Modigie Revenue & Funding (2024)

[00:00] So quick quick background on me. I I was a pre med. So when you look at my LinkedIn, and you see Bachelor of Science, it's not Bachelor of Science of Computer Science, it was actually Life Sciences. So I was intending on being a doctor. I worked in a teaching hospital at UCLA for about three years, and then pivoted, and found myself in software. [00:20] Part of that journey is I'm always learning. And I always look forward to this event, Luke, you know, I learned from you, and Rajesh, I learned from you, and and I'll continue. And if you look at, you [00:35] know, Anand yesterday, he probably would have said, I don't swear like Anand. I don't know who who watched Anand yesterday, but very inspiring CEO of in inside. And but profitable growth is is is hard, but it is possible. And I hopefully, I can share some nuggets with you of our story and how we got there. [00:57] Scaffolding is critical, and I'm gonna share with you, I think from the onset, you have to have this mindset of building from day one of thinking profitable. A shocking statistic, twenty eight percent of the publicly traded companies were not profitable in 2021. How is that possible? Crazy statistic. [01:17] It's my own money, and it's my co founder's money, and for like many of you, you put your own hard work money in here, spend it wisely. Right? There's a lot of things you can spend money on, but you got to say no a lot. And if you do a and b, and I thank Nathan because I have control of the company. Right? He's been a big help to make sure that I stay controlled, that that [01:41] we have ownership of the company. So that's one, is the foundation we're going talk about. Number two is, particularly in a down economy, figure out ways to remove buyer friction. We're a sales led growth company. Many of you here might be product led growth, but we actually have to do some hard work to convince customers of of value. [02:06] Part of that, we do everything for the buyer, and I'll share with you what what I mean by that. And as a new vendor, as a company that's never spent a dollar on marketing that has no brand recognition, you have to derisk it for the customer to adopt you as a new vendor. And then what I call escape from velocity. I believe we're on the the front end of escape from velocity, I'll tell you how we [02:29] got there and what we plan to do that. And you really have to differentiate yourself by offering something unique and different. [02:39] Offer something everyone needs. I feel we have something that every b to b sales organization needs, and I'll show you what that means. And get inside this trust circle. What we have going on is our buyers are bombarded. Email, in mail, phone calls, and they're blocking us. So if you get inside the the trust circle to get that first meeting, it's highly valuable, and I'll share with you how we're how we're able to achieve that. [03:08] So modigie is basically a software as a service that boost sales rep productivity, and we drive revenue through efficiency. And so 40%, we're finding about 40% of contact data that reps use to prospect is inaccurate. It's a shocking statistic, but it's real. And so what modigie does is we fix this inside Salesforce before a sales rep makes a phone call. 40% inefficiency. In today's economy, you have to provide revenue outcomes or efficiency. [03:49] So what we do is we sit inside Salesforce, we monitor leads and records that are gonna go into a cadence or sequence, SalesLoft, Outreach, I'm sure you've heard of them, [04:00] and then that's when we act. So we inspect every record, make sure it's accurate. If it's not, we quarantine it, or we fix it. It makes reps extremely productive. [04:15] So that's my little that's my little spot in in in the Salesforce ecosystem. So we have a tab, and that is functionally where we place our information and gets mapped to the to the dialers. It gets mapped to the sales engagement tool, and we look and feel just like Salesforce. And what it gives me is the ability to reach what I feel is about 70% of the b to b market, which gives us a little bit [04:41] of leverage. [04:47] I don't know how many of you can relate to this, but [04:51] I can sell without a CRM. I can sell without intent data. I can sell without conversational intelligence. These are wonderful technologies. I can sell without a sales engagement tool. I just need a spreadsheet, and I have to have the contact information for my buyer. Otherwise, it's a non starter for anything else. So where we find ourselves, when we thought about where where we would place modigie in the in the ecosystem, there's lots of wonderful sales tech [05:17] out there, is we're the last mile. [05:21] We're cleaning everything up. Otherwise, all those tools to record conversations and train against conversations, the intent signals, who's my like, who's my high fit buyer, they're ready to buy. You can't reach them, it's a waste of money. And so that's part of our sales motion. [05:40] So, as people that know me, know I love live music, and I just moved to Nashville from the Bay Area. It's a wonderful town. Anybody been to Nashville, live in that? Yeah. There's music everywhere. And so when I think about this, [05:56] the way that we started our company, it's like a three man band. Rush, great band. BC Boys, since we're in New York, great band. The Police, that didn't go so well. Right? They broke up. But right now, we're through we founded this company based on the ability to produce wonderful music with with just three people initially. And there's a lot of crossover between what I do, and what my co founder CRO does, and what our COO [06:25] does. Look at look at so I call it the Swiss Army Knife. But we all come together. We're all around innovation. All three of us, get together on innovation. Two of us focus on lead gen and sales, and then, we have a COO who really is incredibly talented that runs, not only operations, he runs product, he runs technology, he runs customer success, which I do as well, and and so that would cost a lot of money [06:55] if you had specific people to fill those roles. [06:59] Expert advisors, this came out of Anand's I'm keeping score on what Anand said yesterday. Don't believe you have to raise VC? Did not do raise VC. Don't be afraid to hire expert advisors. So we have advisors. I have a president of a telecom company because we're dealing with mobile phone information. I thought it was important to have that. We have Google