How Outleads CEO Dorin Rosenshine grew to $1.6M revenue and 45 customers in 2018.

hello everyone my guest today is dorsen rosenschein she's the founder and ceo of out leads a microsoft accelerator company at leads enables brands to engage customers with online advertising and relevant content based off off-site and offline data she has over a decade of experience in optimizing the digital presence for firms in a variety of industries from consumer electronics to home improvement doran are you ready to take us to the top yep let's do it very good okay so what's the company do what i miss in the bio and what's your revenue model how do you make money yeah so we basically enable companies to run online ads to you based off of your phone call activities so if you're calling up a bank and you're talking about a mortgage we enable the bank to then show you ads online based on the fact that you called and you spoke about that mortgage okay and how's that tech work what's the tracking obviously it's not a cookie it is sort of a cookie so basically what we do is we connect your online presence with the phone call that you make so if you're on a website and then you transition into a phone call we have technology that basically follows you around and connects the phone call that you uh just placed to your online session and appends the data from the phone call back into your online session then enabling companies to advertise to you based off of that okay but if all that originated from a website visit am i aren't i already able to be you know retargeted from that website visit regardless if i called or not uh so i missed what you said because the you broke off a little bit you asked about sure what i was saying is can't i still be retargeted since i visited the website regardless if i called or not oh yes but your calling is a much more a much stronger indicator of your interest right so if you're on the website and once you call right you've left the website now without connecting your phone call data to your website activity the company has no idea if you left because you called or if you just left because you weren't interested how are you connecting how are you connecting the two though right so what we do is once you're on the website we generate a unique identifier to you and we append that identifier to the phone number so once you dial as soon as the call connects that code it's like a numeric code it's being dialed immediately as soon as the call connects and it's being picked up by the call center okay so hold on sorry i don't understand that i go to dropbox.com i want to buy dropbox they're using your technology i then grab my cell phone that's sitting next to me and i dialed dropbox how on earth are you gonna connect the two right so if you're on a if you're on your mobile phone and you're so there's two scenarios right there's a scenario where you're browsing on your mobile phone and then you're clicking the click that you have the link that you have on the website on the mobile phone and you're clicking the call but in that case we generate a numeric code and we append it automatically to the phone number as soon as you click to call okay so and then once you call in so you actually will see like your phone number with a comma and a and a number like a two i totally get i totally understand that use case right if you're on a one computer and you're calling from another device right so what we do is we generate a numeric code that is displayed on the web page and then you're being prompted for it once you call so you actually see so when you're browsing on the website you see the phone number and then it says extension so and so so for you would be let's say extension one if i visited the same website as you would be extension two and so forth so we and then we re-use those codes all the time i do have to say that because of the growth of mobile activity most of the uh most of what most people do is you use they they'll um they'll browse from their phone and then they'll dial in from there they'll click to call and then dial in like that so what's the is this like an eco i mean i would say i follow that buying behavior on like if i want to buy a book off amazon but if i'm making a decision about buying a piece of software for my business to use it's not going to happen on my phone it's going to be on a computer yes but a lot of times so you'd actually be surprised at how much the mobile share of traffic has grown and it's it's nearly uh it's nearly equivalent to the desktop traffic on and actually it's even surpassing it if we take tablets into account even on b2b websites uh that you know the traditional b2b websites that you think so people like i totally get the traffic and i totally believe that i've seen the stats i'm talking about a buying decision though like even if i browse maybe i want to buy manny's you know company outreach i want to buy a license for my thing i might browse outreach.io on my phone but still when it comes in to put a thousand dollar a month credit card in i'm gonna do that via like a computer and what you're saying is when people do that the way you're tracking is with these unique identifiers the extensions yes and and also there's the right this there's different stages right so you can be on your computer trying to decide if you're going to buy it or not but when you want to dial in it's much easier to just open the website on your mobile phone and click to call rather than open the keypad i've never i've never done that i go to the website i look at the call and number in the upper right and i pick up my phone and call it i've never opened the thing on my site and like click the thing this is why i'm pushing you by the way because my audience will go well whose use case is more right what am i more likely to do doran's or nathan's right right well i mean so also leah there's a lot of other industries that are more like b2c that are using our uh our