HighLevel Revenue & Funding (2024)

[00:00] Hello, everybody. My guest today is Sean Clark. He dropped out of college to start the world's largest answering service and then left after twelve years to start an accounting company, sold that, and is now helping marketing agencies close more leads to customers through automation. He lives in Eugene, Oregon, married with a six year old son. Sean, are you ready to take us to the top? [00:18] >> Absolutely, let's do [00:19] >> it. Awesome. [00:20] All right, so the company you sold was, I believe, Invoice Sherpa, correct? [00:23] >> That's correct. [00:24] So is that like a FreshBooks competitor? [00:26] >> No, it was accounts receivable automation, which sounds really boring, but basically it just helped small and medium businesses collect money that was owed to them. And by automating all kinds of outreach to the customers and just basically bothering people until they paid their bills. [00:40] And why'd you sell it? [00:42] >> You know, I grew it from my kitchen table to about 1,000 customers. And I just wasn't sure kind of where to take it and where to go with it. And right about that time, somebody came in and said, Hey, we'd love to buy you out. And it was enough money that I could move on to my next adventure, but not enough that I could retire on a beach. So I said, Alright, let's do it. [01:01] What'd you grow revenue to before you sold it? [01:03] >> It was about 40,000 a month. [01:05] Okay, so healthy. That's good. [01:07] >> Yeah, not not too bad. [01:08] And you didn't use any his brokers, you had just a strategic or someone reach out direct? [01:12] >> Actually, did. I got a cold call from a broker. [01:16] Thought Which that [01:17] >> was like, Latona's, I believe. Okay. And I thought it was funny because I thought the guy was nuts and I told him he just said, Well, just name a price. And so I named a price that I thought was a little crazy, and he came back with a couple offers. [01:28] Wait. What your crazy price? [01:31] >> Oh, I think my crazy price was like $400 or something. And then, he actually came back with a couple of people who are willing to pay something something close to that. [01:42] Well, that's but that's like that's not a I mean, if you're doing $40 a month, I mean, you're doing $500 a year. That's less than one x ARR. That's not crazy. [01:49] >> Know what the heck I was doing as well. So for the record, I was I was I was probably surprised just due to my naivete, not necessarily [01:56] Got it. [01:57] >> Due to the number. So, yeah. [01:59] So you sell [02:00] >> that company. I that it was a good education. [02:02] Let's talk about high level now. What's that company doing? Is it is it the SaaS company? [02:05] >> Yeah. Absolutely. Yeah. A 100% SaaS. [02:08] Okay, so walk us through what it does. [02:10] >> Yeah, absolutely. So what we do is we basically work with marketing agencies who generally focus around lead generation or just companies who do a lot of lead generation. And the whole goal is we help double the number of customers that they pull in from the same leads that they're already generating. [02:24] Okay, interesting. And are people, I mean, is this a campaign driven thing? People turn it on and then they turn it off, is your churn high? [02:31] >> No, churn is not high because generally the marketing agencies, we sell it to them at an agency level or at a larger company that generating a lot of leads. So this is something going to be doing constantly. And we don't sell it on a per client basis, we sell it on a per agency basis. So they can continue to use it so long as they're operating and generating as an agency. [02:48] So what is churn like last twelve months revenue churn? [02:50] >> Zero. [02:51] Zero, you haven't had any downgrades or no cancellations? [02:54] >> No, not at all. Although we're still really small and we're still growing. So I anticipate that that will at some point happen. But for the moment, we're delivering a lot of value. [03:01] When did you launch the company? [03:03] >> About six months ago. [03:04] Okay, so okay, very new, 2018 era. [03:06] >> Very, very new. [03:07] How many customers today? [03:08] >> Right now we only have 10 agencies that we're working with. [03:11] 10 agencies, okay. How'd you sign up these first 10? Where'd you find them? [03:14] >> All just bootstrapping and we integrated with a couple of software marketplaces as well. And they sort of just found us. And then we started realizing, Oh, wait a second, maybe this is a good market. And we started just outreaching to them directly. And we just found that there was a really natural fit from what we were selling to what they were needing. It was very surprising. [03:35] Which marketplace did drove you the most of those agencies? [03:38] >> Well, ironically, was So we were selling to direct customers at the time. Was Doctor. Krono, and we had a medical med spa that we'd done business with. Their agency reached out to us and said, Hey, can you guys do this, this and that? And we said, Oh yeah, absolutely. And they said, Well, if you can do that, I know 100 other guys who need this. And so that really, we pivoted at that point and we've just [04:00] >> been driving at that direction, kind of adding new features as we go. [04:04] But what marketplace? You said you integrated with software marketplaces. Oh, [04:07] >> Doctor. Chrono. [04:08] Oh, it's called Doctor. Chrono. [04:09] >> Sorry, it's a medical HR, I'm sorry. Yeah, they have developer's marketplace or an apps marketplace that really helped us get some customers early on. [04:16] Interesting, really interesting. Okay, good. And how many, sorry, what do the customers pay on average per month? [04:20] >> $300 [04:21] Okay, so you're doing about $3 a month right now? [04:23] >> You got it. [04:24] That's good. And 0 a year ago, obviously, right? [04:26] >> Yeah, exactly. [04:27] That's great. And you said you're bootstrapped, I assume you put some of your own capital into this. How much have you? Yeah, [04:31] >> it's all self funded just out of the out of my previous sale and as well as my say, just personal savings. [04:37] How much have you put in today? [04:38] >> I would say about $100 so far. [04:41] Does that make you nervous? [04:42] >> No. [04:43] Are you married? [04:44] >> Yes. [04:45] Does it make your wife nervous? [04:47] >> No. She [04:51] >> runs her own business and she's much smarter than me. So