on our advisory board, technologists, the lead technologists at Google. We have the cost of legal, [07:27] oh my god, $850 an hour. So one of my advisors is an is an attorney, but he also worked at SAP on the deal desk. He worked at DocuSign. He built their go to market strategy [07:40] and privacy compliance. But I also have people on my board from RingCentral and Lacework, which raised more money than any, cybersecurity company in a single round. So we're stacking the deck of things I can't do that I need expert advisors. So check on on Anon. Thank you. Don't believe your own hype. We haven't hyped anything. We've spent $0 on marketing. We've aggregated our customers through just hard work and grit, and now we might go out to [08:11] market and tell the world of you know, what we're doing. [08:19] Don't sell only to startups. That was another thing Anon said yesterday. We actually started out upstream. So the majority of our revenue as a new company comes from companies that are worth over $1,000,000,000. I'm gonna share an example of a company that's worth $25,000,000,000 that that we're working with. [08:39] Don't hire salespeople before you can sell. [08:43] And I'm gonna come back to this. That 1.7 that we did last year, it's a small number. I've been dealing with hundreds of millions of dollars of numbers when I've worked at in sales leadership. That's just two people selling. That's me and my co founder. [09:01] So now that we know I'm trying to go back. [09:06] Idiot. Is there no back button? Anyway, so the, the idea is that two of us, just two of us selling accomplished that. And what I feel good about is we have the feedback loop from every client engagement. So I was determined to be on every install of our software, which takes two hours to install and set up in in Salesforce, to be on, so I can get the feedback loop to improve our our technology. So, yeah, [09:31] don't hire we haven't we just hired our first salesperson because now we've mastered what the sales cycle looks like. [09:39] In 2022, we were at a you know, to to hire that individual and to hire my first customer success manager, came to Nathan to get a tranche of money to help us scale and grow for growth. And and here are the numbers. I'm not afraid to show it. And at the end, I'll show you my pro form a for the next twenty four months or next two years. But we made profit last year, and we made [10:02] profit this year or the 2021, we made profit. In 2022, we made profit. We were a services company in 2020, and we didn't launch our product till q one of twenty twenty one. [10:16] So this is hopefully, I share some nuggets with you about so in in a down economy, you got to do a lot of extra go through a lot of extra hoops for for buyers. I have a couple fun stories. But one, I'm gonna show you what a value report looks like. So I heard, you know, Luke, you talked about data driven. Almost everything is data driven, particularly the type of deal sizes that we're working on. And [10:39] you have to prove that you can solve a problem, so come up with a use case or two, prove it out empirically through data, and then increase you know, it has to be around increasing revenue, increasing productivity. A lot of companies are are are doing more with less, obviously. I mentioned earlier, de risk it as a new vendor. So through because we have a Salesforce managed package, we we took change off the table. One of the [11:03] things that we run into in in in b to b sales is I don't have enough people. Not me, but the buyer. They're too busy. You look redundant. Right? Change management. I can't take my sales guy. I have fewer cycles to spend learning a new tool. And because you don't have to learn a new tool, I took that off the table. [11:27] Get creative when it comes to deal, making deals. You know, we're a SaaS that has a twelve month subscription. That's our typical contract. [11:38] But if our buyer says, listen, [11:41] I need, you know, I I need assurances that that if you shit the bed, that we can get out. And so on occasion, we will build you a three month contract. We'll have specific metrics that we have to hit and be bold, and we can hit them. And so I can write that into a contract. It hasn't failed this yet. [12:01] This is a fun one. So, a cybersecurity company we're working with, we had about a $150,000 deal on the table. And you if recall at end of last quarter, you [12:17] know, POs that anything had like 50,000 or 100,000 had to go to a higher level of authority. And so our procurement basically said, listen guys, if you take a $99,000, 990 you know, $99,999 PO, we can we can cut you a PO, or you can wait for two weeks. Take the PO. Get off the table. And so we did. And then now our job is just to make sure that the deal goes well, so we get [12:41] our our get our upsell. There's the PO. [12:48] So I mentioned being data driven. Right? And data driven basically is giving our buyer became RevOps. RevOps became a really popular title recently, where they oversee the disciplines of marketing, sales, customer success, and their role is to extract as much revenue per head count as possible. So we had been building this revenue model or calculator to show the impact of our software solution, and it really stems back to, and I'm going to show you what a [13:16] data diagnostic looks like, is what comes from the outset that we can build around. Is it a 30% improvement? Is it a 40% improvement? What's that improvement look like? So this is an example. It's a big number. It's a big number, and we have an insertion strategy because not all companies want to spend that kind of money, even though you can show a 2200% ROI. I never thought I'd be doing ROIs again, but some you know, [13:40] right now, that's that's that's the kind of level of conversations we're having. And again, there's a revenue output. Job to be done. Rev ops needs more revenue with existing headcount. So we show them that. And then we show them, listen, if you do nothing, it cost you money too. [14:00] So you have a choice. You can you can give me 300,000, and I'll produce a lot of revenue for you. I'll help your reps produce revenue, or you could do nothing, and you're you're it's it's a cost burden. [14:12] So those are some of the techniques that we use. Now I talk about escape velocity. Escape velocity is really, to differentiate yourself. [14:21] I feel I'm gonna show you something everyone needs. [14:25] We call it go to market data diagnostic. I mentioned to you that we're