How Missive Reached $2M ARR with 2,000 Paid Customers While Staying Bootstrapped (Interview with Co-Founder Rafael Masson)

Introduction and Background

Nathan Latka

00:00Hey, folks. My guest today is Rafael Mason. He's first and foremost a failed musician. He found solace in building beautiful and reliable software instead. He spent his teenage years playing guitar, then wrote code for all of his career and still really enjoys it. Also developed a love for delivering stellar customer support, and he would blog if time allowed it, says every founder ever. Rafael, you ready to take us to the top?

Rafael Masson

00:19>> Absolutely. Yeah.

Nathan Latka

00:20Alright. So I love this. We had your cofounder on back in the day about a year and a half ago at missiveapp.com. You guys are team inbox, chat, and tasks. Right?

Rafael Masson

00:29>> Yep. That's correct.

Nathan Latka

00:30Alright. So tell us who you're competing, obviously very competitive space. Are you similar to sort of Front App and Hiver, these kinds of tools?

Rafael Masson

00:39>> Yes, we are definitely similar. Front is probably the one we are closest to

00:47>> and we had some discussions with Front. They tried our product, we tried theirs and there was some inspiration from both sides and we have a good a good relationship with them. But, yeah, yes, it's it's very similar.

Nathan Latka

01:04Have they offered Matilda and the team, have they offered to buy you guys? And you said, no. We we we want we want more.

Rafael Masson

01:10>> I I don't think I can I can tell whether this happened or not?

Nathan Latka

01:15Fair enough. Fair enough. Well, I love that you guys are well, at least you were bootstrapped a year and a half ago. Are you still bootstrapped today?

Still Bootstrapped After Years of Growth

Rafael Masson

01:22>> We are still. Yes.

Nathan Latka

01:23I love this. Okay. I love this. And it was great because when your when your cofounder came on, he told me in 2020, guys are doing about $45,000 a month in revenue. You doubled to 90,000 a month in revenue. I don't wanna ask right now how much you're doing because I wanna leave that as an open hook. So for people that have not heard of missive before, tell us what you're doing.

What Missive Does

Rafael Masson

01:40>> Yes. So missive is a shared inbox with chat and tasks for productive teams. It's first and foremost, full featured email client where you can chat with your teammates just like in Slack, but within each email thread, you get a separate thread to chat so it keeps things organized and with the right context.

02:08>> What else? I mean, so you don't have to switch between your email app and chat in task in Slack, sorry. And on top of that, you can easily enable a dedicated team inbox flow with triaging and assignment like you would expect in a help desk. And we also support SMS, Twitter, Facebook, Instagram, WhatsApp. You can manage these channels collaboratively the same way you manage email all within the same app.

Nathan Latka

02:40So, like, if if you're listening right now and you have a team of three, you have, like, a SDR, maybe you have, like, an AE or BDR, and then you have, like, the founder of the company. And when someone signs up for your application, you always send out, like, an onboarding email. You could create a shared inbox where replies to that onboarding email goes into a box where the BDR, the AE, and the founder can all,

03:00you know, interact together, decide on a discount, reply to the email, all that stuff.

Rafael Masson

03:04>> Exactly. You would typically have a company with a info at which lands in the sales or customer success teams. You have you may have sales at, you may have support at, these classic stuff. And of course, a manager, a team of founders, they can always look into things if each team is doing their job and can track work being done. Mhmm.

Nathan Latka

03:29Yeah. Very cool. I love this. Okay. So so I guess dive in here. It's kinda cool we're getting the second half of the company on. So did you guys were you there sort of day one? You guys are co founders. Right?

Rafael Masson

03:39>> Correct. Yeah. We are three.

Nathan Latka

03:40And did you three of you guys?

Rafael Masson

03:42>> Yes.

Nathan Latka

03:44Oh, 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

04:07your 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

04:31get 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

04:53not 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

05:19going 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

05:41you 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

06:07interview. Okay. And did you guys just say, you know what? We love each other. It's just gonna be 30%, 30%, 30%, or do you split it differently?

Three Co-Founders and Equity Split

Rafael Masson

06:17>> It's split differently for kind of a historical reason. Missive is second product we built together. We started another business, which is conferencebadge.com. It's for event organizers to build and to design and print name badges for their attendees.

Nathan Latka

06:35Conferencebadge.com?

Rafael Masson

06:37>> Yes. Correct. And it's still still on. We

Nathan Latka

06:42We need that, by the way. We have a big event coming up in September, and I just challenged my team. I said, guys, figure out a solution to print name badges for our event. I don't want us, like, stuck where people have to handwrite on their name badge or the permanent marker at the admission desk.

