Founder Interview
How Resource Guru Reached 1,450 Customers and 40% Year-Over-Year Growth in 2018 (Interview with Co-Founder Andrew Rogoff)
- Interview Date
- November 27, 2018
- Interviewee
- Andrew RogoffCo-Founder
Company Metrics at Interview Time
Customers (2018)
1,450
Avg Revenue per Customer (2018)
$105 per month
Year-Over-Year Growth (2018)
40%
Customer Churn (2018)
3.5% per month
Total Funding Raised
£685,000
Historical Snapshot
These numbers were reported by Andrew Rogoff during the interview recorded in November 2018 and are a historical snapshot, not current figures. See Resource Guru’s current numbers.
Key Takeaways
- 01Resource Guru launched in 2012 as a SaaS team calendar and resource scheduling tool
- 02The company had 1,450 customers as of November 2018, tracked daily via a dedicated Slack channel
- 03Average revenue per customer was $105 per month, with the average plan priced at about $5 per person per month
- 04Year-over-year growth was 40% in 2018
- 05Customer churn was 3.5% per month, with revenue churn at 0.8% per month
- 06The company raised £685,000 (approximately $870,000) across two rounds, including participation from Index Ventures
- 07Team size was 11 people, all working remotely, with some in Sweden, some in South Africa, and others elsewhere
- 08Customer acquisition cost was $325 per new customer
- 09Customers came mostly through SEO; acquisition spend went mainly to software directories and to sponsoring relevant events
- 10The company was cash flow positive at the time of the interview
Company Metrics at Time of Interview
| Metric | Value | Source |
|---|---|---|
| Customers (2018) | 1,450 | Founder interview, Nov 2018 |
| Avg Revenue per Customer (2018) | $105 per month | Founder interview, Nov 2018 |
| Pricing per Resource (2018) | $5 per person per month | Founder interview, Nov 2018 |
| Year-Over-Year Growth (2018) | 40% | Founder interview, Nov 2018 |
| Customer Churn (2018) | 3.5% per month | Founder interview, Nov 2018 |
| Revenue Churn (2018) | 0.8% per month | Founder interview, Nov 2018 |
| Customer Acquisition Cost (2018) | $325 | Founder interview, Nov 2018 |
| Team Size (2018) | 11 | Founder interview, Nov 2018 |
| Total Funding Raised | £685,000 | Founder interview, Nov 2018 |
| Year Founded | 2012 | Founder interview, Nov 2018 |
Growth Breakdown
Revenue
Resource Guru had 1,450 customers paying an average of $105 per month at the time of the interview. The company grew approximately 40% year over year in 2018. Revenue churn was 0.8% per month, kept lower than customer churn by expansion revenue as customers added more people to their accounts.
Customers
The company had about 1,450 customers in November 2018. Andrew and his team tracked new customer sign-ups in real time through a dedicated Slack channel. Customer churn ran at 3.5% per month, which the team worked to reduce by shipping features customers were actively requesting.
Team
Resource Guru operated with a team of 11 people working fully remotely, with people in Sweden, South Africa, and other locations. Andrew was more focused on product, while his co-founder was more focused on marketing.
Funding and Profitability
The company raised £685,000 in total across two rounds: an initial friends-and-family round and a subsequent round that included Index Ventures, a large European VC. Despite having raised outside capital, Resource Guru was cash flow positive at the time of the interview. Andrew said the company would be raising again soon, roughly in the ballpark of 5,000,000 (he did not name a currency), and he declined to share a target valuation.
Growth Strategy
SEO as the Primary Acquisition Channel
Resource Guru built its early customer base through search engine optimization, targeting terms like resource scheduling. Andrew used tools such as Moz to identify and prioritize keywords by relevance and search volume, and the company continued to rank for a range of related terms.
Competitor Keyword Analysis
As the market matured and more competitors emerged, the team began analyzing competitors' keyword strategies to identify additional ranking opportunities. This allowed them to expand their SEO footprint beyond the initial seed keywords.
Event Sponsorships
Beyond SEO, part of the customer acquisition budget went to sponsoring relevant events; asked for the last one, Andrew thought it was a Digital Project Manager event. He gave no sponsorship spend, because that area sat with his marketing-focused co-founder.
Software Directory Listings
Andrew said the CAC money was mostly spent, he thought, on software directories, listings where teams looking for a resource scheduling tool could find Resource Guru.
Feature Releases to Reduce Churn
The team found that releasing new features from their product roadmap directly reduced churn. Customers were actively waiting for planned features, and every release brought churn down.