finding 40% of contact data is inaccurate. Think about the cost. 10 SDRs cost about a million dollars a year times 40%, that's $400,000 lost productivity. A non disruptive solution, more deal flow. So we've been fortunate enough to come up with something that is really frictionless, that, others will talk about on our behalf. [14:56] Get the insertion. So I mentioned, we've already showed like a proof of value. Right? But those price points, there's a lot of consolidation in in in budgets, so I'm willing to take smaller deals that may be 25% of the size. $25,000 deals, $50,000 deals, just to get the just to get the insertion. Get a small order, and then earn earn the customers, you know, through through, through customer success at time to value. Right? And I would [15:23] urge you all to do the same. So this is where it starts for us. I mentioned that I was pre med, so when I think about my upcoming doctor's appointment, new to Nashville, so I have to go to my new primary care physician. [15:38] When you're my age, you do the PSA test, and there's a lot of things. You want to know what's going on. You do that through a blood test. This is my version of a blood test. So what we do is we take, the last fifteen or thirty days of contact data that companies paid their reps to use to prospect and effectuate engagement. Here's an example of a $25,000,000,000 cloud services company. [16:00] They thought that mobile mobile phone coverage is what our big bet is. Right? That's what we're specialized on. That they had 28% mobile phone coverage, didn't understand. They thought it was higher. 68% of those phone numbers were wrong. [16:16] They also had 9.8% of the prospects had changed jobs. That's another thing we do. We look at our people still at the target company. Our prospects still at target company. Have they changed? Is John Smith still at eBay or is he at Amazon? So they've effectively have in access of 91% of the market. They had no idea. They've never had visibility before this before this diagnostic. In over a 147 reps last year, 500 meetings, upside down. [16:46] Less than 1% call to connect rate, it's all because of that bad data. [16:54] So this one, what we've decided to do is take this data diagnostic, and we've built a network of ambassadors. K? And that's how, you know, I mentioned earlier, like getting the Circle of Trust, you have so much bombardment that there's only so much mindshare to get. And so what we've built is a program called ambassador program. So we have started, and actually this is old already. Mandy Mandy updated that this, we have 12 ambassadors 12 of [17:27] the top, 300 influencers on LinkedIn recommending and promoting modigie. Not modigie the company, but modigie the data diagnostic. It's a you know, it's a free it's a free diagnostic to see, the impact of of inaccurate information and our ability to fix it. [17:45] So as I mentioned, if I execute, there's no reason I doubt that I can. I'm sharing with you my pro form a. As a founder, I'm not giving up equity to VCs. That's 3,000,000. I can spit off 3 to 4,000,000 of EBITDA over the next two years, and I feel really good about that. [18:09] So what I shared with you is if you're lucky enough to get a band together of people who complement each other, who have different skill sets, that's a great start. Spend your money wisely, outsource everything you can. [18:25] I like to say, be a need to have versus a nice to have. [18:30] Lower the barrier to entry. Do everything for your customer. Make it easy for them to buy and partner with you, And then they escape velocity. Find your version of offering something that didn't exist, that everybody needs. [18:47] And that's it. [18:49] Thank you. [18:52] If the data diagnostic resonates with you, that's a website specific for this event. We'll prioritize you and your business, [19:02] but you'd have to act pretty fast on that because we're getting really busy. Thank you.

Introduction guys modigi launched really as an agency back in 2019 they did 300 000 bucks in Revenue in 2020 then they started getting involved in the Salesforce app exchange built SAS and now today they're doing 140 000 a month in Revenue uh up from Calla you know 120 a year prior so Healthy Growth totally bootstrapped three co-founders on the majority of the business they use debt from founder path 300 000 bucks paid back on a 24 month term to hire their another sales rep that's now helping them scale as well um and they only have six full-time employees with a 1.7 million dollar run rate really high Revenue per employee hey folks my guest today is Ken hoppy he's the co-founder and CEO of modigi built a real-time software engine for sales and is accomplishing a series of industry first the most essential tool in the sales stack and linchpin making everything else function properly has currently are usually it's had zero visibility into its performance now mod Digi changes that they provide real-time visibility into the performance of the tool eliminating valuable wasted sales resources and at the same time optimizing performance of the entire sales Tech stack can you ready to take to the top let's do it all right just be clear are you sitting on top of like a CRM to add more visibility or what did you mean by that yeah I like to start out by saying you know I'm old enough to say back in the early days I can sell without Salesforce I can sell without gong I can sell without Outreach or sales loft or even success right so all I think you've had a lot of those Founders on now I can do is I can do it with on spreadsheets but really what we're saying is the most essential tool is overlooked is is the if I don't have the the right contact information to reach my likely buyer none of the tech stack matters and so what we do to answer a question yeah we sit inside Salesforce so give this coverage of 80 of the of the market we feel we're we're a Salesforce managed package and what we do in basically in the background is we're um Auto inspecting this has never been done before which is giving visibility into the accuracy and quality of contact data so um as a is a full production product we we actually run inside Salesforce and interact with all the different uh sales engagement tools that I've mentioned or sales Tech stack tools but what we're doing Nathan on the front end of our customer engagements is we're actually running what we call a data Diagnostic and for the first time ever we're giving companies visibility into the quality uh