Mass Mobile Apps Revenue (2024)

[00:00] Hey, folks. My guest today is Ali Ispahany. 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 for both mobile and web channels. It's called massmobileapps.com. Ali, you ready to take [00:16] us to the top? [00:17] >> I am. [00:18] All right. Very cool. So what was the retail brand you were trying to launch back in 2013? [00:22] >> It was a retail store, bricks and mortar location. [00:26] And so what was like a gas station or like a radio shack or? [00:29] >> No, we carry brand name goods like Diesel, G-Star, Versace, all that kind of stuff. Brand name clothing. [00:35] Clothing. Okay, that's what I was looking for. So clothing retail brand. And so tell me what you were looking for that you couldn't find. [00:40] >> I was looking for a way to better connect with my customers. We used to send out emails biweekly and we'd look at our open rates. We get 15%, 20% if we were 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 rewards program usually do 20% more than businesses without. And that's kind of [01:02] >> when this whole thing went into motion. [01:05] So first line of code for massmobileapps was 2013? [01:09] >> 2014. I was looking for it. I started doing some research, found a company that had some developing talent and took down with them. [01:20] So massmobileapps, so you're not a technical founder yourself. You found a technical firm to build it for you. [01:25] >> Yeah, I have. Well, we've built a team now. It's all offshore. Built in India and working with them now for about four or five years and a good team together. [01:36] Tell me how you found them and had confidence. There are lot of folks right now that are listening that are business 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 use and how'd you find them? [01:47] >> 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 offshore. I was dealing with them for a year and a half or so and had a good relationship with their project manager. And all of a sudden that guy left and it's a long story, what ended up happening [02:10] >> was the guy that I had a relationship with came back to me about six months, eight months later after leaving that company, just saying hello. I mentioned it to the owner there and he got red flags and said that we were going to start working together. But what ended up happening was it went legal. I had to sue them, they held my source code, the good learning experience for me. They had everything on their servers. I [02:34] >> held my code, was asking for a lot of money to release my stuff. [02:37] How much? [02:38] >> $50,000. $50 k they wanted. But this day after that, I told them that I had a conversation with their former CTO. And then I just went to put my team together with the help of the person that I was talking about now. [02:54] So is that person now running his own dev shop out of India? Is he working with multiple companies or just you? [02:58] >> No. He works for a big company in India. They have over 800 people that's on staff and we've What's it called? Suntech. [03:07] Send tech. [03:09] >> Sun, s u n. Suntech. [03:10] Oh, Suntech. Got it. Very cool. And it's for outsourced dev shop work? [03:14] >> Yeah. Yeah. Primarily. [03:16] Interesting. And now 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? [03:24] >> Initially, the product was built for my own store. I was building it out to, like I said, help increase my sales and better connect with my customers. It morphed from there because I think the initial budget for my own store was about $25 to $30 ks. And then I was looking for a way to recoup that, talked to a couple of guys that I knew in the industry and they were interested, showed them the product and just more [03:45] >> from there. And I basically was doing it part time for a couple of years and then went full time. [03:51] Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 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 Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect [04:15] your Stripe account, you see your valuation real time, you can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna [04:39] get a different valuation. A VC is gonna pay a different valuation, private equity firm is different. If you're gonna 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 [05:01] 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, 1,200,000 seed round, 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna 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 [05:27] going out right now and you're raising your seed round. We'll 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 dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. Alright. We're gonna go back to the YouTube video here in a second, but if [05:49] you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. 