How Prospectify CEO Matt Ekstrom grew Prospectify to $300K revenue and 100 customers in 2016.

this is the top where I interview entrepreneurs who are number one or number two in their industry in terms of Revenue or customer base you'll learn how much revenue they're making what their marketing funnel looks like and how many customers they have I'm now at $20,000 per talk 5 and6 million he help on global domination we just broke our 100,000 unit sold Mark and I'm your host Nathan lka okay top tribe this week's winner of 100 bucks is Dustin Goodwin he's in the HR industry specifically in the software as of service space looking to increase his Revenue so congratulations Dustin for your guys' chance to win 100 bucks every Monday on the show to build your idea simply subscribe to the podcast on iTunes now and then text the word Nathan to 33444 again text the word Nathan to 33444 guys if you want an easy tool to use to book your meeting back to back to batch your calls to make sure people actually show up when they schedule you want to use aity scheduling it's what I use for all my podcast interviews at Nathan lat.com schedu I'll tell you more about how I use it later on in the episode Nathan lka here this is episode 553 coming up tomorrow morning you'll learn from Eric Burman of branded ties he's Jack Canfield's internet engine and they did 4 million in 2015 revenue on Pace to do 5.2 in 2016 good morning folks Nathan Latka here our guest today is Matt extrom he is the one of the founders of prospec toy. and formerly he co-founded hiring solved he's in charge of all things revenue for prospec toy a promising funded sales intelligence platform Matt are you ready to take us to the top sure all right man give it to us so what does prospect toy do and how do you guys generate Revenue um to prospective a B2B uh SAS product for sales people people particularly at the top of the funnel that helps people Prospect um based on their ICP in a quicker way um just helps them save time um and really our goal is you know longterm is to be able to to um scale personalization from a sales standpoint and revenue model how do you generate Revenue uh would generate Revenue by uh so far just using our product but yeah we're a month month-to-month subscription um credit based if you're doing the prospecting along with uh our upcoming company search okay and what is the uh in our research on our team was doing this when we went to your pricing page we kept getting a 404 error I don't know if that was intentional or not but what what does your ka's pricing look like oh really um this the first I heard of that that's you guys you have you have like a beautiful homepage and then I click on pricing and I click on the plans thing across the top I'm like what the hell's going on it's 404 so I don't know what's going on oh that's where um I'll have to check that out but if your revenue's dropped in the past two days that's why so it's a $40 a month for 100 credits credits are verified um email addresses meaning we have a very very high confidence level that it will not bounce uh and we go all the way up to custom pricing and all that but uh the ones you can buy on the site are $40 then $190 then $490 and then $975 per month and if we average that out Matt what's kind of the average customer paying you per month 352 okay okay good so you know that you're tracking these numbers huh absolutely we've been raising money so that's why you've got your you've got your funding deck right in front of you right uh no but I have those details memorized for sure what is the give us some of the history what year did you launch the business in uh so we we launched it this year uh in February of 2016 we did us we did a short beta in January um but my co-founder and I really uh started working on it aggressively about November of last year uh as far as building it and what is the you give us a sense of kind of traction now how many customers are you working with uh we're you know we're we're up there we have over a 100 people using it daily um I haven't looked at the customer numbers in the last week um but to give you an idea we have you know about 100 people that we can count on being in in the app on a daily basis are those customers though or those free users oh no definitely I'm only counting customers okay got it so you have about a 100 customers and is it easy I mean can I just do $352 RP times 100 customers to get an MR of about 35 Grand that would be users not necessarily customers so some of them have um you know uh multiple team members but we're we're over you know we're pretty well over 20k mrr okay but below 35 yes okay good so so you're between 20K and 35k you're raising Capital where are you based geography wise uh Phoenix oh Phoenix interesting what's the f I mean are you trying to race from local Angels or you going to the valley or New York or what uh for this round we actually just closed um our first round um it's not been made public yet but uh it's local Angels uh it's a Million Dollar Round um post there you go there you go baby breaking news a million raised sounds like you were going to say four million pre five million post right yeah and that was an equity round Matt yes it is why did you decide to do an equity round instead of a convertible note up front um I I think I think it was just timing and uh what what the local Angel scene was was more interested in especially at that at that size what walk us through cuz people always curious kind of negotiations around the valuation cuz it sounds like you're doing you know call it 25 Grand in Mr right now so AR what is that 300K so if you've got a 4 million preone valuation I mean that's a great great well you know 10 11x I'm sorry can you hear sorry let me correct you yeah yeah I can hear you I'm sorry uh let me correct you I I meant to say four million post so post okay so 3 million free y got it yes sorry about that it's still pretty healthy I mean you did a good job negotiating valuation if your goal is to maximize valuation what did you use besides Revenue to of argue for a higher valuation uh you know several things uh just the the trajectory of it um just the amount of growth month over month that we did really we got to 20K Mr when it was just me and me and Noah my co-founder that was it and we were overwhelmed uh at that point with customers and users on a daily basis trying to do support trying to do everything that a business needs to do um including continuing to scale growth so I think they saw that the fact that we hadn't put a dime into marketing other than using our own Tool uh eating our own dog food so to speak so I think a lot of that played into it so what would you do in prospec toy to get prospec toyed customers would you I mean I imagine you had to put some inputs like B2B SAS companies that just raised money with Team sizes of x amount and then to get the leads what were some of those inputs you used uh really that that's a very interesting question because uh we're we're just about to Launch our company search which will include about 10 to 12 million companies uh starting in the US uh where you can do that sort of hyper targeting on the typo company um which you know and then be able to prospect people on top of that um but no we we we had to you know go without those sort of specifics I guess so to speak um yeah it was more more uh using Google to really hyper Target um you know certain individuals and like give me an example of an individual you targeted um I think we saw our most success you know from a from an outbound standpoint um uh just looking for terms like sales hacker uh things like that um but our overall our customer base is pretty diverse so we're really trying to still figure out you know who uh who our uh ideal customer profile really is MHM got it what is the and I think it's and I think it's changing I'm sorry with the company search that we're going to release we're going to appeal to probably larger teams than we have in the past have anyone who started paying you over the past 12 months stops paying you have you lost anybody of course yeah I think every company does uh it's less than 5% sure annually or monthly but uh alt together annually but you know most of them were you know we had a couple Wealth Advisors as an example that came in bought our biggest package prospected you know got 5,000 people or so um out of it and then realized oh I don't need to do this anymore so that you know not necessarily people we targeted but Word of Mouth got around hey there's this new tool that will help you um and I think they got more than they bargain for how do you man that's I I hear this come up all the time when I talk to email Hunter TW fur any of these comp data ni mattermark crunch Bas it's like people go in they download the ex they pay the one time you know month they download a crap ton of data they save in their Excel sheets and they cancel I haven't talked to anyone yet that's really figured out how to extend the lifetime values of these customers by doing things kind of over time that get them to keep paying how are you going...