How Maropost CEO Ross Paquette grew Maropost to $40.3M revenue and 5K customers in 2025.

hey folks my guest today is ross paquette he's building a company called morrowpost.com launched or at least earliest date i've got revenue data on call all the way back to 2016 2017 uh now scaling up now he took some capital from an outside partner and said you know what i like the bootstrap life much better he said you know i'm gonna buy him back and he did it now he's continuing to scale they're doing m a one of the great bootstrap success stories ross welcome to the show thanks so much for having me nathan okay did i get that right when was founding year it was actually 2000 uh jesus what year are we now it's 2011. sorry ah okay okay so 2011. and then for folks that have not heard of you before just quickly what do you guys do what are you selling yeah absolutely so we have a single solution that encompasses uh commerce cloud marketing cloud and service cloud so effectively ecommerce and retail marketing automation email sms and then help desk so live chat chat bots ticketing and all and so on and our target market is mid-market uh um e-commerce and retail businesses or organizations hot very hot space so so when did you do you remember the year you guys passed a million bucks in revenue yeah that would have been 2013 i guess and what was that like what were you selling back then is the same thing's there is it changing yeah no it was it was mostly email marketing and marketing automation so we very quickly went from 300 000 in revenue in 20 i guess i would have been 2013 actually and then 2014 3.3 million 2016 if i'm not mistaken was 13.3 million and then 26 million in 2017 if i'm not mistaken interesting and then you told me on the last show you broke 40 million in 2019 yeah correct yeah very cool okay so how many of these companies our customers are you serving today uh just shy of 5000 actually we're about to we should hit 5000 in a couple months holy cow okay and average companies paying about what in terms of rpoo uh probably about 1800 per month 1800 a month okay so i mean can we can multiply those bad boys to get mrr if you want yeah and not 9 million in mrr give or take yeah how i made them a little bit less i'm a little bit over yeah yeah will you break let me let me ask you this will you break 100 million bucks in an ar this year run rate uh just shy of it actually uh sorry um yeah just shy of it most likely so you think by december of 2022 so this year you'll do about 8.3 million in an mrr that month right yeah i love that okay so now let's let's reverse engineer from 100 million run rate right so you're getting there a bunch of ways first off you're preserving equity with some buybacks you're doing some acquisitions for mna let's talk about the funding strategy first so you thought you wanted to raise and you did what year was that and how much did you raise that was 2016 and we did an all secondary round for 37 million u.s 50 million canadian if it was relevant okay 37 million u.s and that was 100 secondary to you or also early employees investors yeah it was a combination like everybody got a bonus and all that kind of stuff okay okay and what valuation was that at 163 million did that feel fair at the time yeah it did yeah okay at the time yeah yeah and that was poster pre yeah that was uh there was technically no post or pre because it was all secondary so oh god i got it got it yeah so we could take 37 divided by 163. they bought about 20 percent of the business 21. yeah exactly yeah okay and then you sort of casually said it felt good at the time what happened yeah it was i mean it was it's it's easy to look back i mean it was it was all very positive they were really great people great groups but um you know coming from a fully bootstrapped approach where the business is based on profitability and growth at the same time and not grow by all costs where effectively the founder being myself is is gambling with the growth of the business which is as i see it um you know we were just really weren't aligned from a philosophical perspective but i don't think that would have been any different with any other parties frankly i think it was just you know it was just how the times were then with from an investment standpoint at least from you know kind of the vc to to um you know kind of startup ep firms as well and so for us it it just really didn't make sense to continue down that path 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 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back into the interview and so i mean a lot of people a lot of you might right now be listening thinking about raising capital or doing a secondary like you just described but they're really not sure like what their first board meeting is going to be like you obviously didn't like what you saw or heard in your first couple board meetings otherwise you wouldn't have bought them back out so what were you expecting and what happened to be honestly it was that's actually a great question because i had absolutely no idea so like no preparation whatsoever you know very little from a content perspective we were doing like again you know i think about 16 million at the time with maybe maybe 20 employees in the business and um yeah i just had zero experience from that perspective so it really wasn't anything on that front i think it was a combination of things that happened over you know over the three year period that you know it was just like we better separate here this is going to go sideways the business had gone from triple digit growth to single digit growth um you know so really nobody was happy across the board i don't take a salary or compensation i i do well with the company as well so i'm very focused on again continuing to build the business not just you know ross has got you know compensation coming from salary and options and all this kind of stuff as well so what did you do about it that's right so you didn't you didn't obviously like that sort of pressure it didn't make a lot of sense right so what did you do about it you raised this capital are they still on the cap table today no no so i bought them out or you know there's a few more nuances to it but yeah we effectively decided on a figure i went our separate ways and um [Music] you think i'm just going to let you off the hook by saying we decided a figure how the hell do you go with the figure they just paid 160 million valuation can you convince them to sell them back at like 1x or they're going to say ross you got to give us a premium our capital was tied up no no it was nothing like that it was just uh kind of what you said okay so they're like they're like if we put the same 37 million bucks in the stock market we would have earned 10 so give us 10 more than...