How Mass Mobile Apps Hit $45K MRR Bootstrapped with a Team of Eight (Interview with CEO Ali Ispahany)

Introduction and Background

Nathan Latka

00:00Hey, 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

00:16us to the top?

Ali Ispahany

00:17>> I am.

Nathan Latka

00:18All right. Very cool. So what was the retail brand you were trying to launch back in 2013?

The Original Retail Store

Ali Ispahany

00:22>> It was a retail store, bricks and mortar location.

Nathan Latka

00:26And so what was like a gas station or like a radio shack or?

Ali Ispahany

00:29>> No, we carry brand name goods like Diesel, G-Star, Versace, all that kind of stuff. Brand name clothing.

Nathan Latka

00:35Clothing. 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.

Why Ali Built a Mobile App

Ali Ispahany

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.

Nathan Latka

01:05So first line of code for massmobileapps was 2013?

Ali Ispahany

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.

Nathan Latka

01:20So massmobileapps, so you're not a technical founder yourself. You found a technical firm to build it for you.

Ali Ispahany

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.

Nathan Latka

01:36Tell 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?

First Line of Code and Year Founded

Ali Ispahany

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

Finding the Outsourced Dev Team

Ali Ispahany

02:34>> held my code, was asking for a lot of money to release my stuff.

Nathan Latka

02:37How much?

Ali Ispahany

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.

Nathan Latka

02:54So is that person now running his own dev shop out of India? Is he working with multiple companies or just you?

Ali Ispahany

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.

Nathan Latka

03:07Send tech.

Ali Ispahany

03:09>> Sun, s u n. Suntech.

Nathan Latka

03:10Oh, Suntech. Got it. Very cool. And it's for outsourced dev shop work?

Ali Ispahany

03:14>> Yeah. Yeah. Primarily.

Nathan Latka

03:16Interesting. 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?

Ali Ispahany

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.

Nathan Latka

03:51Oh, 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

04:15your 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

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05:01not 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

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06:15interview. And so what are customers today paying on average to use the tool or technology?

Business Models and Pricing

Ali Ispahany

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.

Nathan Latka

06:56And 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?

MRR Breakdown by Channel

Ali Ispahany

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.

Nathan Latka

07:18Very cool. So if you're doing $35,000 in MRR today, what were you doing exactly a year ago?

Ali Ispahany

07:24>> A year ago, good question. Probably less, about 40% less, probably about 27, 28.

07:32>> 25, 26.

Nathan Latka

07:33Okay. And have you self funded all this or did you decide to raise capital?

Bootstrapped and Team Size

Ali Ispahany

07:36>> No, all bootstrapped. Haven't thought about it, but yeah, it's all been bootstrapped.

Nathan Latka

07:40Love that. So you're still on a 100% today?

Ali Ispahany

07:42>> A 100%.

Nathan Latka

07:43Awesome. Well, tell me more about the team. How many folks?

Ali Ispahany

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.

Nathan Latka

07:59Mean, it's the outsource dev shop, Suntech and you.

Ali Ispahany

08:02>> Yeah.

Nathan Latka

08:03Interesting. 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?

Ali Ispahany

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.

Nathan Latka

08:25And how many customers do you have today?

Ali Ispahany

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.

Customer Count and ARPU

Nathan Latka

08:48Two fifty that are paying monthly?

Ali Ispahany

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.

Nathan Latka

08:58But 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?

Ali Ispahany

09:03>> Roughly.

Nathan Latka

09:04Yeah, 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?

Ali Ispahany

09:14>> No, I wouldn't.

Nathan Latka

09:15Tell me why.

The Lifetime Deal Experiment

Ali Ispahany

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.

Nathan Latka

09:42Yeah, that's interesting. And so you got, you you sold 2,800 people. What was the one time lifetime value?

Ali Ispahany

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.

Nathan Latka

09:57And 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?

Churn and Upsell Potential

Ali Ispahany

10:05>> Churn is very low. Churn is less than less than 2%.

Nathan Latka

10:11Monthly?

Ali Ispahany

10:12>> Yeah. Yep.

Nathan Latka

10:13So 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?

Ali Ispahany

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.

Nathan Latka

10:45So with that additional product, are you able to upsell so that you make up the hole created by the 24% churn?

Ali Ispahany

10:51>> Yeah, absolutely.

Nathan Latka

10:53So you have over 100% net dollar retention today then?

Ali Ispahany

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.

Nathan Latka

11:01No, no, question's not about churn. My question is, can you upsell customers to make up for the churn hole?

Ali Ispahany

11:06>> Can we upsell? We

11:07>> can, absolutely.

Nathan Latka

11:10Is 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?

Ali Ispahany

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.

Nathan Latka

11:53So your highest ACV is what? What's your biggest customer pay per year?

Biggest Customer and ACV

Ali Ispahany

11:58>> Paying 700, give me one second. 700 a month? 700 plus 3,000 a year, 11,400 annually.

Nathan Latka

12:07Yeah, 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?

Ali Ispahany

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.

Nathan Latka

12:23What's the number one keyword you use that brings you most traffic?

Ali Ispahany

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.

Nathan Latka

12:35Interesting. You can rank for, mean, builders are pretty competitive searcher, I imagine.

Customer Acquisition via Organic SEO

Ali Ispahany

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.

Nathan Latka

12:48Interesting. Would you ever sell to a company like Buildfire?

Ali Ispahany

12:53>> Buildfire is a direct competitor. So will we sell to them? I don't know. We never say never, but

Nathan Latka

13:00If they offer you, you know, 500 ks all cash upfront today, do you sell to them?

Growth Ambitions and Acquisition Offers

Ali Ispahany

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.

Nathan Latka

13:21Yeah, but you know, he exited for, you know, not a great multiple, you know, was effectively a flash sale at 18,000,000.

Ali Ispahany

13:27>> Yeah, I saw the interview he did.

Nathan Latka

13:29Yeah, 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

13:49one, favorite book.

Ali Ispahany

13:51>> Favorite book? The Kite Runner.

Nathan Latka

13:55Say it one again? The what?

Ali Ispahany

13:56>> It's called The Kite Runner.

13:59>> The Kite Runner.

Nathan Latka

14:01Number two, is there a

14:04CEO you're following or studying?

Ali Ispahany

14:07>> Jeff Bezos.

Famous Five Rapid Fire

Nathan Latka

14:09Number three, what's your favorite online tool for building massmobile?

Ali Ispahany

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.

Nathan Latka

14:18Number four, how many hours of sleep do you get every night?

Ali Ispahany

14:22>> Four or five.

Nathan Latka

14:23Okay. And situation, married well, you mentioned kids and wife, right?

Ali Ispahany

14:26>> Yep. Four kids.

Nathan Latka

14:27How many kids? Four. Wow. How old They're are all old. Okay. How old are you?

Ali Ispahany

14:33>> 52.

14:34>> 52.

Nathan Latka

14:35Last question. Something you wish you knew when you were 20.

Ali Ispahany

14:38>> Wish I knew was 20.

14:43>> Hard question. I think technology. I was always a techie, but

Nathan Latka

14:51Guys, 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

15:12his 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

Ali Ispahany

15:22>> Nathan.

Nathan Latka

15:24One 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

15:49Central. 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

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16:33for 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

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