How Mailigen CEO Janis Rose grew to $1.5M revenue and 1.5K customers in 2018.

hello everybody my guest today is giannis rose he helped he helps companies to maximize their email channel roi by providing the tools and knowledge to achieve just that he plays an active role in overseeing all product development international marketing initiatives and channel development at his current company mail agent he believes that people that work that he works with and appreciate appreciate his creative and innovative thinking not all work he also loves extreme water sports ianna's are you ready to take us to the top oh yes nathan all right i'm gonna i'm gonna guess if i had to guess which extreme water sport you like the most i'm gonna guess something like uh you're wearing like a suit and stuff so wake boarding might be like too cool for you i'm gonna guess like solemn like water ski i'm wearing a suit i could take off this it's cold out is it wakeboarding i'm waiting for it oh wow okay you are you got a cool factory skater uh kiteboarder pretty much anything that's amazing all right tell me about the company so melody what's the company doing how do you make money uh so we help our clients to tell their stories through email that's how that's our tagline rise and tell so email marketing well we started from newsletters as broadcast emails as pretty much any company and then autoresponders and now we provide all full email marketing automation transactional emails additional tools like text messaging online surveys built in uh one platform is managing that's great and can you give me i meant you you mentioned right before the show that you listened so you know form anything else you want to share with us before i kind of get this to you know your full story um let's just go to those questions directly then when did you launch company what year 2010 2010 and i mean where were you personally at that point i mean just school or a quick corporate or what was in asia i lived in asia actually first four years of the company i was away i was living abroad and the company was born while i was away the team was built locally in riga latvia when i arrived four years ago i moved back i had a team of 25 people then that's amazing now i saw you had a wedding ring on there did you find did you get married was it you know kind of a spouse in asia is that why that happened no after after after i graduated my high school i decided to leave latvia and to denmark and then i went to spend 10 years in asia with a couple breaks in europe but uh more or less i spent 10 years there you know started my professional career and i t and then uh moved the start what we did was a lot of different what projects and i hated to look for new clients every month every third month so we decided to build our own product and platform which was militant then and uh no i got married three years ago uh and uh that was after i got back that's great and and so focusing kind of doubling on the products here i mean are you serving what kind of size customer are you serving what's the average customer pay per month for melo jen well average check is around 130 euros and so it goes from in the range from 25 thousands of email subscribers uh well we have clients ranging from let's say a minimum 500 subscribers but we have hundreds uh uh customers with hundreds of thousands up up to you and five million subscribers as a client base their subscriber base okay so we have very very wide range of clients small to medium size and then even some corporates enterprises we focus on smes yeah basically the average customer pays about 130 euros a month yes correct okay that's great that's about 143ish united states dollars for those of you wanting to convert and then um over the past i guess what it's been eight years now over the past eight years giannis how many uh how many companies have you scaled to how many customers so we're around 1500 paying customers okay very good and then um you know what i'm gonna say next right [Music] tell me if i take if i take 500 customers times 140 per month you're doing what about 200 grand per month right now oh not really we're at 1.5 uh million a year okay i know that's good we're growing this year has been we've grown this year and a number of customers and also the average check okay so if you're at 1.5 million bucks in terms of run rate today that's about 125 000 dollars per month where were you a year ago in november 2017 around 80 okay so that's good so what is that 40 50 year over year growth well this year is going to be around 40. okay 40 okay that's great and then have you done this all bootstrapped or have you decided to raise capital well we started with the very small angel money and then uh 15 grand us and then we raised around 40 in the first year and then uh you know 60 in the third year and then we got around 300k thought in in on the fifth year so all in all around half a million dollars in eight years in small trenches so it's not a lot yeah was that all kind of convertible notes or did you ever move to equity or is it debt it was mostly equity okay we have we're quite diluted uh i'm a minority shareholder so how many are like uh what percent the 10 20 percent well i would say the employees and founders have less than enough just around 45 and then the few investors have 55 okay and wait are you a founder yes okay so you guys are around 40 you said yes okay how many found so we are uh well i have around 20 and then the other three are kind of smaller i see you have four found co-founders no we have three co-founders one was a superstar employee that we gave equity i see how many team members today total around 35 sorry still so around 25 30 we have some part-timers okay so 25 full-time and is everyone remote or where's everyone based we have 15 here on the ground in riga and then we have uh team in saint petersburg and then a few around the world okay when you sorry when you say so that you're saying in latvia yes okay latvia and remote very good and then talk to me about you know churns critical in any sas company what's your turn today we have to look at different regions uh i'm because obviously i did look at the insurance before we got to the call i had to uh you know kind of refresh that in my memory so looking at different regions let's say where we are where we locally represented like latvia and some local countries uh even russia churn is very low one two percent per month that's the lowest revenue churn uh logo term okay right so and then month when there's zero churn and then in us some kind of more like a global well it's around six percent chart okay so when you look at your