How Ppcscope CEO Brian Johnson grew to $317.8K revenue and 646 customers in 2019.

hello everyone my guest today is brian johnson he leads an amazon advertising analytics and optimism optimization company and he sold physical products online for 12 years in 2015 he developed a consulting practice specializing in amazon's pay-per-click advertising platforms brian founded the amazon ppc troubleshooting community community amazon ppc consulting association along with many others before launching his current company ppc scope all right brian you ready to take us to the top you bet i am all right so you you you kind of basically locked up these distribution channels first in the form of communities and forums and consulting and then you saw this idea for the sas play when did you have the transition where you said oh my gosh i've got to move away from the agency and go all in on the ppc scope sas play well it was really it was a blue ocean so that's kind of why i started the community as well is um i didn't have the answers i needed nobody else did either so i started the community in order to collaborate with others and uh one thing led to another people started asking me for more and more advice um and after a point i started it's like okay i need better tools to do what i'm doing um so i started poking around and um you know looking for for programmers to help me and start putting it together and the first version was as about as ugly as you get yeah yeah what year did you launch ppc scope that was uh 2015. okay and it is pure play sass right yep so on average what are customers today paying you per month for access to the technology uh today i mean our average revenue per user is um it's about 41 dollars per month okay and what walk us through kind of what they're getting for that okay so um ppc scope is a essentially it's an analytics platform for uh ppc advertising for on amazon so those brands who sell products private label products on amazon they want to advertise they're going to use the pay-per-click advertising this software helps them translate the the data a lot better than what amazon provides and it also allows them to manage their ad campaigns both creation and optimization right within the software so better view better analytics better profitability metrics um just all around a better view of what their advertising is doing for them brian will this tech only work well for kind of physical products going through amazon or what work for kind of for example books yeah so um no it doesn't it doesn't really work well for books primarily because the the ad platform amazon has a couple of ad platforms and the one that primarily is used for books um is they don't have any kind of technology interface to it and so it's really limited it's a very manual process still interesting so this is primarily for you know physical products and so oh you launched in 2015 you were four years later today how many customers have you scaled to um we're at uh let's see last time i checked here we're at 646. you're looking at a dashboard or something aren't you well i'm actually i i took some notes at it so yeah 646. have you have you listened to the show of course okay good so you're you were ready for it huh i hope so that's good why do you like one thing i'll forget yeah out of curiosity why do you listen to the show you're a busy guy um you know what um you know there are certain shows that i like to listen to i certainly like yours i like the fact that you uh you know you hit everybody hard with numbers and uh hopefully i'm prepared enough no you're it's good so far 646 customers times the 41 price point you're doing about 26 grand a month right now and just this sas where was it a year ago um it was actually a little bit a little bit lower we had mainly because we did somewhat of a pivot um but we actually had a lower average revenue we were down about 34 per month per user but we had about 700 users so we had a little bit more users but we changed the type of users that we focused on okay so 700 times 30 would be about 20 grand or 21 grand in revenue about a year ago per month yeah 20 23 on average yep okay interesting um so so kind of slow patient growth it looks like nothing crazy but slow and patient can can win a lot of win a lot of board games um walk me through how you got the first 10 customers i assume you probably used your communities i did yeah so it was it was just kind of an extension of that as i tested the waters and said okay you know if if i built this thing would you actually use it and the first uh you know the first version of course it didn't do much at all really it was just more like oh hey i can visualize a line chart of the the data that amazon won't tell me that was enough that was enough to to get um probably two or three hundred users within the first um i don't know probably six months i think you know so but it was just it was a whole i mean i looked back at that first version it was horrible of course but what did you actually do though so you have the community i mean walk me through which community did you post in how did you post it what was the call to action in the post well part of it is um because there's a number of um there are a number of amazon seller related communities on amazon as far as facebook groups for instance um is that where the amazon pc troubleshooting community is it's a facebook group it's a facebook group yeah exactly yeah so when i started i started it just so i could try to you know talk to other people and i literally called it amazon ppc troubleshooting specifically just to you know talk about that one very niche topic right it wasn't about selling you know all the other topics that other authors and and uh podcasts talk about it was strictly just the advertising and it was strictly just the troubleshooting but it was such a big problem that it just people gravitated to it from you know to get some help look at this i go there now there's this big beautiful eye kind of this good looking bald guy with a big old white smile so there's 14 000 people in this group now huh 15 15 000. yeah this is great interesting and so you've your only monetization strategy here is really upselling the the sas product or do you monetize this other ways well yeah so i actually um because i rolled it out again it was that blue ocean gap of knowledge and tools that was available so um you know it started out with a community rolled