How Leaddyno CEO Brett Owens grew to $1.1M revenue and 2.4K customers in 2018.

hello everyone my guest today is brett owens he's co-founded and successfully bootstrapped two software service companies that are growing and profitable today he's currently the marketing director and co-founder at lead dyno an instant affiliate marketing solution for small businesses brett are you ready to take us to the top i am yes sir all right so you said you listened to the show you're loving it why do you love it well i like the specifics you're pretty hard-hitting and uh so ready for that uh and uh yeah i like the nuts and bolts i like the nuts and bolts uh story of how people built their companies and i guess why they do what they do well so you know what i usually ask so save me some energy tell me what you can right now about the company and then i'll dive into some stories that i think might be valuable for my audience for sure so we did we started leap dino in 2012 we launched the product in april of 2013 so we had a pretty quick uh turnaround in terms of getting something to market so that uh first year of despair that i know you love we closed the year with a whopping i think we had three thousand dollars in recurring monthly revenue twelve or thirteen three one two three sorry twenty twenty thirteen was that yeah that was twenty thirteen yeah thirteen grand you said three grand three grand three three three co-founders so we had a grand each of revenue never mind expenses um so needless to say uh we worked for free for a few years we did we did bootstrap as you said uh in the in the intro so uh worked our way up and today we have uh feeding ourselves and other miles to feed overall we're at about 10 or so people in terms of full-time uh equivalents here and uh doing uh larger revenue we're above seven figures now in terms of annual uh revenue numbers that's great and how many customers are you serving now and we have uh 20 oh we're nearing we're over 2 400 on the customer side of lead dyno okay and then we also have an affiliate network that we launched that plugs in with it you don't have to be a lead dyno customer to join that but many of many of them are lead nano customers or they join and then see how awesome league dyno is and sign up but we have 1800 merchants on that side as well that we're supporting okay and those are separate so lead dyno there's 2 400 plus another 1800 on the affiliate side yeah so call it about maybe just call it over 3000 maybe or so okay so so tell us what lead dyno does what are you doing obviously it's a sas model yeah so lead dyno and i know you've talked about affiliate marketing before and you know uh amazon's probably the classic example everyone's familiar with so you can get an amazon link if you want to promote uh a link to a product get some sort of commission from amazon you're gonna link to that what we do is basically help somebody who sells direct they have their own online website they have their own online store and they want to launch their own affiliate program uh that's what we're helping them do so a plug-and-play and especially convenient for people using shopify bigcommerce other e-commerce platforms we have apps integrations that they can just click and plug us in there and what are people paying on average for this thing per month on average so our pricing is between uh it starts at 29 a month and then it goes up to 249 a month actually up to 349. uh but we're under 100 a month in terms of what they're paying and i've just in my experience found that to be a pretty good sweet spot for small business where uh under 100 is a i would say a good price point for a serious yeah well so if i take that 2400 times the 29.00 that puts you about 70 grand a month in revenue but you're north of 88 per month right now right that puts you above a million in arr and what does growth rate look like right now year over year uh growth rate i believe we grew about 30 year-over-year uh last year so 26 2017 over 2016. that's great so yeah so you're doing about what 60 grand a month 30 about 13 months ago something like that uh yeah that sounds right yep grown 30 so first off that's great for bootstrap company 30 year over year where are you getting the growth from how are customers finding you combinations so uh we're kind of just visible out there when we started uh the company one of the things that we we figured we would do i mean i guess we had nothing to lose because we were new um is a lot of the classic affiliate systems kind of sort of the who's who that was out there uh they're kind of behind sort of veiled gardens where you almost couldn't get a demo without talking to a salesperson and we said well hey we got nothing to lose let's just i'll do these demos we'll put them out there on the website sure competitors can also view them but we'll just kind of get that stuff out there so that's what we do we're really active where we're posting stuff on our blog we send out newsletters every day featuring affiliate programs in our industry just sent out the adult newsletter today with valentine's day coming up um figured that would be appropriate um so we so we get some good organic visibility and then also through app stores that's a good source from integration partners as well so from the shopify as i mentioned big commerce wordpress woocommerce those types of those types of app stores cool and i will add a note for anyone listening going wait did he just say valentine's day you're oh you're hearing this probably in june july probably an august time frame i just want to let you guys know that because we have a huge waiting list for the show i only release one a day on the podcast but if you want them all immediately you get them basically the day i record them at getlatka.com so brad i want to put that out there in case people want more of you sooner that's why they need to be on your list all right good so um why would somebody use your affiliate solution over like a share a sale so one of the big benefits and we do have um user we have customers who use both they've used a share sale for many years and and and of course a very good product comprehensive product um but with that it's got it's got 20 years