services so anything from travel and insurance to healthcare education you know a lot of these industries that are not b2b they're actually very much b2c uh are gonna are a lot more like mobile based and more tablet based yeah that's why i was pushing that by the way i was hoping you would help us get a better identity of what your customers are so it is more b2c it's more consumer companies it's definitely i mean yes and if you look at the verticals it's definitely we we have a lot of clients that are b2c so like anything in auto as well real estate you know those and those are all b2c companies they're not b2b b2b it's actually not a very uh strong vertical for us not that strong i wouldn't say that it's non-existent we definitely have clients that are b2b but a lot of the vertical the verticals that we serve are b2c okay enough of that i totally get the product now um how do you make money is it a sas company or what it is a sas company we charge a flat monthly fee so what the the one thing that i do want to emphasize is that we don't actually serve the ads we just connect the data we take the data from the contact center and push it into online advertising and analytics platforms so then it's up to the market or the digital marketer to decide what they want to do with that data and how they want to utilize it yeah so for if because of that reason because we don't actually serve the ads and we don't guarantee any uh any results because it really depends on how the client is using the data because we don't guarantee any results we just charge a flat fee and what i don't want to go down every example every pricing option you have but on average what's the customer pay you per month it uh it really depends we it really could vary a lot because we have clients that are like enterprise enterprise-sized i totally get that totally i'm just the smallest uh the smallest clients pay usually about 500 a month uh and that's you know that's a client that usually gets uh something roughly a thousand phone calls a week okay that's helpful and would you say that's a fair average 500 a month uh no that is not that is the smallest dad the average is probably around uh wow you're really catching me off guard here but it's something like 3 000 maybe that's okay yeah i'm just i i'm sure you have all of the cohort analysis going on i just i don't want to spend time on all that i'm just curious quick quick overall okay yeah i would say that's that's a quick gauge okay and and put all this on a timeline for us when did you launch the company what year 2013 2013 okay great and have you bootstrapped to date or have you raised we have bootstrapped uh you know 2013 when i say 2013 that's sort of when the idea was conceived at the time i was working full-time i had a full-time day job and i was just putting a couple hours a day into this in the evenings and on weekends so it took took about two years until i had decided that i'm gonna leave my my day job and then i did it gradually so it took after that another year to until i left my day job completely and just uh what do you mean you were like consulting or something yeah so exactly i was actually freelancing consulting uh and i just uh kind of let go of my clients one by one and until i transitioned into into outlets full time so it really wasn't until just a couple of years ago that i've uh been into this full time got it and i i thought you write in the bio that you were part of a microsoft accelerator which means you have some funding yes so we got uh 25 000 uh from the microsoft accelerator and that was the only outside funding that we've ever received that's great that was more of a grant so microsoft is actually uh you know there are are they on that are they on the cap table nope okay so then yeah they don't i don't believe they do this anymore but uh at the time it was a grunt that's great and what have you scaled to over the past four or five years in terms of total customers using you now uh so we have several dozen okay customers using uh using our platform that's great so it's very much kind of a high touch high rpoo high acv model yes i mean it's uh you mean the sales model right correct yeah i mean if you have if you say several dozen what you mean like 36 or something like that yeah we're actually in the mid 40s okay that's pretty good but yeah but i mean uh we are yes it's it's a very it's a very like high involvement sale because we have to work with both the marketing the digital marketing team as well as the contact center and it usually gets involved because there's a little bit of work on the website to be done uh the implementation happens on both the website code as well as the contact center uh side so it is a very high involvement sale and it takes a very long time to complete it yeah i want to chat more about how you're figuring that out in a second but first 45 customers paying the average you just gave me that puts you at about 135 grand a month is that generally accurate yes that's great and what's growth look like so a year ago what were you doing per month uh whoa these are you're catching me a little bit off guard here um i want to say that about a year ago we were at roughly half okay so that's that's healthy growth that's great bootstrap you know that's good uh so call it 70 grand a month you've doubled since then and where's my most that growth come from does it come from expansion revenue on the older cohorts or brand new customers signing up both so we have both so we had a good number of new customers signed up but we also have rolled out new features uh we integrated with bing ads we rolled out an integration so at the when we first started we were mostly integrated with just google adwords and once we added bing ads that meant that we are optimizing much more a lot more budget so we have a much bigger budget right so because the bing ads ad spend was added to what we were optimizing we also added a lot more features