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 actually from short period of time but one of them company called point click care that um we increased their their lead conversions or number of conversions on their website by 168 in the first month um and and and so and that's not um that might be a little high but i think the lowest one we've got so far i think is 63 and so because we're used to working from that mindset and that model of hey we can use our technology to help and you know define who is a good prospective customer on your site and bots don't work for everybody i mean boston salt lake sales people do maybe one day they will but they don't today so what we what we do we go in we look at their their website uh traffic and then we say based on the scores we would suggest that people who fit this profile and it works with anonymous visitors it's how are you scoring them are you reverse engineering an ip address and then like an employee account at that ip address company or something or how are you scoring it's all based on behavior because we we did over the course of the 15 years with the bpo we we profiled about a billion visitors and we had 14 million live sales interactions so we took and looking at all of that conversion data we can go we can say well based on the behavior of that visitor on the website even if they're anonymous and that's where you know this there's a lot of companies out there that are doing that ip reveal or you know but but ours works on and with anonymous visitor data based on the behavior and what they're consuming on the website so we can identify and predict the conversion potential and intent and then reach out and engage those people and commensurate with that score so it's a really high scoring visitor you can say well let's get them to a sales person you can still use bots but you just have to be i don't know more uh calculated in the way you engage the visitors lower has to be lower touch the economics don't work as nicely do you pay for bombora data or zoom info data or full contact data to enrich the data that you're tracking not yet okay so really you really you don't pay anything out to other any other data providers no huh fascinating trying to position it as you can use all of those things you still have a lot of anonymous visitors on your website that you have no idea who they are what they do they may have very high purchase intent or you know there may be somebody on your site that doesn't necessarily reveal themselves if you do have an ip reveal you could say based on our score based on looking at the behavior of this visitor we think this is a great opportunity and potential that you could do a bdr outreach for somebody who's been on your site but didn't necessarily engage you yeah are you profitable today are you reinvesting everything back in growth i've been reinvesting everything now i'm just trying to go on that pretty much break even line and uh you know so we're bottling up you know a little bit above a little bit below every month and as we grow i'm just going to continue to invest and build don what would you value the company at today that's a very good question i don't know i've heard some crazy numbers what's the craziest well i mean somebody you know i i the multiples with some of this stuff seem a little off uh for me um maybe as high as 30 million but um you know i don't know that seems a little nuts to me to be honest with you that's 25x on your current run right yeah but yeah i mean we got lots of work to do and lots of building to do and um let me ask the question more directly make it real david cancel approaches you wants to buy lyft ai to enrich drifts tool um he offers you a uh 7x multiple on your current revenue so call it he offers you eight or nine million bucks all cash upfront no earn out do you take the deal i don't know i don't know if i'd want to answer that i actually met david kensal i i i can't tell you how much respect i have for him and uh yeah i don't think that's a question that i want to answer have you signed any lois to sell the company in the past year no very good building building building i love that last question here churn any any gross turn none yeah none yet very cool all right um yeah i mean again you launched it this is what's impressive you launched this thing in march and it sounds like you sort of reached out some to some folks that you already had relations with via your bpo business you closed them from zero to a million dollar run rate under basically six months which is really impressive so congratulations um let's wrap up here with the famous five number one favorite business book um i like that made in america so i read it three times back to back-to-back actually about 20 years ago it was amazing sam juan right yeah yeah number two is there a ceo you're following or studying uh it's what do you say david cancel but there's a few like that in our space that you know it's actually crazy how many good ceos are but he's certainly one you should go by olark and then compete with david and rich o'lark's basic chat tool with your ai and sort of machine learning and then go head-to-head yeah yeah it's like i actually said this guy on my advisory board and it was david as well and he was on their advisory board and i said i always say i wanted to play on the tour and but i just never knew tiger was that good you know once then you start you start playing at that level and you go wow this guy is good i mean would you would you ever go and raise some capital to go but you know o'lark's doing 12 million in terms of run rate right now but they have no interest in like scaling you clearly sort of have this other thing you can add to a live chat to would you ever go buy a company like olark and then scale possibly yeah and where would you get the capital to do that i mean it sounds like you're personally wealthy but you'd probably use some other finances too we're in the midst of actually looking to uh raise money because i think if we're gonna be really successful with this it's gonna take a different kind of war chest how do i get in on that deal um i might talk to you soon nathan okay good ruling you for a while as well i want in don i want in i'm gonna be i'm not publishing this episode unless i get in i'm kidding it'll go live no matter what i love your story but i'd love to be in all right number three talk to me about your favorite online tool for building your company because i drove um i you know i don't know twitter is pretty amazing you know i i mean just even following like i would say once a week jason lemkin says something on twitter that i follow that i find wow you know i wish i would have known that 20 years ago so uh i'll say twitter number four how many hours of sleep donnie getting every night about six and a half not bad in situation married single kids i'm married three kids three kiddos wow how are you i'm 54. 54. last question take us back 33 years what's something you wish you knew when you were 20. i would swing for the fences guys there you have it market link was his first company launched in 1990 it was in marketing agency did about 10 million uh at its peak in 2018 then realized you know what i got to spin out this lift ai product which is essentially you know using conversational marketing in a real sort of revenue attribution way he launched it just a couple months ago in march 2020 already has eight customers paying on average thirteen thousand dollars per month so six figure acv's right off the bat broke a million dollar run rate doing about 1.2 in terms of ar run rate right now team of eight people building us three engineers first quota carrying sales rep just joined with a million dollar quota we'll see how that goes bootstrapped which we love don or roon for you thanks for taking us off thank you nathan i appreciate it 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 it additionally if you want to take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathan laca dot com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive i am on these shows but i do it so that we can all learn we have to counter those people we got to push them away click the thumbs up below to counter them and know that i appreciate your guys's support alright i'll be in the comments see ya