How Printingforless Founder Andrew Field grew to $46.3M revenue and 300 customers in 2024.

hello everyone my guest today is andrew field he is the founder of pfl andrew are you ready to take us to the top let's go all right what is pfl and what how do you guys make money pfl started as the world's first ecommerce commercial printer way back in 96 since then we've expanded to become uh the leader of a new category that we call tactile marketing automation and in short we help people with marketing both in a more traditional sense of print and direct mail as well as we today have integrations with marketo oracle eloqua salesforce marketing cloud and salesforce sales cloud that enable people to leverage the rich behavioral data that resides in those systems of record to inform their most expensive touch and to have orchestrated true multi-channel marketing this is send a handwritten letter to this client once they hit this activation metric based off the marketo api it's tied into pfl uh it's not so much handwritten but we do dimensional mail we do boxes we do personalized notes we do pretty much anything that is legal to send uh through the mail or fedex very good now is it a sas platform or is it pay-as-you-go it's a sas platform for the software subscription and it's pay-as-you-go for what we call the consumption which is the box with the mug and the starbucks via is in it and the printed piece etc so when we just look at the sas side of the business over the past 12 months what percent of your revenue is actually just the sas versus the markup on the starbucks monk you said it's about a quarter for the sass and the rest of it is the consumption interesting okay um and are you what's the trend are you is it more sass or less sass over time well for our company as a whole if i divided it differently and if i said here's e-commerce print where you go to printing for last.com and configure your order upload your file that area is just right now being surpassed by our sas platform the tactile marketing automation interesting okay full let's just focus on your sas platform so on that platform what's the average customer paying per month i'm sure you have a bunch of cohorts but on average uh it's in the ten thousand dollars eight to ten thousand dollars a month and the reason for that is people don't start at that level of spend they end up there because we insist that they very carefully measure roi because we can rapidly become a six figure a year line item and when some cfo comes along and says what in the world do you spend 300 grand and who's pfl we want that marketer to be able to say well let me show you that that 300 grand we spent the last 12 months helped us close five million dollars of new business and launched the company in 97 is that right in 96 1996 very good and then fast forward to today how many customers do you have just on the sas platform on the sas platform we have about 300 customers okay and can i mean can i take 300 times 8 grand you know the average you said they each pay to kind of get your monthly recurring revenue which would be 2.4 million uh you did that was perfect except you didn't go times 12 for 12 months well that's because i was talking about mrr not arr oh yes that would be right in the ballpark of our mrr okay very good and again just on the south side yeah that's good what does growth rate look like on that so if you're doing 2.4 million today what were you doing about a year ago so we started in 14 uh we we started on the path of the famous triple triple double double doubles so we tripled in 15 uh tripled in 16. doubled in 17 and we're on track to double this year that's great okay so you were doing about 1.2 million a month about a year ago sure that's health that's really healthy growth very impressive um but by the way i also this space is very interesting to me because everything gets more digital like we started sending out let me see we started sending out this physical mailer which is essentially a magazine for me to be sas ceos and the amount of feedback we got on this like way larger than anything we've ever done digital so we're going all in on physical right just go the opposite of what the market's doing right yeah well you're actually right on trend because what people are finding is obviously if you can get a customer to take the next action in their journey with an email do it because email is you know a fraction of a cent a piece and you can do it at scale but it's for the people who are ignoring that the people who are heavily utilizing uh gmail spam filters or sanebox or something like that that that means they're just not interacting anymore or if they're just they have what we call digital clutter fatigue the different sources say people do between see between three and ten thousand marketing messages a day i mean your gas pump talks to you for crying out loud and so we try to help people cut through that digital clutter and get notice and drive business results and bootstrap review raised capital uh we bootstrapped for the better part of 20 years and then earlier this year we raised a 25 million round from goldman sachs okay so 25 million bucks into the company um and can i ask at a high level generally speaking valuation wise were you pushing four or five six sex are what were able to negotiate you can ask but we're not going there okay okay what would you generally find a healthy environment or not a healthy environment for sas valuations um i think it's a insane valuation for sas companies i think when you see these bay area vcs uh throwing you know 30 million