with her without me, she'll do fine. [04:56] That's funny. All right. What's the team look like today? [04:59] >> So we've got myself, another developer, I'm a software developer, I've got a software developer partner who's living in Qatar right now. And then we've got a couple of contractors that are doing things like design and front end work and so forth. [05:11] Okay, so two remote and then everyone else's contract? [05:14] >> You got it. [05:15] That's awesome. Okay, very good. And then Churn, it's too easy to talk about those cohorts. I mean, do go from 10 customers to 100? Where think they're going to come from? [05:23] >> I really think it's gonna be through the affiliate model. So somebody that I really admire from a So a couple of people you've had on, Brendan King from Vendasta and also I can't remember his name, the gentleman from ClickFunnels. [05:37] Yeah, Russell Brunson. [05:39] >> Thank you. Very similar models, very similar customer base. So we're going to work with those agencies. We help these lead generation agencies actually raise their retention because we're able to help them actually close a lot of the leads that they're bringing their customers. Whereas right now, lot of those customers, those leads just kind of die on the vine because the customers don't do a good job actually following up on the leads and we automate that whole [06:01] >> process. And so as a result, we're a huge value add to those agencies. [06:05] Yeah, that's interesting. Good. And so these agencies, I mean, how many customers are they typically using your software on? [06:11] >> Generally, it's about, it's anywhere from 10 to 20. I mean, every agency is different sizes, right? And we're early on, so we're starting small. And so the agencies we work with, again, are going to have a stable of 20 customers, but we generally are for the agencies that we target, we're really targeting people who are not necessarily the business of creating a beautiful website or a beautiful Facebook page or whatever. They're about driving you actual leads. [06:33] >> So we have really good coverage in those agencies and we generally can take about 80 to 90% of their customer base and do something pretty awesome for them. [06:40] Interesting. You had a lot of options kind of what you could do after you sold EnvoySherpa, why decided to get into this space? [06:45] >> You know, I worked with a lot of small businesses every day, and I was in the I heard a lot of different pain points And one of the things was always about marketing and sales. And I naively thought I could go into the marketing space and sell direct to customers. And I found that to be really tough sledding, compared to my previous business. So when I, you know, I just love the idea of helping small businesses [07:12] >> grow. And if I can do that in any kind of way, that's what I [07:14] want to do. Yeah. So you've got high level, it looks like you do like a lot of things like reviews, text message customers, appointment Yes, it's a [07:22] >> management product and it's really grown into more of like this. Yeah. So we've got the reviews side of the house, the booking widget sort of side of the house, but the whole idea is leads come in, we automatically do multi channel drip out to them. And what that means is we send automated emails, text messages, phone calls, and voicemail drops, and we engage those leads until they respond. And at that point, we bring the sales teams [07:44] >> in, and then we give them all the tools they need to do things like manage the opportunity, book them in for appointments, send out the reminders, and then even do the reputation and the reviews on the back end and help them just do a better job on the SEO side. [07:58] Interesting. Very cool. And I see you have the magazine behind you. You're getting the magazine. [08:02] >> Yes, I do. [08:03] How are we doing? Is that the second issue of Latka magazine or third? [08:07] >> I'm not sure because it's the first one I've gotten, but [08:10] What do you think? [08:11] >> I love it. I'm a huge fan of you, and I've I've listened to you for years now. It's it's an honor actually just to be talking to you. So it's it's very cool. [08:18] Well, I'm thrilled that you're coming on. It's wonderful. Yeah. The magazine is a big test, but I there's something nice about holding something physical with a ton of SaaS data in it. And so we're gonna [08:28] >> see It feels very GQ to me, which I love. It's kinda like the GQ of SaaS, I feel like. Yeah. So if you're if you're kind of a business nerd like me, then it's it's a cool thing to have. [08:38] That's awesome. You know, that's that's my new that's my new tagline, GQ of SaaS. Right? [08:43] >> That's that's I I feel like that's kind of your MO as it is. Like it. I think it fits. [08:48] Awesome, Sean. Let's wrap up here with the famous five. Number one, what's your favorite business book? [08:53] >> Oh, good degree. [08:54] Number two, is there a CEO you're following or studying right now? [08:58] >> Yeah, probably Brendan King from Vendasta. [09:02] Number three, what's your favorite online tool for building the company? [09:06] >> I would say besides my own tool. [09:09] Yeah, besides your own. [09:10] >> Yeah, definitely. Probably like Slack is great. [09:12] And number four, how many hours of sleep do you get every night? [09:15] >> Six and a half. [09:17] Good. And what's your situation? Oh, I know you have a wife. Married. How many kids? Any kids? [09:21] >> Married, one child's boy, six years old. [09:23] Okay. And how old are you? [09:25] >> I am 36. [09:26] >> 36. [09:27] Last question. What do you wish your 20 year old self knew? [09:30] >> Start start earlier. Go go harder. [09:34] Guys, start earlier. Go harder. Sold his first company now building high level to help small businesses with reviews, text messaging, and even appointment scheduling. They now have about 10 agencies using them paying $300 a month. Those agencies sell through to SMBs doing about $3 per month right now. Got his first couple of customers by integrating with a software marketplace, DrCrono, which is a medical HR kind of developer marketplace. He's bootstrapped the company off money he made [09:58] from a call it a $400.500000 sale of invoice share, but team of two right now are building the company in remote locations, zero churn so far. Sean, thanks for taking us to the top. [10:07] >> Absolutely, anytime. Thanks, Nathan.