Getcredo Revenue & Valuation (2024)

hello everyone my guest today is john doherty he's the founder of credo they take a high-touch approach to matching businesses with the right seo and marketplace agencies and marketing agencies sorry he has a decade in seo primarily on the largest sites on the internet we'll jump into those in a second he lives in denver with his wife and their black labrador butterbean all right john are you ready to take us to the top let's rock it nathan all right so tell me more about this it sounds like you're a marketplace huh yeah we're a marketplace but we're we're a high-touch marketplace above uh like an upwork or a fiverr we take a we don't concentrate on the you know the smaller budgets the 200 i need four blog posts a month we concentrate on the people that have three 5k a month to spend on high you know high quality seo email marketing facebook ads that sort of thing and match them up with the agencies that can do that and what's your cut how do you make money we so we have a dual uh retainer plus commission model so the agencies that we're sending work to directly pay us on a monthly retainer um various levels and then they also pay us a percentage of all the work that they close okay so in perpetuity is the retainer aspect much like a sas model is a predictable and recurring or no 100 okay and which part of the business makes up more of your revenue the marketing folks paying you that retainer or the cuts you're taking from place jobs uh right it's uh right now it's definitely the retainers um but the but the but the commission side is growing interesting um if the retainers like end up getting big enough where it can underwrite your whole business will you like eventually remove the commission to drive more usage of the marketplace or no uh no because uh so with the way my business works right there are people that there are a lot of people that can only spend a couple hundred bucks on marketing right but there are a lot fewer that can spend three to five k that sort of thing so we're never going to get that huge volume of uh of people right so we necessarily need to have the commissions in there so that as the number of leads grows we don't have to bring on more agencies to work with to send them more work we can just keep sending the same agencies more work and make more money from it at the same time interesting what is the i mean give me a sense of the size of your retainers are we talking a grand a month 10 grand a month what are they paying on average they're anywhere from 500 a month to 2 000 a month okay got it and would you say 500 as a fair average if i force you to pick an average most of them are around 500 okay got it um let's get more the backstory here so when did you launch this so i launched it uh almost five years ago as a side project and went full time on it two and a half years ago when i got uh i experienced some career turbulence and got laid off from my last job yeah that's a very creative way to say you got laid off career career turbulence all right career turbulence all right so five years ago 2013 you did this then you got laid off and two years ago you went all in um marketplaces like this are really tough how did you get the first agency paying you a retainer when you didn't have any jobs yet yeah really tough so i actually didn't start on the retainer model i actually started as a pay-per-lead model uh so i had a lead come in that was perfect for a buddy that runs an agency in utah and i basically sent it to him and said hey would you be willing to pay 50 bucks for this lead and he goes yeah which are paypal three minutes later i had 50 bucks my paypal account i sent the lead to him he closed him as a client and i went and bought a domain name and threw up a you know crappy wordpress site on some shared hosting i had interesting and that's the whole story that's the that's the beginning story i mean i've been through a lot of other business models since then when i went uh when i went full time on it two and a half years ago i was on the model of when they closed work then we would get paid a commission of course at that point i'm taking on all the risk so then i moved to a straight retainer model so i actually didn't start doing monthly you know monthly recurring charges until we had a good volume of leads coming through the through the platform the commission structure is tough in a marketplace because look i'm like a good guy but there are times where i found someone through one of these sites and then just we get connected on skype or email before you know it like i don't even realize it but it's just easier for me to pay them via paypal and then i'm not even going through a marketplace and the marketplace don't can't even track the commission i mean how do you deal with that so we don't actually they don't actually pay the agencies through our platform um at this point so we make the connection we're a middle man and that we're making the connection between the client and the agency the client signs the contract directly with the agency and then we treat the agency as our customer and so we catch up with them every month you know are used to working with these five clients did these three closed okay and so your commission is two that you owe to credo is why well i hate saying this but like why would they tell you because if they don't tell me then i stop sending them over ten thousand dollars a month of potential work okay but can they work can't they just work with that person that you already found them directly then moving like outside this is the big marketplace issue by the way people move out of the marketplace so like i'm trying to figure out how you handle that totally so i mean we right now it's it's a it's an honor-based system i mean we're not working with a thousand different you know agencies sending them work right we have basically 15 that we directly send work to um on an ongoing basis and so we're i mean they're they're our customers we're basically like an agency to them doing lead generation for them nice um and so you know if they cut us out and i've only had that happen one time in the last five years i've been running this business and basically i just removed them from the platform and stopped sending work to them got it okay that makes sense because we're in touch with both sides the agency and the client so if the client so if the agency tells us we stopped working with this client we ping the client and say like hey we heard you stopped working with them how did it go and they'll tell us if you know and they're like actually no we're still working together what are they talking about literally i had it happen where i emailed them they're like what are you talking about we just paid them yesterday