How Mass Mobile Apps CEO Ali Ispahany grew Mass Mobile Apps to $1M revenue and 250 customers in 2024.

hey folks my guest today is ali ispahani he's a serial entrepreneur with a retail background that was looking for a mobile solution for his first retail business in 2013 he couldn't find it so he decided to build it the platform has grown and now offers a full suite of software both mobile and web channels it's called mass mobile apps.com ali you're ready to take to the top all right very cool so um what was the retail brand you were trying to launch back in 2013 it was retail store bricks and mortar location and into what was like a gas station or like a radio shack or you know so we carry brand name goods like diesel g-star versace you know what kind of stuff brand name clothing clothing okay that's what i was looking for it's a clothing retail brand and so you tell me what you were looking for that you couldn't find um i was looking for a way to better connect with my customers we used to send out emails you know bi-weekly and we look at our open rates we get fifteen twenty percent if we're lucky and a lot of opt-outs looking for a way to increase sales and better connect with my customers i did a search on google and found that a rewards program businesses with a rewards program usually do 20 more than businesses without and that's kind of when this whole thing uh went into motion so first line of code for massive mobile apps was 2013 uh 2014 uh and the sport i was looking for it i started doing some research uh found a company that uh had some developing talent and uh have done with that so mass mobile okay so you're not a technical founder yourself you found a technical firm to build it for you yeah i have well we've built a team now um it's all offshore uh developers all in india in india and um working with them now for about four or five years and a good team together tell me how you found them and had confidence there's a lot of folks right now that are listening that are business uh folks and have an idea and they need to find that initial engineer or engineering outsourcing to build it so who is the firm that you used and how did you find them so we had a local firm i'm based in toronto canada just north of toronto and we had a local firm and was using these guys they have offices in toronto as well as india we were using their talent uh offshore um was dealing with them for a year and a half or so and had a good relationship with their project manager um and all of a sudden that guy left and it's a long story but what ended up happening was the the guy that i had a relationship with came back to me about six months eight months later after leaving that company just you know saying hello i mentioned it to the owner there and he got red flags and said thought that we were gonna start working together um but what ended up happening was uh it went legal i had to sue the mate so it held my source code the good learning experience for me they you know had everything on their servers i held my code was asking for a lot of money to release my stuff how much 50 000 bucks 50 grand they wanted the day after that i told them that i had a conversation with their former cto um and then i just went uh you know put my team together with help of the person that i was talking about now and so is that person now running his own dev shop out of india is he working with multiple companies or just you no he works he works for a big company in india they have over 800 people uh that's on staff and what's it called a suntec send tech satin sun suv suntec oh suntech got it very cool and it's for outsourced dev shop work yeah yeah primarily interesting and uh okay so walk me through how do you give him a scope how do you set a budget to make sure that he builds the mvp so you can start selling as fast as possible initially the product was built for my own store um i was building it out to like i said help increase my sales and better connect with my customers uh it more from there because i think the initial budget for my own store was about 25 30k uh and then i was looking for a way to recoup that talked to a couple of guys that was you know that i knew in the industry and they were interested show them the product um and just more from there and i basically was doing it part-time for a couple years uh and then went full-time 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 finderpath 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 attraction 1.2 million seed round 3.7 raised they sold 22 percent of 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 than what you can get now inside of founder path and we're thrilled to bring it to you all right we're gonna go back to the youtube video here in a second but if you wanna check this tool out if you 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 evaluation 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 and so what are customers today paying on average to use the tool of technology so the um uh there's two business owners we have we have a white label reseller model um which is where we license our software out to others that want to open their own business uh before coveted we were doing 250 a month for 10 app credits where they could sell 10 different businesses in that uh when corvette happened we you know try to have help a little bit and get back we reduced our plan our opening plan to 125 a month for five uh and then the um the other business model is direct to business so if you're looking for an app for your business you can come to us we'll build it for you we charge 1500 bucks uh for a one-time setup fee and then about 100 bucks a month to uh maintain the app and if you ignore the setup fees and just look at resellers on the monthly fees are you direct on the monthly fees what's the percent revenue break down 50 50 or what no no we uh we're white label researchers we're doing about 45k mrr right now we're doing about 35k not white label resellers about 7 000 in um direct uh businesses and then we about three four thousand dollars a month in doing custom work for our club very cool and if you so if you're doing 35 000 bucks in mr today what were you doing exactly a year ago uh a year ago good question probably less uh 30 40 less probably about 20 20 27 28 20 25 okay and have you have you self funded all this or did you decide to raise capital all bootstraps haven't uh thought about it but yeah it's all been bootstrapped love that so you still 100 today 100 awesome well tell me more about the team how many folks so we have a development team of about seven people um project manager and then locally it's myself pretty much that has you know where's all the hats i had a couple guys that we were working with locally but no real uh domestic it's really eight i mean it's it's the outsourced dev shop suntec and you yeah interesting so how are you i mean that's a lot for you to wear i mean how are you are you storing the retail store uh we i still own a retail store my wife and kids run that now um i'm there you know a couple a couple hours a week but uh yeah so that's that's that retail store is kind of our guinea pig so anything that we want to put into the platform we throw it through there let's see how you know what kind of feedback we get that kind of stuff and how many customers do you have today uh we have um we have so we had uh in 2019 we we got together with a marketing company we did a big lunch where we did a one-time kind of thing where we launched everything so we had about 2 300 people that came on board on that excuse me that paid for a one-time fee and i think we have uh active users now over 250. 