How MessageDesk Grew from $200 to $14K MRR with 266 Customers Through Organic SEO (Interview with Revenue Operations Manager Josh Merryman)

Introduction and What MessageDesk Does

Nathan Latka

00:00Hey, folks. My guest today is Josh Merryman. He's the revenue operations manager at a company called MessageDesk, where he aims to align sales and marketing goals with their product development team. He also led the sales team, where they scaled from nothing in MRR in Q2 twenty twenty to 15 ks MRR and two seventy eight customers by next quarter. So approaching that here quickly. Josh, you're ready to take the top? Heck yeah, let's do it. Alright. So

00:21what is MessageDesk? What are people paying you for?

Josh Merryman

00:23>> Yeah. So we're a business text messaging platform that helps small and medium sized businesses grow their customer base, market affordably, earn more online reviews, and get paid faster through business text messaging.

Built on Bandwidth, Not Twilio

Nathan Latka

00:35And do you are you built on top of Twilio's sort of rails?

Josh Merryman

00:38>> So we're actually built on top of Bandwidth, which is a Twilio competitor.

Nathan Latka

00:43Interesting. Is that your biggest expense monthly?

Josh Merryman

00:47>> Not really, just because we're the way we price, we're kind of taking that into account. We get charged about less than a penny per message sent, and we charge about 3 to 4¢ to our end users. So it's not a huge expense there in the grand scheme of things.

Nathan Latka

01:02Do you know how many were sent last month?

Josh Merryman

01:04>> Yes. We do about 100,000 a month.

Message Volume and Customer Count

Nathan Latka

01:07Wow. Okay. Got it. Across how many customers today?

Josh Merryman

01:10>> 266.

Josh's Role and Founding Story

Nathan Latka

01:12Two sixty six. Okay. Take take me to the story. You were there at day zero. Now you're not a founder, but it sounds like you're part of the founding team. Right?

Josh Merryman

01:18>> Yeah. So I'm officially employee number two. We have four co founders and I am the second employee. Me and the first employee came in really the same time.

Nathan Latka

01:26Okay. Very cool. And and what were you originally hired to do?

Josh Merryman

01:30>> Originally I came in, I was a marketing person when we were interviewing and all that, but I had a background in web design and web development. So my first three months on the ground was actually doing software engineering, working in the code base, developing features because at that moment we were just such an we were such an MVP product that there was no reason to do marketing and sales yet. It was like we had nothing to

01:53>> sell. So it was all hands on deck from product development wise.

Nathan Latka

01:56And what are customers paying per month today on average?

Pricing and Average Revenue Per User

Josh Merryman

01:59>> So right now our average revenue is about $52. We have two official plans. One starts at $39 a month, $99. A majority are at the $39 range with, you know, about 25 to 30% of the $99 range.

MRR Growth from Launch to Today

Nathan Latka

02:14That's right. 266 times 52, I mean, what you're doing $13, $14 grand a month right now in revenue. Right?

Josh Merryman

02:18>> Yeah.

Nathan Latka

02:19And that's up from nothing about how long ago. When when did you guys launch Brand

Josh Merryman

02:23>> So we officially went to market in February 2020. Ending February, we had $200 in MRR. So from there until now, it's been consistent growth. You know, in the world of SaaS it's so crazy because there's companies that in that same timeline might do, you know, million in MRR, ARR. So we're not that big, we're not growing that fast. That's our goal though.

Nathan Latka

02:46Mhmm. Very cool. Okay. So February is when you get going $200 a month, now much larger than that. How did you get those first 200 customers? Do you remember?

Organic SEO as the Primary Growth Channel

Josh Merryman

02:53>> So all of our sales and marketing is all through organic just content. So we are literally just ranking on Google for keywords and people are finding us naturally. It's actually kinda funny because we're based in Reno, Nevada, but we don't have any customers in Reno, Nevada. All of our customers are in all the other states. Now we're kinda going to this local outreach because it's just a lot easier now that we have the full product, we

03:16>> have kind of our niche kind of aligned.

Nathan Latka

03:18What's your top keyword that you guys intentionally are ranking for that's bringing in trials and customers?

Josh Merryman

03:24>> Scheduling text messages. Is business intent, is interesting.

Nathan Latka

03:28Scheduling text messages, what's the second highest keyword, do you remember?

Josh Merryman

03:34>> Text to pay, text to donate, stuff like that. You know, things that are business intent around text messaging. You know, scheduling is usually coined with like appointment reminders, follow ups, stuff like that. You know, the casual front desk workflows. Text to Pay is like the field service, home service people that are trying to literally get paid while they're on-site.

Nathan Latka

03:52Yep. And how do you like, when it's like scheduling text messages, imagine there are a lot of very large companies with higher domain authority than you also trying to rank for that. How do you beat them? Like how do you outrank them?