that were relevant specifically to bing ads so so the spend that our has spent with us has grown for those what are what are the pricing axes that you're driving expansion around usually it's like you know per seat and there's like a usage data point there's a few other things what are yours yeah so we have different different levels depending on how many phone calls and how many uh generally actually website visitors we've rolled we've transitioned to just charging based on the number of website sessions so we have different steps and each step is priced differently uh we also have just to be clear so like basic at 300 per month is 10 000 monthly website visitors and then standard at a thousand a month is 50 000 monthly website visitors that's what you mean uh you broke you broke off was just saying basic is 10 000 per month at 300 per month and then standard a thousand bucks per month is about 50 000 monthly unique website visitors that's the value metric you're pricing on monthly website visitors yes yes yes yes exactly and then you know in the case where we roll out a major new feature like an integration with bing ads which is a whole new platform we just upped our prices a little bit for those that wanted to add uh that functionality why price around monthly website visitors instead of like monthly calls yeah so basically we still have you know our our system still runs and generates a numeric code for every website visitor that comes in especially in the case of b2b you know we still generate that numeric code and kind of just pricing around the volume of phone calls that we get just puts a little bit of the risk so the ability of the of the company to to convert to those website sessions into phone calls right it puts us into into that race so there is a risk where a company that is just not doesn't do where the marketing team doesn't do a very good job of converting uh people into callers we would be we could be conceivably losing a lot of money right so we could be running we're still running on the website every time that the website runs every time somebody accesses their website our code runs and that costs us money but if not a lot of people are calling then you know because the marketing team is not doing a good job of converting then we're not gaining much does that make sense yeah that just seems like such a tough sale for you have to do so many things and then also convince the marketing team to make sure they are actually driving calls yes yes you know and and make it you know a lot of marketing teams kind of are kind of saying oh you know we don't want calls because they're very expensive yeah yes but what's uh what's turning this around a little bit is the entry of ai into the call center so google actually just launched a a partnership with genesis which is a contact center contact center software provider one of the largest in the world that is also our partner and they so they launched a partnership where with your calling you can actually be talking to a robot basically and not even realize it so that makes the uh the ability to accept phone calls a lot less costly it makes it a lot much more cost effective every time so totally and it's interesting because you know i think marketers if the cost was the same i think marketers would actually prefer to uh to get phone calls because when you're talking to somebody you're picking up a lot more information and if it's a robot talking then now you don't need to do any manual entry they're just the robot is just picking up what you're saying and totally totally under totally understand yeah it makes perfect sense all this is obviously accumulated into churn right are your customers sticking with you so what is your churn today so we have not lost any customers since uh since our launch okay talk about talk talk about revenue churn though uh so we've not lost we've only grown in revenues because we've not lost customers we have only added and customers have only added more they've either kept everybody that has come on board and when we just had adwords has kept that and when we rolled out bing ads that was the only time that we really raised our revenue our revenue um steps we so jordan sorry sorry just to be clear you've had no one even if you haven't lost a customer no one has downgraded even by one level going from 50 000 hits down to 10 000 hits per month no no no no we don't have that at all we've not i mean cost companies that would they have had tried to sell to companies that were just not at a good time in their you know in their country when they start paying you and then stop no because we we all every time that we've accounted a company like that they've not they've just decided to not sign up so we've never really had a company sign up at a time that wasn't when it wasn't growing mostly because marketers just decide not to spend tools every time someone tells me that zero churn i mean my initial thing is you're if you're not being aggressive enough like it's too cheap like you should you should actually have there is no big there is no hugely successful sas company with no churn so i mean then i'm sure you know then i'm sure we'll encounter it at some point but we just haven't you know but keep in mind also we've really only been selling for the past couple of years mean that's a good i mean that's a more than a year more than a year of sales i mean that's a that's a good cohort of data though yeah well i mean we just haven't encountered it yeah so why not triple price point uh we could we've just you know this competition there is uh and really our interest is really on just growing our customer base at the moment so you know would we do it in the future possible but right now we really just want to grow our customer base and gather case studies and kind of show that the product works really really well but you've already done i mean you've already shown that no one has left right if people are leaving