How Lift-ai CEO Don Simpson grew Lift-ai to $1.2M revenue and 8 customers in 2020.

hello everyone my guest today is don simpson he has pioneered the use of customer engagement to drive revenue for global brands for three decades first in building inside sales operations then leading in the use of live sales chat and now he's pioneering ai to score website visitors conversion potential to trigger optimal customer engagement don you ready to take us to the top yeah you bet thanks nathan that's a lot of buzzwords break it down for me the website is lifthyphenai.com what are you guys doing so what we're doing is we've we had a live chat service for the last 15 years where we had a bpo companies would outsource to us to engage visitors on their website and convert those visitors into customers and we worked on straight commission so we'd start out and we'd go in and we'd look at their websites and we'd say well here's how much potential revenue that we think we can create for you um one fortune 500 customer we worked for they were doing 150 000 a year in revenue in live chat and we looked at their analytics and did a forecast so we think we can do 15 million and we did 16 and a half million in the first year so now that was when we started that business there was probably four or five chat companies in the world and now everybody and everywhere this chat uh market has exploded um so over the years uh we've tried it we've been as we've invested in building out that analytics and building out that technology you know it became increasingly more powerful and once we really started to figure it out we thought hey you know what this is something that we want to take that experience and background that we have in building and using that technology for our own purposes and and deploy it you know so that customers can use it themselves it's not pure sas what do customers pay you on average to use the technology you know we're still playing with the pricing on it we've got a like an entry point of fifty five hundred dollars a month um it's kind of up to a hundred thousand uh visitors a month and then over a hundred thousand visitors starts at 8 500 a month but i mean we launched this we actually launched the business on the first of march uh which was uh weird timing giving covid so we're still we're working and still playing with that but that's that's what are you pre-revenue than don today any customers or no yeah we've got eight clients in production um we were hoping to hit a hundred uh in mrr at some point this year and we've already hit that so we feel pretty good i mean part of kovid so just to be clear don you're doing you're doing north of 100 000 per month in revenue yes okay got it so that's eight customers paying what on average 12 000 a month yeah yeah in that range that's to me that's super impressive i mean how do you basically launch from scratch and land a bunch of i mean these are 120 000 year contracts you're landing right off the bat for a chat ai tool well it's it's it's a it's really a revenue tool so you know what we did historically is with our bpo you know we were looking at our you know minimum entry point would be about fifty thousand dollars a month so you know what i guess we're we're used to dealing in that world and in that space and typically we would go and depending on you know what the volume and their acv was we would need somewhere between 15 and 40 percent of the revenue in order to make it viable uh and now with this what we're trying to figure out well how can we get awareness another piece of technology in their stack somewhere around you know eight ten twelve percent maximum is where we're trying to get to with the incremental revenue that we're generating and what we get compensated for but that's really it's because we went from hey we're gonna do this we do it all as a bpo do now it's a sas play and a technology product totally separate businesses yes walk me through how you spun so just be clear you ran an eight what was the agency name were you doing the bpo stuff market link okay marketlink.com yeah and okay business we ran for you know almost 30 years and have been running for almost 30 years and it's still in existence today but this technology business this lift ai is a new product company that we launched don let's stay on the market link for a second so launched in 1990 been around for almost 30 years how much revenue did market like do in 2019 oh 2019 i'm not sure you know we we we peaked at about 10 million yeah revenue in i would think that would be 2018 maybe 2019 okay um do they own any portion of lift ai i know they're separate company okay got it so there wasn't any conversation around hey we're spinning lift ai out of market link market links should own a portion of lift ai they should be they should have equity oh there's a a change in and transfer of uh ip and and uh and so forth as a result but it wasn't how does that work i mean there's a lot of there's a lot of people listening right another stuck inside of an agency they use a little side piece of software to service customers they love to spin it out but they don't know where to start walk me through how you actually did that economically well we took uh economically because i i owned i started market link and so i own market links so for me to go and take and separate these twos really relatively nicely oh you own 100 market link yes oh got it it's not your partner i bootstrapped that business just though i started just out of university and now i've been bootstrapping lyft ai so it's just it's just me negotiating with me so how am i going to set this up well that's a little simpler so you personally own 100 of lyft ai the tech tool yes i see i see okay that makes way more sense got it so i mean what's a team look like today how many people well we've got eight ftes and um you know we've historically what we did is we you know we had a team uh in india that was part of the market link business we actually had a few iterations on this it took us about four or five years to really figure this out and make it work to the point to make the technology work and lift ai where you know it was it works and it's accurate and and and to be able to operationalize based on you know the the the scores that were gleaning from the technology uh to really make it sing it took quite a few years it wasn't like we just said hey we did this overnight um and we had a fairly significant team in india we outsourced a bunch of uh of the development to a team in russia and then just kind of over the years as we iterate we got to the point say okay this product is you know this technology works and it's good um but now we've got a pretty small team internally just to continue to fine-tune um while we see and try to find that product market fit and then full-time folks how many of those full-time books are engineers three okay three any quota carrying sales reps besides you yeah well actually yeah we have one okay okay fair enough how do you set the quota us we're look how do you set the quote i guess that's good question we're looking for a million dollars a year a new revenue problem got it and so do you fall for the ratio where if they hit a million dollars in new ar added they're they're making about one-fifth of that in terms of total earnings yeah it'll cost it costs a little more than that in the first year you don't get things off the ground but that would definitely be yep yep yep interesting do you think you can you can hire 10 aes and sort of follow so same economics well i certainly hope so you know because we did we've done this kind of one iteration of our business was outbound demand in bdrs you know we work for companies like xerox in the 90s doing that kind of work we work for like microsoft in the 90s doing that kind of work so we have that in our dna so i'm my thinking and focus is is we should be able to go after um you know the market we're trying to serve with a with a pretty a pretty clear outbound approach it was about 8 000 companies that we identify that have 50 000 plus visitors uh a month on the on the in traffic on their website wait say that again you're you're targeting how many targeting 5 000 800 000 companies yeah with how many hits with 50 000 visitors plus a month plus we know what their chat tool is because that's what our because we've worked extensively in this chat space and working with companies like drift and live person and so we thought you know we really tried to hone in and narrow our focus from a go to market perspective on that group that's compelling um do you use tools like built with or firmographic and technographic tools to find that list where the javascript code from drift has been installed or intercom has been installed yeah yeah that's exactly what we did that's really smart yeah so how do you like like you find me i'm your target you call me if you go nathan screw intercom try lift it i mean how do you convince me to switch off my current javascript install to you well we don't we so you continue to use whatever you're using we're just going to enhance it so um you know one of the companies the initial companies that you know we've launched and got a testimony we got quite a few good testimonials...