How Rallymind CEO Mark Michael grew to $2M revenue and 113 customers in 2019.

hello everyone my guest today is mark michael he is running a company called dev hub a data powered experience i.e landing pages all right mark you're ready to take it to the top yep so what's the company do uh specifically and maybe can you name a customer using you and how they're using yeah uh okay so basically it's a platform but we always say people are using us to build 10 to 60 000 experiences i.e today's websites microsites and websites you don't need us if you're building under 10 you need us if you're building more than 10 all the way up to 60 000. uh one of the customers that we work with is winstar cruises they use us to roll out about 400 uh port let's say specific pages as part of the seo and hybrid sem play you have search engine marketing yeah yeah there's a lot of people doing this they'll launch like thousands of landing page every single month relative to long tail keywords and if you do it at scale you can actually start to get a lot of organic traffic that way and we're seeing also like a lot of demand gen kind of companies for like the enterprise uh one right here in our backyard in seattle uh rolled out about eight hundred pages is that behind language but uh behind me like well i guess yeah behind us there's a couple companies right there's amazon one block over there's another one across the pond microsoft uh one of those two rolling out about 800 pages for like six different languages obviously pumping their cloud services yep so what are i mean generally speaking i'm sure you have a lot of different customer cohorts here but on average what's the customer going to pay you per month or per year to use the technology uh it's between about 20 well between eight thousand twenty four thousand and then fifty thousand plus uh a month or a year a year okay so i mean is it fair what would you say hold on sorry sorry uh the fifty thousand ones are monthly well screw it per month it's anywhere between uh 499 bucks a month all the way to about 50 000 a month okay yeah so i mean that's obviously a massive range so would you say what is a fair average like five grand a month 500 a month well i would say it's closer to probably 15. 15 grand a month okay interesting when did you launch the company what year i mean technically the company launched in uh september 2007. okay and what's the difference between rally mine and dev hub are they the same company that's really what i wanted thank you thank you thank you so much so basically like dev hub to us like to us a website or landing page or micro site at the end of the day the engine that generates that all is the dev hub technology but like it's the craziest thing i think sometimes we get caught up in like this terminology aspect where someone's like well we want to build location pages well what's the difference between like a location page and a landing like i mean it's just it's legit the same thing but it's all semantics and what people are calling it so when we simplified kind of we basically built a product site called it rally mine it made that focus around landing pages and all the uses of landing pages especially at scale then that's what kind of turned everything over in the last two years but it's all the same company it's all i mean it's all the same technology too okay so so today how many customers are you serving 113 that we count okay 113 now can i take 113 times 15 grand a month to back into your mrr i would go it's a little bit higher just because there's a couple that are in the 50 000 range that really skew that um but just i mean between you and i slightly under 5 million bucks in terms of ar yeah yeah so okay but one of those numbers then is very different right so 113 customers at 15 000 rp a month is 1.6 million a month in revenue you're at 5 million which is about 450 thousand dollars a month so is your problem lower no yeah annual not not monthly okay got it yeah so you're more at like yeah that's more like okay well even if that's so fifteen thousand dollars a year is actually annual right call it fifteen hundred bucks uh a month that would put you at some like 150 grand a month you're north of that yeah so just to be clear like last month what did you do right around 200 000. okay so you just told me 5 million run right 200 000 a month is not 5 million run rate no it's under 5 million okay under 5 million got it so you're doing essentially two today where were you exactly a year ago do you remember just call it one okay so you've about essentially more than doubled your year yeah where's most of that growth come from new customers or expanding wallet share on existing customers it's a it's a perfect mix of both okay so you have 50 percent of new customers adding to the revenue and then the other it's 50 upsell yep what are you upselling what's your most powerful upsell metric um i mean it's basically kind of what we call i guess new units added right so typically you know because we are white labeled right someone will roll us out with like say one huge national brand um and then they'll be like holy that worked really well we want to try this with our other two three four five six customers okay so when you when you kind of look at the cohort that signed up exactly a year ago what was annual revenue churn on that cohort annual revenue churn on that cohort i don't know what is your turn like two percent okay and we don't really like how do you measure that what so how do you measure that well those are like failed kind of onboardings like we have we actually haven't lost a customer once they've been with us for almost eight years okay so you're saying every one so what is the two percent churn then so have they given you a credit card and they stop paying via credit card yeah basically like we set it up they thought you know they wanted they think they're gonna crush 600 pages for this automotive brand whatever a month they only get to like 10 and they just it fails kind of in the onboarding system okay so they were paying they stop paying use about two