Lemlistrevenue & valuation

hello everyone my guest today is guillaume mubash if you haven't heard of him or his company he's running a tool called lem list which is growing extremely quick he just broke two million bucks in ar maybe north of that uh it's a platform that helps sales teams book more meetings and close more deals with their prospects in less than two and a half years again they've grown that team to 8 000 plus customers without any funding totally bootstrapped he's also the founder of the sales automation family which he calls the coolest and biggest facebook community about sales automation guillaume ready to take you to the top of course i am nathan thanks for having me you do have a bit of a cool factor to you you stay very close to customers you record videos in that group every day you engage with them how do you have so much time to say so engage with 8 000 customers yeah i'm not alone first of all so i have a great team helping me out but i think for me it has always been important that our users are really successful so i invest all my time and energy in that specific purpose and i don't do anything else so i try to say no to many things that are irrelevant to to helping our customers and so my focus is very narrow what's like the number one thing that you get asked about that you have to just continue to decline over and over again um i guess like i keep helping i don't do that to all for all of our customers but i keep helping people if they are in need you know for advice on how to set up you know their outbound pipeline so that's something where i'm doing like kind of like free consulting sessions uh depending on on some customers where i could just like spend maybe like uh either 20 minutes recording a video for a customer like going through his cold email templates see how things are set up all these type of things and always trying to help but i think it's also part of the dna of the team so now i'm not the only one doing this and it's easier to scale i would say what does the team look like today how many folks so we were like uh 12 people when we reached 2 million in arr and in september 2020 we're gonna be 19 people okay so 12 right now how many engineers uh engineer team is my two co-founder plus uh two more people and three more people now so it's five total five total interesting and do you have any quota carrying sales reps or no they're just they just focus on helping helping your customers uh so we have like two person in the support that i'm gonna call like outreach experts uh we have one uh sales like sdr uh who's in charge of outbound prospecting and then the rest is more like growth and marketing so content and uh helping users to to basically find the best resources and be successful in their sales uh sales prospecting do any of them carry a quota or no uh what do you mean like the for the sale sales target yeah yeah of course yeah like uh rsdr like she has a quota of of deal that she's too close okay so there's one quota carrying person sort of on your team yeah and then it's more like we have objectives and goals but based on the growth like monthly growth so everyone is basically like incentivized on the same goal which is mrr how do you incentivize that it's not easy to get these incentive structures right yeah so we do that uh per quarter so we have like we do that exactly the same as way like we incentivize like sales team so it's uh for example because i know a lot of people you know they're trying to put bonuses on number of qualified leads marketing qualified leads says qualify leads but i think this is a bit i think it's too complicated and i think people tend to always optimize things based on so for example if i tell you you need to reach that that amount of marketing qualified leads what you're going to try to do is book let's say as many meetings you can for your sales team however the quality of the lead is not going to be that great however if everyone is focused on growing the mrr and then we set up like the mrr goal at the beginning of each quarter now everyone is focused on one thing which is revenue and revenue for us equals profit so it's like everyone goes to the same direction and i think it's like it's a better way to incentivize so we have like different levels and each level you reach you will get a bonus and then you have like a higher level than higher bonuses can you walk us through this a bit more so june uh ended the second quarter you guys it sounds like broke that two million run rate right around there that's an easy number to talk to so your team meeting at the end of q2 and you're setting goals for q3 what is the new mri target for q3 q4 yeah so i our goal essentially was to do like a 5x from december 2019 up to like uh december 2020. so the the monthly goal is i think it's around like uh 14 to 60 each month month-over-month growth rate so i think it's 16 to reach like 5x more or less and basically like this is the goal for the year so we don't really adapt anything uh so the growth for example if it's faster and then we cut it per quarter so for example if the growth was like faster in let's say i don't know like uh april and march or like in q2 if the growth is faster than 16 then you know like the the goal at the end of uh of q3 it would still be the same as i decided at the beginning of the year i see so what what was revenue in december of 2019 so in december 2019 we were around a bit less than a million yeah so i think it was like a 600k or something like that yeah yeah so so it's six times yeah well it's something like uh yeah 600k arr or something yeah because so you came on in in march of last year and you were at about 250 000 in an mrr so through last year you you three x or maybe more than three x what you're saying is between december of last year when you're at 600 in ar and two or three months from now and december of this year that's crazy by the way we're like three months four months left in the year but end of this year you want to be up in the like you know 2.53 million ar range yeah exactly yeah yeah yeah what's the reward how do you incent the team so let's say they hit everyone hits the goal what's the reward uh they get like a bonus on their salary and a big smile i like the smile part but there are people that are going to listen to this and they're going to want to aren't going to want to copy you because they're going to like the model they're going to agree with you that like mql you know things are like