How Silvrback CEO Damian Sowers grew Silvrback to $2.1M revenue and 500 customers in 2024.

hello everybody my guest today is Kermit Keane he's a professor of management at the University of Arkansas Fort Smith where he teaches strategy international business and entrepreneurship he operates silver-backed comm a subscription blogging platform for writers seeking a less mainstream alternative and their blogging experience as well as blog platforms review.com Kermit are you ready to take us to the top let's do it all right tell us about the company so how is so we're back different than say WordPress yeah well aside from subscribers we're basically a niche player that is purely a blog platform we play the minimalist space so that means lean uncluttered experience is really what we mean and that's the struggle to maintain that so we're really kind of in no way an anti wordpress think of us as a log cabin and WordPress is to stop the the tall steel skycraper type of environment and what's the business model is it a peer play SAS company yes but it is a subscription-based platform so and what is the average customer pay per month for it would you say around we have different plants around 25 to 30 bucks ok year ok a year well ok so this is very much hopefully your kind of a high volume space then right thousands and thousands of people no ok how so how many people are now using it today around between 500 and 600 so if you have so it's a small but but this would be typical for small blogging platforms less than a thousand would be typical for players like myself pistachio poster gone which is now gone completely but so the smaller players are pure plays are going to be typically smaller except for medium perhaps ok so it sounds like a and they pay on average what two bucks a month or about 25 bucks a year yeah okay so I mean that our high plant retail is thirty five thirty four ninety nine but they can do quarterly as they can do monthly so yeah I'm just turning it back in so like last in terms of revenue you're doing about a grand a month is that right correct okay so so you're right now also a professor obviously that's how you obviously make your living why not cut your safety net why not leave the school go all in on the company and build up to a million dollar company my basic philosophy has always been number one silverback would not be that kind of company because of the generic nature of the space virtually you know there are dozens and dozens of free options running around out there looking for ways to monetize their model to pay for the stuff and as a result I never envisioned it as being something that would be that kind of all and kind of deal I always saw as part of what my teaching experience is is to tell students to create multiple streams of income in other words don't depend on the big a check your ace in the hand because when you lose it then where are you so my this is just part of my own philosophy of multiple streams of income so you're a professor you've got this which is grand a month what other streams do you like to eat any real estate whether streams yeah yeah yeah I have rental property so I have a small portfolio there that does three four grand a month yeah you know and then I am a stock you know portfolio Roth stocks so I play with that so I lose money there I lose money everywhere but again again it's about what do you want something to be in your portfolio of of income and so it I'm a guy in my mid 60's oh I'm not gonna throw the pension account and everything at a venture unless I feel really good at it and it's probably not gonna be a startup yep I'll probably buy an existing model what year did you launch the companies over at silverback was actually launched by a programmer called damien sours named Damien sours back in 2013 late so it really came online full force in 2014 I bought it in 2015 okay I acquired it so I'm a blogger so I write in with what I was interested in it was like wow this would be great so would you buy it for like a you're talking a couple thousand bucks and no I won't say I can't not I can't disclose okay but why not but that was like just me I was like four years ago three years ago yeah three years ago okay let me ask you a different question if you want to say that say the number how did you value the platform if it's basically a free platform oh it's not free we're a subscription base so but it's only come on it seemed like it's doing like less than a grand a month it's baby there's no in other words you're not paying a revenue multiple actually you do in that space if you go online to buy businesses is very much connected to its growth prospects number one and two what is its revenues aim at a multiple okay so what Robert knew multiple did you pay and how do you negotiate it we don't know we don't know what the revenue was back I mean we don't know what the prices those on line businesses are two and a half to three times net flows are flows I should say you took in top-line our bottom top top line and ARR or monthly month annually annually yeah yeah annually now now what if you did this really for business reasons or if you're saying you know what I'm teaching this at school this is a great testing ground for me to actually test the things I'm teaching to show my students how to do it which one was it more of more of um it was a it was literally an economic stream for me yeah and it made me learn to do things online that I would want to talk about in the classroom so you ride on the point it had multiple reasons for doing it I'm a hobbyist I'm a blogger it brought cash and it made me learn new things constantly what are what are the big costs associated with running it so you make a grand a month on it what are your cost anything your hosting costs are can be substantial if you go with those that can handle volume which occasionally blogs spike and you got to be able to manage that load the other is just coding costs I'm not a programmer like the founder was so I have to you know all those subcontractors I use so to build product when I bought it it was pretty rough product yeah and it was a you know was just a startup it had a lot of holes in it didn't have a lot of but it sounds like you paint a pretty you're not revealing it I'm based off your facial reactions because it was a it was a pretty expensive price for what you got and maybe you haven't made that cash back yet well that's correct yeah it was more it was a it was an upcoming business that had peaked and now you have to go and find your base in reality as opposed to the flood I mean it's part of what happened in the 2012 to 2014 window with blogging lots of new platforms came on it was kind of the heyday of blogging you know medium came online ghosts came online subtle posted on post you know in other words you just could list the whole group of them that came online as new offerings and many of them have since changed direction because it's just tough WordPress well for sure but they were a little earlier pull it much earlier player but yeah they they won that space largely and WordPress it's not really a blogging platform I mean it's money's in you know full website development and well I was told I would argue though they grew I mean it's a freemium offer where it starts with blogging and once you get Boulder then they upsell all the other stuff okay so let's talk more about you so so the team right now it's just you and when you need a developer you'll maybe hire a part-time developer yep I have an ongoing relationship with a developer who takes care of bugs and additions and new features which we just steadily keep bringing on so you know basically the money that comes in is what pays for all the game I I don't put anything in it I take a little bit out but basically it all pays for the game my environment has been that most students don't want to do this they're looking for the job they want that kind of predictability it's the kind of the nature of my local environment overseas very different your Arkansas very kind you know traditional conservative environment so but I have some students that do it and it's usually just about an attitude it's about I'm gonna go chew it off and make it happen and if I fail at that one I'm gonna go chew off another one so they're just a tenaciousness about the person that you go like okay this person do you ever get a call from a parent and go Kermit Jane just told us she's launched she doesn't want to go do the job at Deloitte she's launching her own company cuz of your class let her do this has never happened not happened no hey well that's too bad unfortunately because you know I came from overseas for 10 years a lot of these and kids in that environment were much more aggressive and much more where-where'd you comfortable hardened where were you overseas I was in the Middle East I was in Oman for 3 years 7 years in the UAE you know United Arab Emirates so in start-up kind of academic institutions so and they were more they were able to take on they were happy to take on more risk over there yeah if you seem to be or reckless if you will and say oh I'm gonna go try that or I'm gonna go do that because they usually had money a lot of them were from families with money so got it...