How Markup Hero CEO Jeff Solomon grew Markup Hero to $699.6K revenue and 10K customers in 2024.

hey folks my guest it is jeff solomon it's a real treat because he's a six time founder with three exits velocify in 2017 428 million is obviously probably the best known one he's also been teaching and coaching entrepreneurship for 10 plus years and invested over 150 startups experienced in sas content marketing and many other uh many other areas like venture funding b2b software ux ui as well all right jeffy ready to get to the top let's do it all right so um 2017 was out of exit did you jump right into markup hero after velocify or no no no i did um well i played around for a little bit you know had a nice exit so i took a little break was doing some angel investing still working with amplify the the accelerator that i that i founded uh you know previously in 2012 doing some deals there and then mostly was consulting for a number of years you know just going into other companies that needed help with product and growth and marketing and stuff like that and then uh maybe two or three years ago started toying around with this markup hero product so tell us about it what's markup hero so it's a it's a highly commoditized space right it's screenshots annotations file annotation image annotations a ton of products out there that do it um something i use every day a lot of people use every day uh and it was just a i didn't really have a solution that i liked that did everything and you know one of the things that we we started doing was was trying to figure out could we get other sas applications to add this capability right so so a good example is is um evernote which i don't use anymore but i used to they bought this product called skitch and it was a screenshot and annotation product and they integrated it and so it was really nice when you made a note in evernote you could drop an image in just like you can in notion or any of the other similar apps but you could right click on it open it annotate it save it right back into the page it was super useful and none of the other products have that asano doesn't have that you know uh notion doesn't have that like there's so many any of the product management monday.com all these guys so our thought was like hey we built this platform that is you know direct to consumer direct to business person sales and we have that and it's growing and it's nice but can we make a library that other sas companies could integrate easily and add that capability and that's sort of what we're out trying to try to grow right now interesting okay so that's the main focus now what are you charging for this when people sign up what do they pay well on the core product when you just go to our site it's like four bucks a month it's a cheap very low cost product um high volume thing um and then on the api we're kind of still in beta you know we've got like a handful of customers using it we're charging on a per markup basis so if they have a thousand customers and five of them use it and the rest don't they only pay for a total number of markups it's kind of how we're pricing it um you know so it could be you know a couple hundred bucks for them a month to handle their whole client base depending on how heavily it's used but we're still trying to figure out what's the best best pricing model we're just trying to get some really good companies that have users that find it valuable but but starting off seat based four bucks a pop uh when did you launch the business what year uh it was during covid uh whatever 2018 yeah yeah okay got it so and i guess why jump into like a very competitive space where you know the winners really are the ones that have the best distribution channels right they're on the top of all the big blog posts they dominate the seo blah blah blah because they're basically feature parody on everything else like why do this i mean by the way we're trying to quantify obviously the exit right velocity i think you guys have raised about 20 million bucks or something and yep you sold for 180 and there were what three or four co-founders yeah three co-founders it was a slim cap table like really nice exit for everybody um you know to answer your question uh i think it was a combination of one i just didn't feel like there was one product that had everything there was multiple products that i used back and forth to accommodate different needs so that was one issue i feel like there was there was room for improvement and two um you know i wasn't at the time necessarily looking to have another billion dollar exit or huge exit like that you know i really wanted to build stuff that i liked that i used personally and i had a team of guys that i met at a consulting company that were just looking for something fun to work on and we kind of toyed around with some ideas and we were like hey we can we can put something together that's really nice and maybe make a great lifestyle business out of it and i tell that to founders all the time it's like hey raising 20 million bucks and like going for the moon and taking 14 years to get to 130 million exit is cool but that's a lot you know it's like there's nothing wrong with a business that's throwing off three million dollars in ebitda with three guys you know that's a nice business so i was like i think we can build that oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 interviews i've done manually saves you a lot of time well we've done this we've built it into the beautiful interface inside of founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're going to see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're going to get a different valuation a vc is going to pay a different valuation private equity firm is different if you're going to do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when i hover over here right so the teal is what a vc would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on youtube all these datas are built from real-time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raised they sold 22 to their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of sas valuations and what you can get now inside of founderpath and we're thrilled to bring it to you all right we're going to go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your valuation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform i hope to see you there all right let's jump back into the interview yeah well i mean i mean jeff can i try and quantify this right so if you had raised 20 million total and assume a 1x liquidation preference it took you 14 years to do this but assuming one exquisition preference 120 million dollar exit assuming it was all cash up front there's about 100 million left to hit the full sort of waterfall cap table right after the one x prep assuming it's participating um you're splitting it amongst obviously the three co-founders if we assume you guys each own 33 at the beginning plus there was maybe 15 esop plus the investors owned another 20 you're walking away net like pre-tax was something like 15 to 20 million bucks effectively right but it took you 14 years to do it hell yeah i mean it's a long ride you know it was a long ride and so the liquidity isn't as good as people think you know yeah i mean basically a million bucks a year right as you could sort of maybe more than a million a million five a year yeah plus salary it's like yes that's true and versus can i make a nice business that's thrown off a ton of cash flow it's very low cost to run there's nothing wrong with that and a lot of founders are just like no no no i got to get the big bucks i got to do this big thing i'm like okay man but like a lot of people do a lot worse than me like that was a clean cap table situation i've seen i've seen a lot of people sell for...