How Leadfwd grew Leadfwd to $900K revenue and 100 customers in 2019.

hello everyone my guest today is bill kalert he's a technology sales and marketing visionary strategist and organizational leader who conceives develops and markets game-changing products and services that deliver rapid revenue growth for b2b and b2c clients right now building a company called inbox 25 and a new product forward dot io bill you ready to take us to the top sure all right let's talk about the oldest thing first and then your new stuff later so what is inbox 25 and what's the revenue model how do you make money sure uh inbox 25 is a marketing automation platform uh so we compete directly against firms like marketo pardot act on firms you've firms you've probably heard of a revenue model is a sas based business uh integrates well in the smb to mid-market enterprise space it's primarily b2b um and uh we integrate with uh salesforce sugar suite very nice have you picked one specific app exchange that's driven most of your growth or has it been really kind of you're all over the place uh the initial growth was through uh sugar uh it's kind of like a trial uh but now we're uh pivoting and transitioning over to salesforce obviously because it's a much larger pond to fission okay so sugar crm integration drove a lot of your early growth correct yeah interesting did you have an exclusive partnership with them or did you just happen to rank really well in their ecosystem uh we just happened to rank really well in our ecosystem just just due to our uh the way we integrated the data in it was uh it wasn't a traditional list-based approach we went in at the cell level of the record of about 13 different modules of data okay this isn't this isn't by accident though i mean it takes a certain skill set besides just timing to rank really high in any of these app exchanges so so obviously you just touch on some of the product features but tactically you know does and i'm not familiar with sugar so forgive me do they have is it a review based ranking system for inbox 25 to be at the top of the app exchange i know um sugar's app exchange is very uh it's uh very unsophisticated okay so uh so they're modeled there is there's no algo that that that moves you to the top of the bottom it's just it's just the relationships that you've been able to develop inside of their reseller ecosystem interesting interesting okay so i mean give me a general sense of how effective this was for you in the first year of the sugar serum integration how many new users did you get from the platform uh geez we uh pivoted to marketing automation about four years ago so in the first year we probably had about 150 users or customers users okay cool and you know customers i'm i'm not counting them as a one-to-one model users and customers it's the same thing in my mind we could have i mean i could have a customer with more than one users in it but we don't track revenue that way because our model is solely based on the number of active targets so if your acne industries you could have one user or 50 internal users and our business model doesn't unchange so you do not upsell based off seats you only upsell on a usage-based model which is number of active targets correct interesting many would say that's a disadvantage that you're leaving revenue on the table uh not in our space in the crm world where it's at where it's based on seats correct but in our space where it's based on database size um that's the that's the sole driver because the database size drives the amount of traffic that we see and the amount of calls replacing through the through the apis interesting um you put you said you launched this four years ago so what 2014 was launch date seems like a long time ago yeah probably 2014 2015 i'm trying to think yeah around that time frame okay and you've bootstrapped the company or did you decide to raise capital bootstrap i love that very good how did you fund early on yourself where'd you get money from american express that's an expensive apr yep sure is yep what do you need the money for like why did you have to you know grow up some credit card debt there in the early days to to get going uh well we've been cash flow positive everyone since which is which is good and bad you know it's good and that there's no there's no debt it's bad because things that would normally take 12 months take 18 right because we don't because we don't have the velocity and the capital to go bring in you know instead of three developers you know if you brought in six not that you know you can compress it in half but you can accelerate stuff yeah what's your team size today how many people um we're privately held so i really can't disclose a whole lot of data i want to but i can't but if you go on linkedin you can go find out um we're under 15 people okay under 15 that's fine i'm just i guess i'm just more curious as a follow-up to your prior question which was like how many developers do you have uh we have uh again you put me on the spot you don't have to share by the way i'm just i'm just following up to the question you asked uh no we have under 10. okay got it so so you feel like you have grown slower because you haven't been able to accelerate your kind of developer sprint cycles absolutely yeah interesting what's frisco like are you hiring kind of talent in frisco are you hiring from all over the place uh talent can be from anywhere as far as as far as i said we're concerned our main office is in staten island uh new york okay i work uh remote so if you have so if there's any talented people that are in the midtown area the staten island jersey area we'd love to talk to you yeah yeah you've i mean a quick quick linkedin search you've got kind of uh gabi and romania and then you've got look like some dev folks on the mainland here you know i've got danny a junior applications engineer and other people actually based up there in new york so you're paying some you're having to pay some big salaries to have developers in new york or at least big relatively speaking to romania and no comment no i mean you don't really have to comment on that one it's pretty it's pretty common knowledge developers are expensive in those areas um okay very good so less than 15 people today uh you're working remote again playing in the sugar crm space you launched this in 2014. um help me understand you said you're a sas pricing model based only on database size and active targets i mean give me a general sense are we talking enterprise here smb is it 10 bucks a month or you know 10 grand a month typically yeah um what it okay so we typically uh run off a second annual agreement okay so let's say that you have a database of uh 20 uh 20 000 records sitting in uh sitting inside of your crm uh that might be ten to fifteen thousand bucks a year okay um wait sorry for how many uh let's say 20 000 rappers interesting okay now so it's almost a dollar a record annually say that again it's almost a dollar or record annually you say yeah i like at that level but if you but if you go up to say 100 000 records it's not a linear scale so it's not a hundred thousand bucks a year it would be great if it was but it just isn't yeah well you don't need to you're going to be highly profitable anyway it's software yeah so like it's like it's a very flat um it really flattens out yeah do you have a large split kind of the pareto principle eighty percent of your customer twenty percent of your customers make up eighty percent of the revenue or are you pretty kind of flat there's a flat average you're all mid market oh no eighty uh the 80 20 world just completely applies yeah yeah and it's weird in this space in that there's really no correlation between employee size and database size and you would think that a larger company with 5000 employees would have a bigger database than 50 employees or 100 000 employees would have more than a thousand employees but i have not found that correlation to be true at all i wish it was but it just isn't well maybe a bigger database is what allows small teams to compete and stay small maybe uh which is potentially interesting um it also explains why you don't price on a per seat model there's not a direct correlation there the value of the database um just because we don't have time to go on every customer cohort i mean would you say that 15 to 20 000 per year is a good average or you think it's north of that um for us it's that's a that's a solid average okay it's like that's that's your sweet spot right there in the middle 20 thousand active context annually okay and can you can you paint the picture of is there a customer that you have permission to talk about just so we can really visualize who the kind of person using you um i can i can give you a great idea let's say you're a mid-market firm you're b2b uh you have a small marketing team may be you know a handful of people um you do you have a crm um and you need to do some digital marketing and you have a database of 20 to 100 000 records per year and you do you want to run some automated campaigns you want to be able to run some workflows you want to be able to provide a holistic customer journey view after you're out to your sales reps and you're tired of doing everything piecemeal and that would be kind of a typical customer that we face and we end up and we end...