SalesProcessrevenue

hello everyone my guest today is nick kausman he is uh he has got a bsc in engineering physics he's the founder of sales process dot io it grew from zero to a 1.8 million dollar run rate uh over the past several years it's bootstrapped one commission based employee we're going to dive into it today he's helping 250 sas and high ticket service companies scale up nick are you ready to take us to the top let's do it all right man so crowded space marketing tech sales tech how are you positioning this how's it different so we focused on helping sas companies grow profitably we help them install what's called video sales letter funnels that uh basically it's the vsl video sales funnel plus paid traffic to a demo so we're like uh we're helping companies just pump uh fill their calendar with demos and um yeah our service and our product shows them how to do that and uh achieve profitable growth so there's tons of marketing firms out there that show people how to do ads show help show people how to do outbound prospecting but not too many of these folks understand that they need to make it profitable so you know like this is your world if you're generating a demo at like 150 dollars per demo on facebook or using linkedin ads let's say your show up rate is 70 the close rate is 50 or 30 you uh you want to make the math make sense right so if you're spending a thousand dollars to get a client you want your groceries to be over a thousand dollars in that first year you want that payback period to be pretty sure so you guys can grow so that they can so they can grow profitably so we focus on that so essentially we build machines where you can spend one dollar for sas companies we spend one dollar you should make at least three dollars back in like 30 days and we had to eat our own dog food so we got to 1.8 million in seven months that's where you're at today 1.8 yeah well 2.2 in uh in revenue but since we're bootstrapped i just look at cash collected we're at like 1.8 so let me ask it differently last month how much did you do in revenue uh 180 okay 180 got it and what's that up from a year ago uh that was it's up we were doing like 30 last year okay got it so about 30 grand in december 2017 now at 180 december 2018 you're saying you do all that by eating your own dog food you do a lot of demos every day oh yeah buddy how many you want you want me to share my screen right now no no that won't come through it won't come through on the show uh yeah like i have a sales rep i got joseph in arkansas i'm in toronto i do five to six demos a day and then joseph's doing five to eight demos a day okay what's a team so just two of you today uh so there's to get we got to 1.8 with just me and joseph um but then i brought on two other sales reps that are ramping up right now they're not really selling they're just training right now okay are they like full-time employees or commission only commission only everyone's commission only okay so just you really full-time yeah and joseph's full-time but he's commission only okay two okay got it got it very good okay so two full-time um and breakdown so so like what's the average customer pay you per month you have a lot of sas companies using you yeah so our contract values anywhere from six grand to 15 000 a year okay a year and is that just is it is it really variant on how many leads or how many demos you're setting up for them so we teach them it's an e-learning it's like a consulting e-learning package right so the 15 grand it's more hands-on where we actually help them write their copy and their ads like that's that's really what they're they're paying for like we just write banger ads that cut through facebook and youtube um so that's what our 15 000 clients get and then our six grand package is basically the the um the playbook on how to build these video sales letters so we give them the sales scripts the bsl scripts the ad scripts the templates how to set the crm um you know how to hire folks how to do a demo how to cl how to one call close most people have no idea how to do that yeah so it's just to be clear is so is this like a is this like an agency on steroids nick or is this truly a sas company it's not an agency it's it's a it's a like info product okay got it yeah yeah but so but it's not i mean you have to hustle every month and close new deals every month to build stackable recurring revenue correct yeah well the contract is per year so it's a yearly uh contract and we have a group we have a community so they pay to be part of the community okay so let me do a specific example here i'm going to pick one of these logos you have off your site so a company like copilot or gather is power advisor stream is paying you what you're saying is co-pilot's gonna say you know nick we need we have two sdrs they're they're putting into aes right now we want to test if your system makes our sdrs more effective for getting demos for these aes we want to sign up for you to do you know line us up 200 demos over the next year and you're going to say okay that's 15 grand yeah well we'll be we'll look at it depends on the price point in the market that they're in right we usually with if they're just doing outbound if they're selling something over like 50 grand they're looking at five to 20 demos a month if they're a little bit lower price point when they're selling like smbs like we can get like 120 demos a month it just depends on the on the uh on who they're going after how many customers are you serving today 280 280 okay and when did you launch company what year so i've been i started i started seven years ago but i was i was kind of like uh i would go in i can only help two customers at a time so i'd go in for half a year and i was i'd roll up my sleeves and do all the work so i'd build the funnel i'd get on the phone i'd build the sales team i'd run their ads and we would do it was a hundred thousand dollar fee plus 15 of the lift so i would go in and i could only do two those a year so then we we did we did these deals everyone started asking me sorry so that was back in 2011 yeah 2012 2012 yeah and so like where were you in life at that point was this like college or out of college or quit corporate uh so i grew up so when i was in school i uh i studied engineering i paid i was in 50 000 worth of debt i had to pay pay off my student loans so i got a job selling door-to-door for a company called canadian property stars became the top sales person there and then paid off all my loans when i graduated i started a business called midnight detailing where we took the door-to-door marketing and sales method applied it to uh washing rich people's cars in toronto and uh that was an awesome business it ran seasonally um we took that from zero to three thousand customers in two years then we sold it to a company called go wrench auto because we couldn't i couldn't convince people to wash cars in the wintertime um so i sold it that's because that's the wrong thing to convince them over in the winter time you just need to put more salt on the roads yeah exactly right that's that's how you get more car washes yeah so after go wrench i got into helping sas companies and then we started i started doing like the done-for-you work and then we transitioned uh last year to this uh this accelerator model which is you're basically i mean i see you're definitely kind of angling towards hey if you're in 500 startups if you're nyc if you're in tech stars like use us we'll help you drive sales and you're definitely positioning on your sales page to that audience is that accurate yeah that's right yeah um what i want to understand though right is how much of this is i mean you're an engineer so you think about systems you hustled your ass off you know just doing two clients a year just do whatever