250 that are paying monthly at different different price points when we when we launched we had much lower price punches trying to get break into the market but if you're doing 35 grand a month in revenue it costs 250 customers that means on average they're paying 150 bucks a month roughly yeah interesting uh okay and then i guess talking about that lifetime deal a lot of people like do this you know look the jury's out in terms of if it's effective or not it can be a huge distraction would you do it again uh no i wouldn't i wouldn't tell me why because uh the lifetime customer is uh you know their drain on the resources as far as the training and that kind of stuff and um it doesn't help the brand to be honest with you the brand was uh we had we i purposely did it in a different brand name because i didn't want to associate with my humble brain so we use a different brand name and we used um the guys that i was partnered with as the front men yeah that's interesting and so you got you know you sold 2800 people what what was the one-time lifetime value if they had a whole um funnel of different offers so i think it went from 97 all the way to 9.97 if you buy otos and you got some amount of cut of that uh but wouldn't do it again so now building pure play sash churn's critical in this space what's your churn today churn is very low um [Music] insurance is less than less than two percent monthly um yeah yes yep so 24 annually uh max which is great now are you able to upsell those customers are you is there something you can sell more of or no yeah we've now launched our own e-commerce components so we've uh i'm not sure if you're familiar with opencart opencart is open open source software that's basically an e-commerce environment we've now taken that embedded into our platform and we've got our essentially our own shopify uh where we're able to launch uh we're gonna be launching that we've already it's already live and we're gonna be launching that to our existing customer base in the next two or three months so with that additional product are you able to upsell so that you make up the hole created by the 24 churn uh yeah absolutely so you have over 100 net retention today then we have yeah my turn is very low i i gotta look at it to be honest with you i didn't i didn't check those numbers before i well no my questions are about churn my question is can you upsell customers to make up for the churn whole can it counts absolutely we can absolutely is alex sorry what i'm asking is the exact customers you had paying exactly one year ago let's say it was 25 000 bucks a month in revenue 24 of that churned that same customer quote from exactly a year ago were you able to upsell them the ones that stayed at least 24 to make up for the loss yeah let me give you some um background on what we do so basically let's say we lost the customer last week but the existing customers they pay uh some pay the opening price points 125 like i said for you get 10 uh five credits for that so when our customers grow as they sell more of their customers our label customers we charge them more so if you want 10 apps or 20 apps or 50 apps we've got a customer that has 300 apps um right so we charge um i think our lowest price is 10 bucks per app so we charge accordingly so your highest acv is what's your biggest customer pay every year um 700 one second 700 a month plus 3 000 years 11 400. yeah okay cool so yeah i mean you have the opportunity to upsell customers for sure if you've got one paying 11 000 so that makes a lot of sense how are you signing up customers today where are you finding them besides the reseller partners yeah right now it's organic people are coming to us on our website our website is you know ranks pretty well so it's just already what's the number one keyword you use that brings you most traffic um i don't i don't even do any seo anymore we use it's i think it's massive laughs when i do my last search mass mobile or mobile apps app builder that kind of stuff interesting you can still you can rank for i mean app builders are pretty competitive searcher i imagine yeah i i've i haven't i haven't checked that recently but i know that i when i took my lexus scores and uh my similar webs were pretty high interesting uh would you ever sell to a company like build fire um billfire is a dirt competitor uh so would we sell to them i don't know um like we'll never say never but if they offer you you know 500k all cash up front today do you sell to them no no no absolutely the 500k is nothing to you know i think this we're looking to be you know be uh the business the biggest player of the game was was a company called business apps they were doing 15 million dollars annually and uh we're looking to get into that territory mm-hmm yeah but you know he exited for you know not a great multiple you know is effectively a flash sale at 18 million yeah i saw the interview he did yeah yeah yeah uh interesting so okay cool that makes a ton of sense so um that playbook it sounds like it's word of mouth plus these channel partners you can keep scaling um you have uh eight you know eight people something on the team today mostly outsourced plus you so it sounds like i've got the thing here massmobileapps.com if you guys want to check it out i'm ali though we're rooting for you man in the meantime let's wrap up here with the famous five number one favorite book favorite book um the kite letter say one again the the white it's called the kite runner the tight runner number two is there kite ticket oh kite runner yeah yeah uh number two is there a ceo you're following or studying um jeff bezos number three what's your favorite online tool for building massmutual or mass mobile um we built our own we used to be monday.com but we built our own version of it now we call flex flow number four how many hours you sleep to eat every night uh four or five okay in situation marriage well you mentioned kids and wife right yep how many kids four wow and how old are you they're all they're all okay how are you 52 52 last question something you wish you knew when you were 20 um um hard question i think technology more i was always a techie but yeah guys technology earlier massmobileapps.com solving his own problem back in 2014 launched his own retail store wanted a tool to help him manage it more effectively said he knew what i'm going to build it myself and so he did 26 000 bucks a month in revenue about a year ago now 35 000 a month nice growth 100 owned by ali and bootstrap which we love he used outsourced firms including his uh his outsourced dev agency suntech to drive growth here without adding to his fixed expenses in terms of head count so growing nicely serving 250 customers today mainly getting customers through word of mouth and his partner channels ollie we're rooting for you man thanks for taking the top thanks one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathanlacka.com in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode and if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive i am on these shows but i do it so that we can all learn we have to counter those people we got to push them away click the thumbs up below to counter them and know that i appreciate your guys's support all right i'll be in the comments see ya