How Snapaddy CEO Jochen Seelig grew Snapaddy to $12M revenue and 1K customers in 2024.

hello everyone my guest today is johan celek he is the founder of a company called snap addy snap paddy is helping people automatically capture contacts and visit reports faster and more effectively all right you on you ready to take us to the top oh yeah hi thank you thank you for the podcast i'm really happy to be here and good so tell us what the company does and and what your guys's revenue model is how do you make money okay yes snap eddie we um creating tools for capturing leads and contacts into crm systems so normally every business people and b2b companies have the problem that contacts in the crm system are not up to date or all the salespeople they're not really happy to do the contact work in the crm manually so we have tools for capturing needs on trade fairs and also in the daily work to crawl contacts out of email signatures or sing in linkedin and help them to get the data completed in their crm okay and walk with your pricing model so are people what are people paying on average per month for this yo we have several packages so the smallest is a basic package for one person it's only for small companies and one to ten people it's 19 euro per month and they pay for a year so normally we have only yearly packages so 228 euro are the smallest packages and normally companies with 15 employees and more they pay 99 euros or 199 euros per month so you and just to avoid having to go down every customer court since we're short on time on average what does the customer pay would you say uh on on the yearly or what do you mean whatever you however you measure um normally i think the the most companies they pay five thousand to ten thousand euro per year okay five thousand euros bigger ones five thousand euros well is that the average or is that the bigger ones um it's the um the average is around 3 000 euro i think okay per year and the bigger ones they pay up to 10 or only 40 or 50 000 fair enough so about 3 000 per year on average in terms of euros which is 3 300 united states dollars yearly or about 275 dollars if you do that on a monthly basis but you said most your plans are annual you have to pay annually or for more years so we're not to have the normal sus model with a monthly payment because we have many customers and they need support from us for the first time because we also have to do crm mappings um so normally not the customers can start and only touchless pay and work with software um they have to pay some entry points and kickoffs and you must think about that there are fields in the crm system which will be different to our snap eddy tool so we have to um fill up and make the two tools work together i understand what year did you launch the company um when we founded it or what when did you launch the company we launched the company 2015 so four years before now and we have now about 15 employees and 1 000 customers using our software okay so a thousand customers and you said 15 employees have you bootstrapped the company or raised we have bootstrapped that we are our three grand founders of the company and one of our founders also had a sas company before he started with the company in 2000 and he made an exit to a private equity company i think six or seven years ago which company and um transportion group it's located also in germany now okay and which private everyone bought it oh sorry i don't know by now i think it was rainbow but i'm not for sure okay very good well back to your business so you just said kind of a price point on average annually is about 3 300 bucks north of a thousand customers that will put you about 3.3 million in terms of ar run rate right now is that accurate um yes of course um this year we are planning to do uh 2.8 um for the year okay so so which means right now you're doing less than 2.8 what did you what'd you do last month um last month we did around um 250 000 per month okay well 250 thousand dollars per week but we have an um difference because there are peaks and downs you know there are trade fairs in the first three months and in the last three months and there we have more packages and because they are paid annually they pay upfront for the whole year or for more than one year so we have up and downs in the revenue yeah but you don't yawn you don't calculate the whole annual payment in the month you collected it you divide by 12. so yes when you just like when you just look at your monthly recurring revenue last month what was mrr um the mrr is around 180 000. one one eight or one eight zero um one one eight zero 180k 180 000 right now per month which would be about 2.1 million per year right now run rate you're hoping to grow that up to 2.8 million in terms of run rate by the end of this year okay so which of if you're doing 180 right now again you can't have a thousand customers all paying 3 300 per year because that would be 275 000 per month so which one of those numbers is too high um it's how you calculate because we have two different models and we're not working with the um with the calculation of downgrading it to the months and say okay they pay for 12 months and we um split it because we go with the right revenue we have for this month so this is more important for us for calculate and if you have um the model that um sorry this is like this is really simple this is just basic math you can't have a thousand customers that pay three thirty three