percent of your of your revenue annually is that accurate in terms of turn okay that's fairly low i mean for for for this kind of thing are you priced too cheap um it's you know honestly i sometimes blame us for being in too deep you know like it was this year obviously things have gotten pretty nuts around here and uh we've had a couple people through our office and right over here on those are a couple dashboards up on the office big screens and like someone walked in and they saw that two percent one of our technically investors walked in and was like holy you know what you guys can do with that kind of churn you know and i was like no what they're like you can hire sales against that you can do a bunch of stuff i just we just never thought of it like we just i think we're just in too deep how much have you raised a date i mean like just under 2 million bucks okay so about to all equity or some of that debt uh i guess there was a little bit of debt but basically all equity okay like you raised a convertible note that converted equity or something no we did one of those you know sas kind of loan thing who'd you take it from lighter capital sas capital mark who'd you take the loan from lighter capital sas capital espresso there's a bunch of these firms i know it was lighter okay it was lighter so i mean you're being a bit hesitant there did that not work out how you thought it might i i don't know i don't know i i have like i mean it's i think it's a weird thing well it's becoming the reason i'm asking that it's becoming more popular i mean there's a lot of people using some form of debt now there are all kinds of different debt providers right so you have to get with the right you have to get the right deal right so if something didn't work well for you it is valuable for my audience to understand why it didn't work i know i know um like one day i'll kind of i i don't know listen trust me if you watch anything about me in real life like i'm pretty i live like right here right now you know um what was it was it a fixed was it a fixed interest rate mark or was it a percentage of revenue that you're paying back percentage of revenue okay somewhere between three and eight percent per month yep okay and was it a three to six year term uh yeah and repayment cap was something like 1.4 or 1.5 x of the total money you got yup okay and how much did you raise about 100 uh no about half a million okay about half a million so and what year was that 2000 and i believe 15 or six i think it's 2016. okay so did you are they off your i mean is that done now have you paid that back or shut that thing down uh almost okay are you looking to recap that with a new debt provider hell no okay um why do you say hell no the alternative is to take equity and take delusion no we make money okay then why why did that your if you're making money you were able to use that 500 grand to drive growth i'm just trying to figure out where the friction is okay i mean i mean again like i'll tell you this is for a certain segment of your audience right so you know we've been in business for let's say like i said about 11 years right um at the time we took it i guess closer to like eight nine right you raised money back then let's call it two million bucks you think you figured everything out you think okay this time when i get money i'm gonna i'm gonna what do most people say they're gonna raise money for to drive growth right and aka sales right and so like it's just not right like to me if i was someone in that realm i would say if you take that money pay yourself more because you're the one that can drive more sales than trying to figure that out with that uh so you what you're telling me is you took money and you didn't know how to spend it to drive growth that's your fault yeah i wish it was i bet you i bet you this the underside of most of those deals that they're they're all the same well the point is you can listen to grow your business you take money somehow you can either take dilution and raise an equity round you raise two million bucks or you can take debt the fact of the matter is you shouldn't do either if you don't know how to spend money to grow your company what i'm hearing you say is you do not know how to spend that 500 grand or grow your company i mean again i i think the person listening on the other end will know exactly what i'm talking about mark they won't that's why it's an interview show that's why i have ceos come on and share stories that's why i ask questions so if you're just going to assume that if you're going to assume everyone knows everything already we should end the interview now no you're good man so help give us something to learn from here you're being extremely vague it's not helpful at all was it just the fact that you didn't know how to spend that money to drive growth as fast as you wanted no i mean i think we picked the we could have technically picked i mean listen to me it's a longer conversation than a 15-minute thing but i mean basically i mean like i think one of the big mistakes that a lot of founders make is they bring in people that they think potentially can do a better job than they could have done at a very important part in their business and and that that guidance from those type of people in terms of their qualifications and what they think they can do to drive sales just doesn't pan out so then what do they what do they end up doing is probably going to do another round with another one of those companies and they go back and do another one and another one another one and they actually never get out of that cycle who is that you're talking about a sales higher that didn't work out no i'm talking about like they like my other kind of startups in that same position sorry mark i'm not following you at all here if you're saying you you thought you could bring someone in that would help you drive essentially growth and it turned out to be the wrong person the wrong person to take advice from they couldn't execute my understanding that correctly uh yeah i mean it was the wrong kind of couple people okay