How Rfactr CEO Richard Brasser grew Rfactr to $10.8M revenue and 220 customers in 2017.

this is the top where I interview entrepreneurs who are number one or number two in their industry in terms of Revenue or customer base you'll learn how much revenue they're making what their marketing funnel looks like and how many customers they have I'm now at $20,000 per talk 5 and6 million he held bent on global domination we just broke our 100,000 unit sold Mark and I'm your host Nathan lka I just finished traveling south East Asia for 41 days and I usually always get sick when I travel and quite frankly eating is difficult for me it's hard to find a restaurant and I'm spoiled in Austin with my personal chef well I took these little packets with me this time 30 of them in my carryon suitcase they kept me totally healthy with 11 different secret ingredients you can see them at Nathan la.com juu I'll tell you more later on in the show that's Nathan la.com slj top tribe you know I don't have a lot of time to waste that's why I use fresh books to send out invoices and make sure I'm collecting my money to get your free month go to Nathan l.com fresh books and enter the top in the how did You Hear About Us section Nathan L to hear this episode 623 and coming up tomorrow morning you're going to hear from winmo CEO he's 37 years old two kids Dave Curry they've passed $1.1 million in monthly recurring Revenue helping 2,000 customers close more sales with their tool winmo good morning everybody Nathan lad here and our guest this morning is Richard brasser he is the foremost expert in helping companies increase the effectiveness and influence of their Salesforce through strategic use of social Communications he does this through his company called rfactor which we'll dump jump into having created the sales enablement program for some of the world's best Brands Richard is focused on the pursuit of enabling salespeople to leverage social communication and build more meaningful relationships Richard are you ready to take us to the top absolutely good morning how are you thanks for joining I appreciate you coming on all right tell us what our Factor does and what's your business model how do you make money so there was you know an awful lot of buzzwords in that uh kind of in the normal descriptions at the base of it you know the the truth is that companies need to to engage their potential buyers in a more meaningful way and we know that sales people that are that more efficiently build relationships and build trust and solve Solutions right sales people can't forget that that last part of adding value um but the that do that win right and you know we are very much focused on enhancing uh their ability to connect with more people find people to have a a conversation with through using and leveraging their social network and allowing companies to make it easy for them to engage find and and influence people with content so we have a platform uh it's called soci social Port it's really designed for uh organizations that have an indirect sales uh kind of or a world of resell agents advisors you know anywhere where you got a bunch of people selling your stuff and um and you're looking to make it easier for them to have a social presence have the right content and go out and very effectively hunt the right people then our platform is designed for that it's a it's per month per user model so this is a model yeah absolutely and there's this is not a Marketplace play like you don't have influencers paying on one side and companies's paying on the other no no it's entirely for the companies to leverage with their their salespeople it's an internal tool there's no uh kind of outside influence and it's directly plugged in typically to their CRM system so they can see the exact amount of dollars uh that are resulting from the activity in Social so we can we can actually give that Holy Grail of what in the world is this worth and and why am I paying for it we can actually run reports in CRM to see it and so uh I don't want to go into every like different customer cohort so let's just take an average what's the average customer paying you per month oh it it is across the board I'm only going to make one disclaimer is that we started with the top of the Enterprise so we cut this solution and developed it in conjunction with companies like Microsoft Oracle sap um you know and and and a lot of others and and now we're coming down market so uh when we do Channel activations those can be small accounts that are paying you know somewhere in the the couple hundred to few thousand dollars a month uh the large companies are paying you know uh massive massive amounts per month in the in the six and seven figures okay if you take an average though again I want to go going into every single one if you just take an average across your entire base would you say it's 3,000 a month 5,10 yeah our kind of our typical unless you're part of another organization our typical starting point is about five grand a month okay perfect that's helpful so let's go back and capture more of the kind of the story now some context what year did you launch the business in uh so this product was created in 2009 late 2009 great and what uh bootstrapped or have you raised Capital uh so the company was bootstrapped uh for the first uh say eight years we when we came around this product because the company's been around for 16 years total um we did a a seed round very strategic kind of um angel investor round and we'll we'll probably go out and do a series a um here sometime in the next I don't know six months to a year how much have you raised to date though uh I've raised about $9 million okay and and when you go into and that's all been on a seed round and internal funding Lord have mercy so when you say internal funding you mean like you and your co-founders putting money in correct yes okay where did you guys get a bunch of money from did you have some success before this that's a great it's a great question um I played golf on tour for about seven years wow and started off in technology and digital and marketing and um then had this stint playing golf and um and made some good amount of capital there and my uh and I start winning fees or something yeah yeah you can make make a few million bucks a year playing golf it's pretty good interesting not a bad life thanks Richard for making us all jealous I appreciate that it's all good but uh and then um about four years into the business um I really needed somebody on the operations and finance side you know I'm I'm more sales marketing strategy technology and um so I brought my partner Greg into the business and he was just exiting a uh selling company healthc care It software company that he had built and um and has successful exit so really made a great Synergy coming together real quick question for you this is off topic but back in episode 615 I had a guy named sheen on from Tokyo who runs a company called seven dreams raised 75 million bucks their main product is a carbon fiber golf shaft which they sell for a between uh the average selling point is 1,800 bucks but the highest line of that of that product it's $120,000 carbon fiber golf club have you seen that on the trail at all or no I I have not no I I doubt uh I'm sure there's a market for that because there's a market for anything right but um it was crazy all right interesting so 9 million raised so has the have you done an equity round yet or has this all been convertible note Deb uh no no no the the the first was a the seed round was really a a formal um you know preferred round it was uh it was an equity round okay so there was a valuation on the company yeah absolutely got it and when was the last round sorry and how much was it for uh the last round was in 200 uh 10 and we raised 3.25 okay got it um and then you want to raise a series a how much are are you targeting um yeah probably in the in the seven or 10 range interesting okay great um let's jump into so let's take us forward by the way you said this was launched in 2009 but then a minute later you said it's been around for 16 years which one's right the company's been around for 16 this product was was uh developed in 2009 okay so you I mean you really launched this thing back in 2000 and you've iterated and pivoted and added products that's correct we uh we started out as a sales as a strategy and consulting firm and then started to get heavier and heavier into Building Products one of those products was an online community solution private corporate Enterprise online community kind of like a Yammer um on steroids or you know private corporate Facebook and we grew that and we sold that um in I don't know 2008 is and um did you spin it off as its own entity or what we did yep interesting and and what did you sell it for I mean how's it valued uh it how what was the valuation or how was it valued well both I'm more I'm more interested in the Y versus some big number that's really impressive no that's right yeah we can't share we can't share the big number but um but it was you know we we saw that it needed to be combined with some other uh Technologies and a more more uh mature organization that wanted to be in that business um we wanted to be in the next business which was focused on helping sales teams generate more sales and the intern of collaboration and communication was really not uh the thing that we wanted to do you know for the for...