How Hubstaff CEO Jared Brown grew Hubstaff to $32.9M revenue and 14.9K customers in 2024.

hello everyone my guest today is Dave Novoa co-founder of hub staff calm which helps teams communicated better through automatic time tracking and activity tracking he's been running the online business since he was 23 and now manages a team of 40 remote employees they was honored as in one of Indianapolis his top 40 under 40 entrepreneurs and focuses on teaching others to manage remote teams Dave are you ready to take it to the top all right thank you all right so I believe it was let's say genuine fur March it was April of 2016 you were last on the show and I think you communicated you had about 2600 customers at that point about 1.1 million in AR 20 employees no funding give us a quick update there and then tell us what the company does for those that are new yeah so still no funding still bootstrapped we're at about three point you know 3.8 million ere are now a little over 7,000 customers and we still are in the the world time tracking we do a little more we've got activity tracking we've got location tracking that kind of thing and just so those we don't know it's basically helping managers and business owners reduce waste in their company so how do you go from again about you know you're an alpha 26 enter customers now 7,500 which to unless that growth word-of-mouth good SEO we we try to get we do we do advertising we just basically try to put our product in front of the users that are searching actively searching and then drive them to a drop and if I take obviously the the 3.8 million in ARR divided by 12 you're going about 310 320 per month right now something like that yeah and every yeah 13 okay yeah it's perfect and then if I divide this one you have on our customers into that it looks like someone can get started with you for about 40 ish bucks a month that's the average price is 43 yeah for it 42 43 that's perfect good and then walk me I mean so you do you said you do a lot of SEO a lot of content on inbound are you have you tested any paid channels yet or no yeah we do paid we have not had a lot of success with that yet we've been trying for a long time tell me about one of those rise yeah I mean we've tried everything it seems like we've tried everything I've tried about five different consultants we've tried Facebook who tried AdWords and you know it's not like things are terrible it's just their channel we have not be able to scale anything into into a into it into a significant channel so a lot of people struggle with this right they they hear their competitors doing really well I'm making this up on Google Adwords so they go well I don't know that let's go hire a consultant right and then the consultant just takes their money and fails miserably um what have you learned about how to hire especially a remote consultant for this sort of thing yeah we also we've also had in-house people do this as well and we're doing it right now maybe you know right now RCM I was doing it but so I think you know trial trials are good you know and we we've never had to spend a ton of money on consultants doing this why people charge based on Aspen lobby it'll charge just on flat fee with the third flat fee for this kind of work and basically just the number one thing is make sure you get somebody that's gonna help with analytics and understand what's going on on the backend and conversions not just pumping traffic so name is that maybe a few questions that you might ask someone who's who you're looking at potentially hiring to be a consultant yeah you know number one look for past success make sure that they've had success in in a similar industry because you know b2c does not translate well to b2b at all on pain Facebook AdWords all that's totally different b2b so that would be number one make sure that they have success in a very similar thing ecommerce doesn't even doesn't translate you know yet at all so they've really got to understand different different things how do you have to drive that traffic understand there's less of that traffic understand that each sale is worth more money and understand that basically you know conversions are the most important thing when it comes to advertising and how are you going to track those conversions and how deep are you wanting to be involved in the process so now what is your fully weighted attack look like considering all these experiments you've done yeah so it's still pretty still really low I mean it's like a hundred bucks right now yep I'm curious thought let me see how that compared yeah so it was yeah that's about what you said last time so we could you know most people I think would say to raise that yeah I think why people would say to raise that I we just well they I think you know what I've read the lodges they basically try to say okay you want to do about a third of your LTV which raises up to about you know two hundred dollars to fifty right and do you assume customers right now a lifetime value is 750 yeah about seven hundred okay and you know it's it's G and we just we we just feel like we haven't be able to spend that money profitable so you could spend the money and try but it's just why spend the money if it's not it's not gonna be profitable well and something else to note is right you've been really smart and bootstrapping and so you have to manage quick payback periods so if you're only spending a hundred bucks or getting paid back in two three months right two and a half yeah and that's that's been comfortable for us it's been pretty flat you know but it's been comfortable what do you mean flat well we haven't been able to lower a lot well but that's pretty damn low days yeah that's a really good payback period I mean I talk to beyond the value all the time they're talking 12 16 18 months so that's fantastic another question here cuz I think it's important a lot of people that was into the show have large either user based or customer bases and they always look you know how to get new customers versus driving expansion revenue you know of a couple dollars across a big user base last time you're on the show which was a year and a half ago your our pool was around 33 bucks it's now up to 44 bucks which is meaningful that's ten bucks a channel per customer and you have 7500 of them what's driven most the expansion revenue well we have introduced a new plan a new a new higher price plan and we also have been building a lot of features that we've added to the heart plan so trying to get people to upgrade okay - yeah mine yeah like like for instance like we're just moving a little bit upmarket regarding like what people what our customers are looking for like things like timesheet approvals time off you know that kind of thing so we're looking they're looking to do things with the time and basically for that you know they need to pay for it basically so they can track all the time they want and if they're only looking track time they can get that the basic plan but then they need to upgrade in order to do a lot of advanced things with that time data and has there been one specific additional feature that's driven the majority of that upsell revenue like one thing is just killing it for you probably like app tracking that kind of thing weather I mean there are locations that kind of thing so we're like locations would be example like like GPS locations where you know where a construction company for example can can make sure that one of their subcontractors is on a job on site versus being in their house or whatever so that's an example and the more companies that you get that are looking for premium type features the more that that revenue number average revenue number per customer Rises no medical tell me about churning have additional products decreased you know not really now turn has been turns a little bit of a problem right now turn catching up to that to that level where you know for a long time turn doesn't really have an effect and then once these customers start to age if it hits well you're getting big doesn't matter you know yeah so what is this right now something it's like six six percent that's no below 6% logo turn per month yeah okay and is it if you calculate that on a revenue basis is it about the same it is okay and is that something that you think is just you know it's inherent in the customer you're going after it's gonna happen or you think you can you think I can bring that down at all or no I don't think we can bring it down yeah I don't I think we need it I think we need to fight it towards so I think we need to fight it in in ways that are because you know there's little things going on I mean like for example like fifty percent of our customers are out of the US so you've got that going on you've got we we take we get very good data from our customers when they when they leave it's usually things like for example projects ending or going out of business things that we it's that it's not really like hey we decided to leave for a better product or you don't you know we decided that we're just not using this offering more it's not really like that so it's hard and then we you know we've done a lot of work with dawning and things like that you know to - to hell with this we yeah the dead news so sure I think we need to fight it in other ways like more trials in the door finding new...