of features in it and uh their big focus today is they've got uh the influencers they work with and especially kind of the hot term now for 2018 is almost more micro influencers where they're turning these folks who have uh and they often times their customers are there so they're taking folks who have i mean everyone has a social media following today they've got a facebook uh following they've got instagram followers they've got you know family or following them or friends so turning these people and helping them share their experience their link onto social media but stuff has to be really easy for them to share so that's where we've got a very simple affiliate dashboard that does everything we've got a little one click so you feel like you're easier yeah okay easier to do so you just hit the facebook button for example pops up facebook has a post all ready to go you hit it one more time and it shares tell me about churn oh churn uh yeah so turns a good question so churn is in the high single digits our turn is actually i would say high for assassin's creed monthly uh yeah monthly okay so call like eight percent logo churn per month something like that yeah i would say that's uh i would say that's fair and why is it so high uh it is high because a lot of uh and i think you see in e-commerce there's just high turn in general um in the e-commerce world i don't know what shopify is shopify's published so they might have the turn um numbers my sense is that their turn would be on the higher end as well you um we'll see it was something that we kind of beat ourselves up about for a while where companies uh you know people sign up and then they leave and you feel bad and you find that the reason that they left is oftentimes they shut down their online store um so that's just kind of i think comes with the territory um in terms of small business so what we try to do is just help the serious people as much as we can we do try to help the dreamers get traction we do our best that that was a big motivation for us launching the affiliate network but yeah there's um there is just seems to be a high churn in this type of uh especially when working with small business rounding out the unit economics what are you paying to acquire new customers um and then to acquire a new customer i'll tell you what i'd be happy with because i don't actually know what we're paying uh our number's actually probably pretty good because we get so much more organic but i would say i rule a thumb i'm happy if i if i about a year's worth so let's say well let's call it six months so if i can spend 300 or less to acquire a customer i would be i would be happy with that yep and that that you equate that to about six months of revenue yeah about six months sure yep and then do you do projections and calculations like what do you assume the average customer stays with you in terms of months and dollars yeah that's why um it's very binary where we've got folks who are some folks with us stay for a while or forever if they're serious about it and then you do get the folks who we are very blessed to have them in our lives for the period of time that they are they're very quick when they come in they're here for a month or two and then they they move on and and they're gone um so we i kind of look at it with that with that where the six months i think is kind of conservative i think we could pay up to a year um but i like to kind of do more gorilla type tactics anyway so i always look at i like to be on the conservative side that's like that's why i picked the six months yeah i mean if you look at the eight percent monthly churn you do one divided by 0.08 that means the average customer would stay with you for about 12 and a half months at a you know call it 40-ish a month price point you know they're worth their you know 50 you know 40 bucks times 12 months obviously you do the math there um right what you're saying is you've got some folks obviously that stay longer some stay shorter the question i have for you though is have you have you t with churn being that high have you tested just selling uh one time 600 like up at a price point that's higher than your current ltv oh up front one time yeah just one yeah no we've never tested that we've also never tested doing something um yearly we've always been flat monthly and no setup costs either where i know some of the big networks um and that's always been a drawing point for us i'm sure it does contribute to the higher churn i know some of the big networks they do 500 to a thousand up front to get in which would be to your point um no we've never tested that i don't think we have any current plans to test the best interesting thought yeah it's always interesting because you just don't know what's going to happen like for example if someone pays 500 bucks one time are they more likely to spend the time to learn how to actually get the system going right does the money actually drive the usage yeah it could that's a good point we did have a failed experiment with a freemium type model where we offer free versions and that was a complete mess because the type of customer you get free is not the type where even even we found 19 to be maybe didn't have as many serious people as we wanted so that's where we kind of settled in on 29 is that lower floor in terms of practicing to find a series now you said there's 10 of you guys where's everybody based uh so we've got five here in the office in sacramento and then we have contractors uh basically all over from here to um you know i've got people in bangladesh south africa um so you name it philippines new york city so we've got folks kind of spread out all over that's great and are you looking at i mean what do you want to do with the company keep growing organically do you think you'd ever raise what do you how are you thinking about capital no i think we're pretty against raising i mean well a lot of the reason that we do this is we like not having real jobs and i think you raise and uh you kind of bring that element into it but also i don't think we i i don't think we i don't think we need to to do what we want to do in terms of just continuing to grow and i mean it's nothing too