How Jangomail CEO Mark Richard grew to $6M revenue and 5K customers in 2019.

hello everybody my guest today is mark richard he is an engineer with over 20 years experience in high technology product development and business operations he spent the first part of his career in the medical device industry designing mri systems before transitioning to the sas world he's an m he has an ms and phd in electrical engineering both from case western university mark you ready to take us to the top i think so all right what is django mail and how do you guys make money so django mail is an email deployment platform we deal with opt-in emails for those who want to do broadcast or transaction emails and uh we make money by charging people for sending emails okay and so like how do you beat mailchimp well so mailchimp is really focused on the small customers um and those that are want to have small lists we really focus on those that are enterprise level customers um generally speaking 50 000 emails or more per month those that want to do large quantities of email and we have live support you can actually call someone and talk to someone to get the help you need it's very rare you see an enterprise sale lead with um copy on their home page that says try 10 000 emails free no credit card required that's a very kind of smb sort of approach why do you choose that wording on your homepage if you're selling enterprise accounts well it just works for us you know we want to give people the confidence that uh let's give them a shot and uh and let people try us out there's really no risk involved so you know give it a shot okay interesting but you don't think it says anything to the enterprise customer that says oh wait maybe this isn't meant for enterprise it's a small business tool it's a no credit card required trial yeah you know what i mean maybe it does but uh it you know it's worked for us so far and um so yeah yeah that's just right now okay so so help us understand an average customer what are they going to pay you per year to use your technology well it just depends on the quantity that they're using the quantity that they're sending so you know we have customers that are paying um small amounts you know 100 a month maybe and we have customers that are paying us tens of thousand dollars a month in order to spend massive quantity of emails so it really just depends upon the volume of send you know i totally understand that which is why i was curious about the average so are we talking maybe a grand a month is a good average i think yeah that would be a fair number to use as an average yes okay and what if i was paying a grand a month what would you i mean how many emails am i probably sending so for granted a month you know you're probably spending sending on the order of uh you know million million emails um maybe more maybe less it also depends on what types of emails that you're sending whether you're sending a transactional email or broadcast email but uh give or take you know he might be sending about a million or more and why would someone use you use you for transactional email versus like a sendgrid or a mandrill or these other tools well so yeah i mean we you know again we provide the support um we've also got a number of features that some of the others have struggled to do on some of the other features that you know whether it's attachments or some of um you know uh encrypted type of sending that they need to do secure email attachments um that might be some reasons um yeah okay interesting and put this on a timeline for us when did you launch we launched um i think it's been about uh 14 years ago um a entrepreneur aj goyle was the founder of django mail really when the email business was still very very young and uh grew the company and then it was sold about five or six years ago um and uh you know i've been working with the company since then well did you buy it or were you part of the investor group uh part of the investor group yeah okay you put in your own money or they tapped you to come run it um i was tapped to come run this yeah okay why why not go do your own thing um good question you know i've been with the investor group for um for that period of time and it's just one of the things that i do right now okay but but you're taking you're taking a lot of the risk that an entrepreneur who is starting from scratch would take you also are de-risked a little bit because the product already is i guess probably has customers and some revenue um right are you just saying you actually just enjoy that more you don't like going from zero to one you're more of a one to ten kind of guy well i mean i wouldn't necessarily say that right now at my you know that's what i'm doing and at my point in the career it's just um yeah i i would say that what i do now is the one to ten yes growing companies and uh and and you know seeing what we can do with them to make them uh profitable to grow the customer base and uh provide great service so have you been inside of evers group for a while and done this amongst many companies that they've acquired or invested in and you're kind of an eir yeah so i've been with everest group for that about five years and uh yes i've worked with you know many of the probably most of the portfolio companies that we have we have there about um i think it's eight different companies and i really worked with each of them to um to grow the sales there that's great now do you are you able do you participate kind of on that side of the thing as well in other words you know most of these firms if it's a true private equity fund there's kind of carry and things like that do you get some of that upside or no are you really just incentivized based off the equity you have on this part of the business yeah i'm incentivized basically by the by the businesses that i run and uh and and how they perform so just django yeah well actually django and then we have another company in columbus ohio that i'm participating in as well which one that is called us info search or martin data is it's martin data llc um us info search is the kind of the brand name that it goes under it is a company that provides information for um identity verification and risk management so you run a ceo there too yes how do you do both you split your time as necessary you know and uh you just do what needs to be done work a lot of hours i guess yeah um interesting okay good all right so uh launched in 2004 bought in 2013. you came in in about 20 1314 when everest came in and bought it what have you scaled the company to in terms of total customers today so total customers um you know we're probably at the um about five or six thousand range okay um and uh so yeah it and that that comes and goes it uh you know it goes up and down okay and then look i mean you know we said earlier an average of a thousand bucks a month times five thousand customers you can do the math i mean that puts about five million bucks a month is that right um that would uh that would be a bit high okay yeah i'd say it's okay we can correct one of