How Replyify CEO Ryan O'Donnell grew Replyify to $5.3M revenue and 2K customers in 2024.

hello everyone my guest today is ryan o'donnell he lives at the top of the funnel ever since he landed at yahoo via acquisition in 2007. he then co-founded replify to automate cold emails and follow-ups because other solutions on the market were either glorified mail merge apps or too cumbersome to work with he's trying to fit right in the middle ryan are you ready to take us to the top let's do it dude which company were you with that was acquired by yahoo right media red media and so was that a kind of a pure play agency or no so it uh so it was right media it was the first online ad exchange right just shaking up how buyers and sellers transacted media every platform has it now you know buying on a dynamic you know cpm model not just your traditional cpm based so i i got in there early on ended up joining the international team there grew it from you know zero to about two you know 20 million dollars in revenue yahoo came in acquired the company stayed there for a while uh on international team they they were like hey moved london hong kong or singapore or to take a package i took a package left i thought i'd get rich by building a startup and flipping it to facebook and you know five or six iterations later here we are as i say some some of your other yahoo friends uh went down that path and did it pretty successfully yeah right right so what's up those guys were obvious i think at yahoo or on the early days yeah they're uh yahoo is a a company that's produced a lot of people who've done some cool things yeah okay let's talk about wi-fi so when was launch date 2017. okay and for folks that don't know explain what it does a cold email automation that doesn't suck yeah right uh so built for sales people who are either sending emails one by one trying to get a new prospect to engage or you know sending cold lists over to their marketing team who uses mailchimp and then ends up getting their mailchimp account shut down because you can't send cold emails with mailchimp right yep and what are people paying i know you probably have a bunch of different customers but on average where they pay per month around 99 bucks a month we have plans everywhere from you know zero bucks a month some traditional kind of sas freemium model free plan uh take the branding off for a buck and then you know fits into it really you know nets out on how many contacts you need to prospect per month right and every company kind of grows into that number and figures out their their sweet spot we've got plans that fit all across the board yeah and over the past 12 to 24 months how many customers have they scaled to uh users over ten thousand customers around two thousand okay churn is critical in this space because people have to keep sending emails for them to stay sticky with you what is your turn today and how do you manage it uh seven to ten percent depending on on how you look at it right pure churn or is it seasonal churn where they take three months off because no one no one's buying in q4 for a particular business model how we manage it well hold on real quick let's just avoid all the nuance and just look at it on an annual basis so on an annual basis what's revenue churn seven two and and we're in and we're in the you know just crossed 12 or 14 months old yeah yeah so about seven and a half revenue churn that's that's annually right and that's net or uh or gross do you have to pull up that's okay the the well actually that would have to be you know net unless you have some mechanism to drive expansion revenue are you driving significant expansion revenue at this point or is it probably too early how do you define expansion uh a cohort that signed up a year ago for 100 bucks a month is now paying 200 bucks a month there's expansion of 100 bucks i'll give you an example so we work with a lot of agencies and those agencies will you know do their own business and then they'll go out and sell a cold email automation done for you service into their clients right an seo business will create a new revenue stream we're seeing you know folks coming out of companies doing sales development not wanting to become account executives but wanting to become you know founders and ceos so they hang a shingle up become an agency find companies who don't want to you know build prospect lists write cold emails manage campaigns and and we're seeing a lot of growth in that space well again so back back to the question that do you have a means to drive expansion revenue like additional features additional seats things like that or no yeah and i would look at our our agency model our team model as being that expansion revenue right so agency comes on they start with five seats they continue to you know they continue to grow into it and and expand their their license model but not necessarily like like a you know other than this account type to do this or you know to get salesforce access or switch accounts into into different plans to to jump in you know at a certain account level um but might not be the same expansion that's we might be having a disconnect there on expansion expansion revenue is just you take the cohort that signed up a year ago a portion of them are going to churn which it sounds like you have 7.2 percent of that revenue will churn what i'm trying to figure out is what does that same cohort expand by so if it expands by ten percent and you churn seven percent net net it's 103 percent right ten minus seven so we're we're doing those so the expansion then is is over ten so we're we're netting out better than our churn on the expansion okay so good so you got about seven seven point two percent revenue churn annual in a growth space and it sounds like maybe 103 percent net revenue retention because these agencies are expanding right yeah that's great and um i mean can i uh walk i mean can i do the math 2000 customer times 100 bucks a month that puts you about 200 grand per month is it accurate no okay and so why is that yeah we're well we're doing because we've got plans starting in a buck a month uh-huh right going all the way to 99 a month uh depends how and how you look at our at our user base right and how we