hundred dollars per year if you're only doing 180 000 per month right now which would be about 2.1 million annually the map doesn't work yeah yes because there are some um some communists that are smaller in the thousand comp so it's a little bit more difficult we're not so um the answer then would be the answer then would be your average is not 3 300 per year it's a little lower you have a thousand customers but the average is lower yes of course it has it has to be that's the only way to that's only the math works so what you actually have if you're doing 108 thousand dollars per month right now and recognized mrr that means you got a thousand customers that pay on average 180 per month and some of them pay the full 2100 up front which is why you have peaks and valleys in your cash collected each month is that right yes yes of course okay and then okay so you you found the company in 2015 uh you guys have bootstrapped which i love um did you bootstrap did you ever try and raise capital or were you always going to be bootstrapped no matter what um no we did not try this because we had also some good revenues in the first two years and we made a stable grow rate with everything we need to so this year and also the last year we were positive with our cash flow and so we never tried to um raise capital at the moment because it's better we have the own um yeah we have not to make every month reportings for external people and it's easier for us to to work with us what we what we have yeah when you say casual positive are you just barely are you operating at break even or are you taking like 10 20 30 monthly to the bottom line um in the last year we were um also break even it was zero and this year we are really positive look like but like what's the percentage like 20 10 um i cannot say out of this i don't know at the moment i can i have not never calculated it well then what you just said you're really positive so how do you know you're really positive if you've never calculated it um yeah we've got every month from our bvr it's called in germany so we see how many uh cash we've earned and the revenue and the costs and so we're positive but i've never um calculated the percentage oh i see so you'll see like 10 or 20 000 in cash after expenses added to your bank account and you're just saying you've never figured out what the percentage is no no not on the bank account on the bbr so we see that um that we have this year around 200 000 of positive cash over the past 12 months or just over the past six months of the past six months okay so i mean you can take 200 000 right divided by six that means each month call you're taking 30 40 000 in profit yes of course and you said you're also so you're crashing positive and growing so if you're doing 180 thousand dollars per month right now in revenue do you remember what you're doing exactly a year ago um one year in the future or in the past past uh past um in the past i don't know exactly but i think it was around 80 000 perhaps okay but you're more than doubling year-over-year yes of course and where's most the growth coming from where are you finding new customers [Music] um we have different marketing and sales funnels so we also make outbound calls this is really good here in germany and in the areas so we are looking for trade fairs here because this is one pain point where we can call the customer and say hey you're on a trade fair and you do the manual work of the data entry in your crm and we have a digital product for you that makes everything much more easier and so i think we get the 40 of our customers over cold calls then we have some inbound channels so we're really good in seo optimization and also search engine advertising so we spend money for adwords every month around 8 000 euro and we get at the moment 218 inbounds per month from companies but there are also smaller ones which are not so um qualified but i think we had so 15 to 15 um qualified inbounds from bigger companies where we also can earn money and make a contract with them interesting and so when you look at your fully weighted customer acquisition cost and your payback period what is that sorry i've not uh calculated this so we're not so data driven as you think well data is just a way to help you understand what the company is doing you wouldn't be spending money on search engine marketing if you didn't know that it was working so you've calculated your cac i mean do you know what it is yes um the customer acquisition costs and all this and we um made this um on the last year but we do not this on the um on the fully track of the year so i cannot say um how high the customer acquisition costs at the moment are but but what's the last number you do have the last number was around um two thousand euro okay to get a customer that pays between two and three thousand dollars in the first year yes so your payback period there would be anywhere between kind of in the 12-month range for the first year yes but most the customers are using the software more than one year and also customers they make a contract for three years or five years yep so the math works churn is critical uh johanna in any sas company do you know what your churn is historically the churn is around 15 at the moment but we have two different churn rates because there are two different products one is the grabber product um for also creating leads and enter new contacts and there are also more smaller companies using the