FlowChat Revenue & Valuation (2024)

hey folks my guest today is chris baden he's the ceo and co-founder of company called flowchat a sas company that has a unique way of acquiring new customers their organic tool and strategies have led to boosting their company and others to uh over a hundred thousand dollars a month in revenue now while chris isn't building businesses he's building a lifelong marriage world impacting family and competed on american ninja warrior chris you ready to take to the top let's go nathan how did you do an american ninja warrior you know uh not as well as like because i just i want to climb mount midoriyama which is stage four it's the championship but there's only been like two people-ish that have done that and uh but i i had a blast doing it it was really fun being on the show i was there for three seasons and uh met some met some really cool people it was a great experience that is amazing okay so what is flowchat flowchat is the premium crm for chat so think facebook instagram linkedin all those social dm's all in one place uh simply being managed that's the short punch version punchline version interesting okay when did you launch the company we launched the like we formed the company all the legal stuff was the beginning of this year our first full uh month of sales was april of this year okay so launch in april and how much sales is you in april uh in april we did just over 35 000 in sales and uh year to date we just passed 260 000 in sales so far 35k your first month uh yeah so we have been running chat sequences essentially we're using flowchat to grow flow chat which really helps because we're you know eating our own cooking uh the congruency of that and uh we've we've been in we've had a sales agency so it's not like we this is really important to know we didn't go to our warm market first i really don't bring any company or product uh to warm market first i like to go to the cold market because frankly they're just more honest they're like you suck and here's why i'm like thanks that's what i needed to hear actually so we just it's kpis outreach how many book calls how many showed how many clothes and it turned out we're solving a real problem and people just started responding to it well and then we moved into war market okay so so in april how many like how do you quantify how many outreach you had and how many book calls did you get uh yeah so we're booking about uh 10 plus qualified sales calls per week per profile we're currently using two profiles and so so that's those are the numbers uh and then we've yeah i mean uh closing you know 20 ish uh and yeah and so how many customers do you have today uh we currently have uh 246 i had i had i got some numbers ready so i've seen at least a few of these that know i'm about to i'm going in right now so and so what do they pay average per month uh on average per month uh that's we're primarily selling annuals so i could give you my pricing we have a basic and a pro which is 2 000 or 8 000 for the year or it's 250 uh for the month and it's or a thousand a month okay guys so so what i'm trying to back into is what your actual like recognized mrr was last month so take your annuals divided by 12 what was your mro last month uh like our current mrr is just over forty thousand forty thousand two hundred sixteen as of right now like per stripe amazing okay i was gonna say so you're using strike for this yeah yeah so forty 000 bucks a month across 246 customers um and just making sure again you are reading the mrr thing in stripe that doesn't include like annual upfront payments all in the 40k right it it is including that uh the one that we have on our dashboard is including that calculation yeah so if you took only monthly members at mrr it would be a lower number i don't have that one uh ready for the conversation but um yes i don't want to exclude the annual payments i just want to only count 112 of what they paid otherwise we're looking at basically what you're saying oh oh yeah that is 1 12 so we you know uh so the 40k the 40k represents our monthly like actual monthly payments and then it's taking our annual divided by 12 and adding that to so it is a clean mrr calculation yes yeah that is clean then yeah that is clean so you've from since april you've gone from nothing to 40 about 500 000 a year company yeah and under like correct five months right correct yes so how did you do that how are you signing up so many customers you like i i mentioned you just mentioned sort of outreach booked calls paid customers how are you doing the outreach though at scale yeah so uh referrals uh affiliate program um that that is a part of our equation so for example last month alone we did just over 105 000 in sales 41 of that revenue actually came from some type of referral uh direct referral um so there there may be like other you know conversations that kind of assisted in the sale but like hey you should meet so and so that represents 41 of the revenue so that's how it's kind of created the acceleration beyond just you know two profiles doing some outreach now it's important to know that um we currently have three partners uh prior to this software company it's actually our second software company so we built and sold one uh our first one on accident about a year and a half ago and there was only two partners in that business sean uh melissa malone um they represented one entity and me another entity and we've been doing business together for like the last five or six years or so go ahead what's up what did you sell that company for um it's how do i answer that quote we like it wasn't like an exact amount uh we licensed like our list and different and it's still kind of going um it wasn't like anything like life-changing or really like i don't i don't have a headline for you unfortunately nathan because see here's what happened i learned about you after i did that and i was like oh i didn't i didn't sell that i screwed that's it was that i'm i'm trying to understand is like did you get cash from that sale that you used to read yes uh yes yes you did it was good question um look can i look can i share a little bit of the story like i don't know and you can tell me how to answer that exactly it's more time than money is the short answer i like oh that i lose you you're like oh chris what's with this chris guy what's that very common i mean obviously this sweat equity is a big thing but people also put cash in i mean you must know so zero keep it in no cash none of your own money yeah correct but i we also didn't like put like we're let me uh what we started doing is saying we started solving this problem with the spreadsheet and people said hey this is really good but it's just kind of manual with the spreadsheet so we're already profitable so like i mean we've um if we need to exp like hire we have 10 people on the team currently we'll be bringing on the 11th uh in a few hours i have an onboarding call with them uh and so like we were profitable from the beginning now we've taken some of those profits to pay expenses for the company we're currently at like 41 percent ebitda um so i am i how am i doing over here nathan last month of about 40 000 an mri you're taking about 15 000 to the bank right cash so out of the out of the hundred and uh last month specifically was forty five percent profit net profit out of the 105. just just talk about mrr because what you're when you say 105 what's happening there is you're selling upfront annual plans from referral partners yes so we're talking about two separate that's fair i'm sure that's fair fifteen to twenty like you take forty ish percent to the bottom line or something like fifteen correct correct yes i'm sorry yeah you're right you're right that makes sense um and then so 10 people on the team today uh 246 customers again what i'm trying to understand here is also what your software does is how you