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...