Best Quotes
“It's an online team calendar and it also tracks time off, people's time off. And we're changing the way teams manage their time, trying to help companies become more profitable, more efficient, and get them away from their old spreadsheets and other things they used to use to track their team's time.”
“Average is about $105 a month.”
“We're up at about 1,450 customers.”
“We actually have a channel, a Slack channel that shows us all the customers as they come in.”
“It's mostly through SEO. That's kind of how we started in the beginning.”
“Churn is about 3.5% month on month customer churn. And the kind of key way for us to keep it low is to roll out the features on our roadmap. We've got customers absolutely crying out for the things that we've got planned, And every time we release something, we find that our churn goes down.”
“First round was kind of friends and family. And then we had another round which included Index Ventures, which is large VC in Europe.”
“We've grown about 40% in the last year.”
What Happened Next
This interview captured Resource Guru in November 2018, when the company had 1,450 customers, 40% year-over-year growth, and a team of 11 working remotely across multiple countries. For current revenue, customer count, and other live metrics, visit the Resource Guru company profile on GetLatka.
View Resource Guru’s current profile and metricsFull Transcript
Chapters
- 0:00Introduction and What Resource Guru Does
- 0:15Revenue Model and Pricing
- 1:03Average Revenue per Customer
- 1:40Customer Count and Slack Tracking
- 1:53MRR Calculation and Growth Context
- 2:36SEO as the Primary Growth Channel
- 3:36Keyword Research Process and Tools
- 5:11Year-Over-Year Growth Rate
- 6:16Fundraising History and Index Ventures
- 6:57Team Size and Remote Work
- 7:23Churn: Customer and Revenue
- 9:55Customer Acquisition Cost and Sponsorships
- 10:58Profitability and Future Fundraise Plans
- 13:08Famous Five Rapid-Fire Questions
Introduction and What Resource Guru Does
Nathan Latka
00:00Hello, everybody. My guest today is Andrew Rogoff. He's the cofounder of Resource Guru, an online team calendar that's changing the way teams manage their time. Follower of all things digital and part time eco warrior as well. Andrew, are you ready to take us to the top?
Andrew Rogoff
00:14>> I am.
Nathan Latka
00:14All right.
Revenue Model and Pricing
Nathan Latka
00:15Right, so tell us about the company. What does Resource Guru do and what's your revenue model? How do you make money?
Andrew Rogoff
00:20>> Okay, it's an online team calendar and it also tracks time off, people's time off. And we're changing the way teams manage their time, trying to help companies become more profitable, more efficient,
00:42>> and get them away from their old spreadsheets and other things they used to use to track their team's time.
Nathan Latka
00:50And is it a SaaS model?
Andrew Rogoff
00:52>> It's a SaaS model, yeah. So we're a sort of fairly typical subscription based app. We have three pricing plans.
Average Revenue per Customer
Nathan Latka
01:03Andrew, what's the average company pay per month for this?
Andrew Rogoff
01:09>> Average is about $105 a month.
Nathan Latka
01:13And what will people get for that? How many team members can they manage?
Andrew Rogoff
01:18>> For that, get... It's about... The average plan is about $5 a month.
Nathan Latka
01:22So a team of 20 people, 25 people?
Andrew Rogoff
01:24>> Roughly.
Nathan Latka
01:25Yeah. Yeah. That's great. Very good. Put this on a timeline for us. When did you launch the company? What year?
Andrew Rogoff
01:30>> Launched in 2012.
Nathan Latka
01:322012, very good. And then what have you scaled to over the past four years? How many... Or sorry, past six years. How many customers have you scaled to?
Customer Count and Slack Tracking
Andrew Rogoff
01:40>> We're up at about 1,450 customers.
Nathan Latka
01:44Very specific. You're counting every morning, right?
Andrew Rogoff
01:47>> We do. We actually have a channel, a Slack channel that shows us all the customers as they come in.
MRR Calculation and Growth Context
Nathan Latka
01:53Well, let me be extra specific with the number. So 1,450 customers at a $105 a month. That would put you guys about $152,250 per month right now in MRR. Is that about right?
Andrew Rogoff
02:08>> Yeah, I think so. That's, yeah. So we're coming up to about 2,000,000.
Nathan Latka
02:12Yep. That's right. Yeah. So $152,000 per month, obviously times 12 puts you at about 1,800,000 in terms of run rate. So do you think you'll hit 2,000,000 by the end of the year? We've got thirty days left.
