How Livehelpnow CEO Michael Kansky grew to $4M revenue and 6.5K customers in 2019.

hello everyone my guest today is michael cansky he has been in the customer service tech field since 1997 he's passionate about customer service believes that ever with every fiber of his body that each and every company should be striving to boost his customer service profile and produce customer experiences with lasting impact that will always and that will always put them ahead of the pack it has founded his current company live help now in 2005 that's what we'll focus on today michael you ready to take us to the top yes i am all right talk us about live help now is it a sas company first off yes it is okay and tell us what you do we provide just best in class help desk suite it's it's an omni channel solution allowing customers so companies to provide support on any channel customer desires okay and what do people pay on average per month for this it's 21 per month okay uh that's great and so really servicing smbs well believe it or not about 60 percent of our clients are enterprises fortune 500 more than 100 companies well sorry 21 bucks a month is not enterprise that must be the per seat price yes per seat price is 21 21. so our pricing is per system we have four systems that we offer uh live chat support ticket software uh which is email management system knowledge base system and voice um so full contact center solution okay so so so don't just give me that the logo level when a new enterprise signs up with you on average for all your stuff however money they buy across however many seats they buy on average what do they pay per month or per year got it so on average they pay about 50 dollars per seat per month or 600 per year per seat okay again go above the per because i don't know how many seats on average you're signing up that's why i'm asking the question so are we talking 10 000 acv accounts or a hundred thousand or a million uh yeah it's about a hundred thousand okay okay so i mean i could essentially take a hundred thousand right divide that by 600 a c and say your average team size signing up is about 160 people about that yes i see i see okay that makes sense all right okay good you launched in 2005 you said correct that's great and then um have you decided to bootstrap the company or have you raised no i raised uh i didn't raise anything it was just my investment my personal investment to the company okay and so and so people are going to wonder wait how does michael guy get so rich where he could put his own money up how did you make money before this uh so i was a consultant i was just a programmer in it consulting going from company to company and uh just uh the idea kind of entered my mind because i was developing a lot of customer service tools for companies and i just found a niche in um um i was really dissatisfied with the way companies were doing customer service so i just wanted to improve it a little bit and that's where idea was born that's great and how many customers have you scaled to today uh 6 500 customers 6 500. okay um are all those paying customers yes okay you will not have a free version okay trial goal goes to page and you said on average these people are paying a hundred thousand dollars per year yes okay well something's wrong i mean unless maybe you are doing this 6 500 bucks or sorry 6 500 customers paying 100 a year means you're doing 54 million dollars a month right now in revenue no for the enterprise slice of our business no okay so average average revenue per customer was my question oh yeah it's about average across uh 12 seats per account okay got it average so i can take 12 times 600 per year right and then divide by 12. so you're doing about 600 bucks a month per customer got this product yeah okay that puts you at 3.9 million per month that's correct got it okay and where were you exactly a year ago so our growth is significantly lower than it was a year ago a year ago we were growing about 80 percent per year well no no what were you so today you're doing 3.9 million bucks a month what were you doing monthly a year ago a year ago 3.5 oh okay i mean yeah not horrible growth well for the sas company why did it slow down uh saturation market saturation it's just an incredibly competitive field interesting okay walk me through kind of the team you have supporting this business how many people are on the team today 25 people 20 of them are united uh just developers okay so 25 people and where's everyone based uh everyone uh so we have two offices one is in uh quakertown pa and another one isn't hardborough pa so all in the us in pennsylvania that's great um and are you how are you operating the company are you operating right at breakeven you're reinvesting everything or you're you're profitable or what or burning yeah will be profitable you have a very healthy margin okay uh we we do reinvest heavily uh you're usually in talent yeah so we're hiring very talented people okay uh so just bear i want to make sure i'm not missing something here um most people i mean if you're doing 3.9 million dollars per month right now that means like over the last year you've done about 40 million dollars in sales that's accurate correct that's correct why do you only have 25 people because it's a sass it's it's it's the it's the uh no that's the best thing about sas no no no no but i've done almost 3 000 interviews with sas founders and and across probably about 300 000 employees across their teams the average are per employee is about 139 000 your average ar per employee so 46 million bucks in revenue and 25 employees means you're doing almost 2 million dollars per employee well it could be accurate yes something something something feels very off to me if you knew how to grow the company you'd have way more people than 25 people because your margins right now are extremely high are you are you actually doing it's okay if we got these numbers wrong we can correct them are you actually doing 40 46 million bucks a year right now in revenue so sorry so we must have we must have lost something here so um the the total revenue for the year i thought you were asking me for the year is 3.9 million dollars okay that's right that's what i thought might be happening yeah 3.5 was last year okay yeah i was talking about per month so last month how much did you do so so you're talking you're talking about monthly or monthly yes monthly last month you did about 320 000. 