How Karmacrm CEO John Paul grew Karmacrm to $6M revenue and 600 customers in 2024.

hello everyone my guest today is Jay P he was thrown into business at 18 taking over his father's furniture company and growing it from a hundred grand over a million all before twenty-one years old he's been in deep code since he was 15 and his self zero squirrel chaser he sends founded several SAS companies we're going to jump into his current one karma CRM today JP are you ready to take us to the top absolutely alright does call my CRM do exactly what it sounds like you're playing in the crm space that is true yep and pure-play SAS model pure place ask model yeah we're currently focusing on professional speakers so more of a nitch sierra i like that still and what is the before we kind of dive deeper there into that knee give me a general sense what's the average customer paying you per month for the software about 50 to 200 bucks a month okay and how did you set on speakers I mean obviously I think in a niche kind of focuses specific in this space it's so fragmented but why speakers so we found out that we have a pretty healthy segment of our customer base that were speakers and we kind of realized that the general CRM market is so saturated that it's hard to kind of compete in that space so it was a lot easier for us to pick a niche serve them really well you know it's puts a face to a customer much more than quote-unquote small business mm-hmm and and what have you I wanna put this on a timeline real quick so when did you launch the company what year though the company was launched seven years ago 2011 2011 and what have you scaled to today in terms of total customers so we're over 600 customers okay that's great so Kevin can I take that 600 times a 50 to get your you know general mor per month today is about what 30 grand yeah and and what is growth look like so if I go back to a year in September of 2017 what were you doing in that month so we've grown about like I said 15% you owe me over the past couple years that's pretty good so maybe 20 grand a month about a year ago not the 30 grand a month yeah an agent are you doing this all boots shrubs we took a small friends and family round of funding but generally I'm strapped yeah okay like what are you talking like a hundred grand yeah okay very good and and what is it sound like you've launched several SAS companies I mean why decide a couple years ago going to the CRM estates it's extremely crowded a fragmented many would say being commoditized very difficult challenge you decide to take on yeah so it definitely was a challenge I went into it initially seven years ago because I co-founded a web development firm and there was no good CRN's out there so I hadn't tried to get my sales guy to use Salesforce type drive drive pipeline deals a couple of other months at the time and he kept going back to spreadsheet so as a developer I'm like I'm gonna build this simple tool you're gonna use it and initially it was just for dog food purposes and then we kind of turned it into a full scale company and so what was the key thing in a develop to actually to your sales person I use it cuz that still is a struggle today yeah it was a everything was just a little too complicated at the time it was you're selling web development custom development projects and our project process wasn't too complicated it's just like are you working with us already not how much you paid us we didn't need to have all these bells and whistles at hoops and funnels we just needed a way to stay in communication with our customers I think I can visualize that like I resisted for six months we paid for a bunch of tools and I'm finding like okay you're still using spreadsheets I'm gonna build this thing oh yeah did you sit on Monday group from there that's great what how many team members are yet today just you another guy or more we read for folks into two co-founders you and the other one actually just me just you okay got it so they so maybe you're that other gentleman you mentioned was your first employee my well I had a business partner at a previous firm but we have a sales person and customer support okay very good and where's everyone based one person is based outside of st. Louis and one of them is here in Denver Colorado okay so good so kind of remote and um walk me through me this is a cool thing and live a lot of developers listen that kind of launch a side project and they launch it it feels good but they never actually get revenue going so how did you get your first 100 customers so our first hundred customers actually came from I have a little bit of a background in internet marketing SEO so we kind of just got it out there we started a blog a before we had a product six months prior and we got listed in a couple three CRM Nick Brown up posts from small business erm I think calm and yeah we got listed there I mean they were getting a bunch of beta customers and I initially thought I was just gonna have to you know prod all my business connections directly to sign up and I ended up having you know 3,000 and mr when we launched beta which was pretty nice because we had a lot of people that were kind of interested in free product mm-hmm that's very good so you've scouted 600 today have what's your fully weighted CAC on these customers as far as which what you pay to acquire them so it varies very varies a lot they sign up as organic or if it's not but our target is about three four hundred okay so you're willing to spend up to call it three hundred bucks to acquire the customer that means you got what about six month payback if they're paying 50 bucks a month yeah that that's good and where you when you are spending money to acquire them where are you spending is it Facebook Ads Google Ads where is it mostly Google Ads I'm just going to do some Facebook too as you probably know the CRM spaces very crowded and very expensive so we have to be careful with how we acquire customers with a pretty strong organic channel with the speakers because it's more word-of-mouth and then we're working on with the paid side which is you know always a challenge what we found some good ROI there Square cat we're finding that as we go name one angle in your product that speaker just love that they can't find in Salesforce or pipe drive writing these other CRM s I think the the overarching theme is not one specific feature but the language is catered towards speakers so we provide pre-populated email templates that are written into service speakers and how to speaker sell to associations and things like that the language in the in the app the custom fields instead of deals it's called gigs so across the whole system it's built to reflect the language and that this distance speaker and this flow of the speaker's business as opposed to a standard vanilla CRM yeah that's that's pretty smart it makes a lot of sense now a churn is critical and I know speakers come and go like the wind so what's your turn today and how do you manage it turn is definitely an issue I think in any small business product when you're when you're catering to $50 people get that's all I got two thousand dollar enterprise contract you do get higher churn and some of it is just from people going out of business so one of our pursues in the coming quarters is to actually help our customers grow more directly and that might mean providing some basic internet marketing services or consulting out how to basically just get from 0 to 1 as far as growing a business goes what is what is turn today they're like what's the 10% a month 20% what's the number 5 5 % okay I mean so not horrible but also not like amazing right it is hopefully a number that makes it a little difficult to scale rapidly but it's something that we've seen pretty consistently throughout the course of the product so now something we have any low-hanging fruit on yeah yeah so if your turn 5% each month that means each one will stay with you for maybe 20 months and so what your lifetime value assume is 20 months times 50 bucks some thousand bucks something like that yeah yeah that's right it varies between thousand yeah and and so you said the next place is for like for you to grow this thing as you want to add on additional xserve it sounds like service related products which obviously margins are way lower on that and I imagine you would hate having a call a day where you're talking to 20 speakers back-to-back for 20 minutes of pop doing consulting services how do you scale that sure yeah it definitely wouldn't be me doing it directly but I think with some intelligent design and just a couple good pointers and maybe some partnerships we it's not as much about margin as it is about helping our customers grow so I think margin is obviously important too and I think it could be a you know an additional product to you know create negative churn but it's also to keep them brown so that in the next you know annual surgeon comes up they're like hey we're in business for driving you want to keep going so on average across your paying customer base how many gigs are they closing like per quarter or per year I don't actually have that number in front of me it does vary wildly based on with the fact that we have speakers and then we have our other customers who a gig or a deal so that might be some you know very different things interesting yeah what do you do they actually...