Josh Merryman

04:01>> Yeah. I mean, it's a it's a game for sure. You know, there's definitely a strategy of going after keywords that have high buyer intent, but maybe low search volume. Mhmm. Whereas our competitors, they might have the money to just put ads on these keywords and where they're not really competing in the actual content space, they're just paying Google to be on the first first in that kind of ranking. You know, for us we typically show up

04:22>> in the third, fourth, or fifth in those searches. So we're not first all the time, but being third to fifth, you get, you know, 20 to 15% click through out of the total people that search it. So it's still enough there to make some money.

Nathan Latka

04:35And how else can you like go deep on these keywords, where you're better funded and bigger competitors won't go as deep?

QuickBooks and Xero Integration as a Differentiator

Josh Merryman

04:42>> The big differentiator is through integration. So in the SMS text messaging world, we're the only company that's directly integrated to QuickBooks Online and Xero, which are two of the biggest small business accounting softwares. So in the text to pay realm, you know, lot of SMS people will offer text to pay, but it's not through an accounting system. So for most small business owners, if they're using QuickBooks Online, our competitors aren't actually a solution for them. There's

05:08>> no route in which they can do that, which for us, we just piggyback off QuickBooks. So when we do text to pay, it's just plugged into your accounting, we're not creating extra work when it comes to year end financial balance sheets and all that.

Nathan Latka

05:20It's almost like an invoicing to like FreshBooks, right, on desktop, but you're doing that just for text messaging, text symbols.

Josh Merryman

05:26>> Yeah. Yeah. Exactly.

Nathan Latka

05:26Interesting. Okay. Makes a lot of sense to me. Talk to me about funding. Have you guys stayed bootstrapped or raised?

Funding History and Convertible Note

Josh Merryman

05:32>> So we raised a pre seed round. We've done just over $500,000 in funding to date. We were bootstrapped up until, you know, mid twenty twenty. So

Nathan Latka

05:45So pre seed, $500k raised. And and do you have any idea was that on a note or priced or or maybe not? Because these are

Josh Merryman

05:51>> It was a convertible note round.

Nathan Latka

05:53A convertible note. Okay. Very cool. Do know the cap that was on it?

Josh Merryman

05:58>> I do not. No.

Nathan Latka

05:58Okay.

Plans for a Seed Round

Nathan Latka

05:59Not cool. Any plans to raise more capital to keep fueling your growth or no?

Josh Merryman

06:03>> Yeah. I mean, we're looking to do our seed round sometime at the end of this year 2020 or early twenty twenty or not 2020, geez, 2020 Early twenty twenty two probably more realistically. You know for us we're growing consistently, you know about a thousand dollars of new MRR each month. So a new round is really just money in the bank. We can start competing with our competitors at the advertising level and really try and jump our

06:28>> conversion rates at that first initial touch point from 15% of people that search to getting to like 45, 50%. So that's really where that money would go. So for us, it's not an absolute need to grow, it's just a matter of can we grow faster with the cash on hand.

Nathan Latka

06:41Mhmm. How much cash is on hand?

Cash on Hand and Burn Rate

Josh Merryman

06:44>> Right now we have probably just over a $100,000 in cash on hand.

Nathan Latka

06:50Does that make you guys nervous?

Josh Merryman

06:53>> Not really because we're making you know, about 15 k a month and we have a really low burn rate. You know, most of our staff, you know, honestly most of our staff are college interns that are either working as you know for free, because they're only working less than like twenty hours a week. Our paid staff, there's only two or three people that are really paid. And then our co founders all aren't taking any money right

Nathan Latka

07:16>> now.

07:16So it's like seven people total, but that are full time and really three are paid.

Josh Merryman

07:20>> Mhmm. So our burden rate in that sense is not bad. And we aren't, you know, we're very confident in our growth to becoming cash even, you know, breaking even in the coming months. So it's like that's it's really where if we raise a seed round, it's all for extending our growth, not really to extend our runway.

Nathan Latka

07:39Mhmm. Do have other ideas of ways to extend growth besides, you know, more competition on these SEO keywords? Anything else?

Josh Merryman

07:46>> Yeah. I mean, for us, we were really hoping in 2020 to do trade shows alongside our big integration partners. You know, QuickBooks Connect is a big one. XeroCon happens in Australia. FreshBooks is someone we're looking to integrating with sometime soon. And we never got the chance to do that obviously because of COVID unfortunately. So we're hoping this time around those become a huge growth lever just because if you use QuickBooks Online, we become an immediate,

08:13>> you know, no brainer solution. We can automate all of your invoicing through text message for $40 a month, that's a really easy sale. But when you have to do it through organic content, you can't always guarantee that people searching use QuickBooks Online. Right? It's been a lot harder going that way.

Nathan Latka

08:28Yep. What about churn? I mean, do people run one big text message campaign and leave or do they stick around?