and coverage like the inaccuracies for example how many of the people that they've prospected to in the last 30 days have actually changed companies don't even work at the Target company how many phone numbers did they call that word inaccurate that didn't work and we had no idea so we we've sort of evolved as a company because we originally thought the idea was we're just going to add mobile numbers to um you know help companies and and bdrs and sdrs reach their likely buyer add the mobile Channel we thought that was the problem to solve or the job to be done we had no idea how bad and inaccurate the contact database was that they were acting on and we're finding basically that's the bigger issue to solve so if we can identify inaccuracies and correct them before they go into an outbound call step then we've done tons of sense to me what our customers paying an average per month to use the technology yeah it's funny so when we you know we reflect when we first met I was excited about a ten thousand dollar annual contract and and our highest paying customers are are close to two hundred thousand dollar uh uh acbs bookings today today yeah so we're we're really sort of leapfrogged um because of the value and and really starting to see bigger publicly traded companies just giving us input to our product Evolution what I just described to you really came from a customer that said hey I don't trust my data that I have today can you can you use your software and inspect what we have and is that an average though whereas those are just your like what's the average acid full base yeah so our our ACB we're we're modeling at like eighty thousand dollars oh wow that's still an increase when we from when we talked in 2020 where it was about ten thousand yeah I mean I I I didn't think it would happen so quickly where where we're getting our first orders are over 100k which is hard 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 the into the beautiful interface inside of founder path 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 evaluation 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 evaluations inside of your frownerpath 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 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 traction 1.2 million seed around 3.7 raise 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 valuation 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 want to check this tool out if you want 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 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 all right let's jump back into the interview it's allowing you to drive that expansion those expansion is it more seats more features some utility-based upsell it's a great question you know it's actually um if I step back and I look and I originally thought our buyers were sales leaders well our true buyer is Rev Ops so Revenue operations has that analytical brain where they're thinking you know so they're by they're reporting the cro and they're reporting to the CFO so they think Financial so we built a revenue impact model based on um we really work hard on the front end of these engagements to show mathematically like the amount of time wasted that we could solve for the amount of Revenue impacted if if you add our solution and so we're coming up with these ridiculous rois of like a thousand two thousand percent and so we're able to get these large deals because we show um for every dollar you give me I can give you ten dollars back in revenue or optimism what is it but is it a feature-based upsell is a seat based upsell it is a utility-based up so what's or is it uh we're adding a million bucks of new Revenue we keep 20 of it a take rate model yeah so if you remember last time we you know so we charge a platform fee and then we charge a consumption it's a consumption-based model and it's really about um it what's growing is the ability to add functionality so when you add automation modules there's an additional uh fee for that when you add the ability to do Dynamic phone number validation there's an additional fee for that when you can do Dynamic um employment dispositioning so we're adding to answer your question we're adding actually additional functionality which adds value to the customer and adds more uh billable for for modigi I'm trying to drill here account because I think you're pricing a very smart way that I want others to copy you base you charge off the consumption models number of API calls and so what I just heard you say is they can unlock additional features which enables them to call different kinds of apis which drives up the consumption model Revenue so it all feeds itself is that all accurate it is so we have different like recipes I call them where if for one recipe what used to be called getmo Digi which is just you would send us an API or a request to add a phone number and we would do our you know our we perform form work return a mobile phone number validate it return it at the same time check for employment now now what we do that would be one one fee now if they say I want you to check my existing mobile phone number that's another fee I want you to Auto just when you identify that someone's changing API call yeah API call yeah yeah so someone paying you 200 000 bucks a year how many API accounts are they probably doing in that year oh you're catching me right in like this we're transitioning we're trying to really figure we're in our second year of the product and so we're really trying to refine our business pricing proposal it'll continue to evolve so it has been typically um platform fee plus API calls right and what we do is we we calculate um how many net new prospects their bdrs are calling and in the old business model all we are doing is what percentage don't have a mobile number and that was our addressable Market if you will with that company now every Prospect is our addressable Market because now we can inspect every single record and what that last year though for your old pricing model someone that paid you 200 grand for the year how many API calls would they likely do I mean are we talking 20 000 a million 20 million well to get us different we used to charge based on a credit and the credit would be a one to one so you would you basically how many credits then it could be so for a hundred thousand it might be a hundred and fifty thousand contacts so one to one to one so it's one dollar equals one credit equals one API call no I mean