just entire customer base let's see after again 2500 customers in a given month what you'll lose four four percent five percent total around five four yeah five five percent logo turn per month and do you know what the number is in terms of revenue churn is it about the same [Music] so the wrapping insurance around hmm four percent yes okay similar okay very similar yeah by the way it would be very similar if if if all your customers are basically paying around the same amount your your revenue churn and your logo turn will be about the same right yeah it depends if we're looking at also the annual because we we we sell different plans for monthly annual and all that so then it's if it's annualized churn right or what do you call it monthly recurring um adjusted right so yeah then that's correct if we would take an account that we're looking at annual deals as a churn then they hit harder because let's say we could we could lose ten thousand dollars while the it's a only eight hundred dollars a month in one month right yeah well i mean you're just talking about measuring monthly or measuring annually so five percent logo churn per month or five percent revenue return per month would be equal to about 30 revenue churn per year right yeah okay great and then how are you adding new customers what are your growth channels um we we did really good job i think at the beginning a few years ago we have good organic traffic and referral traffic so we have very good hot prospects coming from review sites like some reviews like top ten type of reviews uh get apps kept terrorism thing you know that kind of do you want to pay for your placement on those or you just do the free ones no no not anymore because we didn't see a high kind of increase in results from organic to paid so we moved away from paid then they were quite expensive leads in in the sense so we have now gone over to sales facebook video ads and facebook and driving them through a sales funnel on content webinars and uh strategy calls so we go for higher ticket uh clients uh through strategy calls and we we also do uh agency type of services to our customers so um anybody that signs up and we see that they could benefit from us running their campaigns or start developing a strategy or something like that so we go in with the you know kind of agency upgrade okay got it so let me ask you to you know you said you're doing about 125 000 per month right now across 1500 customers which means each each customer pays about 80 bucks or 90 bucks per month in terms of fully weighted cac what are you willing to spend to acquire a new 80 or 90 a month customer well right now i pay out like 70 70 for average for a customer and who are you paying that 72 it could be different for all partners affiliates it could be either our internal uh marketing kind of numbers and acquisition numbers that we focus on yeah okay very good so seventy dollars to get a 80 or 90 a month plan you get paid back basically in one month huh yeah pretty much yes that's great one of your top referring sites is a site called valuewalk.com was that an accident well no um we did it actually it was a cold sale and uh but they're not uh our biggest customer we have a lot bigger customers so they're just a customer yes they're not like a referral site no okay they're actually a customer oh interesting yeah similar web says one of your top referring sites is actually valuewalk.com do you have powered by like mailgen and maybe male 1 yeah that might be why that's great very good um let's uh let me look here so um let's wrap up here with the thing actually before we wrap up any plans to raise capital well we're looking for m a opportunities right now because obviously we're head-to-head with mailchimps of the world and i think being part of a bigger organization would be uh more beneficial instead of us a tiny island and a massive ocean sure right what would you i mean help me understand a little bit more about the business because i'm sure there's some potential buyers listening right now so if you're doing call at 1.5 million per year um are you guys cash flow positive are you burning money no we're positive okay uh okay that's good and then um i mean when you and your founders talk what's a price that that would make you guys really really happy oh we're looking at a couple times of revenue okay i mean so if someone if someone offered you 2x so 3 million bucks all cash up front would you take that deal oh we'll have to look as i said you know it's it's a bit it's a synergetical partnership or investment that we could look for because i'm still here and i want to be here in a few years time i'm having fun i love product and i love what i do so i'm looking i would be looking for a company a partner that's interested in continuing building the company and the brand or or just name the perfect acquirer for you hmm like actually the company what company would you love to be acquired by um salesforce okay i would say give me one that's more real like there this is too small for them your your rounding error give me some give me someone that you think is is likely to acquire you and also would be a perfect fit a tough one i can't name you now you don't know anyone okay all right very good all right well guys there you have it reach out to him if you're interested uh let's wrap up here with the famous five number one what's your favorite business book uh extreme ownership jacob number two is there a ceo you're following or studying right now um i'm into biohacking a little bit so i love aubrey marcus from on it he's a cool guy number three what's your favorite online tool for building your company besides your own cake hr and uh number four how many hours of sleep to get every night six and a half okay that's good and situation married any kiddos yet married and a small baby girl nine months oh very good that's great and uh how old are you 35 35. last question giannis what do you wish your 20 year old self knew um it's gonna be a lot of work but have fun while you're doing it guys it'll be more work than you think but have fun while you're doing it launched mailgen back in 2010 competing in the hyper-competitive email marketing space just past 1500 customers 1.5 million bucks in ar or about 125 grand per month in revenue that's it from 80 grand per month in revenue just a year ago they've raised just five hundred thousand dollars to grow to this point five percent logo turn per month payback period about a month so they're spending 70 bucks to get a new 80 a month customer team of about 25 people in latvia and other remote locations giannis thanks for taking us to the top cheers nathan