know where to drive outreach are you sending cold messages on via your facebook fan page and your twitter profile on linkedin managing them in flowchat and then converting those people that way to book calls uh yes correct um and outreach too that's my question it's primarily outreach we do we have cold we also have warm so uh to put a flowchat into two buckets really quick uh we have importing tools so we can build lists of ideal uh customers or prospects essentially uh really efficiently and very quickly and then we engage that list via chat so we deploy chat sequences to build relationship eventually start a conversation so uh for example um any like facebook group that your facebook profile is a part of uh you can go and import that member list or if there's any post comment or facebook what's that facebook group you can get and import the list of all the members of your group um you don't have to be you just have to be a part of that list it's only public data for example if it's a private facebook group you can't touch that um yeah so you um if like for example nathan like if you're a part of a facebook group your profile is you're able to see that whole list already it's you have access to that yeah so it's just an efficient way of grabbing that another one could be like a facebook ad post or comment people that are liking loving laughing at engaging with a post for example that creates a list of hundreds or thousands of people that are engaging with something like you can import that list as well so yeah so how many affiliates you mentioned 100 000 in total cash made last month 40 came from a referral how many unique affiliates drove at least one sale uh great question um it is above 15 it's less than 40. somewhere in there i don't know the exact number sorry go ahead who's the biggest affiliate uh biggest affiliate earned just under five thousand dollars who was that was it like a big facebook group owner or something uh no no just a guy that was doing a lot of chat there he was focused yeah and so what's next up for the company i think you as a bootstrap to date are you looking at raising or no correct um here's here's the honest answer i've never raised before i've always had to create i've created profitable companies from the beginning i've always had to create something out of nothing and i do that through just solving problems for people it served me well i'm open to that conversation though i'm currently talking with a couple different investors and i it's just more this honest place of i know this is it can be a really effective powerful way to grow and so i'm open to those conversations but i just haven't gone through that process yet okay that makes sense that's a totally reasonable answer and then um you mentioned that this all came out of an agency how much revenue did the agency do last year the agency was doing doing around like 400 500 000 a year wasn't a big agency um so yeah we were that's that's what you learned about how you learned about the problem and started building software for it correct so once once we sold our other one we're like uh what should we do it's like we've been in i've been employing myself and others the last 10 years of my life my partners sold over 100 million dollars and all kinds of selling all different types of products and services like let's go on sale so we were you know all the sops the tech stack building sales departments and we just kind of niched down in this area and found a way to productize ourselves which is now flowchart.com very cool chris how did you hire the first developer were they in-house or overseas i love the story actually nathan the ethos of flow chat is flowchat this is what i mean my outbound sequence and our now cto's outbound sequence met each other and we jump on a call and he shows me all this cool software stuff and he's like well what do you do i was like everything you just showed me but on a freaking spreadsheet we should have a conversation so that's kind of it was outreach is how we met and that's why he'd been working on this project a little bit which also helped with our speed of mvp coming to market how much equity did you give them uh worth worth partners so 33 uh who's the third you him and who else uh sean and melissa malone uh so we all have our own entities and those are the three partners to make it chat shawn and melissa then you and then your cto yep that's great cool very cool all right let's wrap up here with the famous five number one favorite book uh favorite book right now uh is actually this one uh mover of men and mountains it's a really cool story about uh have you heard of this one before not i don't even know how to say his last name um archie some french canadian name that i'll butcher if i say it but if anyone's watching this they can see it movers a mountain of men about a guy that in the early 1900s grew in kind of big machinery so it's an interesting entrepreneur story interesting number two is there a ceo you're following or studying uh yes i'm a huge fan of marcus lemonis um i know he's not exact in in my my sphere i've also followed russell brunson uh really heavily over the last uh four or five years so uh those are two and i've definitely taken it now being more committed to sas uh definitely jason lemkin yourself dan martel what's your first thing what's your favorite online tool for building a business besides your own click up good one zeb came on recently bootstrapped a 30 million run rate then raised 30 million and another 100 million over a billion dollar evaluation heck of a story there number four how many hours you'll sleep to get every night uh average about six six hey did you switch to click up from someone else we we were using spreadsheets and then moved to click up yeah and was it easy to get going uh was it yeah i hired a consultant and had them train our executive assistant and then over a 60-day period she migrated us so for me it was how would you consider cook up like a key piece of your operations or could you rip it out pretty easily uh you know it's it's it every every team huddle we use it and we're signing and development and it's pretty integrated at this point yeah not too expensive right hopefully compared to what i've seen that's out there it's very affordable guys there you have it very cool number four how many hours of sleep together oh you said six what's your situation married single kiddos so i'm married i'll be eight years next month and i have three kids under the age of six so a lot a lot of energy over here and chris how old are you i'm 34. 34. last question something you wishing when you were 20 uh business models understanding software and leverage and multiples and um you know if it it takes the same this is more succinct way of saying it um you can spend you know x amount of time selling a thousand dollar thing or you can spend x amount of time selling a hundred thousand or million dollar thing it's like just freaking go for the bigger thing sooner there you have it flowchart went from nothing to forty thousand dollars a month in recurring revenue and under called six months using an affiliate model he spun this idea out of his agency which is doing a half million dollars a year in revenue but again growing nicely now all 246 customers were most of them on annual plans so he got no cash issues taking about 40 percent ebitda margin to the bottom line charging customers on average about 160-ish or about two thousand dollars in terms of acv as they continue to scale bootstrap nick thanks for taking it for chris thanks for taking us to the top i appreciate it 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 1 pm 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 acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathan lacka dot com forward slash slack in the meantime i'm hanging out with you here on 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