How SanityDesk CEO Samuel Cook grew SanityDesk to $180K revenue and 50 customers in 2020.

hey everyone my guest today is sam cook he's a former us army officer and russian history teacher who founded sanity desk to help experts authors and coaches build their entire businesses online he lives in key of ukraine and his tech team is based in poland and ukraine samurai takes the top ready to go nate all right so talk to me real quick what kinds of customers are you selling sanity desks to we're specifically targeting experts authors uh consultants solopreneurs people are just starting their business and are overwhelmed by the tech because the tech monster is really you know it stops a lot of people from ever getting started especially now with kovid you can't rely on in-person networking you really have to have your id set up yup no that's absolutely true and so i mean can you name a customer or two that people might know yeah uh peter sage just signed up he's got about a 60 000 person audience he was actually user number one of sandy desk five years ago he just signed up for the sas version of it he that was when we were developing our agency and uh mary lee williams who wrote the book change your questions changed your life and uh david babalane who wrote the book uh stor primary color is a story phd and uh you know film script story consultant so uh not everyone are have written a book but everyone uh wants to write a book uh i think generally who were working with and their individual experts coaches consultants on their way when did you launch the company sam launched october 31st of uh 2019 literally i think that was the first day we were we were in business according to state of delaware and how many customers are you working with today uh we have just over 50 customers i think we have about five subscriptions uh ending their trial today tomorrow so we'll be just crossing north of 50 customer mark uh right now that's great and what are some of these customers paying you per month on average to use the full tech well we have uh we have two plans we have one that's 99 a month which i think we have nine or ten users on that but we're actually mainly only working with people who are willing to pay for the enterprise version which is 2.99 a month uh it's up to 10 000 users it has the smart page technology where you can create you know thousands tens of thousands of variations of every page based on user data and also they get a dedicated tech support rep with that plan because we we're using this kind of guided onboarding model concierge level support to really work out the onboarding process education and kinks in the tool as we go to the first hundred users so can we multiply 299 a month times 50 you're doing like 13 15 000 a month in revenue yeah i think we're at 12 and a half when you average it out between the 10 or so lower plan users and most of them on the 299 plan so yeah 12 and a half 30 000 mr and where were you a year ago do you remember a year ago we had no no revenue we started selling in i think we got our first customer end of february and and you know march was really when we started selling in earnest and where are you driving this growth for i mean how are you getting you know 10 20 30 new customers each month well two places i had a marketing agency that i built up that had about 100 000 people on its list we had the story matters brand story matters academy we're getting people coming over from there who are old customers we're also doing uh facebook ads um to warm audiences who've never signed up but you know half a million plus people who've seen me on on video marketing for the past three four years online face for tv baby yeah yeah and then cold traffic uh cold traffic through our new sanity desk video ads has started to generate some leads so basically old agency marketing new product they have an affiliate commission as any agency or reseller can get and then you know sanides just launched its own funnel and facebook ads and we're also doing some you know linkedin outreach have you bootstrapped the company today or did you raise capital no we've raised 450 000 in outside funds uh the company bootstrapped the first 700 000 as an agency the agency sold the ip in october of last year agencies got about 725 000 invested into the company has one of the angels that transferred the ip and then 450 of outside monies come in since then so what percent of sanity desk does the agency own [Music] i think at a 4.5 million post money valuation uh on a safe that's going to put it 20 percent yeah yeah now did you own 100 of the agency yeah yeah so so why deal with that off it's the same owner on both things why not just say sam cook owns that 17 insanity desk well the the one reason was the team at the agency uh you know i am actually putting two managers uh in the cap table plus we're going to set aside some of the the cap table for the team so that part of it is to incentivize the team to do work for sanity desk at way way below market rates because because the team their shareholders the team also had some past invoices to pay off uh so even if even if i wanted to uh you know shut down that company and roll it into sanity desk they're they're actually handling the obligations which they're winding down on a monthly basis that that they owe and the new company has no ip uh or or that you know no debt so that was the cleanest way to make the transition brand new company uh ip transfer yep that all makes sense got it so 450 raised outside agencies put in 750k when did you raise the 450 from outside angels it's been since august of last year uh we got our first outside angel to put in 100 um five or six more in for 25. sorry five more in for 25 uh one in for another hundred his brother in for 50. and then i think we got a couple loans uh as well we got a sba loan which i call outside capital but you know that's not equity yep so i think 4 000 in angel money to be precise plus about 50 from the government and you've used this obviously reinvest in the team how many folks on the team today fourteen we have nine in the product uh my partner's chief product officer slash cto uh even though he's not a developer by trade he's how many pure developers pure engineers five pure engineers one qa to design any quota carrying folks quota carrying do you have any sales people with quota oh yeah uh i got one sales sales rep one customer support rep uh one hiring officer one finance person but they don't all have quota just a sales person it's a sales person and i'm the other sales person yeah so besides you the other sales person with quota what do you set their quota at annually um well he's on a base plus commission so basically uh he's on a base a thousand dollar base plus 150 per new sign up uh inbound leads and then 250 if he finds him himself so what do you want him though to be closing monthly in terms of your monthly occurring revenue what's this quote at target 20 20 per customer 20 per sales rep that's one deal a working day uh we're also looking for new sales reps to kind of increase that so got it so 20 per day at whatever three hundred dollars i've got 20 per month one deal a day um as right now per rep you know if they speak to three or four i understand i understand so so yeah 20 new customers this one guy who's doing sales right now you want him to close 20 new deals new deals per month at about 300 per month yeah exactly which is 6 000 a new monthly recurring revenue about 72 thousand dollars in arr yeah how do you i mean how do you get that to scale you need your sales people to be closing more than that if you're gonna go higher and build an army of sales people oh yeah yeah i mean look that's where we're initially at uh we need to spend more money on ads i mean i think realistically um if we were to get uh you know right now we're spending about a thousand dollars to a party customer if we were to have a budget to spend on ads and you know some some float for that uh yeah i mean one sales rep i think i that's what i think he can close based on what we're bringing in on ads but one sales rep is really good if his phone's filled all day could probably close four deals a day so yeah yeah i could go with one sales rep and then have another one um you know so i we're having about a 30 to 50 close rate of people we speak to and it's a 30 minute call that's great and so when you take your fully weighted cat today facebook ads commission's a salesperson all your expenses what's it cost to get 300 a month customer uh well they pay a 4.99 upfront onboarding fee um and in 299 a month we're paying right now about 12.50 to acquire a customer 12.50 got it so you get 490 that paid back instantly which leaves about 800 left to be paid back that comes in over a three month period so you got about a three month payback period how much more can you invest in these channels they seem to be working um it you know it really it really just depends on optimizing our facebook ads and you know getting the money in so i think i think facebook ads could definitely scale up i mean we're taking a global approach we we got a customer from italy in we got...