we define what the average so we have a agency owner ceo who has a plan and pays us money and has multiple seats under their plan that they're paying for we're doing around 50 grand a month in revenue okay that's fine so 50 grand a month right now in revenue i can just then obviously divide that by the 2000 to essentially get you know a form of affordable art but what you're saying is again 99 bucks a month is not the average that's actually your highest price point 129 is our highest price point 1.99 right right okay so you got about 2 000 folks on average maybe paying you 25 bucks a month that brings up about 50 grand per month today in revenue and now where were you at a year ago i mean you were just starting did you have any revenue year ago yeah uh july 2017 584 in revenue august was 1 200 some dollars right so we then you know kind of hockey stick up to the right yeah well one to be fair and i'll give you credit but obviously growing from 100 bucks to you know you know a thousand bucks is pretty you know easier than going from a million to ten hey it's it's it's part of it um i was digging in your podcast you know when you guys sent the note and said you wanted to jam um you know you bring some hitters onto the show which is which is it was interesting to go through and see you know some numbers that are whatever you think did you enjoy it i i i dig your style man you're you know you're straight to the point you get to it you ask tough questions you make folks you know think about things you know that this will get more downloads though than jay from atlassian because people because they watched jay from atlassian you know he just came on president there that's that's aspirational but it's not actionable someone like you you're one step ahead of someone that's stuck in a corporate job that wants to launch their own thing and they're two years away from being where you are today you're more actionable they see what you're doing they take lessons and they start doing it and that's where we spend a lot of time on our on our customer acquisition so i know one of the questions you're gonna ask is what's your what's your cac yeah right don't have one yeah we're testing right now there there are there are two of us full-time at the moment running this this platform uh we're your typical kind of hacker hustler team um so a lot of our uh a lot of our you know growth and and acquisition comes from dog fooding our own product right so we send a lot of cold emails we've done a lot of podcasts right so we'll we'll cold email podcasters to get on influential podcasts like this um i'll i'll actually have to take you out of the rotation if you're you're on that list i'm sure and uh and then we you know what we do different than some other folks that that we go against is you know we build software that's less annoying to work with right because we we've seen everything we've been in the space for about five years at the top of the funnel and then the context that we bring and the love the bear hug that we bring and kind of help folks who might be new to cold email and getting them successful and helping these agency owners kind of build out their plan is is part of our growth right we don't have a team of you know three sdrs you know funneling leads over to 30 account execs and and worried about that overhead yeah you get two dads who who you know know how to run you know sas companies understand our limits at least you know to this extent and and create a nice business around it any bootstrap today or have you raised bootstrap that's great i mean so how do you get to scale right so how do you double how do you get up to 100 a month that you watch a podcast like yours you listen to to people jam about like how to do this or that um you take lessons you know take notes on what's worked what hasn't worked i mean for us i'm a 30 37 year old father of three and i would say that's my that's my number one job right i coach i work from home okay um i i love my family i grind my ass off right um i work crazy hours but i always make time for my family and i think that that scale and us not wanting you know specifically we don't want to raise money at this point i don't want to raise 10 million dollars and go out and have to be responsible for you know hiring a team and growing the business out and getting an office and being responsible for culture it's not a lifestyle fit for me personally at this moment right i think it's something that that wanted you know we'll be looking to do that i don't know if it'll be with this with this business or not um but again it's the internet you can there are you know 10 million ways to make money on it yeah i mean the the plan though if you did when i say scale i don't mean raise capital i just mean just grow the business or what i'm hearing you say is you're kind of you don't mind just staying kind of about 50 it's a good lifestyle right now as you're managing other parts of your life fair yes is that accurate i see okay good very good i think if we got to the point that the scale comes when the processes and the automation that we've built for running certain components of our business sales marketing you know support uh development when that starts to break down and we have clients who are upset because you know they've waited eight hours for someone to get back to them or you know some feature that they've been dying for just you know hasn't been built when that breaks down that's when we'll look to incrementally start to build there and i think you know when you've got a small bootstrap company that offers a very robust a very robust product offering right so we might have you know two people full-time running this product it doesn't look like it it doesn't feel like it you know you think there's a hell of a lot more than than two people behind this and i think when we start to lose that or if a certain component of that breaks down that's where we look to you know that's where we look to make the next the next move yeah yeah go ahead go for it what's your partner's name the developer mark so i mean you have two dozen customers if you're they're sending in support tickets let's just assume it's just two per week with initial feature requests i mean