but those were hires that you made correct uh yeah so why is that reflective at all on the quality of lighter capital debt they weren't making hiring decisions you were a bad judgment of people and the people didn't work out yeah i can accept that well no i don't want you to accept it i'm curious if that's accurate was lighter telling you who to hire and you're basically mad that you took their advice no hell no hell no so i just don't think we actually needed the money at the time that we needed it okay got it so back to my initial point which was you took on capital that you did not need or know how to spend to drive growth that is at the crux of what this is i mean i think the crux of what this is is really like probably an own insecurity with me on my index probably one of the co-founders of this company and basically trying to bring in um like i always tell people like the two biggest mistakes i ever made one going to college two was you know bringing in other people to run this company at certain points where we just didn't actually need those people period but it was like my own security because even the way i'm talking with you you're not understanding what i'm saying like i always felt like that was kind of like a weird thing in the way i communicated um and so yeah but now since we've been running it i mean obviously we've been doing really well how many people are on the team today uh 13. okay and how many are engineers uh nine okay any quarter carrying sales folks uh me and one another okay so two folks um and then so when you look at your full weighted cack to get a new 1500 a month or 15 000 a year account what do you spend to get a customer um i don't know that okay uh what do you pay commission in terms of if a sales person closes a deal uh no cap they have to close seven deals before they start to reach those other kind of levels what other kind of levels uh basically whatever their um commission structure is yeah that's what i'm asking so are you talking like 10 percent commission's 20 what do you pay on in terms of percent commission it's like a it's like a point system okay i don't know how that works can you explain it i didn't put it together my other co-founder did okay so you don't understand how you pay your sales people uh i mean i just trust the math that he came up with well can you educate us as best you can on that math uh can i bring him in well no cause i mean we're running strong time you don't know i'm just i find it very skeptical that a 13-person team where you are also doing sales and you don't know how the other person doing sales is compensated i mean i just like i mean i know that they i mean i know what their base is and i know what they can make yep you know what quote do you set what quota do you set people out that you said they need seven seven seven deals a quarter okay so seven fifteen thousand dollar a year deals uh it's based on points because again there's different level i mean there's a fifteen fifty thousand dollar a month contract or there's like you know uh four hundred ninety nine dollar a month content yeah so how much how much new revenue do you want them to close each quarter or each month uh i don't know how much do you how much do you again seven deals you just said why it doesn't make any sense because they could be big or small so seven deals is the wrong thing so there's like a half point for like a smaller deal full point if it's this other deal if there's an onboarding cost that they get a point for if it's a higher on boarding because it's like a national franchise that we're migrating over it's all based on like that okay are you guys burning capital today are you breaking even uh no we're banking cash okay you're talking like 10 a month or more uh probably a little bit more okay so a little bit more than 10 a month if you're doing 2 million run rate today would be something like 16 or 17 000 new money in your bank every month is that right yeah yep okay pretty good um so are you planning to raise additional equity capital or no i don't know i mean we keep getting hit up all the time you know um i mean obviously you can probably tell from earlier in the interview like i'm not a fan of it um just a gender role um i i i don't know i think we have something pretty special here we'll see what happens uh okay good let's wrap up here with the famous five number one what's your favorite business book uh the everything store number two is there a ceo you're following or studying no number three what's your favorite online tool for building your company uh outreach dot io and number four how many hours of sleep to get every night i think seven and how old are you 37 37 what's your situation married single kids married but she's personally independent that's good and how many kids none no kiddos and last question what do you wish your 20 year old self knew what is what something you wish you knew when you were 20. uh that you're smart as so what would you say you're smarter than you think yeah i think everyone is i think it's just i think everyone is actually a lot smarter than me no i think there's a lot of people that think they're very smart and they're really not that smart at all and that gets them in a lot of trouble you know i know and then that's a whole different person in general i totally they gotta know yeah i mean you gotta you gotta know a little bit yeah well i think my audience right now is probably laughing hysterically on that note it will wrap up here rally mine helps you launch landing pages at scale 10 20 30 000 et cetera per month for seo purposes they're currently serving about 113 customers launched in 2007 doing a two million dollars in terms of run rate up from a million just a year ago they raised about 2 million bucks to date profiting about 17 000 per month to call it north of 10 ebitda margins nine people on their engineering team two sales folks 13 total people on the team 2 annual revenue churn no expansion yet 98 net revenue retention again as mark looks to scale the company mark thanks for taking us to the top thank you nathan