to incentivize these things so let's say let's not talk about any one of your individual employees but let's say i was one of your employees and my base was 50 000 a year just hypothetically and we hit this goal what would i make on top of the 50k uh so the goal the goal is basically uh let me say it's like 25 so it's it's uh every quarter you can get 25 of your salary of your monthly salary every quarter i can get yeah so what is that what would that mean let's make my salary easier let's say it's a hundred grand the numbers are just easier so what would it actually mean so it would mean that uh you can so if it's a hundred grand it means let's say let's say 120 so it's 10k each month yeah uh it would essentially mean that per year if you reach your goal you can get like a bonus a bit higher than 10 percent at the end of the year if you reach your goal each quarter the total would be a bit more than 10 so a bit more than 10k i see i see i see so if i help the team hit our 15 to 16 monthly growth goal or 5x year over year goal i will make an extra maybe 12 grand on my 120k salary yeah exactly exactly and the only reason i would uh readjust the goal uh is if the first two quarter we wouldn't eat the the target so for example because i know like q1 is really strong q2 is also really strong for us i know q3 is uh sometimes a bit like less strong because you have july and august where those are the months where we see like we sometimes see like uh small companies especially like cheap french bastards that usually decide to churn and come back in september so it's uh it's uh it's usually like a bit less gross in july august more people on holiday but then i know like uh september is strong and then again december is a bit less strong but i know october and november are really strong as well interesting okay so how many customers are you now serving today so regarding our customers so we we launched you know on hapswimo so essentially like that was kind of like our let's say a bootstrap round of funding and and at that time we had uh so i would say like eight thousand something customers and basically now uh you would add so those were not recurring if we're mainly like a lifetime user in recurring we have like more than three thousand companies paying on a on a monthly basis and total customer is more than ten thousand got it yeah so three thousand recurring and then you have five six seven eight thousand or so from that absolute lifetime yeah exactly yeah i see did you uncover any strategy that was particularly effective and converting the appsumo one-timers to true recurring plans a lot of people that go through absolutely the ones that love it are the ones that convert them to recurring well the ones that hate it are the ones that don't end up converting them well yeah i think it's very tough to convert a lifetime deal user into a paying customers the only way to do that would be like to frustrate most of them and say like try to upsell them on specif on specific feature for us we're really like uh very honest in what we served when we decided to make that lifetime deal so we said you're gonna get all the upgrades because that's why you know we decided like we launched with you guys you helped us have the foundation of our community and we're okay with that we could be like very sneaky and try to say like yeah if you want to get that type of feature you have to become like you're paying customers and i'm sure we could convert some of them but i wouldn't feel like fair so i prefer having them are really like strong advocate advocates and just keep focusing on getting like more people because the market is like so huge we don't really need to to go after those customers i think and remind everyone so when you did launch on appsumo what was the lifetime plan do you remember how much yes it was like uh they were paying like 49 uh to get like the the lifetime at that time we were not charging any of our customers so it was actually like the best way for us to launch and start making money getting users get feedback and within two weeks we made something around like 170 000 which was like really good you know like to start a sas company it's uh it's quite nice that was net to you after the absolute fee right no no no so that was like a revenue and appsumo took around like 70 of that but then we did another round with optimal and uh we made like uh we made another like two hundred and thousand two hundred thousand dollar sales and i think so total total with appsumo essentially we made i think uh 150k yeah yeah i was going to say doing the math you take 49 bucks for that lifetime deal times 8 000 customers is basically 400 000 in total sales yeah absolutely keeping about 70 percent you would make somewhere in the 100 150k from that yeah yeah exactly yeah yeah secondary was a bit different uh percentage but yeah around that uh yeah no good good way to a good way to do it if you can make the make the numbers work so okay so 3 000 recurring customers now today and what are they paying on average per month uh so right now they're around like um yeah something in dollars it would be maybe like 60 or something okay and what do they get so we haven't actually talked about what lemlis does what does lemons do what are they paying for so lemnis basically allows you to automate your multi-channel outreach strategy so you can start sending emails sending like messages on linkedin uh create tasks you know for your sales team so they can do calls as well that's like the the latest version of lemnist which is called lemnis 3.0 where we're basically like we have onboarded about like 200 companies on that on that latest version uh and it's not live for everyone yet because initially as you know we were just focusing on cold emails and now we're expanding towards like the entire like sales automation because as you can guess we're going a bit of market on the on the customers uh so yeah and any uh you you're still bootstrapped right yeah still bootstrap so basically like um right now we're making you know like each month uh we're making a bit more than a hundred thousand dollar profits yeah uh so because like our fixed costs are very small like we spend only money on the servers we don't spend any money on paid ads or paid acquisition or anything else and our employees are contractors so essentially it's like are the the biggest chunk of the fixed cost is basically the the founder salary yeah the rest is profit and in the bank so we're