How Karmacrm CEO John Paul grew 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 put like gig Tennessee River Association $5,000 they they put like those things in the platform exactly so with with if we're talking specifically about speakers they have a long sales cycle a lot of times sometimes it might be okay call us back next year source system helps them to put in these gigs keep on top of mind so that they know and you reach out at the certain point you know fairly standard for a CRM but they'll put in you know I think the people that are using the system the best will have a pretty full pipeline with gigs in different stages once that's decision one's already signed a contract and then once the sale closes we even integrate with the platform called a speakers which they kind of hand all the post sales stuff we do all the pre-sales stuff have you published any data on like I mean I would love this data like the average gig price right like depending on season if five grand a hunter brand like ten grand I mean you obviously have all that data you can anonymize it and publish it now be amazing content have you done that we haven't done that yet but that's definitely I think more we drill into the speaker's face we're so kind of half and half we still serve as small business customers and we will continue to but as we drill more into that niche market and learn more about what's important to them I think that's some of the exciting stuff we can do is getting out yeah hey here's some things you should meet we can suggest to you based on the anomalies data yeah well going back high level for a second so you launched it in 2011 I mean you've been doing this for seven eight years you you know look prompted to you you went through a lot of work but I mean you're at 30 grand a month in a revenue I mean I could imagine you're you've tried a bunch of stuff that can get time I mean why not like sell this thing use your everything you've learned start a new you know a new concept or new space where you could maybe have a bigger impact sure it's simply something that you know has cross my mind at one point and kind of my crew philosophy is the company more or less runs itself I kind of more or less on the board of directors for karma we have a team that you know more or less can push it forward so I continue to build it as a self encapsulated unit and if you end up selling at some point great but you know it can run itself without a huge involvement from me so everything you all the initiatives you know don't if they if they absolutely require me they're not gonna work but if I can build a team around it give them autonomy and empower them then perfect mm-hmm so what are you spending your free time on I have a couple other projects actually I have named a few which is very different but online e-commerce and it's been a family-run business my dad started it so I kind of again a similar philosophy there where I'm on the board I work on it very minimally but I kind of add all the skills and digital you know experience I've had to the table mm-hm and then the newest project is what I'm actually most excited about and it's called quick flow and what quick flow is is a SEO experimentation tool that allows you to basically a be test your page titles and your page content but for an SEO purpose interesting talking and staying focused on karma so I mean if someone came you and offered you half a million bucks off cash up front today would you take a deal like that probably not half a million but I definitely you know be willing to chat with people about it you know it's a minute you've always kept on the table and my team is also you know working towards getting it whether or not you sell the company I think creating the systems in the processes to make it sellable it's just good for the infrastructure the company as is so everybody's kind of we're all working towards a goal getting it cleaned up and getting everything you know just well organized yep systematized yeah very good alright let's wrap up here JP with the famous five number one what's your favorite business book favorite business book that's top traction I had to say traction EOS wait is that you're talking this traction or did the other one the other one actually add that ones you but it's the entrepreneur operating system so it's kind of a framework for running your business yep number two is their CEO you're following or studying not currently but I probably should have at least somebody no that's okay if you're not I mean you know just means you're focused right number three what's your favorite online tool for building the business besides your own I asana I'd say for project management and number four how many hours of sleep do you every night solid seven or eight okay that's good in which the situation married single kids married recently one year any kids no kids no kids and how are you I am 33 33 last question what do was your 20 year old self new honestly probably take funding for karma I think if I at the time I was building on the developer I was like a bootstrap this thing not a lot of serums around I decided that to try to pursue funding cuz I'm like I could build better tools or I could pursue funding and I had I done that early on like you know kind of the typical route that is really small Ange around we took and was able to really add gas to the fire five years ago I think you could easily be one of the you know the common household veins and people know about us but I just and I didn't have anybody in my corner say hey you should really think about this it's worth the six months to learn how to be you know to approach VCS and angels and you know I don't regret it because it I know it's may be Who I am today but I think had I gone back I'd say hey put the time in learn you're a young guy it's off time guys they're here from JP founded in 2011 karma CRM it's a CRM for speakers are doing about 30 grand a month in revenue that's up from 20 grand a month about a year ago they raised a hundred thousand dollars currently serving six hundred customers paying about 50 bucks a month again again mainly speakers paying 300 bucks to acquire that customer lifetime value is about a thousand bucks they stay with them for about 20 months and they've got about 5% logo churn per month the team of four people based in spread out really in definitely remote locations looking at and investing in many other projects as well like e-commerce JP thank you for taking us to the top absolutely thank you