dollars at a you know million dollar or a quarter million dollar mrr uh uh company you know most of them don't pan out yep yep no i agree i would agree with you okay good so 25 million bucks raised here recently i am curious though were you there had been discussions with goldman whether to value like a sas platform which typically have much higher multiples but it's only a quarter of your revenue i mean how did you have that debate about should you be like a e-commerce multiple or a sas multiple uh we kind of took a sum of the parts approach ah okay okay so 25 percent sas 75 percent blend it and take it from there you give it a shot very yeah no thank you all right so very good 96 launch talk to me about churn turns obviously critical what's your turn today our churn is modest um the reason is is as long as people are measuring their roi which we really work hard to get them to do they can see that it's working so essentially we think of it like this we sell you a box and maybe that box is 20 depending on you know trim levels 20 to 60 thousand dollars a year for the box but every time you put a dollar in the box the only question is are you going to get a 10 a 20 a 50 or 100 coming out so why would anybody not renew the 20 000 a year box when every time you put you know a dollar in 20 times that pops out i'll give you an illustration we had a customer well hold on hey sorry andrew before you do that what is the number though so what is your revenue churn per year today it's right about 100 net revenue retention okay good so everything you lose you're making up by expansion right okay and now give me the example so the example is we have a customer who's been with us quite some time called invoka it's a call intelligence software as a service based in santa barbara and they had an offer which i'm sure you've seen some of and the author said if you take a 30 minute demo we'll give you a 50 amazon gift card and they delivered that offer via email retargeting ads and random bdr voicemails what we added to it was two things a tactile or physical component and orchestration working through their marketo so today they oh and they had about a one percent response rate of booking demos against their mql list today they added to that they still warm them up with emails and retargeting ads and then instead of a random bdr voicemail a box shows up and it has the invoca label on it and you open it up and there's a 50 amazon gift card that we printed so it's fake and it's on a little tray with a pen and a calculator and a roi uh uh attribution card and you peel up the 50 amazon gift card and you think you just got 50 bucks and on the back it says if you want the real thing you have to do a 30 minute demo next 14 days and the psychologist tells people are 10 times as likely to take action due to fear of loss than desire for gain and in that moment they just lost 50 bucks then she's uh julia's a brilliant marketer she reinforces that with lost language instead of saying grow your revenue with invoca it says find out how much revenue you're missing out on with poor call intelligence and then within 15 minutes that box being delivered the phone rings and it's a bdr saying did you get the box can we talk about it yeah that's a great example one percent response rate to a 22 demo booking rate and their close rate stayed the same that's great i love i love that story that's helpful talk to me about the makeup of your team today what are you guys at total team size we have about 330 people our primary locations are livingston montana where i'm sitting 50 miles north of yellowstone national park we have an office in bozeman and we have a second headquarters in indianapolis indiana that's got okay nice so montana and kind of other remote locations and then as you're getting and adding new customers adding to your 300 today what are you willing to spend to acquire one of these new customers that are paying you call it eight nine ten grand per month it depends on which size because they aren't average i mean we have less than a 12 month payback period i guess okay that was my question yeah good so less than 12 months payback no matter what the cohort is right yeah and when you do spend money what are you spending it on is there direct paid spend or is it mostly an inside sales team or what it's uh we're conventionally structured we have uh we move from marketing captured leads that come from a variety of advertising and marketing things a lot of shows we just dropped about 200 grand on dream force for instance and then positive roi uh yeah all the previous dream forces this was our fifth all the previous ones ended up with a positive roi but because our sales cycle averages in the six months range it takes a while to see it yeah and and then we go to marketing qualified leads bdrs work them then it goes to account execs and then actually our biggest revenue opportunity is the customer success managers post close because people usually start with one program they want to run let's say it's a top of the funnel program and then we work with them to get a funnel acceleration program a renewals program and an events program up and going andrew do your cs people carry quota absolutely they do okay see this is a very interesting debate right now and there's not a good answer i've talked to ceos all in the 100 million kind of run rate they all have cs folks some of them carry quota some of them don't so yours do carry quota what percent of their of their kind of annual salary typically comes up being you know you know base plus the you know the upside uh