into the software rolled into a couple of different like professional training courses that i developed and then finally into my my ad agency yeah so it's all been it's all been very specific you know staying in my lane if you will yeah so let me brian let me ask you i mean there i just saw an article the other day press come out saying something like amazon's ppc business is going to like 4x year over year and it's really now competing with even facebook and google the two big ad players i mean if i'm reading those headlines and i'm a guy like you i'm going wow i had great time in getting in in 2015 and i better go all in on the sas product today i could essentially build the amazon version of google adsense like why aren't you all in on ppc scope why still do the other stuff well i mean lack of focus probably helps um you know it's part of it is i was trying to support over support the community i think you know i was extremely accessible and so i got diversified um it certainly helped with um you know speaking engagements and you know conferences and it's for to have the the course out there because nobody else had the course again blue ocean that's taking advantage of it um but it's easy for you a guy like you to make yourself famous doing this it's much harder to get rich true true but i think each of the areas is certainly uh provided um more than what i would have expected you know it continues to grow each year because of all these different things now for me my focus is is primarily on my ad agency and then second on um on the the sas product yeah um how much volume do people actually process spend through you or it's only an analytics tool well it's an analytics tool yeah it's pure analytics well i mean we can actually manage we can make changes to their advertising through the tool okay you know as each user does so does amazon product have a pretty healthy ads api um yeah i mean it does what they did in 2017 is they rolled out a whole new api prior to that it was a lot of manual you know go out and grab the reports manually so um you know we came in in 2015 again there wasn't any solutions out there that were focused on this um we were proud of being the innovators but it was it was a hard game yeah because we had to basically manipulate the technology in 2017 they retired the old technology opened up the new api that's when the flood of competition came in and so that at that point we had to start pivoting who's your biggest competitor in the space um you know i mean there's there's several of them out here um you know certainly back there's different types that are available um you know certainly uh celex out of germany is is a great uh direct competitor for us um locally i would say like how big do you think celix is what would you guess their revenue is i would say that they're probably i think last time i talked with them um they're probably doing probably four or five times what we're doing and they're primarily just uh europe so i mean that's still not huge that would put them out like a million or two million dollar run rate i mean do you think there are any like 10 20 30 million dollar ar players in the space yet not so much on the software side you get the hybrids that combine the agency as well as the you know other consulting services and the software something like a ticket metrics for instance um they'll have spell that uh t-e-i-k-a metrics agency plus sas yeah their agency plus sas and so for instance for our agency we actually uh we do use ppc scope for our agency but then we also develop our own term you know we only we develop our own software in internally also for competitive reasons do you um so if you look at the past 12 months the total ad spend that you've managed reporting on is about what do you know what that metric is um no i don't i don't want to make it up on this one i would say probably through the software yeah i would say probably it's in the 20 to 30 million range the reason i asked that is like i'm wondering i wonder if you have a large enough cohort of users with enough ad spend where you can actually start doing artificial intelligence machine learning kind of stuff to make ad recommendations i just don't know if that's a big enough sample size yet we do that internally yeah so so this is interesting right so like i understand you're building these tools internally and you don't want to release them because they work so well but i'm telling you like it's the wholesale pickaxes to gold miners like right now you're mining the gold with your own tools like keeping it to yourself but i bet you the bigger billion dollar opportunity is for you to sell those things you're building for yourself to like the millions of amazon sellers yeah and there are ai solutions that have come out and some of them work and some of them don't yeah i mean it's it's still very much we're still kind of in the infancy as far as the industry on uh on the software tools even though it's you know it's been four years now what are you selling internally like you're using these amazon tools to sell what um well it primarily helps helps my agency team so we'll actually manage brands um private label and national brands through our ad agency physical products for physical products yeah exactly why i see and you'll use your internal technology you're not selling to help them get more efficient spend and your model there is a retainer exactly yeah because we continued to outperform what they could get elsewhere because we continue to develop the technology that's smart okay have you bootstrapped the company or raised bootstrap i love that yeah you're just using agency dollars to fund it right yeah yeah and that never really needed it i i know there's certainly areas where we could have uh grown faster had we been able to hire more people on our software team but um we just didn't just mainly lack of you know just out of ignorance you know as far as you know other options well you have limited obviously limited time so i get it um what's the team size today only on the software product just on the software we have five okay five people and where are they based um primarily well they're all over the place so united states uh australia and india how did you find your developers or whatever you're using in india and australia one of my partners actually had previously worked at fortune 500 companies with a couple of the programmers and so we brought them in