Andrew Rogoff
02:24>> We might squeeze... Probably not. Probably not. I think that'll be early next year.
Nathan Latka
02:29Okay. Walk me through how you're driving this growth. Where, I mean, where are you getting these customers from?
SEO as the Primary Growth Channel
Andrew Rogoff
02:36>> It's mostly through SEO. That's kind of how we started in the beginning.
Nathan Latka
02:42What keywords? Sorry?
02:44What was the first keyword you optimized for?
Andrew Rogoff
02:48>> I think it was resource scheduling. It was as simple as that. We had a hunch that people were searching for that and it kind of turns out to be true.
Nathan Latka
03:00Okay.
Andrew Rogoff
03:00>> People are not... That's kind of how we got going is people found us on the web through good SEO at the beginning.
Nathan Latka
03:08When I search resource scheduling now today, you guys don't rank for that. Are there other terms that you rank really high for that bring you in customers?
Andrew Rogoff
03:18>> If you look at... I don't know where we are for resource scheduling.
Nathan Latka
03:23You guys are at position 11 there at the bottom of the first page one.
Andrew Rogoff
03:28>> Okay, Still good. Yeah. It's various... It's lots of different terms around that that we're we're ranking well for.
Keyword Research Process and Tools
Nathan Latka
03:36How many... So walk me through... Instead of saying the actual terms, tell me the process so others can do it in their own industry. So how did you find all the keywords you wanted to rank for?
Andrew Rogoff
03:46>> We used tools really, things like Moz and
03:52>> just good SEO work, which is kind of looking at competitors. In the early days, that wasn't possible because we didn't actually have that many competitors. But now you can look at competitors' keywords and what they're targeting.
Nathan Latka
04:07So Andrew, these things spit you out a list of 700 keywords you should rank for between your competitors and ones through the keywords tool that you know gets searched a lot. What do you do with that list?
Andrew Rogoff
04:19>> Well, you gotta prioritize them. So you gotta look at things like relevancy, how relevant are they to the product that you're producing. And then you've got to look at volumes, so how many times are people searching for those keywords.
04:37>> And then use those kinds of factors to prioritize them.
Nathan Latka
04:44So what I'm trying to get at is once they're prioritizing, you know the ones you want to rank for. Mean, do you have a team member dedicated solely to SEO? Did you hire an agency? How'd you actually implement them?
Andrew Rogoff
04:55>> We actually started off with me doing SEO, which is probably not the best thing in the world.
05:02>> We kind of, to be honest, we've spent more time building the products than we have with SEO and marketing since we launched.
Year-Over-Year Growth Rate
Nathan Latka
05:11So with these tactics though, I mean, what does the growth look like? So if you're at $150,000 today per month, where were you about a year ago? Do you remember?
Andrew Rogoff
05:21>> I can't remember exactly.
Nathan Latka
05:23It would have been, it would have been, it's an round number. It would have been the end of last year, the end of twenty seventeen. Do you remember?
Andrew Rogoff
05:31>> Not off the top of my head.
Nathan Latka
05:33Or you have to know generally. I mean, you doubled year over year, you tripled year over year, you're flat.
Andrew Rogoff
05:39>> No, we're not tripling every year.
05:47>> Sort of monthly growth
05:50>> which I can't, I'm not too sure, we've grown about 40%. We've grown about 40% in the last year.
Nathan Latka
05:56Oh, that's great. Okay, so if you're at $150,000 today, would have been out, call it maybe about $105,000 about a year ago.
Andrew Rogoff
06:03>> Something like that.
Nathan Latka
06:04Yeah. North of a million bucks still. So over the past year, you've basically gone from essentially a million to 2,000,000 run rate.
Andrew Rogoff
06:10>> Yeah.
06:10>> Yeah.
Nathan Latka
06:11That's great. And a very good... And have you raised capital or bootstrapped?
Fundraising History and Index Ventures
Andrew Rogoff
06:16>> We raised capital.
Nathan Latka
06:17Oh, Andrew, I was liking you so much, and now you're on the dark side. How much
Andrew Rogoff
06:24>> We haven't raised a huge amount. We raised, we've raised £685,000, which is about $870,000.
Nathan Latka
06:32Mhmm. And it was angels or equity or what?
Andrew Rogoff
06:36>> Sorry?
Nathan Latka
06:36Was it angel? Or was it an equity round, venture debt? What was it?
Andrew Rogoff
06:40>> First round was kind of friends and family. And then we had another round which included Index Ventures, which is large VC in Europe.