Rafael Masson

06:54>> Well, there there you have it. It's it's what you need exactly. So, yeah, we we built the conference badge first. We met. Phil had started building, my co founder, CEO at missive, he started building conference badge all by himself back in 2013 and we joined him and since he started the product, he had more equity and it's while running and building Badge that we found the need to communicate, to deal more efficiently with customer support and

07:30>> we started building missive. So conference badge is the is what allowed missive to to be built, to pay the bills. And so it's two companies, but since one funded the other, the the equity remained the same.

Nathan Latka

07:47So in missive, Phil owns about 50% and then you two split the other 50%, something like that?

Rafael Masson

07:52>> Something like that. Yeah.

Customer Count and Free vs Paid Users

Nathan Latka

07:54Yeah. Very, very cool. Okay. So talk to me talk to me about growth. I think when we last chatted, you guys were just you're flirting with 2,000 customers, I think. What are you guys at today?

Rafael Masson

08:05>> Flirting with 2,000?

Nathan Latka

08:07Well, sorry. The question yeah. The quest

Rafael Masson

08:09>> Yeah. Yeah. I understand. But I believe because I looked at the the numbers to be kind of prepared for this interview and I believe this was more like users, including free users

Nathan Latka

08:20I see. For 2,000.

Rafael Masson

08:22>> Because we are at close to 2,000 paid customers right now.

Nathan Latka

08:28And how many free today? Free users total?

Rafael Masson

08:32>> Something like a a like a thousand. A a thousand. I have my numbers. It's it's like a a thousand six hundred, 1,600, I I think.

Nathan Latka

08:43So you have 1,600 free users and then another 2,000 paid?

Rafael Masson

08:47>> Correct. Yeah.

Nathan Latka

08:49So so I guess do you usually people have more free users and they convert a percent of those to paid. Do you not let your free users stick around they have to choose at the end of a trial or something?

How the Free Plan Works

Rafael Masson

08:58>> We do let them stick around. The free plan is unlimited in time, but you only keep access to your 15 last latest emails or chat history fifteen days. So you quickly kind of get the need to pay to have more history or

Nathan Latka

09:18Rafael, this is super rare. Like, I've done them almost 3,500 of these interviews. I've never had someone come on with a product led growth model and a free plan, where their free plan is like where your upsell is so compelling, you have less people on the free plan, 1,600, than you do on the paid plan, 2,000.

Rafael Masson

09:36>> I guess that makes sense because I was about to say you if you don't upgrade to a paid plan, it's because it's because we probably don't want you as a customer. Your your need is you're you're probably a solo user who just who's just shopping around for the best email client. They tried them all. They tried Polymail and whatnot and maybe superhuman, but they stick with us. And they don't, like, they don't use email professionally because

10:03>> any professional using email needs to go further the back then.

Nathan Latka

10:09But do you have a free option? Like, your pricing page, I only see start, productive, and enterprise. Do you have a free option people can keep using or no?

Rafael Masson

10:16>> Absolutely. It's it's we're gonna tweak this design because it's confusing to some, but

Nathan Latka

10:21Oh, you're right. It is confusing. I now I look down and I see the free plan.

Rafael Masson

10:26>> It's is there there's no we didn't write $0 in the header, but whatever. Maybe we should

Pricing and Average Revenue Per Customer

Nathan Latka

10:33Okay. It's clear to me now. Got it. This makes sense. Okay. Well, this is very impressive that you convert so much into paid plans. Now there's obviously 14 a month, eighteen a month, twenty six a month, and these are per seat. So people probably sign multiple seats at once. What's the average business paying you per month to use the tool?

Rafael Masson

10:48>> The invoice they get per month?

Nathan Latka

10:52Yeah. Like on average, what's the company paying you the actual?

Rafael Masson

10:54>> A $100. It's Okay. Very like, we have solo users. We have companies over a 100 seats. So it's very it's it's very variable.

Nathan Latka

11:06So what would you don't don't don't don't obviously name the customer. Right? But what what's your largest customer pay you per year?

Rafael Masson

11:14>> Oh, it's something like

11:18>> let me just make it times 12. Fifty, 50,000.

Nathan Latka

11:24Five zero thousand?

Rafael Masson

11:26>> Yes. That's impressive. So thousand. Yes.

Nathan Latka

11:3050 or 15?

Rafael Masson

11:32>> 50. Yeah.