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. Alright. Let's jump back into the [06:15] interview. And so what are customers today paying on average to use the tool or technology? [06:20] >> There's two business models we have. We have a white label reseller model, which is where we license our software out to others that want to open their own app business. Before COVID we were doing $250 a month for 10 app credits where they could sell 10 different businesses in app. When COVID happened we try to help a little bit and get back. Reduced our plan, our opening plan to 125 a month for five. And then the [06:44] >> 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 $1,500 for a one time setup fee and then about $100 a month to maintain the app. [06:56] 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 breakdown? Fifty-fifty or what? [07:05] >> White label resellers. We're doing about 45 ks MRR right now. We're doing about 35 ks in that white label resellers, about 7,000 in direct businesses. And then we do about $3,000 to $4,000 a month in custom work for our platform. [07:18] Very cool. So if you're doing $35,000 in MRR today, what were you doing exactly a year ago? [07:24] >> A year ago, good question. Probably less, about 40% less, probably about 27, 28. [07:32] >> 25, 26. [07:33] Okay. And have you self funded all this or did you decide to raise capital? [07:36] >> No, all bootstrapped. Haven't thought about it, but yeah, it's all been bootstrapped. [07:40] Love that. So you're still on a 100% today? [07:42] >> A 100%. [07:43] Awesome. Well, tell me more about the team. How many folks? [07:46] >> So we have a development team of about seven people, the project manager, and then locally, it's myself pretty much has you know, wears all the hats. I had a couple of guys that we were working with locally, but no real domestic [07:58] >> It's really eight. [07:59] Mean, it's the outsource dev shop, Suntech and you. [08:02] >> Yeah. [08:03] Interesting. So how are you mean, that's a lot for you to wear. I mean, how are you sign are you still owning the retail store? [08:08] >> I still own a retail store. My wife and kids run that now. I'm there a couple of hours a week, but yeah. That retail store is kind of our guinea pig. So anything that we want to put into the platform, throw it through there and see what kind of feedback we get, that kind stuff. [08:25] And how many customers do you have today? [08:30] >> In 2019, we got together with a marketing company. We did a big launch 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 active users now over two fifty. [08:48] Two fifty that are paying monthly? [08:51] >> Yeah, different price points. When we launched, we had a much lower price point just trying to get it break into the market. [08:58] But if you're doing $35,000 a month in revenue across two fifty customers. That means on average they're paying what, $150 a month? [09:03] >> Roughly. [09:04] Yeah, interesting. Okay. And then I guess talk to me 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? [09:14] >> No, I wouldn't. [09:15] Tell me why. [09:16] >> Because the lifetime customer is, know, they're a drain on the resources as far as the training and that kind of stuff. And it doesn't help the brand, to be honest with The brand was I purposely did it in a different brand name because I didn't want to associate with my massmobile brand. So we use a different brand name and we use the guys that I was partnered with as the front men. [09:42] Yeah, that's interesting. And so you got, you you sold 2,800 people. What was the one time lifetime value? [09:49] >> They had a whole funnel of different offers. So I think it went from 97 all the way to $997 if you buy all the OTOs. [09:57] And you got some amount of cut of that, but wouldn't do it again. So now building pure play SaaS, churn's critical in this space. What's your churn today? [10:05] >> Churn is very low. Churn is less than less than 2%. [10:11] Monthly? [10:12] >> Yeah. Yep. [10:13] So 24% annually max, which is great. Now are you able to upsell those customers? Are you is there something you can sell more of or no? [10:23] >> Yeah. We've now launched our own e commerce component. So we've I'm not sure if you're familiar with OpenCart. OpenCart is open source software that's basically an e commerce environment. We've now taken that embedded that into our platform and we've got essentially our own Shopify where we're able to launch. Couldn't be launching that. It's already live and we're going be launching that to our existing customer base in the next two or three months. [10:45] So with that additional product, are you able to upsell so that you make up the hole created by the 24% churn? [10:51] >> Yeah, absolutely. [10:53] So you have over 100% net dollar retention today then? [10:56] >> We have, yeah, like my churn is very low. I gotta look at it to be honest. I didn't check those numbers before I cut them off. [11:01] No, no, question's not about churn. My question is, can you upsell customers to make up for the churn hole? [11:06] >> Can we upsell? We [11:07] >> can, absolutely. [11:10] Is that all I'm sorry, what I'm asking is the exact customers you had paying exactly one year ago, let's say it was $25,000 a month in revenue, 24% of that churned. That same customer call from exactly a year ago, were you able to upsell them the ones that stayed at least 24 to make up for the loss? [11:23] >> Yeah, let me give you some back background on what we do. So basically, let's say we lost a customer last week, but the existing customers, they pay some pay, the opening price point is 125, like I said, for you get five app credits for that. So when our customers grow, as they sell more of their customers, our white label customers, we charge them more. So if you want 10 apps or 20 apps or 50 apps, we've [11:43] >> got a customer that has 300 apps. So we charge, I think our lowest price is $10 per app. So we charge accordingly. [11:53] So your highest ACV is what? What's your biggest customer pay per year? [11:58] >> Paying 700, give me one second. 