How Luckyorange CEO Dann Wajcman grew to $2M revenue and 15K customers in 2024.

hello everyone my guest today is Danny Weitzman he's the co-founder and CEO of lucky orange the conversion optimization suite responsible for helping 90,000 plus websites turn more visitors into customers he's got a background ranging and brand management to lead generation and the understand understands exactly what businesses agencies and clients expect and demand he came out he can be found contributing regularly at forbes.com Danny are you ready to take it to the top yeah man let's do it all right tell us about lucky orange what's the revenue model and how do you what's the business - yeah great question so really we are a typical SAS model subscription as a service users start with a free trial all features included in all plans and from there we really help guide you into a plan that works best for you and your business that could be dictated based upon if you're an agency and you want to attract many sites if you're a high-volume site you need a lot of pageviews or maybe your site that you want to have a lot of operators logged in we're gonna find a plan that works best for you all plans all features start at just $10 a month for unsampled data and it really scales up based upon your needs and really we like it kind of from a holistic standpoint the value we provide should way outweigh the cost and so we understand that analytics or insights as we like to refer to them it's just one part of a sound business model so we really believe from a pricing perspective how we fit into your overall strategy should allow you to then have money left over to then implement on the insights you're gonna learn from lucky ores you go for it's kind of you go from Danny from 10 bucks a month all the way up to 100 bucks a month what's the average customer paying per month would you say yeah we typically see transaction values around that $35 a month price point so it's kind of a hybrid and that really is dependent on you know are you coming to us from a third-party partnership we have where you have a lot of high volume customers that are more self-serve but then we also have a whole separate really revenue that comes from users that are more enterprise custom plan focused what for revenue comes through the partners that you have a good chunk of it it's really like more than 50% not from any one specific partner altogether though as a channel all together as a whole revenue partnership is probably closer to about 40% and so and but it's really just tribute across multiple partners and really white label solutions I mean how does that work no it really works it upon just having will call plug-in directory availability so when you look at lucky orange and the value can provide the very first barrier to gaining those insights is can I even get this code on my website you know so for those businesses out there that you know they're going out of themselves or they're lean on the team and they may not always have access to development support the ability to just hey let's click this button or let's have simple 1 2 3 step installation instructions removes that first barrier which of course is again can I even get this code on my site and that's why partnerships has been really great for us not just in terms of brand awareness but even simplifying the installation process yeah I mean look onboarding is critical it means of a larger percentage of your visitors obviously convert into a trial and obviously a paid plan what have you been able to scale that to how many customers are you serving today yeah I mean we just looked in I mean we're probably mid 15 plus thousand active paying customers or or more so it's it's definitely growing from that perspective but that doesn't necessarily reflect the amount of websites we're tracking as one account could have a hundred sites underneath it you know count as one paying customer so it's it's been really unique to see how the customer need has evolved allowed us to kind of evolve the product to fit that need so Jenny just be clear you've got 15,000 kind of unique people paying you they may have 10 websites under them of varying sizes one might get a million hits a month one might get ten hits a month yeah and that's good and really that number kind of ranges them again you can have a client as you mentioned who's doing hundreds of million pages a month and it could be as it's the first time Shopify or a big commerce store who's got a hundred page views a month and you know they're it what's I think really interesting about then what that story is telling is that whether you're a huge enterprise and you have analytics divisions and people who can analyze his numbers or you're selling bicycles and you can't be behind a computer all day we all have this thirst for understanding of what's really happening on our website and what are the simple things I can do to learn from my visitors to improve these conversion rates it might be as simple as a certain call-to-action did not work or a price point was confusing or a caption and lead form but we all want this knowledge and we want to what we say pull back this digital curtain to provide this transparency so that way again whether you're Danny I think we totally get the value of the product so I want to shift from kind of you sharing what the product does to actually how you've driven the growth of the company most my listeners are CEOs private equity VC they're more interested in that so I totally get the value proposition you made that really clear when did you launch the company and were you there at the beginning I know your CEO oh yeah absolutely so co-founded with funny enough my brother-in-law Brian Gruber our wives are twins and sisters not identical so the important distinguish there people always ask about that this really started we like to say started with Brian creating the technology and we really came together to form this business in what year this was probably 2014 okay so fairly recently and fairly recent and you've already scaled I mean if I'm doing the math you've scaled to 15,000 customers at a $35 RP I mean what you guys are around five hundred twenty-five grand a month in revenue currently well we don't really disclose full revenue amounts and we'll Danny and just tell me where the numbers are wrong you just gave me those two numbers it should be a simple math equation why would that math equation not be accurate a lot of different variables but I want to get back to you had a really good question which was the evolution of the business no Danny but I