Founder Interview
How RapidFunnel Reached Just Shy of $1M in Annual Revenue Across 23 Enterprise Customers (Interview with Patrick Shaw)
- Interview Date
- June 13, 2018
- Interviewee
- Patrick ShawFounder and CEO
Company Metrics at Interview Time
Annual Revenue (2018)
Just shy of $1M
Paying Companies (2018)
23 companies
Team Size (2018)
27 people
Total Funding Raised
$300K
Historical Snapshot
These numbers were reported by Patrick Shaw during the interview recorded in June 2018 and are a historical snapshot, not current figures. See RapidFunnel’s current numbers.
Key Takeaways
- 01RapidFunnel was just shy of $1M in annual revenue at the time of the interview in 2018
- 02The company served 23 enterprise-level companies with more than 20,000 paying individual seats
- 03Individual users on the freemium model paid $14.95 per month per seat
- 04The company raised a single $300K equity round from a friend in private equity, giving up 20%
- 05All 27 team members worked fully remotely across eight different countries
- 06RapidFunnel was profitable at the time of the interview
- 07Patrick did not know all of RapidFunnel's churn numbers yet: it was using ProfitWell to get a better handle on them, and he said churn just hadn't been an issue
- 08Patrick said that, in his head, he would spend $30 to acquire a $14.95-a-month individual user; RapidFunnel had not run any pay-per-click and had not yet calculated a lot of its acquisition costs
- 09RapidFunnel gamifies prospecting by incentivizing employees to share company stories through a mobile app
- 10RapidFunnel had done 20 demos in the two and a half weeks before the interview, and Patrick said it was closing probably 70% of them
Company Metrics at Time of Interview
| Metric | Value | Source |
|---|---|---|
| Annual Revenue (2018) | Just shy of $1M | Founder interview, June 2018 |
| Paying Companies (Logos) (2018) | 23 companies | Founder interview, June 2018 |
| App Downloads (2018) | About 50,000 | Founder interview, June 2018 |
| Paying Individual Seats (2018) | More than 20,000 | Founder interview, June 2018 |
| Price per Individual User (2018) | $14.95 per month | Founder interview, June 2018 |
| Total Funding Raised | $300K | Founder interview, June 2018 |
| Equity Given for Funding | 20% | Founder interview, June 2018 |
| Team Size (2018) | 27 people | Founder interview, June 2018 |
| Countries with Team Members (2018) | 8 | Founder interview, June 2018 |
| Profitable (2018) | Yes | Founder interview, June 2018 |
| Close Rate on the Last 20 Demos (2.5 Weeks, 2018) | Probably 70% | Founder interview, June 2018 |
| Demos Completed (2018) | 20 demos in 2.5 weeks | Founder interview, June 2018 |
| Largest Customer User Count (2018) | About 16,000 users | Founder interview, June 2018 |
| Would Spend to Acquire One $14.95-a-Month User (2018) | $30 | Founder interview, June 2018 |
Growth Breakdown
Revenue
At the time of the interview, RapidFunnel was just shy of $1M in annual revenue. Patrick confirmed this figure directly when asked for a revenue number, describing the company as growing fast after beginning to sell broadly approximately seven months prior.
Customers
The company had 23 paying companies on its platform, with more than 20,000 individual paying seats and about 50,000 app downloads. The largest single customer had approximately 16,000 users, reflecting a strong enterprise focus.
Team
RapidFunnel operated with 27 people working fully remotely across eight countries. Patrick described the team as completely distributed.
Profitability and Funding
The company raised a single $300K equity round from a friend in private equity in exchange for 20% of the company, and had taken no additional outside capital. Patrick confirmed the company was profitable at the time of the interview and was focused on self-funding further growth.
Growth Strategy
Live Events and In-Person Demos
Patrick credited a major industry event, the American Network Marketing Professionals Association conference, as a key growth driver. The company spent five figures to attend and had done 20 demos in the two and a half weeks before the interview; Patrick said it was closing probably 70% of those.
Freemium Model for Individual Users
RapidFunnel offered a freemium entry point where individual users could try the app and then convert to a paid plan at $14.95 per month. Patrick described it through the direct-sales industry, where he had spent a lot of time: RapidFunnel goes to a company with independent distributors and finds a field leader there.
Enterprise and Direct Sales Focus
At the time, RapidFunnel was dealing with large enterprise-level companies and direct-sales organizations, and Patrick said the companies in its current space were spending tens of thousands. Small business owners were a new space it was going into, and he noted that onboarding a small business owner took almost as much work as onboarding a company with 5,000 users.
