How Hellosign CEO Joseph Walla grew to $7.2M revenue and 47K customers in 2016.

this is the top where I interview entrepreneurs to our number one or number two in their industry in terms of revenue or customer base you'll learn how much revenue they're making what their marketing funnel looks like and how many customers they have i'm now at twenty thousand dollars per top five and six playin his happens on global domination we just blow for a hundred thousand units ol mark and i'm your host Nathan lapka okay Tom tried this week's winner of the hundred bucks is repped Guillen's he's in the restaurant industry and he feels stuck he wants to start his own software business so congratulations red for your has a champ to 100 bucks every Monday morning simply subscribe to the podcast on itunes now in order to enter and then text the word Nathan two three three four four four to prove that you subscribed guys if you want an easy tool to use to book your meetings back to back to match your calls to make sure people actually show up when they schedule you want to use acuity scheduling it's what I use from my podcast interviews and Nathan latke calm board /schedule I'll tell you more about how I use it later on in the episode Nathan lakdi here I know all you youngsters and everyone else to get excited to be home with your family for the holidays drinking coffee and as you're coming up on that couch go in your headphones and listen to a little bit of the top entrepreneurs if I get you inspired even when you're taking some time off for the holidays tomorrow morning's no differently up Dinesh coming on he sees twenty deals annually and investing about two of them in 75 150 grand each he does precede deals it likes me to be SAS for investments so what's his secret and life was his biggest hit you'll learn tomorrow tint it has to do with the public traded company what's up guys Nathan laughter here our guest today is Joseph wala he's the CEO and co-founder of San francisco-based startup hellosign the company launched in 2012 and provides the easiest way for businesses to sign and collect legally binding documents online the idea behind hello sign was sparked by Joseph's first successful product alongside his co-founder Neela morrow hello fax hello fax launched in 2010 after attending a prestigious startup accelerator y combinator Joseph are you ready to take us to the top absolutely 64 government you Batman okay hello sign up tell us real quick what does it do and how do you make money yeah I think big zooming out a little bit the fundamental thing that we're doing is we're solving the document transaction problem and people don't realize that they have this problem and originally started out with you know hello fax because we were working in on the go and we don't have a fax machine and then we figured out that when get it signed up who's going to go to kinkos as well and then we found out that a lot of people need to automate these document transactions and that's when we launched our API in terms of how we make money we have a premium product so people can go they can try out the products for free and then when you know the a certain limits that's when we encourage them double grace and we're to say your Dropbox or boss and what is the average kind of customer pay per month yeah so that's not something that we can share what i can say that the you know the pricing plans that we have on he'll sign go from say fifteen dollars a month up and tell you know um yes sir there isn't royal limit because people pay per seat and then I'm aegi side we gotta bucketed pricing so within you know the first plan you get a certain number of document transactions and the second bucket you get another level document transactions and additional functionality okay at walk us through and the pre call I forget who was it was one of your assistants I think I name was maybe Megan but she had articulated one of these you guys have done tell me the wrong so your cash flow positive so walk us through that you know in general give us a range how much are you doing kind of top line and how do you manage expenses yeah so we've been cash flow we were possible closet or 2014-2015 and we always took a very I almost think it was a contrarian you we haven't raised in three years um you know three years ago we raised some money how am I just um yeah so after why she would raise two million and then about it two years later we raised another million in house erased 39 million total um but you know I robbed interestingly we have more money in the bank than our you know our previous from that we raised I think what was your previous round the 1 million yeah it was one and a half yep what a nap okay like over three years in it at this point I think um the thing that we've always done that was a little different as we always thought of ourselves as building a real company and since we never raised a ton of money I feel like we always had to be very disciplined about how we spend our money and how we focused and and I think like what happens a lot with a lot of startup companies they raise huge amounts of money they made a big mistakes and then they go back dramatically which is really damaging for the company so I think we've we've had to focus more on the customer than I say I think like a lot of other companies have had to isn't it sad that in our world that that is such a profound statement like you think when John Rockefeller would say well no right but in our day and age that's like amazing yeah what's interesting is that one up until up until January it was something that was really weird and then the market crashed and then everybody thought it was just like brilliant thing but I think we've always had the same ethos whether the markets hot or whether it's um you know crashing and we'll go through these cycles by the garden so so always stay to saying yeah so we're give us since the sides now where are you at in terms of monthly recurring revenue last month yes that's also know we can share it all I'll tell you you know what's your range Joseph just arranged yeah so also not something I can share the biggest possible that else keep it really vague your here's what i can tell you i can tell you we have 40 boy I you know I looked at this number and a little bit but we were on 47,000 pain customers so they bust Mirza chaos every month and then we have about 60 full-time um a little more you know employees in San Francisco and then in terms of our user base we have you know 526 million users across our products okay and so you've got about 5 million free users you can order about 50,000 and a paying customers yeah so by the six million and then yeah so we converted about you know yeah up your fifty thousand paying customers and number one reason