How Paykickstart CEO Mark Thompson grew Paykickstart to $960K revenue and 505 customers in 2020.

hello everyone my guest today is Mark Thompson he has 10 plus years of internet marketing and entrepreneur experience and is currently the founder of digital kick-start dot-com a software company that helps online businesses with growth and automation all right mark are you ready to take us to the top I'm ready let's do it all right so you've got a bunch of stuff going on digital kickstart is this kind of like the holding company it's an agency then you have software stuff inside of it exactly so we have lots of different pieces of software and so digital kickstart is the main brand for all of those assets okay and at the agency is that an agency or is it just a holding company it's just a holding company so yeah we don't work with clients I mean we have a customer we sell b2c so okay so what's your largest SAS pure-play SAS company easyvsl so it helps you to create video sales letters okay so that that's our biggest revenue generator but it's actually not a SAS company it's actually an Adobe AIR app okay what's the largest again pure-play SAS company SAS is pay kick start so that's our shopping cart and affiliate management solution so tell us about that so how do people use it is it really affiliate management and-and-and payments yeah so it's really we specialize in anyone that has a digital product so maybe you're running a membership site or you have a piece of software of your own or you're a coach or consultant those that's really who we target we're not necessarily a Shopify like a traditional e-commerce store okay and so what do we all pay on average per month for pay kickstart the majority about about 75% of our vendors are on the $99 a month plan so we have 29 a month 99 and 149 a month okay so 99 is a fair average there and what are they getting for that ninety-nine a month they're getting they can add as many products as they want into the platform they can manage as many affiliates as they want to we don't take any per transaction fees so the only transaction fee that they would incur is from the payment gateway that they connect with into our shopping cart okay that's kind of on a timeline for me when did you launch the company we launched it about a little over a year and a half ago okay so call early 2017 and how long had and then the agency the holding on me how long had that been around that's been about five years now okay great so a lot of different a lot of different ideas 2017 this guy launched you turned on pricing and would it be scaled to today in terms of total customers so right now we're right around 50,000 a month in and monthly recurring okay so how many customers is that oh boy good question that's I don't know like there used to be average price points about a hundred bucks a month yep yeah so if we just take that 50,000 divided by 99 or 100 you get about 500 customers yep yep right around there okay and what's growth the plate so a year ago what we got in terms of monthly revenue I mean we were probably around 10 or 12 thousand so you know we were we kind of interests along for a little bit so the I mean when you're starting a shopping cart you want to make sure that everything works right especially when you're dealing with people's money so we were we were very slow to growth and then we did kind of an official launch just a few months ago even it was about 14 months into actually bringing our first beta customers when we did more of a formal product launch mm-hmm what was that product launch and when you say formal what do you mean yeah so we we did kind of that product launch sequence that you hear Jeff Walker always talked about where you have two or three pre-launch videos just to kind of educate people on why they need your product and and how it'll benefit them and then we open the cart for about seven days and we actually did a little bit of a different pricing model we did a thousand dollars and you get twelve months of pay kickstart premium for full year got it I see so you're basically pulling forward that you know get the year for two button two months free yeah and they paid all that upfront correct okay great so talk to me about funding have you raised capital or bootstraps it's all been bootstrapped that's great okay good so obviously at that launch if you pull a bunch of thousand dollar plans forward you have some cash in a bank to work with yeah and obviously with digital kickstart our holding company we've we've created so many different products and assets that we have a lot of revenue coming in from those different streams and then we've reinvested a lot of that into the pay kickstart platform and what's the team size today just on pay kick start on pickax start it's about 15 people and all together across the entire agency all your products like 20 20 okay so this is the majority or business then right now it is yeah we've really transitioned especially in the last year and a half we've transitioned a lot over to pick start okay talking about churn it's critical in this kind of business what's your turn churn is a rut well in pick kickstart it's about percent so it's a little high month here annually monthly okay monthly and that's when percent monthly revenue churn or logo churn revenue revenue turn okay so this okay so this isn't really a SAS comp I mean if you're turning your whole customer race in five months this isn't really a SAS company well what do you mean so I mean the reason SAS is called SAS is it software as a service is that it's it gets higher multiples but its predictive its predictive rep mean you can predict it right it's predictable it is and it is I mean well yours is predictors is predictable that it ends in five months right so like pretty in terms of stacking so you the reason the reason Chernus are critical and any SAS company is if you have a leaky bucket it doesn't stack and then you lose all the economics that you with the SAS company so right why is churn so high mean that seem that's like really really high why is it so high I mean so obviously the the one hurdle that we vote has had overcome is people that are using other shopping carts and then trying to get them to just to make that switch right because sometimes they're you know they have subscriptions and they're already in other platforms and it's not very easy just to transition those that recurring revenue over into our platform so there's certain things that we're doing to help with that so things like we're gonna have an import stripe subscriptions into our platform with PayPal is a little bit harder so there's a few obstacles there mm-hmm how are you what's interesting is I mean you're small enough where you can 20% is is not a lot of 50,000 in terms of you can drive more growth in that to cover it up but on 50,000 1:39 revenue if you're turning twenty percent per month that means next month you're gonna lose ten grand well you're gonna okay yeah so maybe so the churn rate is really just and not everyone is churning at you know at 20 percent I mean so I mean we're still our monthly recurring started at 10 around ten thousand last year and now it's at fifty thousand so I mean were still acquiring new customers yeah I get this so our so our companies that are there are tons of companies that are always acquiring customers but their churn is still through the roof that where it catches up is when you're not acquiring fast enough to make up for the churn but but I see a little bit I want to make sure we're talking about the same thing here the twenty percent monthly revenue turn would mean if you're doing 50 grand this month you're gonna lose 10 grand of that 20% next month but you're still growing because you're adding back more in new customer signups in the lost 10 grand is that what you meant to say is it accurate no we're I mean we're not losing 20 percent of revenue monthly revenue guess we just owe me 20 percent monthly revenue churn I'm sorry that's what you just told me you said you had 20 percent monthly revenue okay I apologize that we're not now we're not losing 20 percent of our revenue each month okay so what is your turn I I'm not a hundred percent sure to bounce with you okay yeah okay how do you so yeah like anyone listening right now is gonna go wait how does this guy not know what churn is if he's building a SAS company so so why do you not look at churn well it's so we're basically looking at a lot of our trials so I think it's the churn is based off of the trials that are coming in yeah I don't know what that means so yeah I'm sorry I don't know what churn is is if you have a hundred paying customers today and next month you'll lose ten of them you have ten percent monthly churn it's just churn is just a measure of the bucket you know buckets are leaky how leaky is your bucket so if you have fifty thousand bucks today per month in revenue how many how much of that will you ignore upsells or new customers you add how much of that will you lose next month just natural churn yeah no it's it's a good question I mean I'll all I really usually focus in on is our our monthly recurring and you know are we getting more trials and that kind of stuff so okay yeah but so most people when they put a performer together for a monthly recurring revenue what you do is you take beginning monthly m RR - lost plus what you added and that's how you get net mor growth...