Turning Employees into Brand Advocates
The core product mechanic incentivized every employee, not just the sales team, to share the company story through the app. Patrick described this as redirecting a portion of the advertising budget back into the company's own people, creating a win-win for both the company and the individual.
Moment-in-Time Prospect Intelligence
RapidFunnel's platform tracked prospect engagement and alerted sales reps when a prospect was actively viewing content, enabling timely outreach. In Patrick's example, the system tells him an old prospect is suddenly checking things out, so he calls just as the prospect has watched one of his videos.
Best Quotes
“We're just shy of a million dollars in annual revenue right now.”
“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. They said well how about 20 and we'll fund you.”
“So we build a bunch of tools and lots of iterations later, but ultimately what we do is we gamify prospecting.”
“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.”
“It's a SaaS model, so there's a ton of margin. We just haven't done any kind of pay-per-click or anything, so what would I spend? I can tell you I would spend right now for a $14.95 a month user, I would spend $30 in my head.”
What Happened Next
At the time of this interview in June 2018, RapidFunnel had been selling for about seven months, and Patrick said it was now finally focusing on sales and wanted to keep funding itself internally rather than raise more capital. The numbers on this page reflect what Patrick reported during that conversation and are a point-in-time snapshot. Visit the RapidFunnel company profile on GetLatka for current figures.
View RapidFunnel’s current profile and metricsFull Transcript
Chapters
- 0:00Introduction to Patrick Shaw and RapidFunnel
- 0:38What RapidFunnel Does: Gamifying Prospecting
- 1:20How the App Works and What Customers Pay
- 3:20Founding Story and Early Development History
- 4:25Private Equity Round and Funding Details
- 5:09Customer Count and Enterprise Scale
- 6:00Freemium Model at $14.95 a Month per Individual User
- 7:03Revenue, Growth and Recent Sales Momentum
- 8:21Team Size and Distributed Workforce
- 8:42Churn and User Retention
- 9:40Customer Acquisition Cost and Willingness to Spend
- 10:33Profitability and Capital Strategy
- 10:48Famous Five: Books, CEOs and Tools
- 12:56Advice to His 20-Year-Old Self: Relax and Be Patient
Introduction to Patrick Shaw and RapidFunnel
Nathan Latka
00:00Hello, 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, RapidFunnel, to help his own sales force. They worked so well that it spawned the idea for RapidFunnel,
00:25the name of the company today. Patrick, are you ready to take us to the top?
Patrick Shaw
00:29I am, Nathan, but my mic just changed, think. Alright. You hear me? Hold You on one
Nathan Latka
00:35you sound great on our end.
Patrick Shaw
00:37Okay. Alright. We're good then.
What RapidFunnel Does: Gamifying Prospecting
Nathan Latka
00:38Good. So tell us about the company. What does it do and and how do make money?
Patrick Shaw
00:42You know, was I was scratching my own itch if you will. I had a large independent insurance group and I was always looking for ways to get them more involved in telling the company story, you know, the story, making it easy, making it effective. So we build a bunch of tools and 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,
01:13direct sales, businesses around individuals telling that company story more easily.
How the App Works and What Customers Pay
Nathan Latka
01:20Mhmm. And walk me through. So let's say I 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?
Patrick Shaw
01:28Yeah, exactly. They have an app that they download. 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
01:53company and who better to tell the story than sell it employees to believe in what the company already does. So they just they bump into somebody and I say, hey, listen, know, I You got this car over here. You need your brakes done. I got an employee group code I could send to 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
02:19you end up using it you walk in you get your discount I get recognized by the company it's a win win
Nathan Latka
02:25That's interesting. So just to be clear, is this a way to basically turn every employee into a salesperson or is it more specifically for the sales team?
Patrick Shaw
02:33No, it's probably the first, but obviously it's highly leveraged by sales teams.
Nathan Latka
02:38I see. And what are people paying... What do they pay you on average per month for this?
Patrick Shaw
02:42You know we have a few different we have a few different models, but but also...
Nathan Latka
02:47You should answer that by the way,
Patrick Shaw
02:48that might be a sales call. Right?
Nathan Latka
02:50You gotta get your you gotta get your reward.
Patrick Shaw
02:53It's you know ultimately it's gonna range you know we're dealing with a lot of big companies so our largest about 16,000 users you know they're paying a few dollars a user.
Nathan Latka
02:53Yep.
Patrick Shaw
02:53Right and if it's a small company of 10 employees and it's a business that might pay around $300 a month.
Nathan Latka
03:12Yep. Is that... Would you say like $300, $400 bucks a month is a fair average? Know you have outliers, but...
Patrick Shaw
03:17For a small company with 15 employees. Yeah.