people convert from free to paid yes it's mainly um transactional so people come in and they get up to three document transactions free per month and we think about that as giving people an opportunity to try the product in a blue Oh cost way and then once they hit higher volume amounts it's a natural upgrade point either that or they wanna like additional functionality and so it's a very low cost way to sell the product to a lot of people and I think that's why we've been able to have a pretty small team for the number of customers that we support you said you have 60 employees on San Francisco yeah but what would you what would you say well let me not ask that that's it I'm sorry what do they span kind of tech inside sales like what kinds of jobs are those yes it's really across the border from you know the product and engineering and design to the sales team to the support team to customer success to we invested actually one of the unusual things that we've done really invested a lot in team operations so making sure that a team is happening has everything that they need so really a really rough support what would you say and for those people kind of not in the valley because we have a lot of people that are kind of not in these kinds of bubbles what would you say kind of the average salary kind of across your entire kind of employee basis I mean is it would you say it's above 100 k each oh that's a rich for you um 11 of it was sharing but I mean you can definitely look at it you know salaries in the valley are certainly higher than well no I mean it's joseph is real quick sorry you know this is like public stuff right you mean you can go look at any kind of kind of things that look at text average techstars in the valley and you can see that a CT on average makes 220 k i'm just asking you're much better than an aggregated data source because you're actually doing it write what you know well the average kind of kind of developer salary into that in the valley whether it's at your company or just on average is what based off your perspective yeah i mean this is something i mean if you go okay um I mean it's really it's really hard for me to say because it really depends on the state of the company and I think what you'll notice is that um you know salaries are different from say if you were a google versus like a startup company or different stages of the company and different equity versus salary mixes so I think you know really hard for me to give like a salary number and I think generally what you do is um you know you saw her like pay scale and other software in order to like figure out another per person basis you know but a cinder experience um how much how much we offer I pray it yeah yes exactly let me ask it differently so it doesn't actually make it kind of per person if you just add up your entire kind of headcount expenses per month right what are those yeah so um generally what you do is as like a rule some you calculate you know 10 to 20 k per person per month and that's like a fully-loaded costs and so that includes people's salaries you know health insurance office costs snacks you know software everything and you know 10 to 20 k per person per montes a pretty good rule some I forgot a lot from investors but it's pretty uncoiling when you talk to other companies in the foyer what's but hey that's really helpful I haven't heard of metric like that before so that makes kind of easy maths for anyone that wants to compare so with 60 employees if you kind of average a total monthly expensive between 10 and 20 k let's just assume 10k on the low end times 60 employees that's a minimum of six hundred grand per month just on a headcount expenses and you guys are cash flow positive is it fair to say you're doing more than 600 grand and mr r yeah i mean if you back and uncle yeah we're definitely doing more than that you want to provide more more range around that or no yeah go hold off on that good I am Legend economics then just yes you want to stay away from that kind of stuff talk to us turn is really important and you have the beautiful luxury of having a large sample size you have 47,000 paying customers what's your growth cuffs monthly customer turn yeah um so also something that I can give some broad strokes on without talking about specific numbers I think in general with a lot of sass products on your pro plans the churn or is a lot higher and then as you get into larger and larger companies the churn goes down look substantially I see this happen I mean a good way to kind of measure this is based off our boost is right like if it's less than you know fifty dollars per month in our pool you know this generally small business space it's great a thousand bucks which is like a team that is you know ten seats on your platform no it's fully integrated into their onboarding process for new hires everything your turn goes way way down right giachini are you like twenty percent small business eighty percent enterprise can you give us any kind of relationship there um I think in terms of like how are ya like are you are you like Jerry mostly small business or mostly enterprise or yes we um you know we're mainly in decem Union market space so we do have some larger customers I think I think this is what you'll find a lot with a lot of tech companies so they start a lot on the low end of the market unlike a pro plans and then gradually as they build out more sophistication in their products and they're offering and they understand the market born they like bring on a sales team they gradually move up market and so that's kind of that is the doubt that we've been taking over the last couple years is that if you will get your pro plans and you'll get the churn rate on the pro plans the revenue per customer you realize that you know you can continue along that accounts will say like a sales team and you do it comes in bro crack I just wanna make when you say pro plans you're talking about your $13 kind of very low our poop original plan right yeah exactly that's um so we think of those days like prosumers and those are you know if you want drop box or boxes there people there pain like say ten fifteen dollars a months maybe there are people that are individual real estate agents or they own a photography consulting firm or something like that those are usually the people that pay for those funds yep yep that makes no sense ok cool so uh will say what do you want to give any kind of course but in the kind of the SMB cohort of your prosumer cohort where do you guys around like five six seven eight percent gross monthly term oh that normal hold on not but I think like there are a lot of standards in the business what's the standard yes I think the standards are like similar to what you've you just