that you can't keep i mean that one guy can't keep up with i mean i mean so how do you manage that we we tag team it intercom is uh it intercom is our best friend i don't mean sorry i don't mean just the inbound message getting a reply i mean him people actually requesting new features twice a week those are that's a whole tech spec that's a whole new sprint on the dev cycle how does he say you have to say no to things we do and and and gracefully i i wouldn't say so we're out of the first year was a lot of those right so january or you know july through february march uh 28 so july 2017 to march 2018 i would say we spent the majority of that time working with clients taking those feature requests trying to understand why is it important prioritizing based on is it important for this one client how much are they you know what's this worth to us in terms of revenue prioritizing features based on paying clients first and then and then the the you know future proofing that feature to make sure that it's not just built for one person that it's something that overall can help you know raise uh raise the the platform and that's how we you know i would say once a week we kind of rip through our feature lists in a google doc it's you know kind of built out and prioritized and then we you know we pick you know uh highest revenue impact uh highest impact across the platform and then level of effort right how long is it going to take to do and then just work on you know really quick sprints and then we'll do a couple of those knock them out and then we'll look at a longer term project um while the the quick features that we just released bake for a little bit we'll roll out some you know some other uh you know longer term things i think our focus in the second half of of 2018 has been let's make the platform less annoying to to use right let's look at you know and and that's not not just our platform but across you know other companies who do cold email automation because they skew from you know mail merge systems all the way through to like i think you had manny from outreach on here right who was going to have a gold star platform different approach than us right he's got a big team and and they're they're doing what 55 million something like that in the north yeah yeah right but i mean there's a huge range right like i had yet another mail merge on right and they're doing about a 1.5 per year right and then manny's obviously opposite end of that it just it just it just depends on what kind of company you want to build so i mean i i get what you're saying it makes sense to me um i mean it sounds like you are strategically choosing to stay at the level you're at right now because of other life situations which i respect you don't hear that often at the moment but but i i don't want to make it like look do you have kids no okay by the way like intentionally no kids not married no house no car no payments i have i have all of that and and i am you know um my son jack came up to me yesterday he's like dad you're the best coach ever right just out of the blue because i i coach everything i i make time to go coach right like you're talking sports or just life soccer basketball baseball golf i'm a i'm a golf junkie so i'd like to be carrying his bag on the tour one day but i make those choices now there are times where where i'll see requests come in you know from a client and i'll get back to them right away right and i'm grinding away from you know after i get the kids down at nine o'clock until one two o'clock in the morning like we're not dropping the ball in anything um we just like we're good where we are right now you got two dudes you know that are you know growing supporting and growing business doing around 50k a month and like we can make that work for now we don't need to we don't need to go past that in 2018. now 2019 is a different story right but we're running tests right now to prove out when and where we make those those investments very good ryan let's wrap up here with the famous five number one what's your favorite business book i don't have one i i have a book on my uh on my uh desk right now the subtle art of not giving and yeah i don't have enough time to read i mean the uh oh the places you'll go it's my favorite business book number two is there a ceo you're following or studying number four or number three what's your favorite online tool for building a business besides your own here come and number four how many hours of sleep are getting every night six six okay that's pretty three kids and coaching all that and the business that's pretty good all right and ryan i'm assume married yes all right last question you're 37 today take us back to your 20 year old self what do you wish she knew i wish i had a computer earlier um cell phones cell phones just you know just started coming to fruition but thank god cell phones were not uh prolific back then right and and held by everyone i think my 20 year old self i wish i'd gotten started uh on the internet sooner and figured out a way to scratch out a dollar and i think you know for folks listening to this you might be in a job thinking about quitting you know doing something find that side hustle find that thing you love right find that thing you're good at and then find people who suck at it right and i think if you can marry those two things up and you can either build a service uh a human based service that you're helping people do something that they otherwise suck at or you can find you know some sort of software or or automation to do something um there's market out there and there are tools like reply if that you can use to go out and test out those markets you know before you make that jump and and i wish i'd you know had that uh that mindset back in the day guys start earlier from ryan launched replify in 2017 today doing 50 grand a month that's from about 2 000 customers paying 25 bucks a month totally bootstrapped turning about seven percent of revenue annually but expanding about 10 percent so 103 net revenue retention too early on cac and ltv and things like that but they're starting to test some of those channels right now as they look to scale ryan thank you for taking us to the top thanks nathan pleasure