Nathan Latka
06:49Yep. So this is this is this is typical, like, is typical venture capital, not debt or convertible equity or anything like that?
Andrew Rogoff
06:55>> No. It's... Yeah. Okay. It's typical.
Team Size and Remote Work
Nathan Latka
06:57And what's the team size today? How many people?
Andrew Rogoff
07:00>> We're 11.
Nathan Latka
07:0111. Everyone based in London?
Andrew Rogoff
07:04>> No, we're all over the place. We all work remotely. We've got some people in Sweden, some in South Africa, all over the place.
Nathan Latka
07:13London and remote. That's good. And churn is obviously critical in a company like this. What's your churn today and how do make sure to keep it low?
Churn: Customer and Revenue
Andrew Rogoff
07:23>> Churn is about 3.5% month on month customer churn.
07:32>> And the kind of key way for us to keep it low is to roll out the features on our roadmap. We've got customers absolutely crying out for the things that we've got planned, And every time we release something, we find that our churn goes down.
Nathan Latka
07:503.5%, that's revenue churn per month?
Andrew Rogoff
07:54>> No, that's customer.
Nathan Latka
07:55What's revenue churn?
Andrew Rogoff
07:58>> Revenue churn is about 0.8%.
Nathan Latka
08:02Okay. Point 8% a month or about 12% per year. So so so just to be clear, if net revenue churn is about 12% per year, that obviously is about 1% per month. And what you're saying is that 3.5% logo churn, those logos are usually paying less. That's why revenue churn is lower than the 3.5%.
Andrew Rogoff
08:23>> Yeah, and we get we get Yeah, and we're getting expansion revenue.
Nathan Latka
08:28How are you doing that? What pricing axes are you upselling against?
Andrew Rogoff
08:33>> Well, the expansion goes by number of customers that add to their accounts. As they add... Sorry, number of people add to their accounts. So the more people they add, the more revenue we get.
Nathan Latka
08:45Is that the only leverage you have to upsell? Is just they have to grow their team?
Andrew Rogoff
08:49>> No, we also have different plans. So you get access to certain features through upgrading your plan.
Nathan Latka
08:57Are there any other utility based things you upsell against, like number of resources managed or any kind of quantifiable axes?
Andrew Rogoff
09:06>> Well, is based on number of resources. So it's a per resource charge basically.
Nathan Latka
09:12Okay, I thought you said it was per team member?
Andrew Rogoff
09:15>> No, it's per resource. So you could have one user of the app, one person that actually logs in and people, and you'll be paying for 80 people. So we charge per person in the app as opposed to per logged in user.
Nathan Latka
09:32Sorry, you just said you charge per resource, then you just said you charge per person. Are they the same thing?
Andrew Rogoff
09:37>> Yeah, to us they're resources. So it's kind of, know, it's a project management term, resources. A lot of people don't like it. They're really people
09:51>> along with other things that you can say to which is ultimately resources.
Customer Acquisition Cost and Sponsorships
Nathan Latka
09:55Yep. Very good. What about what about acquiring these customers in terms of fully weighted CAC? So to get a new $100 a month customer, what are you willing to pay for them? Do you know?
Andrew Rogoff
10:04>> CAC is about $325.
Nathan Latka
10:07Okay. So you get paid back in what, three, four months?
Andrew Rogoff
10:10>> Yeah, roughly.
Nathan Latka
10:11That's good. And where do you spend that money when you do spend it?
Andrew Rogoff
10:16>> It's mostly spent on, I think, sort of software directories
10:21>> and also on sponsorship of relevant events and that sort of thing.
Nathan Latka
10:28What was the last event you sponsored?
Andrew Rogoff
10:31>> Digital project manager, I think.
Nathan Latka
10:34Okay.
Andrew Rogoff
10:36>> Starts and things.
Nathan Latka
10:37And we're talking like $2.03, $4, that kind of range?
Andrew Rogoff
10:40>> In terms of what, sorry?
Nathan Latka
10:41The sponsorship?
Andrew Rogoff
10:43>> I'm not too sure. It's not my... I don't take care of that area. So
10:50>> my co founder and I split our responsibilities and I'm sort of more product focused and he's more sort of marketing focused.
Profitability and Future Fundraise Plans
Nathan Latka
10:58Fair enough. Is the company profitable, cash flow positive today? Yeah. Oh, that's good. Yeah. Okay. So even though you've raised your cash flow positive.
Andrew Rogoff
11:07>> Yeah, exactly.
Nathan Latka
11:09Congrats on that. That means you're raising capital right now or you're selling to your biggest competitor. Which one is it?
