How Neoncrm CEO Jeff Gordy grew Neoncrm to $7.2M revenue and 3K customers in 2018.

hello everyone like guest today is Jeff Gordy he's the CEO and co-founder of Z two systems otherwise known as neon crai means got a background in sales marketing customer service and management is a UIC graduate with BS and with a BS in business management and after making a few mistakes growing up and turning his life around decided to focus on helping nonprofits that's where the companies focused on Jeff are you ready to take us to the top yes I know alright serums are tough non-profit serums are even tougher what on earth compelled you into this business no no no other choice in the very beginning and a passion for nonprofits all right fair enough so is that the business it's a pure place to ask company it's a CRM for nonprofits yes completely basically I was a troublemaker growing up I got kicked out of high school I got kicked out of the home I didn't even get my GED and go back to college for the third time until I was about 28 did you ever stop jail time today alright so you are a newer bad boy yeah I was I was a troublemaker but at the same time I had to make a living so I was on my own around 1516 and worked in restaurants and managed restaurants sold some of the first cell phones sold copiers walked the streets selling fax machines even sold voice mail when voicemail was something you would call call on and then sell as a service so you know and then I ended up running the world's largest hog and ducks of all things down here at Navy Pier I had a staff of 100 kids standing in Chicago Chicago okay yeah so I had a hundred kids selling popcorn lemonade and ice cream in a popcorn shipping business that I was managing and I was getting paid about 40k a year 60 hours a week six days a week and I had an epileptic seizure one day one or in actual never had epilepsy before but out of the blue it just hit me and I woke up and was looking and all my employees were looking at me down on the ground and I said you know I haven't completed college I don't have I don't have a degree I need to do something to change my life and to really make things happen so at that point I decided I'm gonna go back to school and I'd always read a lot and I wasn't done how old are you Jeff at this point about 28 okay and I said well if I'm gonna go back to college we're what better place to do it and I went down to Miami Beach for a year oh gosh was it Miami Dade College and just would spend some afternoons on the beach waiting tables at the evening school in the morning and after a year that I was able to get some student loans and come back up here to Chicago to UIC and really finish school and that's where I got my business management degree in a BS okay so here's a big question looking back was it worth it Oh completely okay yeah you know everything taught me about Karma and that's why I am where I am today if you do bad things bad things come back if you do good things good things come back so Neal and CRM to kind of dive more to the business what's the average customer or nonprofit paying you for months to access this and what do they get yeah sure so the average customer is paying us about a little under $200 we do have some customers that are paying us as little as $50 a month man some that are paying us over $1,000 a month really based on the size of the nonprofit and what they need but all this started when I was going back to school and working at the kidney cancer Association and my partner came in with a beta test platform and said hey you guys test this out at the kidney cancer Association because I was working there just part-time and entering gifts and was absolutely amazed that you could help people and make money but I had a background in using sales software and marketing software and I was falling in love with nonprofits so in my partner was a developer so what we did is we just kept adding more and more and more features we started off with no capital absolutely nothing I think we paid ourselves 5k the first year 15 a second and you time the first year of neon right correct what year was that 2005 okay 2005 good so you know are you still bootstrap today ever you raise capital still bootstrap today I love that very good so they're so bootstrap and what have you scaled to in terms of total nonprofit span yeah we are last year we closed up around 6 million this year we should close up around 8 million so what does that mean in terms of customers though about 3,000 nonprofits oh wow okay I mean that's very healthy and by the way this is impressive because people that have tried to sell the nonprofit's before listening that you appreciate how difficult it is to sell to a non-profit I mean this is not an easy thing so I mean what are you finding your sales cycle is like how are you closing these deals well in the very beginning I thought that this company would never last because I was trying to sell I'm working out of my apartment I actually made the first sale of my car and I was called calling all these businesses and sending all these emails and nothing was happening I was doing two-three demonstrations a day on the calls for four five six hours and one of the problems was just it's a different sales cycle and it's just a different way of selling something so nonprofits generally in the for-profit world when you're selling something they go directly usually the person that has the credit card is reaching out to you they can go ahead and make that decision not too much of a process of coming up with that decision if they like it they buy in the nonprofit world generally you've got one person that's going out and doing some investigation then you've got the executive director that they have to share that with and ideally pull them in then if even if that executive director loves it then they have to sell it to the board then they might be under a one two three four year contract due to some of our competitors like Blackbaud that have really held people in for long term contracts and really kind of got their nails in and then the board has to get that even through their budget and just ensure that they've got money and it's approved for the following year well generally it's a lot longer and in the beginning I just kept knocking on doors and nothing was happening but then it they all ended up coming in later it was just a much longer sale sighs oh my god after their longer some contracts ended they'd all come to you because you're more flexible and maybe cheaper yeah yeah definitely we were we basically came into the market being able to offer more than our competitors were able to offer but at a lower price because we were bootstrapped and didn't have any capital didn't have any debt to pay took three thousand three thousand customers today I gonna add about two hundred bucks a pop per month that's about you know six hundred grand a month or 7.2 million and ARR give me a sense of growth where were you a year ago in terms of monthly recurring revenue Oh about a year ago I would say we were probably you know honestly I don't know off the top of my head but probably about 1 1 1 to 1.5 down from where we're at now ok got it so so maybe we call it somewhere like 500 ish for 450 something like that yeah yeah yeah that's healthy I mean look it's healthy growth I can tell you're good with your numbers ya know well I always like to I always appreciate the emotional side of stories when you can tie them to the data as well because there's a lot of emotional stories where the emotions get get funneled into real strong success there's others where the emotions don't get funneled and everything just crashes and burns so this is a great story this is one where you clearly funnel these emotions and it's turned out really nicely for you so walk me through today so it's our team size and we're guys all based yeah sure so right now we are about to breach the 100 staff number mark we've got about 56 people here in our Chicago office and we've got about 45 in our Chengdu office where's that which country that's in the Sichuan Province in China China interesting and how did that happen so my when I met my business partner and he came into kidney cancer Association he was originally from China he'd worked for Ford Motor Ola IBM and had made some good money and did really well ended up selling his house in car and decided to start this company well he didn't make much money at all in the first few years and not sure he was happy he did it in the early years and actually the partner that he started it with I've got a job offer to join the mark and at 250 K year managing their computers and that's how I got on board so it was just uh it was a long path to really connect getting it up and getting somebody so he built the team in China that's how that happened yeah we actually started our team in the u.s. so year about three into it we've finally got ourselves ourselves 2008 yeah yeah about 2008 we finally got our salaries up to about 45 K or so and decided to hire our first employees well we hired one person in support and we hired two developers and we hired guys right out of school they just couldn't really help us couldn't get us where we needed to be and we couldn't afford good developers I think we were paying them about...