pretty like happy with cash what do you so what do you as a founder that i assume you and your two other co-founders you guys own 100 company basically right yeah we all have like a third of the company yeah so when you guys get together and go hey guys we have an extra 100 grand in the bank now there's like 700 grand sitting in the bank that's obviously not a good use of cash let it just sit there outside of making you feel comfortable which there is value to that but what do you do with it do you give it out as dividends do you reinvest it what do you do with it yeah so we we take we take the cash for ourself and uh and make like uh so first thing is uh we try to make ourselves very comfortable because as you said i think like being in the being in comfort with your company i think it's quite nice because you make like smarter decision uh second is give ourselves dividends and do like some of our personal investments so buying houses etc and then obviously it's a it's a big part right now especially with a new strategy and it's to invest in hiring more people so that's why you know we go like from 12 to like 19 in in the next months it's basically to start growing hiring and building like better processes to grow to keep the same growth rate essentially what would you value the company at today if you were going to value it i think to be honest like uh it's basically like let's say we're at i mean we're in north of 2 million er but i think it's like seven million seven to eight million um if i have to be very like uh reasonable i would say because um it would be like something if you if you're like super reasonable on our market and based on our growth i would say like three to four x arr is uh something that's like the would say low end 5x would be ins so yeah so someone listening right now there's a lot of private every folks that listen came and offered seven million all cash up front so it's a clean deal no burnout i mean would you have to think seriously about that with your co-founders uh no no no it's uh it's just because like our strategy is uh is really like long term and uh there is so many things that needs to be changed in the especially in the sales automation space where i i really feel like um a lot of people have said so much about the entire you know like uh sales field overall it's um i think there's a lot of wrong things you know like a lot of people think that to be a good salesman you need to be like a man you need to be strong you need to play sports etc etc but actually when you look at you know like all the studies you see that best salespeople are introvert best salespeople are usually women and you are like it's for me it's like just a fake image of what sales is about lots of people think that sales you know it's like abc always be closing actually it's the opposite you know you should always be helping people try to provide as much value as possible etc and i think like we have so many like so much more to do in that space that we want to stay and grow the company for at least like three to five years and later on when i would feel like we've done a great job and things are changing maybe you know i'll consider like an exit can you correlate your belief that the current knowledge out there about sales is not accurate with real product decisions you made in the past four months at lemlis can you talk about one of them yeah definitely so if for example if you look like at uh at most companies what they're saying and their tagline is like put yourselves on autopilot first of all like that's that's what they focused on we focus on the relationship and an implementation was our key differentiator so from day one we implemented dynamic photos and videos that you could implement straight into your emails just to make the email more human and we started you know from the from the ground up in the product building our product around that helping people you know like a build warmer relationship giving them tips within the product right now we're also gonna start like putting some gamification within the task people have to do and because i think like sales is amazing for gamification because the the better you do actions and spend time on researching your prospect the higher your booking rate is going to be and hence your bonus will be higher as well so i think it's like literally the best place to have fun while doing something you know like and care about people and uh and that's basically all the things we we're implementing so small things within the platforms that makes it more human like little comments whenever you're doing specific actions etc etc just so so people feel more comfortable and uh happier in their job also our customers sticking once they start paying what's your revenue trend look like on a gross basis so like for me i don't think it's a question we can answer like straight to the point just because like it's um i prefer answering in terms of persona and churn so basically sales team that are with more than salespeople more than five sales people so from five to let's say 30 or 50 that's kind of our sweet spot and those people are not churning like we have negative net mr churn so something around like minus five minutes six percent uh however if you look at also a big chunk of our business which are a smaller um smaller like uh business so i would say like startup less than 10 people etc the churn is around like maybe 10 but the net mrr churn is basically around like maybe three to four percent because we see those people for example as i said they're gonna say hey guys we love the product uh we're churning because it's august but no worries we're coming back in september and they come back in september you know and sometimes it's like oh yeah we finished our campaigns we're gonna come back in one or two months and you see them come back so every time i look at the so we have like a questionnaire when someone turns and every time i see like someone leaving it's usually because they're gonna come back and they're just short on cash or just you know like watching their standings but for the customers we're really targeting and where we're really focusing they don't leave what are you paying fully weighted to get a new 80 dollar month customer would you would you say uh so our cac it's difficult because as i said like we don't spend anything on ads so our cache is more linked to let's say like the the time we spent and based on our salaries so i don't i don't really put