Nathan Latka

11:34Yeah. Yeah. 50,000. Yeah. No. That's impressive. So you guys do there is a clear sort of enterprise sales motion here then.

Rafael Masson

11:42>> You mean an enterprise what do you mean exactly?

Largest Customer and Enterprise Opportunity

Nathan Latka

11:46When you talk about whenever I talk to a founder that has sort of a lower price plan under a $100 a month, but then they have a customer that's paying something like 50,000 a year, to me, that's a signal that there's an opportunity to upsell all their other customers eventually to $50,000 a year.

Rafael Masson

12:00>> Well, definitely. Well, it helps that we recently introduced the enterprise plan that you see, like over 80% of our users are on the productive. But we recently introduced the enterprise and it does help a lot that this biggest customer is the biggest in terms of seat and they are on the enterprise plan. You can do the math, it helps a lot. And well, enterprise users is, we're not even scratching the enterprise market. We want to get

12:34>> there eventually and analytics

12:39>> is the feature we are missing that people are expecting and that it's table stakes for these larger companies and we are working on it actively. It's going great.

Nathan Latka

12:52How are you tell me how you're trying to speed up your product loss so can get analytics live faster. How many engineers are on the team today?

Team Size and First External Hire

Rafael Masson

12:59>> We we actually hired our first employee, like not even a month ago. So everything I'm telling you today is we built it at, we were three. Wow. Just the three founders. We are all engineers. We are definitely not salespeople. We are engineers and we all do customer support. But yeah, three developers.

Nathan Latka

13:22Three developers. And so just to be clear, 2,000 customers at a $100 a month. You guys are doing about $200,000 per month right now in revenue. Right?

$2M ARR and Year-over-Year Growth

Rafael Masson

13:29>> Roughly like 2,000,000 a year. Yeah.

Nathan Latka

13:32Yeah. That's obviously a great run rate. That's almost double from a year ago. Again, you're doubling year over year in your bootstrapped. You are the example. When I tell people it is possible to grow fast and you don't have to raise VC, you're the example of that. So how are you doing it? No business, no marketers. Was it SEO? What's the playbook?

Growth Tactics: SEO, Ads, and Word-of-Mouth

Rafael Masson

13:48>> SEO, yeah. We do have some pages on our website that we kinda optimized, like like we we think we optimize them and it seems to work because we have customers. These pages bring customers. But yeah, we did try a little Google AdWords, a little bit like Capterra ads, but we we canceled these. We should, if we wanted to go to be serious with this, we would hire some professional to help us and probably something we'll do

14:20>> eventually.

14:23>> But yeah, it's word-of-mouth. It's really word-of-mouth and we reach out to folks. Phil has this this little Twitter search for some keywords and, hey. You probably should try missive, this classic little

Nathan Latka

14:36What's the sir what's the Twitter search he looks for?

Rafael Masson

14:40>> I guess it's something like team email, maybe some competitors. So some yeah. Some competitors'products and email. I don't know what.

Nathan Latka

14:52Would you say this is Phil's biggest trick? I mean, again, you have no business people, no marketers on the team. You're at 2,000,000 run rate. So it's this Twitter search for specific keywords that's driven a lot of your growth.

Rafael Masson

15:02>> I would doubt it. I would believe it's much more word-of-mouth and these pages we have, like missive versus x customer x competitor.

Nathan Latka

15:13Oh, okay. Tell me about tell me about those pages. People are always asking me, Nathan, how do we build compare pages on our website? You guys have missive versus I'm trying to find an example on your site. It's

Rafael Masson

15:22>> all in the footer. Yeah.

Nathan Latka

15:25Missive versus Spark, missive versus Slack. Okay. So walk me through one of these pages. I'm on the missive versus Sparkmail right now. So what makes this page do so well from an SEO perspective?

Rafael Masson

15:35>> From an SEO? Oh man, it's a good question. I mean, it's it's honest. It's a honest take. When there are some shortcomings in missive compared to the other product, we do state it clearly and we we don't want to bring users in who won't like missive and would actually rather use Spark or like a more personal oriented email app. It's just honest and I believe it kind of scores nicely on the the Googles in this world.

Competitor Comparison Pages Strategy

Nathan Latka

16:10It's a very it's a very long form page, guys. This is not Yes. Little pager. Mean, it's a very long page with a lot of very rich text, clear h one tags, and then social, you know, imagery throughout. And then, honestly, Rafael, you got nice social proof at the bottom with embedded tweets.

Rafael Masson

16:25>> Yeah.

