How FlowChat Reached $40K MRR and 246 Customers in Under 6 Months Using Affiliate Marketing (Interview with CEO Chris Baden)

Introduction and American Ninja Warrior

Nathan Latka

00:00Hey, folks. My guest today is Chris Baden. He's the CEO and co founder of a company called FlowChat, a SaaS company that has a unique way of acquiring new customers. Their organic tool and strategies have led to boosting their company and others to over $100,000 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're ready to take us to the top?

Chris Baden

00:21>> Let's go, Nathan.

Nathan Latka

00:22How did you do on American Ninja Warrior?

Chris Baden

00:25>> You know, not as well as like because I would just I wanna 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 but I I had a blast doing it. It was really fun being on the show. I was there for three seasons and met some met some really cool people. It was a great experience.

What is FlowChat

Nathan Latka

00:42That is amazing. Okay. So what is FlowChat?

Chris Baden

00:46>> FlowChat is the premium CRM for chat. So think Facebook, Instagram, LinkedIn, all those social DMs all in one place simply being managed. That's the short punch punchline version.

Company Launch and First Month of Sales

Nathan Latka

00:57Interesting. Okay. When did you launch the company?

Chris Baden

01:00>> We launched the like, we formed the company. All the legal stuff was the beginning of this year. Our first full month of sales was April of this year.

Nathan Latka

01:08Okay. So launch in April. And how much sales did you in April?

Chris Baden

01:12>> In April, we did just over 35,000 in sales and year to date, we just passed 260,000 in sales so 35

Nathan Latka

01:19k your first month?

Cold Outreach Strategy and Sales Process

Chris Baden

01:21>> Yeah. So we have been running chat sequences essentially. We're using FlowChat to grow FlowChat, which really helps because we're, you know, eating our own cooking, the congruency of that. And 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 to warm market first. I like to go to the cold market because

01:45>> 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 closed. And it turned out we're solving a real problem and people just started responding to it well. And then we moved into warm market.

Nathan Latka

02:01Mhmm. Okay. So so in April, how many, like how do you quantify how many outreach do have and how many booked calls did you get?

Chris Baden

02:09>> Yeah. So we're booking about 10 plus qualified sales calls per week per profile. We're currently using two profiles. And so so that's those are the numbers. And then we've yeah. I mean, closing, you know, 20% ish. Mhmm. And yeah.

Customer Count and Pricing

Nathan Latka

02:26And so how many customers do you have today?

Chris Baden

02:29>> We currently have 246. I had I had I got some numbers ready. So I've seen at least a few of these and now I'm about to I'm going in right now.

Nathan Latka

02:37So And so what do they pay on average per month?

Chris Baden

02:41>> On average per month, let's see. We're primarily selling annuals. So I 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 for the month and it's or 1,000 a month.

MRR and Stripe Dashboard

Nathan Latka

02:56Okay. Got it. 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 MRR last month?

Chris Baden

03:06>> Like, I and our current MRR is just over 40,000. 40,216 as of right now, like per Stripe.

Nathan Latka

03:12Amazing. Okay. I was going say, so you're using Stripe for this?

Chris Baden

03:15>> Yeah.

Nathan Latka

03:15Yeah. So $40,000 a month across two forty six customers. Just making sure, again, you are reading the MRR thing in Stripe, that doesn't include annual upfront payments all in the 40 k. Right?

Chris Baden

03:27>> It it is including that. 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 ready for the conversation, but

Nathan Latka

03:40That's right, Chris. No. No. I don't want to exclude the annual payments. I just wanna only count one twelfth of what they paid. Otherwise, we're looking at basically, what you're saying is Oh. Oh.

Chris Baden

03:49>> Yeah. That is one twelfth. So we you know, so the 40 the 40 k 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.

Nathan Latka

04:01Okay. Well, yeah, that is clean then. Yeah. That is clean. So so you since April, you've gone from nothing to about $500,000 a year company in under like five months, right?

Chris Baden

04:11>> Correct.

Affiliate and Referral Program

Nathan Latka

04:12Yes. So how did you do that? How are you signing up so many customers? You just mentioned sort of outreach, booked calls, paid customers. How are you doing the outreach though at scale?

Chris Baden

04:21>> Yeah. So referrals, affiliate program, 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, direct referral. 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

Previous Software Company and Agency Background

Chris Baden

04:49>> just, you know, two profiles doing some outreach. Now it's important to know that, we currently have three partners prior to this software company. It's actually our second software company. So we built and sold one, our first one on accident about a year and a half ago, and there was only two partners in that business, Sean and Melissa Malone. They represent one entity and me another entity, and we've been doing business together for, like, the last five

05:12>> or six years or What that for?