maybe you said maybe we need to do some case studies to show that it actually works too many are leaving yes yes so we are thinking we're thinking about it uh it's you know it's in the talks we might do it in 2019 and we still have a little bit of time to decide do i uh increase our price points yeah yeah so um by the way don't come back and blame me if it fails i'm just saying when i hear zero churn i don't see that as a strength i see this i see it actually as a weakness it is it is a good it is a good uh it is it is a good uh it's a good point i think our we were really really pushing you know because i spent so such a long time and and uh and a lot of uh resources on building the product for almost three years you know our focus once we launched our focus was really just let's just get customers and really show that this is working and and it's been and also keep in mind that once a customer comes on board it takes time to kind of gather a case study gather the data because it it we still do a lot of a lot of changes in the implementation once the customer comes on board right so we we have a lot of optimizations a lot of things that are added and changed and tweaked so it really takes time to actually show the customers that uh that this is valuable and for them to really see the value so for a lot of those reasons we we've decided to just keep we haven't really paid too much attention to the price points themselves our focus has really been on just growing the customer base and gathering case studies but it might be on the books um an increase in the price sure what's the team size today we are five people okay and what's the breakdown wildly um really overloaded so we have uh three tech people and two um two sales people that's great and is everyone remote or all based in new york uh everyone's based in new york that's great okay five people in new york so i assume casual positive we are cash flow positive yes that's great any plans to raise uh no not at the moment and any acquisition talks with anybody uh no comment how do you if you should analyze uh you know someone wanting to buy you what are the pros and cons uh you know i mean i think this technology it's it's very very valuable but at the same time you know like every startup it's very uncertain so um given that i've been in it uh five years i i'm not uh you know i'm kind of very neutral you know two words i'm not really leaning towards either way i'm not at the point where i'm still really excited about super super building it but i'm also not at the point where i really really want to exit uh so uh so you know i mean i think one of the pros is definitely cutting the risk that's involved one of the cons is that you know you really don't know if there is more upside uh as far as uh you know the from a resource perspective i think it's going to be much easier to grow inside a company i mean if a company that has like 3 000 clients that could all be using this uh this service as an add-on if it buys us then all of a sudden we just have really easy access yeah this is like a car dealer you know company that already sells to car dealerships or restaurants or anything yeah yes yes yes or even just a company that is like you know that that is all over like all of these verticals that you know it's uh it doesn't even need to be necessarily focused in a specific vertical and just selling to companies so so i think that's it that's a huge problem and you know the ability to kind of make the sales organization more professional the sales process more professional uh i think i think all of those would be pros um the cons would be losing the flexibility and freedom and uh to some extent i think of of just being a tiny startup doran last economics question here because we're out of time uh cac what are you spending fully waited to acquire our customers uh so we have we're spending a good a few thousand dollars uh to to acquire every customer and that's spread across the sales and that's spend so what's your payback then is it about a month or two months or more it takes us more it takes us even more to it takes us uh because keep in mind also once we sign up the customer uh we have a lot of times we give them free trials we give them pilots so it takes us it takes us almost six months to recover yes yeah very good you just break even on that all right let's wrap up with the famous five one word answers here if you can number one what's your favorite business book uh can we can we kind of go on a little questions yeah if you don't have one just say none none number two is there a ceo you're following or studying i was following steve jobs number four uh three how many hours of sleep sorry what's your favorite online tool for building your business gmail and number four how many hours of sleep to get every night i shoot for seven to eight and what's your situation married single kiddos i am engaged getting married in five weeks oh congratulations that's great no kids yet no kids all right but hopefully soon that's great doran and do you mind me asking about how old you are i am 31 i'm gonna be 32 in a couple months that's great okay last question what do you wish your 20 year old self knew oh man live the moment because it's gonna pass guys there you have it live the moment she launched out leads back in 2013 helps you basically do retargeting based off call-in data something very unique tough to track she's figured out a way to do it team of five based in new york currently serving about 45 customers doing caught 135 grand per month in revenue that's up about doubled year over year and she's doing it bootstrapped which i love no churn so far so you know obviously testing price point maybe she needs to be more aggressive there but she'll figure it out spending up to three thousand maybe four thousand five thousand bucks to acquire a customer with a six month payback period dorne thank you for taking us to the top yeah thanks thanks so much