want to make sure I get the numbers right first cuz those are wrong you're the evolution story will be different so do not have 15,000 customers or is the price point higher or lower well price point will its variance based upon what match we're looking at in terms of is it you know subscription from the subscription model credit card is about from invoice so it there are there are some other variables that will go into that equation okay but you're you're you are a pure place SAS model everyone is paying you on a monthly recurring basis well I don't really care if it's we have credit card or your website or invoice right I mean it's not always it could be by and really - or animal model okay but regardless if you take if it's by annually or if it's annually you divide by 12 months that's I get a monthly ARPU so generally 35 hours so yeah correct okay so where's my math wrong because if I take fifteen thousand customers times 35 bucks that's 525 grand a month in revenue it sounds like you're not there yet we're not there yet but there I mean there are some other variables to it but we'll share those thanks I'm interested in the variables which variables in particular well I don't know them that's why I'm asking what variables would lead that multiplication problem not to not equal that well again we're looking at other things that would in terms of how the revenues coming in from the different sources the different price points customers that are you know on and off line so again there are a few other variables that will play into the factor to it okay before Danny you get more into the evolution and I will promise will shift away from the numbers here in a second I mean can you give me a general range of where you're at today I mean are you guys above 300 grand a month or is it significantly lower or significantly higher uh-oh it's currently lower okay lower than 300 yeah okay and how do you guys bootstrap this thing or of you raise capital totally bootstrap the whole way through it you know we took part in an accelerator earlier on that was more meant to be kind of just a milestone of where are we how we you know are we getting some early on guidance so small accelerator we took place in but really it's been bootstrap how much money did they give you 18 grand okay so super smart they take like what six percent equity or something diluted oh yeah yeah yeah which to which accelerator was that it's put called spark lab they were out of Kansas City and you guys are still based there right still based in Kansas City Kansas yeah I love that what have you grown the tea insights to so just now we brought in our ninth team member and we've kept it relatively lean intentionally you know we really want to be let technology be the solution and then let us be the people behind the technology to help you know drive it from both a customer service standpoint or sales standpoint so we've really you always really good tech out there to help us you know keep the team lean but provide they all in Kansas City or they're all remote everybody's in-house it's awesome where are you recruiting developers from in cans city okay this is a really great question we've recruited anybody from one employee used to work at hobby lobby after owner familiar with horribly lobby there a craft store but he was there just working the floors of Hobby Lobby but always had a hard and passion for development in tech and really was self-taught another guy recently moved to the area and tried it did some other startup B type things someone else from another startup here in town so it's really been kind of a mash up of towns of people who are really self-taught we've had people who have had marketing backgrounds and wanted to go into reading weather patterns and ultimately just have a love for development so it's been really neat to see how these people who have a real thirst for knowledge you know become self - I didn't go to lucky orange though why not go to one of the other big tech companies in Kansas City I mean are you using equity to bring these guys in and incentivize them well I'll tell you what we're providing I think more than anything else a culture that works for some people one of the really things we do as part of our interview process is we help the applicants interview us because we're not the right fit for everybody similarly every candidate will not be the right fit for us they might hit every checkbox yes you can pass our test yes you pass or code but culturally you may not like what we have to offer you know some people really want as you mentioned a more a larger environment where they have more specific set schedules and time off policies and some people really appreciate that structure some people have come from that world and they're like you know what I want a change of pace I know I you know I want a different lifestyle I want to start blending more of my family and we really recognize they appreciate that it might be because Brian and I ourselves our family or that we both have young children so we certainly appreciate this work-life balance and we try to put it to action not just on paper but really encourage our family and we would call our family our team members to treat this as extension of family bring your family in from time to time let them hang out in the office if you want to you know providing weekly checkups to make sure you're taking time yeah got it makes it makes good sense it's the culture it's the culture that's pulling these folks in but you're you don't have a big equity pool you're not giving your developers 2 3 4 or 5 percent of the company well right now it's just I think oftentimes when you see people being brought in from equity it's often times the offset risk or offset salary but you're really risky well I would I would argue that point because we're you're way riskier than going to a Facebook or an Amazon or a bigger tech company you're a three year old company with less than 300 grand a monthly recurring revenue that's bootstrapped so I think you need to find what risk looks like so it is if I go to big company big company has layoffs are they less risky because they're doing more revenue or can I provide and meet what the company with that person is looking for which is a stable income which we can guarantee I don't Danny I'm sorry as an early startup I trust my vendor view about 2,000 DS you you are significantly more risky in terms of going out of business and stopping and having to say hey we can't make payroll this month than a established tech company that's growing quickly like Amazon our Facebook