well you're going to find this interesting they have a quota because they can they can grow the business organically without a new contract without new software and it's a consumption business that they grow their expansion through expansion but as a company philosophically nobody gets paid on a commission because we want one team working off of one number so everybody's variable comp is is based on company-wide numbers not individual performance because i don't really want to have a winning player on a losing team so how do okay let's say the whole team hits the goal how do you decide who gets what of the upside of the bonus uh that's sort of predetermined ahead of time it's part of people's uh salary negotiations and that sort of thing so they know what their upside potential is yeah but but they you know we don't know what percentage of achievement or over achievement by the way we're going to hit as a company gosh i would love to push harder here just learn this because again it's so new i i want to roll play with you for a second i'm just now joining your company i'm going to be on the cs team my ba i'm going to make this up my base is 40 grand maybe something like i mean is that fair is that kind of at a range that what you might pay for a cs person no we pay higher than that okay double uh sure a new person not a lot of experience uh well probably less than 80 but okay i wish i could hire anybody for 40. okay good so let's say let's say 60. in my head what am i looking at every day going i need to help the team hit hit that thing so i get a little extra bump is it like a is it a bookings growth target is it an ar target what is it uh it's based on a number of things we look for very hard company-wide at new business uh one of our three this quarter we change it up every quarter and there's usually three different uh metrics that were were attaching upside to um for the last several quarters one of those metrics has been net promoter score which i'm sure you're familiar with and um so to hit low goal on net promoter score is uh 75 score medium is 80 and high is 85. last quarter for instance we hit 81. okay so let's say the team hits 85. what give me an example of what money in my account that might look like because the whole team hit 85. uh i don't want to get into the specifics of salary but what i'll say i thought you were going to role play the actual when people say well what's the pay package look like here's what i tell them to maybe make it easier for all of your your listeners yeah what i tell them is i'm going to pay you as if you're hitting ote and one of three things is going to happen in six months either number one you're going to be crushing it and you'll get a big raise number two you'll be roughly hitting your ote your quota and you'll keep your job and number three if you're falling far short you're going to go down the road yeah yeah okay good that's helpful yes can we just lay that out for people and nate one thing that that does that weeds out people who aren't confident that they can sell because i don't think the biggest problem of having a sales person not hitting quota uh the biggest problem is not made up for by the fact that you're saving their bonus if they're on a straight sales commission the biggest problem is the wasted leads you have a lead that could have gone to a closer and instead it went to somebody who didn't see and you wasted all the effort that went into those leads yep andrew makes perfect sense let's wrap up here with the famous five quick answers here number one what's your favorite business book um business is a calling number two is there a ceo you're following or studying well i look at a lot of different ceos i watch i watch uh elon of course just out of sort of fascination and we have a very tight partnership with salesforce and i'm always looking at benioff because i think he's a visionary moving forward number three what's your favorite online tool for building a business well we're salesforce customer we're uh we use marketo very heavily we have we have a pretty advanced implementation of of marketo and personally i'm a big fan of evernote okay number four how many hours of sleep to get every night i shoot for seven and a half they say sleep comes in 90 minutes sleep cycles is that what you get seven and a half yeah pretty well okay and what's your situation married single kiddos um been married for 35 years this december no kids no kids that's great and how old are you um i'm 59 and if you if you want to say i might have one kid come here lucky right here there you go oh very good all right and last question here what do you wish your 20 year old self knew uh how hard this was going to be i probably would have chickened out guys it's probably harder than you think again pfl uh launched many years ago 1996 turned on a sas model in 2014 uh now has three how about 300 customers on that paying eight grand a month so 2.4 million bucks per month there in revenue obviously multiplied by 12 to get ar about 28 million just on that line of business that's about a quarter of their business again helps you basically do tactile marketing right so sending out physical objects related to your other online marketing flows whether it's a marketed integration or sales force they just raised 25 million bucks from goldman sachs they are about doubling year over year so that 2.8 right now our 2.4 today is up from 1.2 million a month just about a year ago they've got a team of about 330 people in montana and other remote locations andrew thanks for taking us to the top thank you take care