Andrew Rogoff
11:14>> We're going to be raising soon.
Nathan Latka
11:17How much do you want to raise?
Andrew Rogoff
11:21>> I think it's going to be roughly in the ballpark of about 5,000,000, something like that.
Nathan Latka
11:25Yep. So hoping to raise 5,000,000. Obviously, you're still probably negotiating this, but ideally, what would you like to raise that in terms of pre money valuation?
Andrew Rogoff
11:34>> I don't know. And that's not that's not a number I would wanna check out there either.
Nathan Latka
11:38Well, Nate At the moment. What what what... Not not Don't share what you're actually potentially going to do it at because obviously it's sensitive when you're negotiating, but what's something that would make you happy? What's something that feels fair?
Andrew Rogoff
11:54>> Probably what, in terms of multiples of revenue,
Nathan Latka
Andrew Rogoff
12:01>> would say
12:04>> eight might make me happy.
Nathan Latka
12:06And what I'm most interested in is your thought process. So how do you get to that?
Andrew Rogoff
12:11>> Based on typical SaaS valuations. I mean, I keep an eye on generally
12:19>> what SaaS companies are valued at and anything between five and I don't know, are some of the recent crazy ones have been up 17 or 18. Those
Nathan Latka
12:31are the crazy ones though. See the problem is you never hear about the crazy ones on the other end of the spectrum which raise at 0.5x or 1x.
Andrew Rogoff
12:39>> Yeah. If we were ever in that position, we would just take it alone. And in fact, that might be the way that we sort of go forward is to...
Nathan Latka
12:53Like a venture debt?
Andrew Rogoff
12:55>> Yeah, that type of thing.
Nathan Latka
12:57Yeah. Do you have a US based outlet yet or no?
Andrew Rogoff
13:00>> Not yet. No. Very good. I've always Go ahead. Always targeted that market, but we haven't got an outlet there.
Famous Five Rapid-Fire Questions
Nathan Latka
13:08Yep. Very good. Let's let's wrap up here with the famous five, Andrew. Number one, what's your favorite business book?
Andrew Rogoff
13:16>> I don't read a lot of business books, but I would say Getting Real by 37signals is a book that's really helped me.
Nathan Latka
13:25Number two, is there a CEO you're following or studying right now?
Andrew Rogoff
13:31>> Not really. Jason Fried, I kind of also from Basecamp. I kind of keep an eye on him from time to time. He puts out some really interesting stuff.
Nathan Latka
13:42Number three, what's your favorite online tool for building the company?
Andrew Rogoff
13:47>> We use something called Clubhouse, which is a really good tool for software development. Definitely recommend that.
Nathan Latka
13:55Number four, how many hours of sleep do you get every night?
Andrew Rogoff
13:59>> Try to get eight,
14:02>> but something's keeping me awake at night these days.
Nathan Latka
14:06So what do you get?
Andrew Rogoff
14:09>> I think it's probably more like six or seven.
Nathan Latka
14:11Okay. Six. We'll call it six and a half. And what's your situation, Andrew? Married, single, kiddos?
Andrew Rogoff
14:16>> I'm married, and I've got a daughter on the way next month.
Nathan Latka
14:21Oh, very exciting.
Andrew Rogoff
14:23>> Next month. I mean, in the next couple of weeks.
Nathan Latka
14:25That's extremely... Well, I'm glad we got the interview in beforehand. Congratulations. And how how old are you?
Andrew Rogoff
14:32>> I'm 52.
Nathan Latka
14:3352, last question. What do you wish your 20 year old self knew?
Andrew Rogoff
14:39>> Apart from kind of things like lottery numbers and that type of thing, I think how little time you end up with when you start a business like this. It would be good to know that so that you can get on with some of your passions before you dive in.
Nathan Latka
14:59Guys, remember how time sensitive is to launch a company? It's extremely intense. Coming from Andrew launched Resource Guru back in 2012, now 1,450 customers paying $105 a month. So about $150,000 per month right now in revenue that's up from $105,000 just a year ago. 40% year over year growth. They follow an SEO playbook to drive that growth. $870,000 raise. They are profitable team of 11 in London and other remote locations, 1% revenue churn per month,
15:27that's gross and the net revenue churn per year, right around 12% spending up to $325 to get a new $100 a month customer. So four month payback again, they help teams manage the time of all their resources or their people or employees. Andrew, thanks for taking us to the top.
Andrew Rogoff
15:41>> Pleasure. Well, thanks for having me. Great show.