reporty.app Revenue & Valuation (2021)

hello everyone my guest today is a label hacked he used to be a rabbi that moved into tech he's currently a tech lead at pro edge by day and on these days and uh nights and weekends he works and hacks on various projects most recently he acquired a shopify app through microacquired and spending all of his nine to five uh non nine to five hours on that label how are you ready to get to the top i am ready let's do it so the app is called reporty.app tell us what the company does yeah so it's a shopify app that allows you to set various types of notifications uh and reports to be sent out you know daily weekly monthly about your purchases your orders on your shopify store and you can include you know all sorts of tracking data utm values etc stuff like that and so i want to give the story of why you chose to acquire this versus build it from scratch so so let's sort of dive into that when did you buy it off the micro choir um so i closed it i think it was last week monday okay so very recently and do you know when it was launched when those founders wrote the first line of code uh i think about a year and a half ago so relatively recently yeah fairly young so so what what what made it stand out to you on microcriters a lot of companies for sale they're sort of micro sas companies why did you pick this one yeah so i've so i've been hacking on various stuff on the side um all sorts of stuff from like an sms based tipping app to like an automated deal aggregator um and i finally settled on i want to kind of market i want to get into in sas i want to get into e-commerce tools specifically for various reasons i have a bunch of friends in the industry i think it's a growing industry and there's just a lot of potential so i wasn't really planning on buying something i wanted to start building something i started looking into different like inventory tracking options uh talking to a bunch of friends that do e-commerce mostly on amazon but also some shopify um and i would just kind of browse on microacquire i found that i think i'm product hunt and i've just been following their stuff and then this came up so i'm like you know hey this seems like a perfect opportunity for me look i've never run a business um and for me i i've been following a lot of rob walling stuff start small stair step yep i love rob stuff yeah so i i was like you know this this should be a great opportunity i'm basically going to treat it as my mini mba it's not a massive acquisition and i just want to kind of milk it for everything i can get from it mostly learning and hopefully i can also turn it into uh you know something that can make a few bucks how many customers did i have when you acquired it last week um so i have those numbers in front of me right um so total of 454 free users 27 paid users sorry 26 paid users we have one new paid user since last week um so you know significant amount of traction for a small for a small app how much revenue does that mean for 27 customers so it was uh 375 mrr now it's a 385. um again a small acquisition but i i really plan to use this as you know like i said my mini mba and i think the founder really hadn't done any marketing for it um and you know what gave me a lot of hope for it is probably the fourth day that i had the app um a like fortune 500 consumer package consumer packaged goods company opened an account um a paid account so you know little things like that i was like okay there's probably a lot of potential here it doesn't have to just stay with slack notifications um sorry i don't remember if i mentioned it specifically slack right now can move into whatsapp reports and notifications sms reports notifications email reports and notifications um more smart um you know logic based if else based uh notifications and stuff like that so i think there's a lot of room to grow but again for me it's really about learning the business side the marketing side i could do the tech side already so 26 customers they pay on average caught 15 16 bucks a month so 375 dollars per month in revenue you see an opportunity to expand this from you know just updating companies in slack via you know their e-commerce reporting to other channels as well what did you pay for the app um so all in it was 20 grand okay and how did you think about that in terms of like valuation does it make you nervous that you're spending 20 grand on this um so yeah i'm you know i'm developer by day um but i got a couple of kids so i don't have a ton of cash just sitting around for me it was really so i mean there's people who sell pre uh pre-revenue starter is it that i don't think it's super expensive um it's not a super high multiple either let's say you know you give it around four thousand dollars er it's not it's not a terrible multiple at all and again for me it's really it's such a small number in terms of like big you know big acquisitions that for me is about the learning um and if this is what's going to throw me into the industry and force me to learn about uh paid acquisition forced me to learn about churn forced me to learn about marketing um i think it's going to pay off tenfold did you ever do an analysis on what it would cost you to just build the thing and could you do it for maybe five grand instead of 20 i probably could but again it's because it's in nights and weekends thing um for me it's really about the just throwing me in there um it's it's a lot harder to take something from zero to one than it is to take it from one to fifty minutes and i i definitely agree with that uh so guys so 26 customers so i mean you're in it now yeah you have sunk costs you've got you got 20 grand in and so you're sort of now you got to make this thing work what's the next step what are you going to test so i think next step is step one originally i thought step one is kind of clean up the landing page make it nice and modern um but then i realized let's first of all try and not write a line of code just reach out to the customers first reach out see first of all if they're happy can they give me a review reviews are everything on app stores that's step number one step number two is ask them what they'd like as uh you know their next feature maybe i can add more smart reporting uh tools maybe maybe they'd you know really i guess the next step would be figuring out how to monetize those for users because there's quite a few of them um and maybe some kind of meter based charges or just basically grandfathering in whoever is already there and you know switch it to a 14-day trial and really try and make the product better so people sign on to to a paid plan earlier which is the marketing center which app store you're trying to get rankings in where's it listed currently so it's just the shopify app store it's a shopify app and how many reviews currently uh eight five star reviews and so how do you get that to the point where it's got like 80 90 100 so that you start ranking high in that store then you'll get you know free users from shopify once you start getting higher ratings or a higher placement in the app store yeah so i think i think it starts with talking to the customers just personal emails like if i have their email addresses i can reach out um you know i