How Rapidfunnel CEO Patrick Shaw grew to $3M revenue and 20K customers in 2024.

hello everyone my guest today is patrick shaw he's a lifelong entrepreneur who has successfully built multi multiple companies and sales forces always with an interest in leveraging technology to improve the process energetic and inventive patrick is passionate about people's ability to complete change completely change by changing the story they tell themselves he originally created the ideas behind his current company rapid funnel to help his own sales force they worked so well that it spawned the idea for a rapid funnel the name of the company today patrick are you ready to take us to the top i am nathan but my mic just changed i think so all right can you hear me you sound you sound great on our end okay all right we're good then good so tell us about the company what does it do and how do you make money um you know it was i was scratching my own itch if you will i had a large um independent insurance group and i was always looking for ways to get them more involved in telling the company story you know sharing the story making it easy making it effective and um so we built a bunch of tools and you know lots of iterations later but ultimately what we do is we gamify prospecting so we create incentives around individuals of any company whether it's a franchise direct sales businesses around individuals telling that company story more easily and walk me through so let's say i have a sales force of five people i'm using you what will they see on a daily basis is it an app they have installed or how will they play the game yeah exactly they have an app that they download um there are different what we call group codes so different divisions may have different resources in the app and they may even have different contests and rewards built around that but you know the idea is if a company could take 25 of their revenue of their advertising budget and they could redirect it into their own people one is that's a win-win that those dollars come back to the company and who better to tell the story than selling employees to believe in what the company already does so they just they bump into somebody and i say hey nathan listen um you know i i you got this car over here you need your brakes done i got an employee group code i could send or an employee coupon code i could send to you it's actually my employee discount you know if i send it over to you and you end up using it you walk in you get your discount i get recognized by the company it's a win-win that's interesting so just to be clear is this a way to basically turn every employee into a sales person or is it more specifically for the sales team no it's probably the first but obviously it's highly leveraged by sales teams i see okay and what are people paying uh how what do they pay you on average per month for this you know we have a few different we have a few different models um but but also to answer that by the way that might be a sales call right you got to get your you got to get your reward it's um you know ultimately it's going to range you know we're dealing with a lot of big companies so so our largest is about 16 000 users you know they're paying a few dollars a user right and if it's a small company um of 10 employees and it's a business that might pay around 300 bucks a month yep is that would you say like 300 400 bucks a month is a fair average i know you have outliers but a small company with 15 employees yeah yeah okay very good and when was launch year um we were we were locked in with one company so we started selling about seven months ago and we've been in existence almost three years got it that's good so what so it sounds like you launched late 2017 but you had two years before that were you just doing like development or engineering you had no product at that point how are you supporting yourself well we had we had one company that was footing the bill i had i i was independent with this insurance group so i used it myself and then the company came to me and basically said hey we'd like to buy the intellectual rights i said no you know i'm not into that but but um but i'll consult you and you can build it and i wanted them to succeed i wanted them you know because honestly i mean as an entrepreneur i've always been an entrepreneur this was a big project and i thought you got the money you got the means you do it and they spent close to a million dollars and it was an utter disaster and so then i went back to the drawing board you know i'm like well this is bigger than i thought and i we had one round of private equity and uh so we so we spent the next year and a half in development you raised a big round of private equity or the parent company had a well i did personally i did i had a friend in private equity and and i told him the story and i was looking because this was a new realm for me so i was kind of looking for some advice and counsel and i actually offered them 10 just to help me through the process and they said well how about 20 and we'll fund you how much do they give you 300 000 okay and is that like debt or is that just pure equity no that was pure just equity no payback nothing else and they've offered a lot more now we've had a lot more offers since then but now we're self-funding and it's going great we're dealing with large enterprise level companies um so 300 is all you've taken in that's all we've taken yeah that's great and how many customers have you scaled to now today um individual users is about 50 000 downloads and paying subscribers is 20 some thousand something like that and those are seats across how many logos are those seats 23 companies 20 oh wow so you're selling you're selling big plans these are like bulk this is an enterprise sale bulk deal kind of thing yeah right now i mean i think our big play is the small business owner but but that you know it takes us almost as much work to unload upload uh or on board a small business owner as it does a company with 5 000 users yeah yeah and remind me what did you say i know you said each business might pay kind of 400 bucks per month on average what do you mean listen that's a new space we're going into the the space we're in right now they're going to spend you know tens of thousands i see yeah and what did you see when you said a few dollars per seat i mean we're talking like two dollars or 20 dollars well we also have a so we go to um direct sales as an example because i spent a lot of time in that space um of the direct sales industry where i had independent distributors my happy to be in the insurance space but but um we can go to them and i can find a field leader and we have a freemium model we say just try it and then the individual user pays 14.95 a month 14.95 a month they get all their resources all their videos audios everything's trackable all the way to full closed loop conversion analytics on business analytics on everything we can tell that individual user who their hottest prospect is yeah my prospect used six months ago and you're checking stuff out all of a sudden because you were the right person but it was the right wrong time all of a sudden