700 a month? 700 plus 3,000 a year, 11,400 annually. [12:07] Yeah, okay, cool. So yeah, mean, you have the opportunity to upsell customers for sure. If you've got one paying 11,000, that makes a lot of sense. How are you signing up customers today? Where are you finding them besides the reseller partners? [12:17] >> Yeah, right now it's organic. People are coming to us on our website. Our website ranks pretty well. So it's just organic growth. [12:23] What's the number one keyword you use that brings you most traffic? [12:27] >> I don't even do any SEO anymore. I think it's massmobileapps might be my last search. Massmobile or mobile apps, app builder, that kind of stuff. [12:35] Interesting. You can rank for, mean, builders are pretty competitive searcher, I imagine. [12:41] >> Yeah, haven't checked that recently, but I know that when I checked my Alexa scores and my similar websites were pretty high. [12:48] Interesting. Would you ever sell to a company like Buildfire? [12:53] >> Buildfire is a direct competitor. So will we sell to them? I don't know. We never say never, but [13:00] If they offer you, you know, 500 ks all cash upfront today, do you sell to them? [13:04] >> No, no, not far. Absolutely. 500 ks is nothing to, you know, I think this we're looking to be, you know, be like the business, the biggest player in the game was was a company called businessapps. They were doing $15,000,000 annually and we're looking to get into that territory. [13:21] Yeah, but you know, he exited for, you know, not a great multiple, you know, was effectively a flash sale at 18,000,000. [13:27] >> Yeah, I saw the interview he did. [13:29] Yeah, yeah, yeah. Interesting. So, okay, cool. That makes a ton of sense. So that playbook, it sounds like it's word-of-mouth plus these channel partners and can keep scaling. You have 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 wanna check it out. Ali, we're rooting for you, man. In the meantime, let's wrap up here with the famous five. Number [13:49] one, favorite book. [13:51] >> Favorite book? The Kite Runner. [13:55] Say it one again? The what? [13:56] >> It's called The Kite Runner. [13:59] >> The Kite Runner. [14:01] Number two, is there a [14:04] CEO you're following or studying? [14:07] >> Jeff Bezos. [14:09] Number three, what's your favorite online tool for building massmobile? [14:14] >> We built our own. We used to use monday.com, but we built our own version of it now. We call it FlexFlow. [14:18] Number four, how many hours of sleep do you get every night? [14:22] >> Four or five. [14:23] Okay. And situation, married well, you mentioned kids and wife, right? [14:26] >> Yep. Four kids. [14:27] How many kids? Four. Wow. How old They're are all old. Okay. How old are you? [14:33] >> 52. [14:34] >> 52. [14:35] Last question. Something you wish you knew when you were 20. [14:38] >> Wish I knew was 20. [14:43] >> Hard question. I think technology. I was always a techie, but [14:51] Guys, technology earlier, massmobileapps.com solving his own problem back in 2014, launched his own retail store, wanted tool to help him manage it more effectively. Said, you know what, I'm gonna build it myself. And so he did. $26,000 a month in revenue about a year ago, now $35,000 a month. Nice growth. A 100% owned by Ali and Bootstrap, which we love. He used outsourced firms, including his outsourced dev agency, Suntech, to drive growth here without adding to [15:12] his fixed expenses in terms of headcount. So growing nicely, serving two fifty customers today, mainly getting customers through word-of-mouth and his partner channels. Ali, we're rooting for you, man. Thanks for taking us Thanks, the [15:22] >> Nathan. [15:24] One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. 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 1PM [15:49] Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM 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 SaaS world, whether it's an acquisition, a big [16:11] fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you wanna take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS 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 [16:33] for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty 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 [16:53] got to push them away. 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