense and works for them and then running around the dev summit was just opening the doors up to new clients that we didn't currently know yep very good okay now um are are you burning capital today are you guys operating cash flow kind of break even or positive no we're still burning okay how aggressively like five grand a month ten grand a month or more i think from a conversion perspective probably about twenty twenty twenty thousand thousand and you're just making that hole up by having the agency kind of pay for that that's right yeah cause right now what you're doing about 28 uh 2800 a month what's what on you yeah that's pretty good okay so seven folks on the team now do you have any insight yet into churn no you know when people sign up do they get active pretty quick yeah i think the tune rate currently is around 2.3 percent so i think there is a bit of a little yeah and um it wasn't yes this is one thing right absolutely 2.3 monthly okay so 27.6 annually if you extrapolate it okay and is that i mean when people turn why are they churning i think it's uh trying for a certain reason some of the projects may not be um projects that last for a long time so maybe agency-based projects that are that are two three months space and they they turn off um they may open it up to a couple of users and then drop one or two users off um but in general we haven't seen massive massive just cancellation cancellations which i've seen drop off based on um you know just project timing yeah very good all right go ahead you want to jump in yeah and i was just going to say we see a lot of people maximizing their free tier plan um so how many right now are on the free sorry how many total right now are on the free plan i think about two and a half thousand okay okay yeah so i think that's a key thing for us um one could be being this business we need to have speak to developers that know firebase and there's around about 1.5 million market out...