product so the churn rate for the snap edit grabber is a little bit higher than the for the snap eddy visit report because if i have a tool for my trade fairs and it's fully integrated then i'm not able to churn and searching for another product if this works for the snap-eddie grabber we have churn rate but it's a normal process because if you think they are smaller companies and they think hey we want to make new um new outbound calls we have to create leads and they use our software and then one year later they think no more outbound calls we do more in marketing budget or some other things and then other companies came up and buy the product for so and just to be clear you have 15 percent annual revenue churn do you have any expansion revenue on those cohorts sorry what do you mean upsells upsells um yes of course um we also have many companies um what's the percentage i don't know so if a company starts paying you two thousand dollars a year in the first year you know you have upsell revenue what do you typically expand them to what's their typical second year contract value expand to yeah most of our companies or the customers they will stay with the licenses they have because normally the sales team not so grow so fast but sometimes we have companies there starting with a lower group and not the whole sales team and then make an upselling in the second year or also in between the first year okay do you know does your expansion revenue make up for the 15 churn no i don't think okay so your expansion is less than 15 annually so your net revenue retention right now is below 100 yes i think so okay how do you who does most the metrics at the company or do you guys just not measure any of this stuff um yes we have a cfo he get more metrics of the company and make more metrics but um at the moment we're not so data driven as you think because there are no external reportings we need to and we focus you don't do metrics for external reporting you do metrics because they help you drive the business it's for you yes of course but if you're working on the product and also making sales and earning new customers and you see that it's growing then you only focus on the sales team and on growing the business well yeah but if you knew if you looked at all the accounts that expanded and you saw that all of them were using one feature and one of your tools you would work on building that feature out because it's driving serious expansion revenue currently you have you have product it sounds like you're driving product based off like i don't know random information not actual metrics and usage metrics from the tool yes of course that's right why i mean that doesn't seem smart at all yes um i think it will be important for us to do more metrics and also yeah get more data driven for the company but um this will be um a job for us in the next year i think all right very good let's wrap up with the famous five number one what's your favorite business book um my favorite business book um um the power of positive leadership was really an interesting book because i think that it's important to be a good um leader for the team and if they're working in a happy group and they're really have the power of a team then the company grows faster and everybody's happy number two is there a ceo you're following or studying um not at all number three what's your favorite online tool for building your company one of my favorite tools is it's wanderlust it's an easy tool an easy tool for task planning for every day and i use it every day for making my day a little bit more easier and know what's the tend to topics i need number four how many hours of sleep do you get every night um around six hours and what's your situation married single kids um uh i'm i have no kids i was married but i'm um quit at the moment and had a new girlfriend okay and how old are you how old uh are you i'm 32 years old last question what do you wish your 20 year old self knew sorry i didn't understand something you wish you knew when you were 20. when i were 20 [Music] sorry i did not really understand you and the question is what is something that you wish that you were new when you were 20 years old i don't know nothing at the moment [Music] okay so you've learned nothing over the past 12 years that you wish your 20 year old self i'm sorry then ah i didn't understand it right sorry um what i've learned in the from 20 yeah that sales is really important for a company so if you make more sales and outbound sales you can reach even better goals and i was from an online marketing agency before so i made more with marketing and inbounds and i thought that only over the marketing channel you can raise a company but i think it's not the only right way so you have to do both things then you grow faster snapbatty has passed 2 million dollars in arr helping folks especially folks at sponsored trade shows add new contacts from the trade show floor to their crm in a more fast efficient way to get the crms clean they got over a thousand customers paying 180 per month 180 000 per month right now in revenue that's up doubling year over year 80 000 per month just a year ago they are profitable each month they've raised no capital which is great team of 15 people churning 15 of their revenue annually expansion is still something they're working on spending up to 2 000 to get a new customer for a 12-month payback period johan thank you for taking us to the top yo bye-bye nathan