the other two numbers is the average too high of a thousand a month or is the customer count of five thousand too high so the average um you know the the average if i looked at is um probably a little bit high okay uh i think the average enterprise you know and so we have a number of customers that are at the at the low end so if i'd say actual average yeah it's not going to be a thousand dollars a month you think it's closer to 100 yeah you know somewhere in there maybe i don't know exactly okay um many people listening like oh wait how does he not know this thing he's running the company this is like a critical thing this is how you get obviously back into kind of mrr yeah look um there's some aspects of this that we don't necessarily make public mm-hmm okay i mean but you already said average was a thousand and then you already i mean i'm just multiplying numbers you publicly gave me already right that's fair right yeah sure okay but but now we're realizing they're not accurate so i'm trying to give you a chance to correct them that's all i'm trying to do is correct what you what you already said right yeah so if we if we look at a true mathematical average of it you know maybe it's closer down it's not a hundred dollars a month but it's somewhere in there um uh somewhere between those two numbers and uh yeah i mean that's that's about where we'll go with this okay and are you have you helped me understand the kind of company growth over time you know most term companies once they're owned by private equity firms sometimes they can kind of flatten out as you go for operational efficiencies i mean are you guys flat or still growing um we um have not grown a lot over the last number of years but um you know our our focus is always to continue to grow the company why do you why do you phrase it like that i mean what if five percent growth is actually a good thing well i mean that's like what do you compare you're comparing yourself to something otherwise you wouldn't have said we're not growing that much your computer you know you have to compare yourself to something to say not that much so why are you who are you comparing yourself to um just compared to what we where we'd like to be okay well everyone always wants more growth yeah so so i mean when you say not a ton of growth i mean are you talking ten percent you every year or thirty percent or less i i'm just not going to get into those numbers right now okay uh just to be clear though i mean so we'll go back to a minimum on the other since we can't go down the growth path you know you said somewhere in the hundred range in terms of an average so let's just go conservative and say 100 right 100 times 5 000 customers is still a healthy company at 500 grand a month um how are you driving growth is it getting new customers all together or driving expansion revenue across the cohort base both yeah so so we do look to existing customers and see what else we can do for them as well as we try to go out and get new customers so both directions well i i i understand that but what i'm asking is what has been more effective for you driving expansion or brand new logos um driving expansion has been more effective for us okay and why do you believe that is um you know getting new customers is always at the enterprise level is always a tough thing uh but um you know we continue to do that but just in terms of what's been effective for us it's to um it's to drive expansion of current customers and what are the pricing axes that enable you to drive expansion usually it's the number of subscriptions number of sends things like that yeah so because the uh the number of sends is proportional to the revenue um you know we look for what we can do in terms of the number of cents how can we um maybe if a large customer is using multiple players uh to to deploy emails what can we do to get additional business and uh you know take away from others that are sharing that business um okay got it and you keep mentioning enterprising but you're really not landing enterprise i mean from what i can tell from your funnel from the outsider's perspective this is really meant around landing someone at 100 bucks a month and then hoping they drive increased sends over time and and build up to a grand a month over time um not necessarily i mean you know those that we those customers that we get there are um there are those that come in at a much larger volume and then there are those as you say that we get at a lower volume and then and drive up yes wha what is um i guess maybe what's the operational muscle you've been built in terms of team i mean do you have any do you have an internal team focused on um kind of a sales and sdrs to you know a's and things like that yeah we do yeah we have a we have a team focused on sales and um and as well customer service team that really you know reaches out to current customers and uh and and helps them along the way and mark what is the total team size today um total team size that we have here is about 15 people in addition to some additional offshore um you know uh development teams that we have too and there's a big debate right now on if customer success reps should be incentivized uh or quota carrying based off expansion revenue they drive have you decided to make your cs folks quota carrying so our cs folks do get rewarded based upon um based upon expansion of current customers um that works for us i can see situations where it wouldn't be the best um but uh but it works for us to do that interesting and have you guys with obviously you and everest together have bootstrapped this after you spun it or acquired it or have you raised additional institutional capital no we have not no we're we're doing uh everything internally in terms of capital that's great well hold on so let me let me clarify there um has has the company required additional capital to grow either from everest investing more or outside other investors putting money in since you guys did the spin out or the acquisition in 2013. no no they have not okay got it so you're basically running this like a bootstrapped company yeah yeah that's great that's good all right very good and then what about the other economics so churn's critical in a sas company how do you think about retention um you know retention is really important obviously and uh we make every effort to do that um we've done pretty well holding on to um customers and growing them uh with time um so yeah that's uh you know that's one of our constant efforts to make sure that we're reaching out to them and uh and giving them the attention they need so i mean trying i mean i know i've talked to a lot of other people in this space and i kind of know what an average turn rate is for this kind of price point in the space i mean are you churning 10 of your revenue per year or is it more or less would you say i would say it is um right around that ten percent of the revenue journey yeah yeah and do you see um do you more than make up for that hole on just expansion revenue ignoring new customer ads but just