Founding Story and Early Development History
Nathan Latka
03:20Yeah, okay very good and when was launch year?
Patrick Shaw
03:24We were locked in with one company, so we started selling about seven months ago and we've been in existence almost three years.
Nathan Latka
03:34Got it. That's good. So what so it sounds like you launched late twenty seventeen, but you had two years before that. Were you just doing like development or engineering? Had no product at that point. How were you supporting yourself?
Patrick Shaw
03:44Well, we had one company that was footing the bill. I was independent with this insurance group, I used it myself. Then the company came to me and basically said, Hey, we'd like to buy the intellectual rights. I said, No, I'm not into that, but I'll consult you and you can build it. And I wanted them to succeed I wanted them, you know, because honestly, mean as an entrepreneur I've always been an entrepreneur This is a big
04:06project and I thought you got the money you got the means you do it and they spent close to 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. We had one round of private equity and so we spent the next year and a half in development.
Private Equity Round and Funding Details
Nathan Latka
04:25You raised a big round of private equity or the parent company had a...
Patrick Shaw
04:29No, 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. They said well how about 20 and we'll fund you.
Nathan Latka
04:48How much did they give you?
Patrick Shaw
04:50300,000.
Nathan Latka
04:51Okay and is it like debt or is that just pure equity?
Patrick Shaw
04:53No that was pure just equity, no pay back, nothing else and they've offered a lot more and 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.
Nathan Latka
05:06So 300 is all you've taken in?
Patrick Shaw
05:08That's all we've taken, yeah.
Customer Count and Enterprise Scale
Nathan Latka
05:09That's great and how many customers have you scaled to now today?
Patrick Shaw
05:12Individual users is about 50,000 downloads and k. Paying subscribers is 20 some thousand, something like that.
Nathan Latka
05:21And those are seats. Across how many logos are those seats?
Patrick Shaw
05:2423 companies.
Nathan Latka
05:2520? 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.
Patrick Shaw
05:31Yeah right now. I mean I think our big play is this small business owner, but but that you know it takes us almost as much work to unload upload or onboard a small business owners. It does a company with 5,000 users.
Nathan Latka
05:45Yeah. Yeah. And remind me, what did you say? I know you said each business might pay kind of $400 per month on average.
Patrick Shaw
05:52Did say? Listen, that's a new space we're going into. The space we're in right now, they're gonna spend, you know, tens of thousands.
Freemium Model at $14.95 a Month per Individual User
Nathan Latka
06:00I see. And what did you say when you said a few dollars per seat? I mean, we're talking like $2 or $20
Patrick Shaw
06:05Well we also have a so we go to direct sales as an example because I'd spent a lot of time in that space of the direct sales industry where I had independent distributors might happen to be in the insurance space but but 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. They
06:32get 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 prospects you 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 sudden you start checking things out and we're and the system is telling me hey
06:56Nathan 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.
Revenue, Growth and Recent Sales Momentum
Nathan Latka
07:03Yeah. That's great. Moment, moment, in moment marketing it works. So give us a sense of give us a sense of how you're doing today. So last month what was total revenue?
Patrick Shaw
07:11We're killing it right now. We just did our first kind of our coming out party at an event called ANMP. 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% of those. I mean there's just a lot of value to them and there's nothing like it in the
07:38space. So that's where we're at. Mean we're just growing fast.
Nathan Latka
07:42That's great. Look growth is a good thing. Can you give me though a number? What'd you do the past the past month?
Patrick Shaw
07:46We're just shy of a million dollars in annual revenue right now.
Nathan Latka
07:50Okay good.
07:51So you're doing
07:51about $80k a month currently?
Patrick Shaw
07:52Yep.
Nathan Latka
07:53Yep. That's a great place to be seven months in. That's really impressive.
Patrick Shaw
07:56Yeah. Well thank you. I appreciate it. You know, you know how it is. I mean we've also there's the two years before that and there's a year and a half of development before that. So there's no overnight success stories, we're excited to finally be selling. The fun part, right? Where you're finally like, okay. You know we've got twenty nineteen full time developers. We're in eight different countries.
Team Size and Distributed Workforce
Nathan Latka
08:21How what's the full team size?
Patrick Shaw
08:22The whole team is a completely distributed.
Nathan Latka
08:25How many though?
Patrick Shaw
08:26Pretty cool. 27 people.
Nathan Latka
08:29All remote. That's great. Yeah. That's good. And then look, going back to your per seat price, if you got 50,000 or or I think... Yeah. I think you said 50,000, 20,000 paying. Right? It's about $4 a seat. Right? To get your 80,000.
Patrick Shaw
08:39Yeah. A lot of those big... Bigger enterprise. Right. Yep.