Churn Rate and Targeting Operational Customers

Josh Merryman

08:34>> There's definitely some customers that do that. You know, our churn rate month to month is about six to 7%. You know, in in our early days, first couple months when we going to market, was a lot higher than that because we really hadn't dialed in our messaging. We weren't going after the people that had, you know, a consistent text messaging need. And that's really what separates us from the rest of the SMS field. Most people are

08:57>> going after text message marketing as their kind of content strategy and kind of their target market. For us, we're going after operational messaging. So if you're a real business, your operations aren't just, you know, one month out of the year, they're twelve months. So for us it's not a huge concern, it's just really about targeting at the top level, making sure we find the right people.

Upsell Opportunities and New Product Lines

Nathan Latka

09:14Mhmm. Interesting. And do you have additional product lines yet where you're able to upsell your base of 266 customers to other things or is that ARPU really stuck between that 50 to $100 dollar range?

Josh Merryman

09:25>> So right now it is kinda stuck. We are developing additional features, additional things to move to. You know, there is this in the text messaging world, there's a lot of directions we can go. Do you go omnichannel, bring on like social media channels as a solution like Instagram and Facebook Messenger? Do you go the route of like doing text and email? We actually just launched chatbot that businesses can put on their website. That's gonna be an

09:49>> upsell opportunity. So there's a lot of ways to go. We're still very much in the research phase of that, of seeing where the market is because we don't wanna jump in and start competing with like intercom. Right? Like that's not really ideal for us. So we're still in the very much like collecting feedback from our users. Like what do you need that would make you more money and you would be willing to pay more for?

Nathan Latka

10:08Very cool. And obviously, again, you're gonna raise money to run for some these run for some of these experiments. How much do you think you might raise in q four this year or q one next year?

MRR Target and Q4 Growth Outlook

Josh Merryman

10:17>> Our goal is around $2,000,000 in funding if we were to do it. You know, the amount of MRR we have going into that negotiation obviously determines how much money you can get, how much equity you're giving away at that point. So, you know, we're trying to get as much MRR right now before we even start that conversation. That's really where we're at.

Nathan Latka

10:35Yep. What do you think you get MRR to before the raise?

Josh Merryman

10:39>> We're confident we can get to 20 k MRR. You know, that's really our end goal for the year. You know, for us q four is really where we see a lot of our high growth months because that's really when small businesses are evaluating their own tech stack and looking for new solutions.

Nathan Latka

10:54Yep. Yep. This all makes good sense, Josh. Any any exciting products besides the chatbot coming up you wanna talk about?

Payments Automation Launch and Famous Five

Josh Merryman

11:01>> So we just released last month payments automation with QuickBooks Online and Xero. So if you're a QuickBooks Online user, you can automate your payment reminders up to thirty days before and your payment past due notices, and thank you messages that happen anytime a customer pays. And all of this happens through their mobile phone, which we've seen convert payments at about 50 to 60% faster rate than doing it through email or, you know, mailing an actual invoice

11:29>> to someone.

Nathan Latka

11:30Very cool. Exciting products. We hope you break that 20 k mark. For now though, let's wrap up with the famous five. Number one, favorite book?

Josh Merryman

11:36>> The Four by Scott Galloway.

Nathan Latka

11:38Number two, is there a CEO you're following or studying?

Josh Merryman

11:41>> Steli at Close and Zeb at ClickUp.

11:44>> Yep.

Nathan Latka

11:45Number three, what's your favorite online tool for building a business?

Josh Merryman

11:48>> Zapier is pretty awesome. And obviously ClickUp, we use that every day here.

Nathan Latka

11:52Number four, how many hours of sleep do get every night?

Josh Merryman

11:54>> I'm trending towards seven. Before this interview it was a lot less, but mostly seven.

Nathan Latka

12:00That's good.

Josh Merryman

12:01>> And situation, married, single kids?

12:02>> I am engaged, soon to be married.

Nathan Latka

12:05Very exciting. No kids yet?

Josh Merryman

12:07>> No kids yet. Nope.

Nathan Latka

12:08Alright. And Josh, how old are you?

Josh Merryman

12:09>> I am 24.

12:11>> 24.

Nathan Latka

12:12Last question. It's something you wish you knew four years ago when you were 20.

Josh Merryman

12:14>> I wish I knew a little bit more about the go to market strategy, nailing a niche. You know, we kinda approached this broad market idea thinking we could just dominate with features, and it's really not about that. It's about nailing your niche and finding the customers that would love your product.

Nathan Latka

12:29Guys, MessageDesk helps businesses do text message marketing. They were doing $200 a month back last February, now doing $14,000 a month in revenue, opening at $20,000 a month in revenue in q four this year. They go out and raise 2,000,000 in traditional seed round. We'll see what happens. Josh, thanks for taking us to the top.

Josh Merryman

12:45>> Thank you, Nathan.

Nathan Latka

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