you start checking things out and we're and the system is telling me hey nathan is checking stuff out i call you up i'm like hey nathan you're like yeah you know i just watched one of your videos i'm no kidding yeah that's great moment moment in moment marketing it works so give us a sense of give a sense of how you're doing today so last month what was total revenue we're killing it right now we just did our first kind of our our you know coming out party at an event called a mp and um it's american network marketing professionals association so we did this big event and we had some icons in the industry we've done 20 demos in the last two and a half weeks and we're closing probably 70 percent of those i mean there's just a lot of value to them and there's nothing like it in the space so so that's where we're at i mean we're just going fast that's great look growth is a good thing can you give me the number what'd you do the past the past month we're just shy of a million dollars in annual revenue right now okay good so you're doing about 80 grand a month currently yeah yeah that's a great place to be seven months in that's really impressive yeah well thank you i appreciate it and you know look you know how it is i mean we've also there's there's the two years before that and there's a year and a half of development before that so so there's no overnight success stories but but uh but we're excited to finally be selling that's that's the fun part right where you're finally like okay you know we've got 20 uh 19 full-time developers we're in eight different countries um what's the full team size the whole team is completely distributed how many though pretty cool 27 27 people all remote that's great yeah that's good and then look going back to your percy price if you got 50 000 or i think uh yeah i think you said 50 000 20 000 paying right it's about four bucks a seat right to get your 80 000. yeah a lot of those big bigger enterprise right yep yep that's great tell me you know a lot of times if this kind of price point churn is an issue what's your churn today and what are you doing to mitigate it all i mean we're not doing squat and i can't wait until we do a ton more right but i think we've been fortunate in that our users already have a reason of their own they're trying to build their own businesses they're trying to get their own company's story told and so and they're loading all we have a full-blown you know crm so we're not competing in that space but we had to have a crm so they've got all their contacts they're talking to people they're using the app every day so we we haven't we haven't had a single month of negative you know now that's new customers coming in and i don't know all the churn numbers we're using profit well and trying to get a better handle on some of that but it just hasn't been an issue and you know well let me let me uh patrick let me ask a different question what are you willing to pay to acquire one of these customers um maybe think about the kickbacks you give people that sell for you well i mean it's a sas model so there's a ton of margin we just haven't done any kind of pay click or anything so like what would i spend i can tell you i would spend right now for a 14.95 a month user um i would spend 30 bucks in my head yep because you get a two month payback period there yeah we do different things like we just did this event we spent you know uh five figures to be at that event and you know so so they're staying there we're willing to spend money but honestly we just haven't calculated a lot of that right now we're focused on value we're focused on product and now we're finally focusing on sales that's good it makes a lot of sense are you are you raising additional capital right now we don't want to raise it well i'd like to see if we can in turn complete you know we can fund internally at least until we get to a place where it's it's on our terms and not theirs are you profitable right now oh yeah that's great that's good very good okay let's wrap up here patrick with the uh the famous five number one what's your favorite business book oh um you got a lot there i see dude man i mean i don't know what's that one on your desk right now under your disciplines of execution i love traction i think for other i think for other sas model businesses uh this traction tool has been an absolute gem for us they have a web-based platform what's the website um i don't even know what their website is but it's traction it's gino wickman and this is the book and on it from a business perspective that thing has been and they have a sas model they have a sas model a third party developed it that we do all of our our l10 our executive l10 meetings and all our meetings in the company and so it's incredible accountability and training and tracking and all that good stuff so that's one of my favorites and then four disciplines of execution really represents what rapid funnel is all about so i'd say those two books are meaningful in this conversation number two name and ceo you're following are studying right now um lots of them i i do love um jeff bezos just because you know i was reading his his annual stock reports or whatever you call him and just it's all value it's just like creates so much overwhelming value that i think so many of those other things like churn tend to work themselves out you want to get better at them absolutely but but if you can just figure out how to create overwhelming value to the individual user then uh then the gates are open number three what's your favorite online tool for building your business besides your own uh it's traction yeah okay good so there's a software i mean we live in google docs and all that yeah number four how many hours of sleep you getting every night uh eight at least and patrick what's your situation married single kiddos i got three kids and uh they are all rocking i've been married 20 some years and great and how old are you i am 50 years old 50. great and now last question what do you wish your 20 year old self knew oh to relax a little and uh maybe maybe go and take two or three years before i jump in the fire and you know patience and and focus will allow you to achieve all that you want without getting too worked up over guys there you have it patience he founded a rapid fire back in 2017 before that was kind of doing it inside of a much larger company he had a private equity friend that invested in the company 300 thousand dollars for a call at 10 20 today they're serving over 20 000 individual seats across 23 logos each seat about 4 bucks so 80 grand per month in revenue today it's too early to really look at churn and cac numbers but generally speaking the numbers are working out i've got a team of 27 people uh based totally remote all around the world profitable which i love again helping you gamify the prospecting part of your business and your sales team really turning your entire employee base into a into an incentivized sales team patrick thank you so much for taking us to the top nathan i appreciate it enjoyed being with you love what you're doing with latka it's uh it's awesome and continued success my friend