a number on it to be honest i could say you know based on the based on you know like uh how many community managers you have or something yeah exactly so i know for example our sales rep for example she's gonna bring like uh yeah she's gonna bring so i would say like yeah it depends again on the size of the customers but she can bring maybe like 40 to 250 like new seats uh every every month uh so it's like uh something around like 2k divided by 50 you see so it's like 40 bucks something like that obviously that those make a lot of sense um last question i want to talk to you about before we wrap up you there's a lot of b2b sas brands that are trying to create communities some just flop and it's horrendous others do extremely well i put you in the extremely well category just watching you build community what's sort of been there is no secret i mean it's hard work and it takes a little it's clear it takes a lot of your time but where should a founder want to do what you do in terms of community building where should they spend the majority of their time to be honest i think it's really like uh first it's spending time with your users and understanding what their need is and then is keep providing value and don't get discouraged because like right now when people like go to our community they see like almost 10 000 people they see the videos that i post get like thousands of you a lot of engagements are like oh yeah it's a great community if you scroll down to the very very bottom of the videos i was posting videos with like 10 views uh one card i remember i remember those and i'm like i'm gonna watch it carefully and see if he stays consistent and that's gonna be the leading indicator of if two years from now these are gonna be getting 10k views yeah so you see like it's it's really i think about consistency and again like for me community has never been something where i wanted to measure like the roi i just know within like me that it's gonna bring something long-term and if i keep providing value to our users because you know like i see a lot of people and a lot of companies that want to be like super data driven and i like it but i think in some cases it's not possible hey for example if you just say like okay what's what's the benefit of someone in the community you could measure people in the community that became customers fine that's a good indicator but do you measure all the people from the community that are talking to other people about your brand so it's like you're going to put that in word of mouth when actually it comes from the community yeah so it's um for me it's a bit complex and i think it's uh at some point you know as a business owner when you think you're doing the right thing you just go with it and and and stick to it tactical question here where in your onboarding process do you let people know about the facebook community encourage them to join it's uh around the second email i think yeah okay so which is how many days usually after they start to try out two days two days yeah two days interesting yeah to the community do you know off top of your head if you send 100 of those emails in a day how many will go join the community i think it's uh yeah around like 10 we have 10 click rates so it's it's around that number that's healthy and why facebook versus a slack group or comsar or one of these other platforms linkedin groups so linkedin groups are terrible uh linkedin are they are like so bad with it like the reach is is just very very sad i think facebook is great because you can do live stream in facebook and you get also like the all the basically live streaming in facebook is very easy because you have people asking questions you also keep the video on facebook so you have the like the social proofs etc uh that's something i don't see in slack it's basically the social proof which i think sometimes is lacking and for example i know that everyone goes on facebook and on messenger whereas i wouldn't go unfair on slack just you know to chill and be in a very friendly way like i have some slack communities that i visit but my life is more on facebook if i want to see like updates from friends instagram as well but still you know oh good you guys got to check out this guy's instagram he's going to make you feel like he's telling that he makes me feel fat and tired and sleepy with all the running and canoeing and basketballing and all this stuff all right guillaume let's wrap up with the famous five number one what's your favorite business book uh actually like i read the lost and thunder from renfishkin really enjoyed it so i highly recommend it number two is there a ceo you're following or studying besides rand i like to follow you nice and to be honest i'm all kinds of crazy be careful no no really because in terms of content creation and also how you manage your uh schedule and everything i think it's it's quite impressive thank you it's nice of you number three besides lemlis what's your favorite online tool for building the company uh notion notion is really like the best tool like for the team building processes et cetera it's uh our go-to tool yeah how many hours of sleep do you eat every night uh eight a good eight yeah that's good and situation married single kids uh single okay uh any no kids running around no kids that i know of and how old are you i'm 29 29 la all right last question what's something you wish you knew nine years ago when you were 20 uh start your own company sooner just go out there fail fail and then one day eventually you you get you get there guys lemlis is helping sales team do sales the right way you don't have to be extroverted you don't have to be crazy you don't have to always be closing you can just add value he's building a product with that in mind they were doing about six hundred thousand dollars in terms of ar back in december of 2019 now just call it eight nine months later they're already up to about two million in ar with eyes on 2.5 or 3 million in ar by the end of this year they've done this all boots drop profiting almost 100 grand per month going to the bottom line team of 12 people five engineers uh one quota carrying sales rep plans to expand the team here to introduce some new product lines but recently lemons 3.0 just came out encourage you guys to check it out guillaume thanks for taking us to the top thanks a lot nathan one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss 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