330 000. okay got it that that makes way more sense um okay 330 000 bucks last month and then if you go back a year ago in january of 2018 how much did you do in that month uh so that would be about i don't have figures but the growth rate is significantly lower so 300 300 yeah yeah so you've grown from essentially 300 or 330 grand per month over the past 12 months okay and then now again if you're doing this across 6 500 customers that means each customer is paying on average 51 per month or about 600 dollars per year i got it okay all right this is um you've done something impressive here with the number of customers you've signed up you must have some genius insight into the growth channel here what growth channel are you using so initially it was search engine optimization and um uh just the um content contribution what keyword were you like your number one keyword that that performs the best for you that you work the hardest optimize for on seo is what uh it was always live chat software live chat system okay that must be very expensive though now with tons of money pouring into that space it's extremely expensive yes is that is that keyword still working today no no and that that is another contribution to to the factor of us not growing as fast as as we used to um how do you i mean are you in the process right now of trying to discover new keywords to optimize for and if so what's that process look like uh so uh longtail in in sas business you know we found that longtail doesn't really work as effective as you know money keyword uh and sometimes completely ineffective so um how the the best thing that works first now is is content lots of quality content and it could be um you know the the seo the traditional seo five years ago when you when you you know have a focus keyword and just concentrate on focus keyword we found that it just doesn't work anymore you just have to be genuine in the content you produce it has to be valuable content well but how do you know how do you know your blog team says hey michael what should we write today and you say write about x how do you come up with x we talk we talk one of the things that that we've established here in the culture of the company is we keep constant communication with with our clients so we've been constant communication we have account managers talking to them we know again what does that how does that help you understand what to write about and create content around so if a customer says you know we have such a tremendous volume of customer service increase how do we tackle this how do we process them so the cust customers are satisfied and customers are happy so we come up with a content tackling that topic how do you how do you set up your customer service team so even if you have a 100 clients coming to talk to per one agent that you have on staff how do you still satisfy every one of them i see yeah some of your other posts are like how to make people like you in 90 seconds in online chat things like that things like that yes okay got it and how many pieces how many blog posts are you putting out per month we try to put up at least two well at least two okay so not not extremely high velocity but two it keeps the flow going very good what about churn what's your turn like uh churn uh very very very low about two percent per year okay that's the logo turner revenue churn okay revenue turn per year and um and do you have meaningful expansion revenue that you track no it's not no okay so net revenue retention is about 102 then that's cool okay so you know so so the two percent of revenue that churns why do they churn uh so it's these multiple factors the biggest factor um consolidation so companies would like to consolidate in the one platform that does not only digital uh channels of support but also traditional voice which is phone so they go to companies that are able to provide uh all channels of digital chat social media sms and all that stuff so when you consider your blogging team in any sales and marketing etc what are you paying to get a new 600 per year customer uh it's currently uh probably about 250 dollars okay so you're getting paid back in what five five six months that's cool yeah that's great very good michael all right let's wrap up here with the famous five number one what's your favorite business book uh i really liked um um eos books so um anything anything us i i would uh anything white yes it's the eos system you're talking about blockchain uh no no it's um what's it just what's the last business book that you read do you have one um it's okay also not from the top of my head okay that's fine no number two is there a ceo you're following or studying uh yeah uber ceo okay great uh number three how many are what's your favorite uh sorry what tool do you use for billing very curly number four how many hours i sleep to get every night about four and what's your situation married single kids my kids how many kiddos three three man how old are you i'm 42. you're a busy man last question here what do you wish your 20 year old self knew can you repeat it sorry what's something you wish you knew when you were 20. uh how valuable the time is yeah valuable time this guy's very good again coming from michael launches coming back in 2005. now 6500 customers paying him for his live chat and support system software paying on average 51 dollars per month doing 330 grand a month right now on revenue up from 300 grand a month just about a year ago they are bootstrapped they're profitable 25 people in pennsylvania two percent revenue turn per year no expansion so 102 net revenue retention paying 250 bucks to get a new 600 per year customer so five month payback period they're pretty healthy michael thanks for taking us to the top all right thanks nathan