that's so funny okay so you got 15 customers 500 bucks a month you're doing what about 7 500 bucks a month right now well so that's 15 uh well that is no so they're not all paying me 500 a month that side of the business so i have about i have 10 or 11 that are paying me 500 a month okay i have another three that are paying me 750 a month and i have three more that are paying me 2 000 a month okay so basically it comes out to about 13 grand a month of just that that's great then i have some others that are on a smaller amount um you know i'm not saying them as much work but basically they want to be given direct recommendations so they're paying me anywhere from 100 to 375 a month um and then i have annual people on the platform as well that just pay consultants pay 300 for directory listing for the year agencies pay 700 and we're adding three to five of those a month so make it simple for me what'd you do total last month in revenue last month total minus my consulting we did 23 thousand dollars what do you mean minus your consulting i also do some seo consulting which uh to that as well got it got it got it okay so mine is your software platform twenty three thousand dollars okay and how many people are paying you something uh 85 or so have paid me this year got it yeah so if you've got 85 people you're doing about again 2300 sorry 23 000 bucks per month if i divide 85 into that the average person's paying you about 250 260 bucks a month yep it's about interesting and are you um this is the majority of your business model right now i mean what i mean how much money are you doing just through the commission side the commission side is uh about about a third of that so about eight grand a month so 30 grand a month and we launched that model back in october so it's only been in for like four or five months okay so get give me i want to understand more about the makeup of the company so is it just you or what's your team look like so it's me and i have three part-time people so i have a customer success person basically a sales exec that handles when someone comes in she gets them on the phone what do they need who are they how do they make money what do they need and it gets them introduced to the right agencies um and then does the whole follow-up you know through to close um i have a part-time developer she's based in chicago i have a part-time developer in ohio and then i have a sale or an admin assistant slash ops person here in denver where i am as well that's great okay so for folks a remote team tell me more about acquiring these customers i mean are you paying to acquire these people that start paying you and what's your cac if so we pay very little to acquire them so my background is seo content marketing the organic sides of marketing so most of our these these uh clients looking to hire an agency come through seo half of them come through seo um like what search term typically i mean anything from like so we rank pretty well in the long tail so like uh b2b sas seo agency or sas seo agencies that sort of thing yeah um so so those sorts of like direct um conversion related ones right we're just almost on the first page for like seo consultants seo agencies right agencies you have top 31 sas marketing agencies top 44 so you're doing list you're doing very good in the listicle space but foxtail marketing's giving you a run for your money yeah yeah i mean that's the thing we're competing against these individual agencies right so some people want to go to an individual agency and they'll go to them through search but if they want help finding you know the right fit for them because foxtail might not be right for them right uh by the way this is a competitive space i i rarely see four ads at the top of a search term that's this long tail there are literally four ads for b2b sas seo agency this is crazy super super competitive why does it say i went to the long tail why is it so competitive because you can make so much money with it you can make so much money with seo consulting right i often joke that like if i was smart i'd actually sign all these leads into clients myself and just make a lot more money and build out an agency yeah you know you know why sas it's so competitive it's cause all you vc's listening right now you pump so much money to these sas companies you know what they do they go throw it i mean well not always but they usually throw it away on just crap spend they don't know if it's going to work now you're a difference you know john's a good guy right so we're going to say nice things about john but they have to be they have so much money to spend right yeah totally totally but the challenge as well is that a lot of sas companies you know even if they get to like 35 or 40 people they they've been focusing so much on like engineering product um that sort of thing that they don't even have a marketing team in place and their founder probably isn't a marketer either so they actually it's actually a challenge to help them find the right agency because if it's the founder that's holding the budget strings they hold it they hold everything so close to the chest right you hold stuff close to chest in your business i hold a closer chest in my business so i get it i understand it um but you know the the especially like the sas companies we help out best are the type to have a director of marketing a vp of marketing um something like that that gets the different channels and gets where to invest budget in order to see growth let me ask you a question so one of the things that i started building out is gitlatka.com it's basically a database that is auto-generated from these interviews they do with b2b sas founders and for for many of these companies that page on get latke is ranking number one when someone searches you know infusionsoft plus revenue or a company i've interviewed plus the word revenue or customers that's awesome yeah yeah i'm trying to figure out though how to make that a formula so it only i only have maybe the first spot for five percent of the companies i'm trying to figure out how to build a system to make it so that we have the first spot for every company what would you recommend do you have a new individual pages for each one of them um i believe so we have like individual company pages okay gotcha so one thing you could think about is if you're just trying to show their revenue even doing individual pages for that so for example like you know getlatka.com credo slash revenue right in which case that page is specifically targeted towards you know getcredo.com revenue um so so that's one approach um i mean the other approach is uh there are a bunch of things you could do on your site building out categories and that sort of stuff just to get them all indexed i think