we would basically charge based on the it would just be a two dollars a credit and then we would discount off of that what we found is we we were perceived more as a data company but there's so much more value in the orchestration and the cleanup so a cleanup of a record may take five API calls now there's a simple way for the audience to understand just what number of API calls if they're paying 200 Grand a year yeah the old model at that level probably um 225 250 000 API calls wow interesting okay very interesting model and then if I'm paying you 200 a year what's what's a split between the platform fee for that versus number of API calls is will be roughly about 25 moving forward that's how we've modeled it and again to all the other Founders I mean I think everybody's gone through the same thing where you're trying to you're trying to find a a scalable repeatable model that helps maximize our profit so we're trying to get as close to 80 gross profit while showing True Value to the to the client based on the on the functionality and Ken you're a high Currently serving 30 customers touch low volume kind of sales motion how many customers are you working with now today yeah under 30 and I think the last time we spoke we were probably around 30 and yeah the trade-off has been the smaller SMB companies that have churned um we're okay with what we're really excited about is these larger companies that um are continuing to re-up so we have some El so our LTV um I mentioned to you we have companies that are now by the end of this year I we will probably have three companies that spend have spent about a half million with modigi and that's really where we want to go so it's an Enterprise Enterprise sale so 25 Monthly recurring revenue customers at 6 000 a month you guys are doing about what 150 000 a month in Revenue If I multiply something like that we last year we came in at 1.7 million so it's choppy um I'm hoping to smooth out that curve um So when you say 1.7 million does that mean you did about 140 000 in mrr in December and the Run rate is 1.7 million our our pricing models more bookings related right we sell an annual contract traditional annual contract that gets consumed over um the term of the contract which is a 12-month term yep and so we we recorded it as mrr from a gap perspective yep so from from a gap perspective what was mrr in December was it about that 130 140 range then it is and that's how you get the 1.7 million run rate you multiply times the 12. right okay that makes sense okay now what do you think you can grow here in 2023 well we don't we we've we've been very measured and deliberate in trying to maintain a profitable model and control the company so we haven't done traditional VC so we have a very small staff um but we we feel and what's small how many people so we have really six full-time customer facing whether sales or customer success um we're heavy on product development um and and now we're just looking at um you know we've take non-dilutive capital from founder path thank you so much that's really helping us are you comfortable sharing how much you took we took uh yeah 300 and 2015. awesome what and what did we I just don't remember what did how many months are we letting you pay that back over do you know top your head I think it's a 20-month payback if I record 24 a two year yep yep two years it gave us some Runway what it did it gave us some Runway to hire our first sales leader um and and then uh we brought in we brought a bdr in-house um so again the you know we grew our first year as a services company we were 300 000 in Revenue then which is what year that was um 20. and the 20 the 21 we launched our we became a SAS company in February when the Salesforce manage package was released and then we just did a hair under a million my goal was a million I think we came in at 9 50 or 9 30. and then um we wanted to hit 2 million this year and we you know got close what do they say go for the Stars land on the moon something like that yeah so I mean there's no reason we we can't um I mean my stretch goal again is to double it is double so with with what I love about this though is you've managed so just repeat the number how many full-time employees today so there's six there's six that are actually in the whole time full-time work for Mo Digi and then we outsourced a lot of track development how many contractors it it's an accordion but basically we have our lead tech so two two sides of the house we have our our engine which is in Google cloud and that basically we have a key technologist that runs that and then we bring in expert python developers when needed and then we have a Salesforce development team that focuses on the managed package and so combining those those fluctuate between five and ten people depending on the development that we need I love this story I mean your Revenue per employee Bootstrapped with the six full-timers is through the roof and your bootstrapped outside of the 300 000 YouTube from final path right so I mean you own 100 of the business you plus employees yeah there's three three of us that own the majority ah okay so you have two co-founders two co-founders you know that's amazing but but again um I mean do you ever feel pressure to go raise VC you read all this stuff in the Press uh you know it's interesting you know yesterday I had a conversation with a good friend of mine who runs a industry uh Ventures uh Hans wildens and we talked over this and I ran some models by him and and he said there's no reason you need to take traditional venture capital I mean because we have a path to profitability we're we're profitable at the moment and we just run really lean yep yep I love that do you know off the 300 000 that you took from founder path how much new mrr are you able to generate with that or new AR are you able to generate with it I don't I don't I was on a sales rep though right does a sales rep have a quota we do yeah so sales rep says a 1.2 million dollar quota okay did the rep that you hired with the 300 today did they meet did they meet quota last year no he started in April okay and so I'm a sales oriented CEO and my co-founder is a sales oriented um co-founder as well so we've been doing the bulk of the of the sales at the moment and then um Dragon Joe along and then uh Joe has now he's got a healthy pipeline for 20 uh 23 which we're very excited about I just wonder if this is repeatable right so like for every new sales rep that I'm making this up I