fancy it's just one foot in front of the other so i think if we continue to grow with this type of rate we're happy with that and that's what we would be happy doing for the next 20 or so years we're all pretty young guys so how are you there i'm 36 that's good that's good yeah you still get the young check box right yeah until you're 40 until you're 40 then you're old right no i'm just kidding all right let's wrap up here with the famous five number one what is your favorite business book so i'll go with the uh classic it's got a little bit of a cheesy name with the dale carnegie how to win friends and influence people i i think what i learned from that bug and it's actually one that i listen to on audio and i listen to it a few times it's just looking at everything from the other person's perspective and i think that helps when you're building a company building a product where if you're always looking at it through their lens that's helpful as well as on the marketing side where you're trying to think okay well what is this small business what is a small ecommerce owner trying to get done and then you gear stuff accordingly because you do have a ton of product feedback all the time but if you look at it through that lens of what they're really trying to do i find that to be helpful name a ceo in sacramento that you really enjoy getting coffee or dinner with oh that's a good one i got i'll go with my boy aaron klein with uh riskalyze i always say and i always tell him i was trollish facebook feed i think people might think we're uh lovers or something i always say he's such a handsome uh such a handsome gentleman but he's done a great job of building riskalyze which i'll give them a little plug they do a financial uh risk analysis for advisors who's out in auburn i was gonna say i feel like he has been on the show but i could be wrong um uh is he playing in the cyber security space at all or no uh they are doing uh it's a sas platform but they sell it to financial advisor got it interesting okay uh number three what's your favorite online tool for building a business oh that's a good question uh let's see so i guess i can oh you know what let's go let's do live chat live chat's been very good for us uh what's the website like livechat.com yeah exactly so it's livechat.com and it's what it sounds it gives you that little chat box um on on the website that's something that we've had i think since early days i want to say 2014 i think we put it on the website it was like 2013. and i was a man in the chat initially it was miserable i mean i bought all these chats popping up um at once uh so we ended up hiring someone better than me to do it and we've got actually three uh chat operators now on there but yeah i'll give a shout out live live chat's been great are you finding that those hard costs out of your balance sheet in the form of you know employee salaries are worth it having that short reaction time on live chat oh yeah yeah i mean it's a great support tool um it's funny because you if you don't have it on there um you you don't actually hear everything and see everything so let's say we were getting at the time i mean this is 2014. so let's say we were getting we would get five emails a day two phone calls you install chat all of a sudden you have 25 chats a day and these are just kind of quiet people who were there now sometimes if it's support related you wish that you weren't hearing from it but in reality it's good that you're hearing everything good that you're able to help them out and on the sales side it's been a great sales too i would say i i know you love the numbers i would say probably one in two people who sign up for our an account with us hit us up on live chat before all right number four how many hours you sleep together tonight i'm pretty new i'm about seven eight okay it's good and what's your situation married singing you have kids yeah i married two kids so i mean the seven eight's broken up although my wife's great uh takes care of the newborn so yeah i got a three-year-old and a three-month girl and how old are you oh yeah you said you're 35 right uh yeah 36. 36. okay last question what do you wish your 20 year old self knew yeah that's a good question because i mean it made a million mistakes and i kind of thought about that question and i mean i don't want to sound too uh cheesy but almost wouldn't do it different just because you make all the mistakes um i had another company before this that we started elite dyno for bootstrap that company uh kind of grinded it into mediocrity for 10 years not that we didn't do good things um we just never kind of hit the levels that i wish with lead dyno so in hindsight i guess i should have sold it earlier um but knowing but still the the whole the entire process is valuable so i'm not going to show that thing for a good return or was it like a flat it was kind of like a software thing it was a terrible return yeah yeah no the company still owed me personally on the balance sheet like 300 000 because i ended up being the angel investor and it wasn't pretty it wasn't like i had the money yeah i was like forwarding off a credit card on a company balance sheet and then i got not even whatever 30 cents on the dollar for just the debt owed when i sold it but in terms of so yeah no tricky a lot of people do that i mean a lot of people build a healthy little business they feel good a safe salary but it's never going to really take off but they never they never kill it so congratulations for killing it and congratulations for launching lead dyno i'm excited to watch you guys there you had it he would have maybe thought about selling his first company faster now building lead dino launched what did he tell me back in 2012 now 10 people full-time in sacramento area again growing the team there at 2 400 customers paying on average 40-ish bucks a month they're north of a million bucks in ar growing about 30-40 percent year-over-year so doing about 60 grand a month just 13 months ago cactile to be super healthy churns a little high but that's maybe part of the business and they're looking at interesting ways to solve that so brett thank you so much for taking us to the top hey thank you