Nathan Latka

16:26So this makes a lot of sense. Very cool strategy. I love this story, right? Because everyone always goes, well, Nathan, we wanna grow fast. That's why we wanna go raise VC. And I'm like, guys, it's completely possible to grow very fast and keep your equity. You know? And you guys are proof of that.

Rafael Masson

16:41>> Yep. We're glad of it. We're proud.

Nathan Latka

16:43Your your founder your cofounder told me you guys turned down a $30,000,000 offer last time we chatted. What's the highest offer? You turned on any higher offers the past twelve months?

Rafael Masson

16:50>> No. Not higher than that.

Nathan Latka

16:52No. Alright. So what's the next plan? It sounds like analytics is coming up. What's coming up after analytics?

Acquisition Offer and Future Plans

Rafael Masson

16:59>> Yes. Feature wise, it's after analytics, it would probably be like non exciting, boring features for the enterprise plan, like master user, master admin that can log in as their own users or at least edit every single of their settings as if they were their employees. That kind of stuff, you know. Also, always like incremental

17:28>> improvements in the app just to make the the experience even more delightful. We're big into that.

Nathan Latka

17:35Awesome. Well, we're rooting we're rooting for you guys. In the meantime though, let's wrap up with the famous five. Number one, favorite book.

Roadmap: Analytics and Enterprise Features

Rafael Masson

17:42>> This is a shame, but, I cannot answer this honestly because

17:47>> I I do not read, I don't find the time. I know it's not an excuse, but I would probably No, no.

Nathan Latka

17:52That's say fine. That's fine.

Rafael Masson

17:53>> A business book, but I back in high school, I loved this one book about all the philosophers of the the the past centuries. Like, I like philosophy. It was one of my favorite subjects in school, actually.

18:12>> Yeah.

Nathan Latka

18:13>> Philosopher book.

18:13Number two I

Rafael Masson

18:14>> don't even recall the name.

Nathan Latka

18:15Number two, is there a CEO you're following or studying?

Rafael Masson

18:21>> I like Adam Wathan. He's from is that his real name? Am I pronouncing this correctly? Adam

18:30>> Yes. He's the creator of sorry. I did Wethan. Yes. He he is the creator of the the Tailwind CSS framework. Don't know if you're familiar with it.

Nathan Latka

18:42Yep. We use it.

Rafael Masson

18:44>> Yeah. It's older age and now their business is Tailwind Labs and they just

18:53>> seem to have a blast doing. They do just what they want. They found a way to monetize it. It's the a beautiful story. I like these guys.

Nathan Latka

19:01Love it.

19:02Number three, what's your favorite online tool besides missive?

Rafael Masson

19:05>> I have to say that I don't know if that counts. It's Heroku, our platform as a service. How we where we host missive and all the smaller apps that needed to run missives behind the behind the scenes. It's it's just it's one of the things that allowed us to be only three and manage to grow our tech stack, and it's just I love Heroku. They have their own downsides, but I love it.

Nathan Latka

19:32That's good. Number four. How many hours of sleep do get every night?

Rafael Masson

19:36>> Seven, seven thirty, I'd say.

Nathan Latka

19:38Okay. So seven hours. And what's your situation? Married, single, kids?

Rafael Masson

19:42>> Married with no kids.

Nathan Latka

19:44Married and no kiddos. Very cool. Last question. Something you wish you knew when you were 20.

Rafael Masson

19:50>> When I was 20, I guess I'm I would have liked to be aware of what the stock market is and that the next ten years would have been the greatest bull run and have put my money in all the FANG stocks.

Nathan Latka

20:03Hello. And how old are you today, Rafael?

Rafael Masson

20:06>> I'm 32.

Nathan Latka

20:0732. Last and again, be aware of that stock market. Guys, missiveapp, really incredible story here. Launched back in 2014. Really got going in 2016 with the product launch. They passed $90,000 a month in revenue a year ago. Now at about a $180,000 a month. Again, totally bootstrapped. Doubling year over year bootstrapped. I'm up in a very competitive space. Right? Team shared inboxes. Compete with VC backed competitors that have raised a ton of money. They're still growing

20:29fast, over 2,000 customers today, 1,500 on the free plans. They convert a ton into that paid plan. Biggest customer pays $50,000 a year, and this is best. They're only a team of three, the three co founders. They just added their first external employee, call it four or five years in. So Rafael, thanks for the story. We're rooting for you guys.

Rafael Masson

20:46>> Thanks so much for having me, Nathan.

Nathan Latka

20:49One 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

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21:58for 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.

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