don't know Joe's salary but let's say you're paying new sales reps 80k based and then they can earn 80k commission on top so 160 OTE if they hit caught a million dollar quota I just wonder if this is something you can repeat with founder about can you take 160 Grand to go make the higher then it pays for itself within 12 months and rents wash repeat I mean does that feel doable to you it does we have a flywheel that so I mentioned on the front end of the call we're doing this what's called a data diagnostic that gives the ability to provide empirical evidence of the problem that we're going to solve so visibility and then um you know understand and quantify the problem you'll see the problem quantify the problem and then we have a solution to solve the problem um we're getting really good traction uh on that and so I feel my job is to get awareness to because we we've spent zero dollars on marketing it's all been just brute force and uh word of mouth is where our leads come from that's awesome that's awesome well when you decided to go with roundabout did you do any Research into any other debt providers and again it doesn't hurt my feelings if you name them but help us understand sort of why did you choose to go with founder path uh well we did we did we looked at um we always try to look at three three options I won't name the other two um we just felt um more comfortable uh well first of all you know there's a lot that that you as a person and and the and and the relationship from just what you've built your ecosystem was uh really a a big factor you're rate you're actually your interest rates were uh more favorable as well your terms are more favorable we love that we try to great give good rates and also the key is Founders always forget to ask for this you want the longest payback period possible because it decreases your monthly repayments right right yeah wrong on the 24 months it could be it could be 36 everything in founder path is totally confidential or stock too compliant so Ken I can't share your data unless you tell can I I know what it is do I have your permission to share how long your term is you do 24 months yeah so it was great right you have plenty of time to sort of pay it back it lets your sales rep get up to hitting his quota and so it's obvious hopefully Roi positive debt I think it's like it's 17 000 a month but what it does it gives us that working capital to you know apply to an extra engineer or to you know like I said to hire that sales and not and give give that extra Runway to where uh yeah I love it it's a great model our whole goal is to help as many Founders as possible get to a 10 million dollar run rate and still own 100 so I want to help you and your co-founders get as close to that thing as possible thank you so much all right all right Ken let's wrap up here with the famous five number one what's your favorite book you know it's interesting it's it's relatively unknown but it's called jobs to be done by Tony ulwick gave us some thought process into thinking about solving a problem instead of build just Building Technology so jobs to be done number two is there a CEO you're following or studying I don't know if I'm studying anyone um I think um listen I we we're heavy in the partner ecosystem so um I mentioned so Jason's intact I really one of our best use cases is with Sixth Sense we do some really good coupling with them so I'm really following uh I would say Jason someone on I'm tracking he's great syntax is on fire too all right number three what's your favorite online tool for building motig it's still uh the Google um the Google Docs Google spreadsheets we we use collaborative all that collaborative tools and Ken how many hours of sleep are you getting every night it depends um if I get up for morning yoga but it's uh you know I'd say I I try for seven or eight hours but close to six or seven that's great and what's your situation married single kids so this is uh uh I'll be married 23 years uh this year and I have a uh two daughters 18 and 16. wow and how old are uh I think you had two birthdays since we last spoke are you 54 now yes 54 happy happy late birthday twice Ken last question something you wish you knew when you were 20. you know I'm a late entrepreneur um and I think uh I I wish I would have taken action sooner in my career when I identified early problems um and uh that's that still sticks with me guys Mo Digi launched really as an agency back in 2019 they did 300 000 bucks in Revenue in 2020 then they started getting involved in the Salesforce app exchange built SAS and now today they're doing 140 000 a month in Revenue uh up from Calla you know 120 a year prior so Healthy Growth totally bootstrapped three co-founders on the majority of the business they use debt from founder path 300 000 bucks paid back on a 24 month term to hire their another sales rep that's now helping them scale as well um and he and they only have six full-time employees with a 1.7 million run rate really high Revenue per employee we love this with Chapman mentality we love Ken Ken thanks for taking us to the top thanks David one more thing before you go we have a brand new show every Thursday at 1pm 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 our poo 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 p.m 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 their 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 slash 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 forward slash slack 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