and then our our last programmer that we hired was actually a friend of our lead programmer interesting interesting okay very good and then talking about some of the other economics here so what's churn on the product um we do have a kind of a high churn we're about 11 currently logo churn per month yeah oh man that is high why isn't it stickier well so part of that has to do with the pivot that i mentioned where we didn't change our technology faster than some of the other options that were out there that came out was more automation and machine learning and some of those and so um you know frankly we had people who were jumping the ship to go over to other solutions um there's quite a bit of churn within the seller community where people get you know get in they try to work the business and then they get out because they don't they're not successful and so part of that churn is just kind of a natural um seller's no longer in business yep yep nope that makes sense um are you driving any meaningful expansion revenue yet on their customers or no nothing to upsell yet no so what we've done is part of the part of the pivoting that we did when we launched the ad agency is we focused more on the feature set that are used by consultants and other agencies and so uh a lot of what we get is um we we continue to increase our average revenue um while focusing more on more even a smaller niche of target you know smaller smaller niche of users um that need more of the agency and consultant type uh features so and we're okay with that you know and what what's your as you look to kind of continue to drive growth what's your fully weighted calc look like to get a new 41 a month customer um you know most of it we do have um an affiliate program that drives a little bit that probably only costs us about three about two to three dollars per two and a half three dollars per user um just through affiliate program everything else has been that community kind of the sweat equity yeah yeah and it's hard to measure that yeah uh interesting okay very good that makes sense any plans to raise capital for the tool none no well i mean if you had an extra 100 grand would you just for the tool would you know where to spend it to drive growth um well i i mean i would probably put it more into my my software development team that i use uh for my agency you know i think that's probably that we're getting the best return off of that um yeah i mean not to be selfish you know to the users you know because we do actually continue to roll out new features to the users and uh some of them are you know still innovative um but i think with additional capital we would probably focus more on where we're going to get to get the higher return how because i'm trying to calculate your opportunity cost here right your agency i mean how much if you don't maintain i mean how past 12 months how much did it do in revenue well i can't share those because i do have partners didn't authorize that um but i know but north of a couple million as far as in the in the past year yeah just the agency yeah we're still considered you know fairly small as far as an agency well that's why i'm struggling with why you're holding on to that so tight right i mean the most successful you know we've been about 3000 these interviews i have a little bit of pattern recognition the the companies today the sas companies that are north of 100 million bucks in arr they all start off as an agency um hootsuite was an agency it was a 5 million agency that ryan then shut down and the tools he was using internally he started selling other people now it's 100 it's actually doing about 150 million bucks an arr but the thing where people get stuck is when they don't they hold on to the agency because that money is so nice and they never shut it off and go all in on the sas and you're in that critical moment right now right well i kind of went the opposite direction started off with the software and then yeah shifted over to the agency um you know because because of the clientele that we work with um on the agency side i think that probably you know makes it more lucrative for us you know because we did try to work with the top eight percent sellers on amazon that's you know it's kind of a high bar um you know again it's not like we haven't you know we we do continue to develop the software yeah that could be could a lot maybe more be done with the existing product i i agree yeah it's just a strategic question right it's like either have to you want to build the agency and build your tools only for yourself or do you want to sell the pickaxes to the gold miners yeah i mean a part of it is going to be like having the technology paired along with the agency um that would become a package deal at some point yeah yeah very interesting all right let's wrap up with the famous five number one what's your favorite business book uh built to sell number two is there a ceo you're following or studying you know i love uh i love the fact that elon musk just continues to push himself number three what's your favorite online tool um probably the one we use the most is gonna be probably trello number four how many hours of sleep to get every night probably five to six and what's your situation married single kiddos uh married with uh with a young child okay one kiddo married and how old are you i'm 49. all right brian take us home here last question what do you wish your 20 year old self knew um you know i've got really gotten into personality typing in the last year through ceo coaches so i would definitely tell my 20 year old self to recognize much earlier what um what my strengths and weaknesses are based off of my personality type it would have saved me a lot of headache guys understand your strengths earlier on then doubled down again as an agency doing well launched amazon ppc communities and now as a software to go behind it ppcscope.com has 646 customers paying 41 bucks a month 26 grand a month in revenue up from 21 grand about a year ago really though still focused mainly on the agency not the software it's kind of a side effect but it is bootstrap team of five full-time on it between texas and remote locations 11 logo churn per month which is obviously too high working on driving that down and again all the growth coming from these amazon communities that he is he's brian is curating brian thank you so much man for taking us to the top glad to be here thank you