expansion revenue um we tried we're not always successful but we certainly try yeah yeah that's great so i mean would you say most years you're hitting about 100 net revenue retention when you add back expansion um pretty close yeah yeah and then obviously definitely higher than 100 once you add back new customer ads yeah yeah um that's great are you doing anything to try and curb that down the 10 rev gross revenue turn or you're actually saying that's standard it's going to happen well i think it is going to happen but we make every effort that we can to try to keep that to a minimum um you know customers do come and go it's just a life cycle thing um you know and and one reason that we see some customers leaving is just because they've been bought by someone else and now use a different platform or taking email deployment internally so those kind of things do happen they're just kind of unavoidable yeah but you know where we can um you know one of the differentiating features for us is that we do have the ability for people to call us and give and so that we can hold their hands and what they're doing that makes a big difference and how aggressive are you being with getting new customers so you know what we what are you happy to spend to get a new 100 a month customer um you know so i won't go into the exact numbers that we spend there but um um you know it's it's really about the potential that they'll provide so you know we're aggressive about you know about the marketing efforts that we do in order to get new customers well let me ask differently so you don't have to actually say what the number is i mean how how aggressive are you being in terms of payback period do you want to get your money back in six months or 12 months or 24 months um i would be happy with 12 months okay good so if someone's gonna pay 100 bucks a month which is 200 bucks a year you're happy to spend 1200 bucks up front to get them yeah got it and where would you typically spend that besides your kind of internal sales team and head count any direct paid stuff so we do we do uh do um adwords uh we do you know we've done banner ads in the past we've also done you know a little bit ironic but uh we've also done direct mail um as well so does that work sure i'm sorry does that work it does you know the just like any advertising method the um the hit rate is is relatively low but to a certain extent it does the the one thing about direct mail is that people still see it right as some of the emails that uh that are sent out they just get deleted right away um mail that comes people see it and it might sit on their desk for a while and especially if you're doing that with in conjunction with other campaigns it's just a name recognition thing yeah interesting um how do you track if someone signs up from a piece of direct mail is it a unique url or something on the on the piece of paper mail yeah it's a unique url or a unique phone number that we use those kind of things interest phone number or url what's more effective we do a phone number generally speaking yeah you basically generate you use one of these services which generate a unique phone number kind of per each piece of mail or something right so that what we can yeah just so that we can say okay you know we got these phone calls they came in on that number we can track those things that way yeah very interesting okay so what's the plan with this thing i mean look you know private equity typically you know you build the company you add some efficiencies and then you sell it four or five years later are you selling the company right now no we're not no we're continuing to grow this as we can okay but you said growth is kind of flattened out so at what point do you say okay it's time to sell you know i think that'll just play out here um we do have a number of initiatives in order to try to increase those sales further and get a growth back to where we'd like it to be so no the the selling of the company is not in the cards right now i just understand how you compete with someone like a mailchimp i mean it's really just dominated this space like hardcore yeah it has but you know what there are just lots and lots of organizations that need uh mail deployment and some of them are just not well suited for someone like a mailchimp mailchimp's great for those who want to send small quantities of email they've got a list that they upload and uh you know they send it once a month twice a month uh for those that are doing um larger sends um you know that doesn't quite give them the support of the capabilities that they need but you're right it is a challenging environment with some of the major um large players that are in there yeah no interesting all right very good mark let's wrap up with the famous five number one what's your favorite business book oh my goodness you know um i'm going to go back to a book called um uh first break all the rules and it's uh probably about 20 years old but uh it's been very interesting in terms of of how to work with people and manage your organization number two is there a ceo you're following or studying um not directly i know that's gonna be a disappointing answer for you but um no that's fine number three uh what is your favorite online tool for building the company [Music] favorite online tool i've been a fan of hubspot i think they do a great job in some of the work that they do number four how many hours of sleep to get every night um between six and seven okay we'll call it six and a half and what situation mark married single kids married with two kids one in college and uh one who's married that's great and how are you i am 51 51 last question what do you wish your 20 year old self knew um i wish my 20 year old self that's a great question um you know you there's an old saying that says that no um old i'm sorry no wise person ever wanted to be younger you just gain knowledge as you go forward in life and some of that knowledge just you know circling back at that time that i could make better decisions and uh have a have a view as to what the world is going to become that would have been very useful to me guys there you have it mark richard django male founded in 2004 the founder sold it to everest group a private equity firm that mark was working with in 2013 he now runs it 5 000 customers call it north of 100 bucks per month per customer so north of 500 grand per month in terms of revenue at this point using all kinds of things to get new customers including direct mail with unique phone numbers track attribution pricing based really of number of cents he's really optimizing for these enterprise accounts sending high velocity or high amounts of mail bootstrap since they acquired the company they are profitable 15 people in ohio with the offshore dev team 10 revenue churn about gross annually called eight percent expansion so 98 99 net revenue retention annually as they look to scale he is totally happy with a 12-month payback period as they look again to find that growth again mark thanks for taking us to the top absolutely thank you