Introduction hello everyone my guest name is ken hopp he's the founder and ceo of modigy prior to this company he spent 20 years in various tech leadership roles with two exits and most recently at google experiencing firsthand the widespread shift to mobile for business communications they built real-time mobile phone verification and enrichment platform on google cloud platform to scale and recently integrated with salesforce so b2b sales and marketing can connect with more of their prospects can you ready it takes the top you bet all right so give us a load on here this sounds like an enterprise related tool for mobile where what am i missing no it's certainly it's certainly um we uh our typical clients are b2b uh that have a lot of front end call center reps called bdrs or business development reps that do business to business outreach with net new prospects and so what we saw back in my time at google is that there was a continual decline of the ability to engage with people that we don't have relationships with and so email has has lacked and and people have shifted to the linkedin channel and we saw that everything was moving mobile in fact um you know sundar pichai the ceo of google at the time all of our advertising was shifting to mobile we looked around the office as sales leaders none of us had desk phones so the epiphany was no no one has a desk phone let's just make that assumption and so uh we stumbled across a a study by idc and then the boston consulting group and they really confirmed what we thought is that eight out of every ten business professionals use their their smartphone as their business phone so we thought okay well let's find a data provider that can provide us mobile business phones for our targets and we couldn't find that and so that way what does that mean ken mobile business phones for our targets uh you know the cell phone number for our prospects yeah yeah so we do two things so one of the the other thing that we wanted to address is um particularly for tech people change jobs a lot faster than our parents did back in the day um and so what we often find is bdr reps that are doing large volume outbound um are oftentimes chasing or pursuing 10 to 20 or more of the prospects that don't even work at the target company and the only way that they would know that is if an email bounced so they're calling landlines and and chasing people and and so we wanted to address that productivity as well i see okay got it that makes sense so what are brands paying you on average to use your technology per month right right and uh so we've been mode modeling a little different way so we're a consumption based uh business so platform fee plus consumption so think of it as if you're using our services so each api call or each each request we charge a credit decrement a credit yeah right now we're we're averaging about a thousand dollars a month per client and the exciting thing for us is that we're starting to see um companies that are legging into our business model are consuming those thousand dollars a month within three to four months break that down for me real quick if someone's paying you a thousand a month how much of that are the platform fee versus the consumption fee only a thousand is the platform fee okay oh so they pay consumption on top of that number of api calls that's right they're buying credits or something yeah absolutely so they pre they pre-buy credits um in in the in the way that we we do a traditional model so we we do a capacity plan how many how many of these uh api calls do they need how many how many phone numbers they need for their outbound on a projected annualized basis and then we come up with a business model um and we do net 30 payment terms or or spread out payment terms and then they consume over time uh over that 12-month period what we're seeing is of course with the pandemic there's a shift no one's really working in the office and studies show that no one really wants to go back to the office yeah so our clients are consuming those one month or those annualized credits in a period of three or four months so they're already re-upping their their contracts so what i mean this would reflect itself in your expansion revenue metric over the past 12 months i mean i assume you're above 100 percent how far above 100 in net revenue retention well we're still it's still early i'll give you some some context so our first line of code uh was really in 2019 okay and we created we wanted to create this automated rule of uh or automated workflow of how to um how to enrich and validate mobile numbers and and so we first did that in google in google sheets it's a wonderful tool and so we first wrote our line of code in late 2019 um so really i look at 2020 as our first really billable year and we came in just a hair under under 300 000. um unfortunately we is that cash collected or run rate in december Monthly recurring revenue uh bookings bookings got it yeah so you were doing something what like 35 40 000 a month last month correct yeah yeah interesting across how Currently serving 29 customers many customers so we we came in at shy of um just 29 customers now we and we've got a range um we're the the company's transitioning right now from um from api so the first so we went from google sheets which we were doing um really batch jobs for marketing and sales so those those are really um not true uh ar contracts if you will they were they were project based and everybody's been waiting for our salesforce managed package so they can consume us within salesforce and set up all these wonderful automation rules that are native to salesforce so for example when new leads or new new prospects hit the crm we automatically make a call to modigy and do two things verify the employment and get a mobile phone number and so um we are in the we're basically finalizing the security review process with salesforce to have that available to our customers so we have about 20 20 um pre-sold contracts for the salesforce managed package of mo digi that's great and just to be clear um you had no revenue in 2019 right we did not so zero to three hundred thousand dollar run rate uh in in 12 months and what do you think you can do at the end of this year what do you think you can grow to well the difference will be um i wish i wish i had a crystal ball i mean i know the following i know the following um when you automate a process uh everything goes smoother so the salesforce managed package through automation is going to dramatically improve um both the ability for our clients to consume modgy and at the same time for us to have a a higher consumption which will mean as i described to you um a higher fulfill rate yeah so i mean we're i'm modeling it for um over a million so it'd be a you know a 3x uh growth but the it's all about the uh the salesforce managed package and and the the um the the market for for sales for so the clients that we're servicing are ken how did you get those first 20 clients walk me through that process yeah old school it's brute force so a couple things um again when i was at google i ran a team of hunters and so what i recognized back then i applied today so we use we absolutely incorporate mobile into our omni channel outreach uh and we basically we are our business target our marketing operations sales sales operations chief revenue officers vps of sales and so it's just it's just primarily we started