tried if you probably looked at Dropbox or box or elsewhere you can see something somewhere when you look at kind of growing your company you're gonna great job doing it at 47 I wasn't paid customers numbers about six million users what are you willing to spend not for a new paid customer but what do you want to spend I imagine it sense for a new user yeah we think about it more about how much were willing to spend for paid customer we don't spend as much for an user and the way that we think about how we want to spend for a new paid you sir and there's this amazing like like probably the best article that I read on SAS metrics on crunch nurse calm and it talks about how um yeah i mean you pretty much you spend one-third it's like a three to one ratio LTV to cap ratio so for every three dollars you get an ltb you spend a buck on cap and then other metrics that you will get is payback period because certainly if your startup company in your life you have a three year payback period that's way too long from cash standpoint generally what they recommend is that you okay back period of one year or less so those are the two metrics that are like Doug geometric said you you want to focus on his company and what is your kakom is it 20 bucks a new customer average or what yes that's that's also something we probably um we're gonna share but we definitely try to keep it within those ranges well within the 123 range unltd cat ratio exactly you won't share any kind of range for us to better understand doc in the document signing space right okay even a big range like you can be as vague as you want by the way why are you scared of this you're like you kill your key I mean you're doing well I mean there's several others in your space right that you know you know the Panda docks the pdffiller the seamless docks sign easy doc I mean there's a bunch of kind of people to say what is it scary to talk about what worries you yeah I think they're there isn't a lot of upside and sharing really core metrics probably I think um there are a couple measure so we talked about sharing with the public but I think apart from that it doesn't it doesn't make a lot of sense what if i told you that my listeners are more likely to go use hellosign when they kind of get more data from from transparent CEOs yeah I mean it still doesn't really I'm just hard to quantify that person so I got sharing a lot of all looking super risky right it doesn't make sense for you right yeah makes good sense wait let's move forward Joseph we're gonna get into the famous five here in a second before I do that where's the best place for people to connect with you online if they want to follow you as you build the business yeah Lincoln's crayon onion twitter is good as well yeah sure you know how you connect all right guys I talked about this earlier but I schedule like so many meetings it would blow your mind I mean all my podcast interviews right hundreds of watch bars i talked to monthly i schedule and you know what i do it so efficiently I've get them all to agree to my calendar so all the calls are back to back to back that means I'm not switching in between tasks all day long and get them to match so like me very efficient it's so critical and I use it to go call acuity scheduling to do this at Nathan lakha calm /schedule it eliminate from back and forth between me and people I'm trying to meet with and makes it very simple and most importantly they help me keep my no-show rate very low because they send out reminders helps you look very professional so go to natal Makka calm /schedule to sign up and you get a great deal you know you guys know this I hit people hard I make great deals and gather on the CEO has given us a great deal if you sign up like normal people okay on their website you only get a 14-day free trial to use my link natal nike.com /schedule I get 45 days free okay it's the best it's free go to Nathan like a comp Lord class schedule right now to sign up and I'll see you there all right stop drop a link to that show notes at Nathan latke calm for / the top 5 17 again for / the top 5 17 all right Joseph let's wrap this bad boy up these of a famous five these are one word answers you ready number one what's your bees are gonna by the way these are like cakes compared to what I've asked you okay yeah number one what's your favorite business book uh high output management individual solutions really good too number two is their CEO your phone are studying right now yeah their own der I want you like a lot of um keynotes and weary pages giving some good talks you want mosque and then Bill Walsh discord takes care of itself is really amazing what do you mean that's like Aquino he gave the score takes care of itself after that specific using keynote that's a book that you wrote okay bill wash very good number three is their favorite online tool you have like top towel a favor online tool um her house is pretty great number 3s there's asleep every night I do more these days and what's your situation married single you have kids um I love dating someone pretty seriously okay and it's enough that no kids that you know I'm right it's good and how are you Joseph 31 all right 31 so last question my man check us back 11 years what it was your 20 year old self new e I think I would've um I mean somebody told me to move us in the valley and just not to worry about it and come out here and just crash promises in newspapers I think I would have just given myself that if I sooner go to the valley and just figure it out as you go exactly like don't wait for a job I'm doing you know don't make it too complicated just come out figure out a way to stay with and expensively talked to a lot of people go to other conferences and then figure it out I think that there's a way to make it too complicated you know it's just like it out here in a or so yeah subscribe there you have it from Joseph a wallet with hello sign again doing super well we're about six million free users about 47,000 of them are paying they've raced 3.5 million bucks they have got our pues that are greater than 13 bucks a month that's their minimum plan which means there mr r is greater than 615 grand per month maybe way greater we don't know but definitely greater they've got over 60 folks based in san fran joseph's crushing it man thank you for so much for taking us to the top religious you havin it if you enjoyed Joseph today go back to listen to max I'll chiller yesterday he's the CEO of sales a car they did to 55 million bucks in 2015 revenue up the sales reps get smarter okay top tribe I'll see you bright and early tomorrow morning and don't forget before you listen to any other episodes subscribe on iTunes right now for your chance to win a hundred bucks every Monday you [Music]