How Sitemanager CEO Alexander Hoogewijs grew Sitemanager to $1.4M revenue and 138 customers in 2024.

hello everyone my guest today is alexander hogbegs after graduation with a master in economics he started as a management trainee in a big corporate volvo he then made the switch to entrepreneurship after seven years and joined a web design agency in 2012. in 2014 he decided to start building web design technology to help colleague web service providers in belgium in 2016 he transferred all that ipa into a new company and switched their focus from projects to technology currently he's running site manager as the ceo together with his co-founder uh who's the cto all right are you ready to take us to the top alexander yeah absolutely thank you for having me on the show you bet all right tell us about site manager what's the company do and how do you make money yeah so uh site manager is active in the market of the web design technologies it's quite a competitive market of course with all the cms platforms that there are the open source platforms like wordpress and drupal and all the site builder tools but we found a niche focusing on service providers so we're focusing on the freelance web designers and the small agencies and with the site measure two stick we offer them time saving time saving and producing their website by collaborating between designers developers and then the content managers and time saving in resource management because um one of the bottlenecks that agencies also have is that they cannot find the right resources to do their projects and those are the two main pillars that we try to solve within our site measure platform so first of all collaboration technology and second uh resource management freelance resource management and what do people pay for this would you say on average per month yeah when they open a cloud web design studio they pay when they work as a single entrepreneur 55 euro month and as an agency 155 here a month and then they have a wide label solution for that and then they start upselling or we start up selling to them with the project the website that they're really published live in our platform that's how we do it today and what would you say a fair average is is it around this kind of 60 euro mark look we start really selling after mvp uh as in march 2017 so that's the moment that we really started to hit the ground and at this moment our arpu is 90 euro a month so but that means that all the uh the acquisitions that have been um in the last recent month are not yet producing uh projects yet sure so 990 euro is about 105 us dollars per month that's what the average customer is paying you per month currently yeah that's uh that's correct okay and we ramped up at this moment up until uh 138 customers and a number of users it's approximately uh 300 350 because agents are adding their colleagues to the platform and they're inviting their customers to the visual cms system and that's comparable with squarespace for example drag and drop what you see is what you get yep their design and developer environment separately and how much revenue did you do last month sorry i had a bad line here but i guess that your question is how much revenue are we making uh today currently so we have 12 500 euro a month so it's approximately 150k a year our arr yep so it's about 14 000 united states dollars per month or about again as you just articulate about 150 000 bucks a year um walk walk me through where you're getting these new customers from at this moment we are uh mostly outbound uh sales focus because that's the most easy way to really start selling and we are now converting all the sales efforts towards inbound sales that's uh really what we are starting uh up on right now uh and we are starting uh as after the holiday period uh with um uh sales in the nordics as well but at this moment it's really one salesman focusing on belgium and the netherlands and what what's your turn what's your total team size at this moment our total team size is seven to operational founders and then five people on the payroll and we have a position that will be filled in uh as from september and we have three people joining our team as from september yeah and those seven people are you guys remote or or where are you based it's a combination uh most of the people are working uh in belgium but uh i have to say that three out of five they're working remote okay so kind of belgium and remote locations let's let's shift back to some economics here for a second so so churn is obviously critical in your kind of business what's churn today this moment are assuring if you look at the growth churn revenue sure it's a one percent and if you take the net churn then we have a negative one because the upselling is higher than uh the acquisition that we do today that's because yeah that's just inherent to our business model because all the studios start producing websites so these are both these are both those are both annual numbers yeah the monthly numbers is from uh an average monthly uh yeah monthly okay so if you if you have gross revenue churn of one percent per month annually it's about 12 yeah i guess so but yeah or a time reference is uh isn't all that long uh yeah i i see what you're saying yeah because you just launched recently yeah very good uh when so you launched you said i think you said you started working on this in 2016. how were you supporting yourself between 2016 and last year when you got your first revenue from the new product oh we have a small praise feed round and a seed run so we secured a bit of funding already the precise round was an accelerator program here in belgium the imac i start program and then uh you know a business angel uh and a bank loan and then the siege rounds is now secured for 650 k but no not all the means are leveraged yet so we have secured the funding but this combination and belgium we call it a financial mix combination between a government loan and a bank loan and a private equity player and the private equity is a part in equity and pardon convertible and we can really activate the means as long as we need it so it's possible that when we found really the the scale the scalability button and when we can prove okay our business model is scalable that we will not activate the bank or the government loan but uh directly go for a higher uh a bigger private equity round because you have to look at your balances as well and and find a fair trade between uh yeah the the own means and then the yeah the the things that you take from the banks and from under the loans there has to be balances i understand and how much have you secured today total funding at this moment uh secured 100 850k at this moment not all leveraged yet but it's secured so we can use it you said you want to use that to to kind of obviously grow the business to go do a formal ground what do you think you need to grow revenue to so you can go out and do a round at this moment our goal is to go from 12 uh uh 12k amounts to 50k a month in in a year in the coming years so from that on we will uh go to the next round got it and what valuation do you want to raise that do you have a target in mind oh at this moment it's quite difficult to say i will first see what uh scalable the scalability figures are and then it's better to estimate the price the valuation either the pre-money valuation sorry what are you currently paying to acquire these these new customers you have 138 today in our outbound sales strategy uh it's an acquisition cost a yearly 1200 euro again sorry i'm always talking in europe for you that's okay it's about 1400 us dollars yeah that's 1400 us dollar but uh our customers pay uh upfront so all of them are paying up front so that means that we have our acquisition calls back the health of the acquisition cost back in the first month and then they start producing and um by most of the time we have the time to recover our acquisition cost is below 12 months so that's good just to be clear on a cash basis you get your money kind of back instantly on a deferred revenue recognition basis if they're paying 100 bucks a month on average and you pay 1400 bucks to acquire them you're looking at about 14 months on a deferred basis to get that money back yeah um okay interesting uh that makes good sense and where are you spending most that money is it on salaries and humans or are you spending it directly on ads somewhere now at this moment it's really on working capital so it's on uh almost sales and customer success uh capacity uh and that's also something that we have to solve first so we we know whether bottleneck is today in the position uh process um to be to be to be honest it's in onboarding and training and uh we are now currently developing an online training center so we can reduce the onboarding time from four to uh one hour and and go to a self-service model that's really critical to succeed in uh the inbound marketing as well yep very good alexander let's wrap up here with the famous five number one what's your favorite business book oh uh blueprints for a soft sales organization it's from my jacco vanderkoe and fernando pizzaro it's a great book it's uh explaining everything about itself still number two is there a ceo you're following or studying right now uh i'm a fan of uh the belgium ceo petryan bowden he's the ceo of showpads and they are doing a really well here in belgium number three there's an acquisition in the us as well in boston again yeah i know they're doing great...