in silicon valley and uh the beauty is our first wave of customers were our own doing and then word of mouth spread so we've got we have some luxury of having um reference customers so this this first 20 29 it was really you know cold outbound basically get their cell phone numbers of the cro column and close them 100 interesting and some of the network nathan um but no no one was gifting um you know no one was giving me a freebie yeah yeah of course now have you bootstrapped this or Bootstrapped raised 100 bootstrap oh i love that very cool now that that's surprising i mean if you were high up at i mean you probably had all kinds of people saying we'd love to give you a check whatever you do ken next if you're leaving google we want to do it we have a lot of people that want to give us checks so um i have a business partner uh keith leclaire and he founded a company and our our ethos out of the gate was listen the environment we work in today you can actually build something um for a tenth of what you did in the past so our application all in probably is just under three hundred thousand um if you five years ago that might have been able to build it yeah that might have been a three million dollar um build um our capital expenditures are low we don't have to lease office space so we looked at we said let's prove out a a model let's control let's control the company um keith's former company he grew from himself to 120 million in revenue wow with zero funding um i think the opportunity is big enough to will eventually take some vc funding um but uh how much of the two of you put in Profit together so far a minimum 300k it sounds like yeah the beauty is it's a very profitable uh it's a very profitable business so we we rolled in we had co-founded another company prior a company called first dfx and we rolled some of the money in so we probably only put in about 100 grand total and what's the team size today so we have four full time and we have um with with the advent of of fiverr and upwork we have on you know but because we're at google cloud and salesforce and python it's really easy to add and subtract contractors so at the peak when we were doing full-blown gcp development uh platform development in gcp google cloud and full-blown development in uh in salesforce we had 10 10 full-time got it how many engineers oh 10 10 developers oh sorry so so sorry there's 14 people on the team 10 developers yeah at the peak and then and then we rolled off people as as we as we hit milestones on the product so how many engineers today uh we we have six that are full time okay got it so ten total people working four full-time six engineers that are part-time yeah i've got one head of head of uh technology who is full-time and then we have um six he's 100 google cloud and then the salesforce development team is six and do you have enough history yet to know what like gross revenue term and expansion looks like it's it's early for that it's early for that i mean we we lost some customers due to we lost some forward customers due to um having a delay in the salesforce managed package so we submitted our manage package back in october uh to go through a security review and with kobit everything was delayed um so what normally would take two weeks has taken almost four or four months yeah interesting and and if i ask so ignoring revenue for a second how many api calls hit your system last month we don't track it on api calls on on on a month but but on our on our run rate business we're looking at um so for example on a daily basis we can see anywhere from a thousand to ten thousand across your 29 customers but it it's it's if i get it's a cosine curve right point being though you have somewhere between thirty thousand and three hundred thousand api calls going through your system each month and that's important because you bill based off consumption across the 29 customers right i would not say it's 300 000 yet it's closer to it's closer to um 20 20 000 30. yeah yeah and that really reflects um a request i want you know i want a prospect's mobile phone number yeah yeah interesting and one api quest is one mobile phone number it's well it's a ver we have we have some micro services so the primary two services that people are coming to us for our employer verification and um and the validated mobile phone number we also i have a text earlier today from a large company um it's about a 30 billion dollar company that has um they want to they want us to look at the totality of all the phone numbers that they already have in their crm yep to determine are they landlines or or mobile phones so they're they're positioning it as we can't reach anyone on landlines so let's understand the landlines and and then fill everybody else with mobile phone numbers yep makes sense ken let's wrap up here with the famous five number one favorite business book geez i'm old um it used to be across the chasm but it's it's it's it's horror which is uh harder things yeah number two is there a ceo you're following or studying big fan of jeff lawson twilio uh number four how many hours of sleep are you getting every night you know my fitbit says about uh seven seven i skipped three what's your favorite online tool for building a business so anything collaboration um uh i'm gonna narrow it so the the google uh g suite of tools has been phenomenal yeah number uh oh and what's your situation married single kids uh married with two daughters two kids okay and how old are you 52. no big old guy yeah that's prime prime time baby uh last question what's something you wish you when you were 20 oh um it's just solving a a you know finding a business problem and just um just taking action sooner on an obvious business problem makes sense guys modigy helping especially teams doing outbound make sure they've got accurate mobile information on their prospects he did this because he learned he was doing himself inside of google kenhob's going from nothing to 300 000 bucks in arr in a little under 12 months 29 customers right now they look to scale bootstrapped which we love and profitable 10 on the team four full-time six or sort of part-time engineers they look to scale ken thanks for taking us to the top thank you david 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 backend 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 nathan laca dot com forward slash slack 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 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