can try 10 a day just send out 10 personal emails a day from label at reporting um hey are you enjoying this i'd really appreciate if you can give a review um and then just hear their feedback you know maybe there are things that you know they would really push them from a free plan into a paid plan uh maybe there are things that i can improve that would make them happy to give me a review right away um so yeah i'm really in that just learning how to talk to customers face very cool and what would have to happen for this side project for you to go you know what i want to do this whole time so this particular tool i don't know if this one would become full-time if i can basically take the learnings of this tool and figuring and figure out how to make a full reporting suite i guess then that's probably something i could work on being able to take full time i really really do just see this as a as a learning phase i live in i live in l.a i'm actually in melbourne australia now but it's kind of early but i that's why my brain's working a little bit slow it's about 3am here um so i i'd really i'd need something that's slightly bigger um to be able to eventually jump in something that potentially i can just get a little bit of investment for so i can jump in full time um so i don't think this tool specifically would be able to be that unless i can kind of expand it to a full suite or into maybe a basket of a few different apps so you know you start with just the that one other thing i was thinking about is you know let's see i do want to add a whatsapp integration uh microsoft teams integration email integration all those do i want to do it under the same app umbrella i don't really know how that would affect app rankings on the app store if it's good or bad they'll want to do separate apps one app a few apps that feed into each other so if i can kind of create a basket like that maybe that's something that can take me forward you definitely want to learn marketing yourself or is this actually a measurement and for you to challenge yourself to figure out how to like go find talent a freelance marketer that can help poor fuel on your fire or are you going to keep this a one-man show with no team um i'm not sure i'm really that's why i said this is my uh i'm using this to learn so and but you're a developer by trade that your full-time job is your your lead engineer at a company correct yeah but uh i wouldn't say i'm necessarily the stereotypical engineer um i really really like the business side of things um i write code every day but i'm also managing a team um and doing a lot of stuff on the people side and you know i love all things business and investing so i definitely want to learn the marketing side the people side the management side um whether or not which direction end up going i'm not sure but i want to learn that side but for someone else listening that's going to buy their first sas something sort of micro sas and they don't want to start from scratch where you know microphone is a great resource where else did you look where else should people hunt for these um i looked up flip uh there's a new one i saw pop up on product hunt called by my side project um i guess i would also ask them to just you know why why are you buying it for me it's i have a i have a family so it's a little bit more difficult to get things off the ground after hours so if you throw yourself in for me that was a big motivation but a lot of people don't have to buy it you know a lot of people would really benefit from just hammering it out on their own and learning the product market fit themselves yeah now that makes a lot of sense very cool um did you ever look at or or think about financing the deal or were you always just going to use 20 grand your own capital all paid cash up front um i briefly looked into it but it's such a small acquisition um that you know any of the loan options weren't really there nothing like an sba loan or anything sba starts at like 50 i think yeah so you just did all cash up front yeah yeah interesting i mean i imagine there's people looking at going wow i'm an engineer i could launch a bunch of these side projects and find people like label to buy them for 20 grand if i do three or four per year that's all i need to do right yeah well look then you can i can buy it and then maybe grow it to 2000 mrr and flip it for three or four x so is that your plan i mean would that be fun for you to sort of grow this to four or five grand a month again it could yeah it could be a fun opportunity um but yeah again it's real for for me it's all about learning so we'll see where it goes all right a label on that no that's dropping with a famous five number one what's your favorite business book um so i'm not a big reader but i like tim ferriss has like a coffee table book it's called tools of titans like all his podcasts kind of snippets and stuff number two is there a ceo you're following or studying andrew gazdecki from micro choir he's just he's having so much fun he is i'm a big fan too number three what's your favorite online tool for building a business oh uh i gotta say slack because this is built on slack and it's a great tool number four how many hours i'll sleep to get every night um usually six to seven except not tonight because it's 3am there right now huh yeah number four uh our last set of questions here what's your situation married single kids i am married with two little kids two kids how old are you i am 29 all right last question what's something you wish you knew when you were 20 um i thought about this i think my answer is that what's the word uh expertise really begets passion not necessarily the other way around so go for the expertise first passion is a bit overrated i would remiss to end there i should have asked you this for other 29 years they might be wondering wait why is this label guy rich parents where do you get 20 grand from kenny i mean you don't talk about too much personal stuff but talk to me about how you've been disciplined and maybe saved money like how did you get a 20k to spend on this yeah honestly um i'll be fully honest so saving um some small consulting gigs on the side uh little stimmy helps um stimi stimulus oh god i got it got it you're talking about like the 12 checks the government sent out yeah that's just real yeah yeah well you have when you have a couple kids you get a little bit more yeah um so yeah really just kind of scraping it together um and i chose to to put it into this and i'm hoping it'll pay off does your was yours was there any like hey to your spouse i'm gonna spend a lot of our savings on this thing like are you cool with that and she was like go for it uh no i had to convince her but um look i've been i've been trying to get into these things for a while and i've been building things and uh so it's not like i just came up one day hey let's go buy a business um you know and it's it really seems to make sense um and uh look so so far it's been good so i hope hope it'll continue all right label thanks for taking the top thank you nathan one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2pm central to make sure you don't miss any of that make sure you 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