you had to do to get that revenue to get your debt paid off but i'm curious like usually when someone like you has this kind of success in an agency model over time they get lazier and that's a good thing because they build systems to do stuff they had to do in the past what i'm trying to figure out is have you actually built code that runs this system or have you just essentially hired a few commissioned folks and they're eating their own dog food and they're actually driving this thing like which would be more of an agency model not a sas model so what we did was over i took everything that i was doing that was getting because i my case studies were pretty awesome like zero to a million in a year right from a standing start and i figured out how to do it and then i put i wrote the process and so that's what we sell to our customers now like we have all the documents we have all the templates oh i see we have all the flows we give them the keys to the car and they go and drive it okay got it so you have essentially a templated system but if that you know if if time hero signs up for you and they're they're targeting 100 month smb accounts versus i'm going to make this up catapult signs with you and they're trying to sign up hundred thousand dollars tv accounts like you have to modify that template a bit before you hand that like binder of training to their sales team is that accurate yep that's right okay is that right though that's the deliverable yeah exactly so like for instance like time hero is going to be running paid traffic to a free trial funnel right and then they'll stick a demo in there if for people that want to do multi license like they wouldn't want to sign up like for like 10. whereas some of someone who's doing a 50 000 100 000 enterprise deal they're going to use a video sales letter to book meetings against the calendar they're not going to be it's no free trial for 100 grand right they're going to use the same video sales letter structure but they're going to funnel it to uh the end point is going to be a meeting instead of a trial yeah so let me ask you a question um the the reason sas is so popular is it's just a more effective atm right if you put a dollar if you get if you drive a new dollar of mrr and a sas company you know valuation wise for the founder if you own a hundred percent that's essentially worth annualized so a dollar times 12 is 12 bucks and if you have healthy economics like churn ltv cac payback all that jazz you can get maybe a five to a 10x multiple let's be conservative and say five times at 12 dollars that's sixty dollars for a dollar of mrr you've driven right that that is really effective your model which i mean right now it's a really effective training program but you're you're essentially helping these atms run more effectively but i don't think you actually have equity in those atms how do you move from doing what you're doing now to actually getting into the value that you're creating for these pure play sas companies yeah it's a good question and so our long-term goal and we started doing this already so our customers out of 280 there's a few superstars in there and we have like cash and you know like our business does well so we're able to invest into those deals at good terms because we can help them more like if we give them money then we can help them more than just with the money because we can help them with their ads and scale it who have you invested in one or two of the companies so far uh so right now uh seamless ai okay you know that no i don't okay yeah they're doing really well um which for which do they go through an accelerator seamless is out of uh ohio they didn't go through an accelerator now yeah so you will you will essentially lead the angel round or you'll go on the back of like a vc round i won't lead anything i'll just jump in okay but okay so how did you give seamless dot ai money was it like here's 20 grand for five percent of the company well they had a convertible note right and they like our thesis is like we can get them to that point of inflection where if they solve lead generation and they solve and they solve uh the predictable sales method all it is is a function of cash and time to get to a certain point right so uh we get uh basically we want to get in at that point and then um so you're investing in the convertible note yeah okay which somebody else kind of set the terms for yeah i see what you're saying okay cool um my question still goes back to you i mean what you're doing is you have you're an engineering i mean the the pedigree is like perfect you're an engineer uh you know how to talk you can communicate you've got great you're building a team like you're generating your own revenue but but like if you're optimizing just to like get filthy freaking rich you would go build something in in an exciting space and actually apply these things in your own tech company i mean when do you do that it's got to be on your mind yeah well i've worked with so many sas companies right and uh i just looking at return on capital because i have my own capital i was like well how do i get that's all i care about is just growing capital uh and so i came up with a model that's pretty damn effective right now and i'm gonna hit a i'm gonna handle a plateau and i'm gonna have to do something else to keep the growth going yeah all right all right fair enough um let me uh let me go in here so real quick where are you guys all based where's the team you you and uh the the other full-time so i'm in uh toronto canada joseph is in arkansas i have a guy in new york and i have a guy in vegas okay so toronto and kind of remote and then how many of these customers when their year kind of contract expires how many renew i don't know yet we've only been doing it for a year oh god i thought you said you launched this back seven years ago this is my uh that was my like done for you we launched this like uh this group program the training program uh in january of uh this year okay so it's like a membership site yeah yeah okay very good all right let's wrap up here with the famous five number one what's your favorite business book uh four steps to the epiphany by steve blank number two is there a ceo you're following or studying right now uh yeah jeff bezos number three what is your favorite online tool for building the company close eye out [Music] four how many hours of sleep to eat every night i try to get eight what do you get though nick what do you get you broke up there say that again yeah what do you get how many hours eight hours to try to get eight yeah yeah so but so you say you try to get eight is that actually what you're getting or is it way less seven to eight okay fair enough good and what's your situation married single kids uh i have a girlfriend okay not married no no kids running around you don't know about i don't think so all right just messing with you and how and how old are you i'm 27 27 last question what do you wish your 20 year old self knew uh oh pay people for pay pay smart people for help i got a lot of like people give me the wrong information but then i paid somebody a lot of money to show me stuff and it it helped guys pay smart people for help launched kind of just a kind of hustle agency done-for-you pro system back at seven years ago to help people drive more sales and demos he's now kind of codified that today it's still really a training and membership program but he's scaled nicely to 280 customers paying anywhere between six and 15 grand per year dune caught you know 1.8 million bucks over the past call it trailing 12 months so healthy growth uh two people a base between toronto and other remote locations totally bootstrapped which obviously is a great place to be nick thanks for taking us to the top thanks man appreciate it