you have infinite scroll on that page if i'm correct i do yeah that probably means that most of them are not being indexed unless you have pagination in in the head of your page and so that could be a way just to get them all indexed you know in ranking interesting that's super helpful to understand yeah i'm being very selfish here but my thought process if you can own the number one spot for any business person or an investor looking up another company that's a valuable position to be in the ceos want to keep that page updated and then you create a little network 100 and i do that with the agencies and you know consultants on my platform as well in that they all have a public profile that's indexable they can get reviews on there and for most of the agencies if you search their brand name i rank number two or three with review stars in their search result interesting so so it's their first name and then it's you know maybe their facebook page or something and then it's their credo listing that has like you know four stars five stars or whatever drawing the user's eye and so i'm getting some of that branded traffic as well which they're okay with because i'm basically helping them convert better because they have a good you know listing with review stars and such it's the same as facebook or something like that that's interesting i'd love to do like some kind of like paid game with you where i give you a list of like 30 companies i really want to rank first for that right now i only rank like the number four or five four and then i'll pay you like a prize a cash amount for everyone you get to like the first the number one spot in the next six months that'd be super fun that would be a lot of fun and then you come back on the show and we tell everyone how we did it yeah totally all right after the show email me let's figure that out that'd be fun sounds like a plan all right okay sorry i got selfish there for a second back to you um churn are you losing customers not anymore okay uh you used to be we actually we changed the business model from it was more of a true marketplace and that a lead would come in and then i had this whole like custom email system that would email it out based off of uh you know what they needed and their budget and that sort of thing two two uh people within the marketplace and then they could reply they had a certain like lead cap they could contact um but it didn't really work because uh for multiple reasons one is if you're spending three five grand a month you you need to have a much deeper like consultative effort it's a much more consultative sales process than someone you know saying like oh yeah i'll you know try this out for 200 a month right for four blog posts um so that didn't really work and then agencies as well they're having they're struggling to close the work because they're basically having to do cold outreach to these people right and saying like hey i'm so and so from this agency would love to chat with you about your project as opposed to us saying like client meet person at agency you should talk to them because of f so what what was your churn when it was really bad how many percentage points uh so on my on my highest level at that time which was 375 a month it was like it was like 3 month on month okay at my lowest level which was a hundred dollars a month it was about 12 to 13 percent everyone said now zero zero okay no one brought them down yeah that's great that's good you got a good kind of correlation set up between what you're giving them and what they're sticking for so it's great um exactly in terms of funding you bootstrapped this or you raised completely bootstrapped 100 i love that what are you growing at year over year you're doing about 30 grand today take me back 12 months what were you doing 12 months ago i was at about 13. okay um and 12 months before that i was at four okay that's great so december of 2015 you're doing about 4k per month go forward 12 months december 16 13k december 2017 which was a couple months ago you're doing call it 20ish k or maybe 25 now you're up to 30. yep that's great all right all right um that's great and now what last question here on economics before we wrap up what do you assume these customers are worth to you over their life that's a great question i don't have uh an awesome answer to it i mean like uh so when a client comes in and it's it it's conversion rates right so we convert people into a lead and then we get them on the phone and then we introduce them and then a percentage of those actually close with the agency so i don't have a fantastic idea yet simply because the commission model is still so new um of what a signed contract is actually worth to us yeah um an agency on the platform is probably worth uh somewhere around every agency that we're directly sending work to is probably worth somewhere around 10 to 15 000 a year right now yep that makes sense all right let's wrap up here john with the famous five number one what's the last business book that you read last business book that i read was actually the four hour work week i reread it about every four to six months that's a good one number two is there a ceo you're following you're studying right now uh spencer raskoff of zillow i used to work for him and i still respect him a ton number by the way are are they gonna survive with uh with mr uh redfin moving in oh yeah they'll be great they're they're a solid company number three what's your favorite online tool for building the business uh stripe no question number four how many hours of sleep to get every night eight and a half to nine that's good and such what's your situation married single you have kiddos married with a big dog a big dog good yeah oh what was the name butterbean right name is butterbean yeah i love 100 pound black lab great dane that's crazy okay how old are you i am 33 years old all right last question what do you wish your 20 year old self knew uh i wish my 20 year old self had started writing code earlier start coding earlier there you guys however from john launched a marketplace back in 2013 as a side thing then had some quote career turbulence in 2015 decided to go all in on the marketplace over that time period he's moved the business from doing about five grand per month in revenue up to 30 grand per month in revenue today he's taken churn from three percent and 12 and respective cohorts down to zero in both cohorts because he's really figured out how to deliver that value he's got boot he's bootstrapped now serving 85 again marketing agencies feeding them clients that's his model with his team of four he's full-time three remote uh all sorry three part time all remote around the country so john thank you so much for taking us to the top nathan thank you