Churn and User Retention
Nathan Latka
08:42Yep, that's great. Tell me, 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?
Patrick Shaw
08:49I've been our churn at 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 story told. And so, and they're loading all, we have a full blown CRM, so we're not competing in that space, but we had to have
09:17a CRM. So they've got all their contacts, they're talking to people, they're using the app every day. So 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 ProfitWell and trying to get a better handle on some of that but it just hasn't been an issue and you know.
Customer Acquisition Cost and Willingness to Spend
Nathan Latka
09:40Well, let me let me ask Patrick, let me ask a different question. What are you willing to pay to acquire one of these customers?
09:47Maybe think about the kickbacks you give people that that sell for you.
Patrick Shaw
09:51Well, I mean, it's a SaaS model, so there's a ton of margin. We just haven't done any kind of pay-per-click or anything, so what would I spend? I can tell you I would spend right now for a $14.95 a month user, I would spend $30 in my head.
Nathan Latka
10:11Yep, because you get a two month payback period there.
Patrick Shaw
10:13Yeah, we do different things like we just did this event, we spent you know 5 figures to be at that event and you know so so there's things that we're willing to spend money but honestly we just haven't calculated a lot of that right now. Yeah. We're focused on value, we're focused on product and now we're finally focusing on sales.
Profitability and Capital Strategy
Nathan Latka
10:33That's good, it makes a lot of sense. Are you are you raising additional capital right now?
Patrick Shaw
10:37We don't want to raise it. Well, I'd like to see if we can in turn, you know, can fund internally at least until we get to a place where it's it's on our terms and not theirs.
Nathan Latka
10:46Are you profitable right now?
Famous Five: Books, CEOs and Tools
Patrick Shaw
10:48Oh yeah.
Nathan Latka
10:48That's great. That's good. Very good. Okay. Let's wrap up here, Patrick, with the the famous five. Number one, what's your favorite business book?
Patrick Shaw
10:55Oh,
Nathan Latka
10:57got a lot there. See.
Patrick Shaw
10:59Dude, man. I mean, don't know, honey.
Nathan Latka
11:01What's that one on your desk right now under your
Patrick Shaw
11:02Four disciplines of execution. I love traction. I think for other think for other SaaS model businesses, this traction tool has been an absolute gem for us. They have a web based platform.
Nathan Latka
11:15Read What's the website?
Patrick Shaw
11:18Don't even know what their website is, but it's traction. It's Gino Wickman and this is the book from a business perspective that thing is then and they have a SaaS model. They have a SaaS 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
11:43of my favorites good disciplines of execution really represents what RapidFunnel is all about. So I'd say those two books are meaningful in this conversation.
Nathan Latka
11:53And number two, name a CEO you're following or studying right now.
Patrick Shaw
11:58Lots of them. I do love Jeff Bezos just because you know, I was reading his his annual Stock reports or whatever you call them. It's 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
12:26then gates are open.
Nathan Latka
12:30Number three, what's your favorite online tool for building your business besides your own?
Patrick Shaw
12:33It's traction.
Nathan Latka
12:35Yeah, okay good.
12:35So there's a song.
Patrick Shaw
12:36Google, I mean we live in Google Docs and all that.
Nathan Latka
12:39Yep.
12:40Number four, how many hours of sleep you getting every night?
Patrick Shaw
12:43Eight at least.
Nathan Latka
12:44And Patrick, what's your situation? Married, single, kiddos?
Patrick Shaw
12:47I've got three kids and they are all rocking. I've been married twenty some years and
Nathan Latka
12:52Great. And how old are you?
Patrick Shaw
12:54I am 50 years old.
Advice to His 20-Year-Old Self: Relax and Be Patient
Nathan Latka
12:5650, great. And last question, what do you wish your 20 year old self knew?
Patrick Shaw
13:01Oh, to relax a little and go and take two or three years before I jump into fire and patience and focus will allow you to achieve all that you want without getting too worked up over.
Nathan Latka
13:19Guys, there you have it. Patience. He founded RapidFunnel back in 2017 before that was kinda doing it inside of a much larger company. He had a private equity friend that invested in the company $300,000 for call it 10, 20%. Today they're serving over 20,000 individual seats across 23 logos each seat about $4. So $80k per month in revenue today. It's too early to really look at churn and CAC numbers but generally speaking the numbers are working
13:43out. I've got a team of 27 people based totally remote all around the world, profitable which I love. Again, 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.
Patrick Shaw
13:59Nathan, I appreciate it. I've enjoyed being with you. I love what you're doing with Latka. It's it's awesome and continued success, my friend.