Nathan Latka

05:14Go ahead. What's that? What did did you sell that company for?

Chris Baden

05:18>> It's how do I answer that we like it wasn't like a a exact amount. We licensed, like, our list and different and it's still kind of going. It wasn't like anything, like, life changing or really, like, I don't I don't have a headline for you in front 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. What's that?

Nathan Latka

05:43All I'm all I'm trying to understand is, like, did you get cash from that sale that you used to reinvest that?

Chris Baden

05:48>> Yes. Yes.

Nathan Latka

05:49You did. How much you

05:51how have you invested in FlowChat?

Chris Baden

05:53>> Good question.

05:57>> We so I don't look. Can I look? Can I share a little bit of the story to 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. Like, oh, did I lose you? You're like, oh, Chris. What's with this Chris guy?

Nathan Latka

06:10What's that? Very common. I mean, obviously, this is a big thing, but people also put cash in. I mean, you must know So zero. You put in no cash, none of your own money. Yeah. Correct.

Team Size and Profitability

Chris Baden

06:19>> But I we also didn't, like, put my like, we're let me, 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 if we need to, like, hire we have 10 people on the team currently. We'll be bringing on the eleventh in a few hours. I have an onboarding

06:41>> call with them. 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% EBITDA. So I I am I how am doing over here, Nathan?

Nathan Latka

06:55Yes. You're taking about 15 last month of about 40,000 in MRR, you're taking about 15,000 to the bank. Right? Cash.

Chris Baden

07:03>> So out of the out of the 100 and last month specifically was 45% profit, net profit out of the 105.

Nathan Latka

07:10Just 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 and you're gonna be in cash. So we're talking about two separate things. That's fair. On your MRR, you're saying you take 15 to 20. Like, you take 40 ish percent to the bottom line or something like 15 to 20 Correct.

Chris Baden

07:25>> Yes. I'm sorry.

Nathan Latka

07:27Yeah, you're That makes sense. So 10 people on the team today, two forty six 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 via your Facebook fan page and your Twitter profile on LinkedIn, managing them in FlowChat, then converting those people that way to book calls?

Chris Baden

07:48>> Yes. Correct. And Outreach too. That's my question. It's primarily outreach. We do we have cold. We also have warm. So to put FlowChat into to two buckets really quick, we have importing tools so we can build lists of ideal customers or prospects essentially 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 for example, any, like, Facebook group that your Facebook

08:19>> profile is a part of, you can go and import that member list. Or if there's any post, comment, or Facebook admin.

Nathan Latka

08:27What's that?

08:28Through the admin of Facebook group, you can get and import the list of all the members of your group.

Chris Baden

08:33>> 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.

Nathan Latka

08:41Okay.

Chris Baden

08:42>> Yeah. So you if like, for example, Nathan, like, 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

09:05>> with something, like, you can import that list as well. So yeah.

Nathan Latka

09:10So how many affiliates you mentioned a $105,000 in cash made last month, 40% came from referral. How many unique affiliates drove at least one sale?

Chris Baden

09:20>> Great question. It is above 15. It's less than 40. Somewhere in there. I don't know the exact number.

Nathan Latka

09:29Sorry. Go ahead. Who is the biggest affiliate?

Chris Baden

09:32>> Biggest affiliate earned just under $5,000.

Nathan Latka

09:36Who who was that? Was it like a big Facebook group runner or something?

Chris Baden

09:40>> No. No. Just a guy that was doing a lot of chat.

Nathan Latka

09:44Fair. Okay. Got it.

Chris Baden

09:46>> Focused.

Nathan Latka

09:46Yeah. And so what's next step for the company? Are you I think you guys have bootstrapped to date. Are you looking at raising or no?

Chris Baden

09:51>> Correct. 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 that serve 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

10:16>> to grow. And so I'm open to those conversations, but I've just haven't gone through that process yet.

Nathan Latka

10:20Mhmm. Okay. That makes sense. That's that's totally reasonable answer. And then you mentioned that this all came out of an agency. How much revenue did the agency do last year?

Chris Baden

10:29>> The agency was do doing around, like, $400,000 to $500,000 a year. It wasn't a big agency. So,

Nathan Latka

10:37yeah, we're how you learned about the problem and started building software for it.

Chris Baden

10:43>> Correct. So once once we sold our other one, we're like, what should we do? It's like we've been in I've been employing myself and others the last ten years of my life. My partner has sold over a $100,000,000 and all kinds of selling all different types of products and services. Let's go on sale. So we were, you know, all SOPs, the tech stack, building sales departments, and we just kind of niche down in this area and

11:03>> found a way to productize ourselves, which is now flowchat.com.

Nathan Latka

11:07Very cool. Chris, how'd you hire the first developer? Were they in house or overseas?

