How Moosend grew Moosend to $1.7M revenue and 700 customers in 2018.

my guest today is janice soros he is the ceo and founder of a company called moose end he's been in the banking technology in the past including goldman sachs jp morganing morgan and also was marketing technology obviously now in the present he's a lender at heart using technology to cook beautiful dishes janice are you ready to take us to the top hi hi nathan how are you doing yes sir okay good so so tell us more about the company what do you do and how do you make money right so we're an email marketing and marketing automations platform um obviously we our clients use a platform to set up their email newsletters to design them to set them up to send them to their audience they can segment uh you know their audience lists or obviously um you know just do a normal email blast or they can do automations and uh you know uh the cost of our platform starts from free all the way up to depending on how many subscribers you have to you know as far as can go basically and so why would somebody use you over a mailchimp i mean this is a very fragmented space it is very fragmented uh you know and we have many many many clients that came over over to us from belgium we've actually created a technology that migrates the whole account from melting to okay but why are they switching using us uh yeah sure so the reason a few reasons as you said it's a very fragmented space and if you're in for in a fragmented space one of the main reasons is pricing so we're cheaper alternative mailchimp we have all the features at a cheap price second reason is we have an awesome customer support team while products like mailchimp you may have to wait two three days on a on a ticket or in a queue to get your answer and to be honest with you uh marketing tools these days are quite um quite advanced i mean to set up a marketing automation it is quite advanced i strongly believe it's all open and i'm biased on that but i strongly believe we have better marketing automations and we'll have the best marketing automations that you can find on um email marketing tools and there are yeah so what are what i mean the numbers don't lie so let's just jump into some of the numbers what is the average pay you per month so the average the average customer would pay us 200 okay that makes sense 200 per month now that's not cheaper than mailchimp i mean there are many mailchimp plans way cheaper than that sure but you've asked about the average customer so the average revenue per user per month h200 will have people that they you know they send 5000 emails for for 10 bucks and i mean if you compare the pricing between the two products there is no question about i'm about 40 on average every plan that we have is four percent cheaper than melting and actually um just to add to that um we don't have restrictions about the number of uh campaigns you can send so you can send one or one thousand campaigns a month and we don't basically restrict you on the number of your campaigns you can send well on mailchimp how do you make sure that you have kind of long-term viability as a company because you can have people come in and abuse the system drive your costs through the roof because they're sending unlimited sends and just take advantage of your system but i mean it could happen theoretically and but it's like um blue fair meal you know you pay ten dollars a year to buffet you know you can't have people that they can go in and abuse the system but overall it works uh it works quite well and actually it's uh you know abuse the system abusing the system would mean that they would send unlimited campaigns to their customers no one really wants to do that because at the end of the day they will get so many people playing i'm talking about spammers i mean spammers would not use a product like like ours and we would uh either find them before they started sending a campaign we would find them after the senate campaign but you know we we're in a space and that you know we don't we don't build products for spam and well this sounds like a a product perfectly built for spam it's a flat fee for unlimited sends that's that's a spammer stream no so it's not really flat fee friendly it's flat fee for the number of subscribers you have right um well let's see let's see how how a spammer could take could abuse that they could send let's say 10 campaigns a day to their customers well if their numbers if they get a good open rates good click-throughs if their audience reads their emails and opens them and everything they're not spammers if they're not then then the systems that would have in place will detect those people and block their accounts so you know to be honest with you you know many people say you know email marketing you know kind of spam technology well it's not um we we are a hundred percent against spam in any way my co-founder actually right now as we speak he's in san francisco in the messaging anti-abuse watching group which is a very big sort of forum on anti-spam it's just just to be clear everyone would say that no one's going to come out an animal marketing company's not going to come and say we love spam no one's ever going to say that the fact is it still happens right people still have a platform so i was just trying to understand more around your model let's move on to some other questions here so we're going to put your launch company in sorry you can get the question what year did you launch the company in what year okay so it was 2012 2013 when we got our first customer on the product okay and what have you scaled to today in terms of total customers so we are currently running at around one thousand one thousand a bit active users active customers okay and just to be clear those are paying active customers uh 70 of them yes 30 would be on our freemium plan which is up to 5k yeah so 700 of the thousand are paying you on average 200 bucks a month you're doing about 140 grand a month right now in revenue uh around yeah around around that okay what do you mean around that like is it way lower way higher no no it's 135 that sort of thing so yeah around 140 as you said okay and now let's get into some of the economics here so churn in this kind of business is obviously really difficult sometimes tell me about your church right so the the average turn in the industry from what we've gathered in terms of our data it's eight percent um we are below eight percent churn um on our product we're about six six percent churn okay is that six percent logo term per month uh yeah exactly okay so how do you draw i mean that's still really i mean that's still high right you turn 65 72 percent of your customer base every year how do you get that lower um you know it's tricky um that's where you know really good support really good product comes into play we keep you know at the end of the day what we do is we we try to understand where the turn comes from and i think personally that support in this business is basically the way to beat stern um as innovative people are turning because either they don't understand the product so that we're missing something with custom support or because they don't get what they need in terms of um sort of open rates so that's deliverability um we try to sort of to battle turn through those we do a lot of meetings with our clients to explain to them you know um what they can expect from from email marketing and what sort of operator industry gets where uh recently uh were haven't launched it yet but it is announceable we're launching a tool that when they type a subject line it will predict the open rate they're gonna get in the campaign so we kind of give them some expectations in that respect so that sort of thing interesting um what about the other economics what are you paying to acquire a customer what's your cac we right now we don't spend one dollar on on on ads we don't we don't spend money on not just what's your favorite what's your fully weighted cash so it includes the salaries of your marketing and sales people right so you know i guess we have the marketing team right now is two people um it's very low that's what i was gonna say i mean it's quite low okay you know what what's the total team size so two of them are marketing and sales what's the rest of the team look like so 25 people are in total in the company so have 10 10 12 people in product of around four people on sales two people on marketing um and operations is the rest okay and what do you assume lifetime value is on these customers lifetime value is interesting um we on average i would say about 18 months um i don't to be honest with you i don't have a recent figure in lifetime value and we do have a lot of people that have been with us for many years four or five years since the very beginning some of them and have people that they you know they turn after two three months we think that the two three months of um limit is quite crucial and if people stay after two three months they generally stay for a long time um if that makes sense yeah that makes perfect sense and those numbers run out if you just do the math right 1 divided by 0.06 which is your churn gives you average lifetime value in months of about 16.6 so that's close enough to the 18 number you said and then when you multiply that by your...