I'm just curious those battles happen in Kansas City I'm just curious how you're winning those battles besides culture well because I think this is a matter of concentration right so if our revenue all right you'll see a typical bootstrap model where they're on board to three really large accounts and that's floating the business our revenue model not even our largest customer doesn't even make up half a percent of revenue so we look at metrics like churn and things like that to understand how we're projecting that we won't on board another hire till we're absolutely sure we have plenty of run rate what is your turn today under three percent that's a low percent that's a logo churn monthly yes okay so again we'll have we can have a month that we hit for certainly and we'll have months but it's a it's in that three to four percent range that's healthy so you assume you just do one divided by you know 0.03 or 3% to assume the average customer stays with you for about 30 months is that how you do lifetime value yeah again another tricky equation as when you're in an earlier stage and I'm not exactly sure at what point you become a start-up versus small business I don't know that's a revenue model I don't know if it's a way of thinking I don't know if but at some point you know you start to look at those metrics and say all right we're keeping them on board we can justify the cost and for that matter do we risk losing employees because people start feeling overcapacity so that's another internal metric we look out for our own employees satisfaction are we over burdening employees so we do look at internal employee capacity as a metric for you know are we a good point for a heavy Danny what do you mean what do you mean by that though I mean I mean you could have one customer that makes up ten million bucks a month in revenue and it's totally verifiable to put to put ten people on that account I don't understand what you're saying by how do you tell me how you measure if someone's over capacitated all right let me answer two different points there so the first one is yes would we'd love to have a customer paying you ten bucks a month sure who wouldn't but then to your point you're gonna staff up ten people well what happens a year from now when the customer after their first annual cycle says thanks but no thanks we're done what'd I do with those ten employees redistribute them I know Danny I guess all right tell me about your mom I mean look I can make it art same argument about 15,000 customers you have 15,000 customers paying you nothing but they send you three support emails per month which takes up an hour of your each person's time to reply to that can be you know that can be risky right so what when I talk about is looking at the internal metric for like capacity that we're referring to it's we know we want to have a healthy dose of customer support where we're actively working on you know chats coming in feedback coming in through the website in those tickets and then balancing that with user enhancement what are the features that are being requested what is the next tier things that we want to provide so that way we're not always just kind of chasing our own tail of resolving issue resolving issue but also enhancement enhancement so we try to look at at our daily and weekly capacity from at both the development standpoint and sales standpoint of how much of that time is spent supporting customers versus what can we do to keep growing our user base what are you growing out right now you're over here in terms of revenue would you say uh it seen about anywhere from 100% growth to 80 per row okay so between 88 so if you're doing I mean it sounds like you're somewhere around a hundred grand ish or something like that maybe two hundred grand today you're about half that about a year ago yeah okay got it and what is driving most the growth getting new customers or getting current customers to pay more a good question so certainly just creating a larger pool so top top-of-the-line funneling you know bringing in more users and creating that you know more partnerships and brand awareness through traditional PPC to other distribution models but then recently new efforts into growing um you know average transaction value that could be through things like increasing storage lengths of their customers so if you're a typical customer stores for 30 days incentivizing them to store for 60 or 90 finding ways to help people realize their reaching capacity and probably should be on larger to your plan and it could be tough sure because you know we really provide that the same level of value and service from our or you know entry plants or higher played plans so there is sometimes difficulty in wiggle room into increasing that transaction value yep last questions here we're out of time but last few here attack what do you spend to acquire our customer quickly difficult one but again it we typically try to get it around that fifty dollar price point from a PPC model but a lot of our users are virtually zero customer acquisition cost but we pay Rev shares behind them okay cool makes sense and if you're paying 50 bucks on a $30 a month plan you're getting paid back in two months which works for bootstrap company lousy to say cashflow positive all right let's wrap up here with the famous five one-word answers number one what's your favorite business book disaster artist number two is there a CEO your phong or studying right now Brian Gruber number Brian you over Brian Gruber CTO okay number three is there a favorite online tool you have for growing the business beside your own profit well profit well number four how many hours of sleep do every night seven that's good and what's your situation married single you have kids married with three children all girls supposed to be boys but I love him anyway and how old are you Danny I'm 33 last question what he was your 20 year old self new invest in Bitcoin invest in Bitcoin there guys have it Danny CEO lucky orange found it with family members back in 2014 up to nine people bootstrapped in Kansas City again helping you and helping a lot of folks understand what website visitors are doing understand how to drive up conversion rates they're currently serving 15,000 customers doing you know north of a hundred between hundred and two hundred two hundred fifty grand per month in revenue economics look healthy three percent logo churn monthly spending about 50 bucks to acquire those customers with the two-month payback period Danny thank you for taking us to the top I really appreciate everyone's time