How the CTO Was Hired via Outreach

Chris Baden

11:12>> I love the story actually, Nathan. The ethos of FlowChat is FlowChat. This is what I mean. My outbound sequence and our now CTO's outbound sequence met each other. And we 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 Net Net, outreach

11:33>> 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.

Equity Split Among Partners

Nathan Latka

11:41How much equity did you give him?

Chris Baden

11:43>> We're we're thirds, partners. So 33.

Nathan Latka

11:47Who's the third? You, him, and who else?

Chris Baden

11:50>> Sean and Melissa Malone. So we all have our own entities, those are the three partners that make up FlowChat.

Nathan Latka

11:55Sean and Melissa, then you, and then your CTO.

Chris Baden

11:59>> Yep. That's great.

Famous Five: Books, CEOs, and Tools

Nathan Latka

12:00Very cool. Alright. Let's wrap up here with the famous five. Number one, favorite book.

Chris Baden

12:06>> Favorite book right now is actually this one, Mover of Men and Mountains. A It's really cool story about have you heard of this one before?

Nathan Latka

12:15I have not.

Chris Baden

12:16>> I don't even know how to say his last name. R g, some French Canadian name that I'll butcher if I say it, but if anyone's watching this, they can see it. Movers of mountain and men bought a guy that in the early nineteen hundreds grew in kind of big machinery. So it's an interesting entrepreneur story.

12:32>> Interesting.

Nathan Latka

12:33Number two, is there a CEO you're following or studying?

Chris Baden

12:36>> Yes. I'm a huge fan of Marcus Lemonis. I know he's not exact in in my my sphere. I've also followed Russell Brunson really heavily over the last four or five years. So those are two, and I've definitely taken it now being more committed to SaaS. Definitely, Jason Lemkin, yourself, Dan Martell.

Nathan Latka

12:56What's your favorite I think those are. What's your favorite online tool for building the business besides your own?

Chris Baden

13:01>> ClickUp.

Nathan Latka

13:04That's the one that came on recently, bootstrapped at 30,000,000 run rate, then raised 30,000,000, then another 100,000,000 at over a billion dollar valuation, heck of a story there. Number four, how many hours of sleep do get every night?

Chris Baden

13:16>> Average about six.

Nathan Latka

13:17Six. Hey, did you switch to ClickUp from someone else?

Chris Baden

13:20>> We we were using spreadsheets and then moved to ClickUp.

Nathan Latka

13:23Yeah. And was it easy to get going?

Chris Baden

13:27>> Was it well, I hired a consultant and had them train our executive assistant, and then over a 60 period, she migrated us. So for me, it was.

Nathan Latka

13:35And how would you consider ClickUp, like, a a key piece of your operations, or could you rip it out pretty easily?

Chris Baden

13:41>> No. It's it's every every team huddle, we use it, and we're signing and development, and it's pretty integrated at this point. Yeah.

Nathan Latka

13:49Not too expensive. Right? Hopefully.

Chris Baden

13:51>> Compared to what I've seen that's out there, it's very affordable.

Nathan Latka

13:55Guys, there you have it. Very cool. Number four, how many hours of sleep do get?

Chris Baden

13:57>> Oh, you said six.

Nathan Latka

13:58What's your situation? Married, single, kiddos?

Chris Baden

14:00>> So I'm married. I'll be eight years next month, and I have three kids under the age of six. So a lot of lot of energy over here.

Nathan Latka

14:07And and, Chris, how old are you?

Chris Baden

14:10>> I'm 34.

14:11>> 34.

Nathan Latka

14:12Last question. Something you wish you knew when you were 20.

Advice for Younger Self

Chris Baden

14:15>> Business models. Understanding software and leverage and multiples and, you know, if it it takes the this is more succinct way of saying it. You can spend, you know, x amount of time selling a thousand dollar thing, or you can spend x amount of time selling a 100,000 or million dollar thing. It's like, just freaking go for the bigger thing sooner.

Wrap-Up and Key Numbers Recap

Nathan Latka

14:35There you have it. FlowChat went from nothing to $40,000 a month in recurring revenue and under, call it, six months using an affiliate model. He spun this idea out of his agency, which is doing $500,000 a year in revenue, but again, growing nicely now. All two forty six customers are most of them on annual plans, so he had got no cash issues taking about, let's call it 40% EBITDA margins to the bottom line, charging customers on

14:56average about a 160 ish or about $2,000 in terms of ACV as they continue to scale bootstrap. Nick, thanks for taking or Chris, thanks for taking us this out.

Chris Baden

15:05>> Hey. Appreciate you, Nathan.

Nathan Latka

15:08One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. 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 1PM

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16:43See you.