How Soloseo CEO Michael Jensen grew to $2.7M revenue and 5K customers in 2024.

hello everyone my guest today is Michael Jensen he's an entrepreneur and co-founder of solo SEO the leading provider of DIY website marketing and SEO tools he lives in Washington State and enjoys racing and being adventurous with his kids in fact he just came in Michael you told me from sledding are you ready to take us to the top yes for sure right so would you guys get a big snowstorm yesterday well big is relative but here in Washington we get any snow we try to make the most of it so we've actually went to try to find a sled hill and there wasn't none there wasn't much left so we just threw snowballs that's cool all right tell us about solo SEO what to do and how to make money so so SEO is a set of do yourself SEO tools and we we work directly with customers and we also partner with hosting companies and so hosting companies will sell a resell our art tools as part of the packages that they sell with their hosting and then we work with customers directly to that anyone with a website basically that wants to rank higher in the search engines so we we provide a bunch of tools that help them to do that and what are people paying you on average per month would you say so the plans start from anywhere from $19 a month up to $99 a month for our Pro package so what do you have fair average is a 20 30 bucks yeah yeah about then somewhere in there okay and give you the back story when did you launch company so this goes back to really 2005 my business partner Aaron Stewart and I we we had tried out a few different online companies and done a few things together just you know seeing what would work and we had a real problem getting a lot of traffic you know as anyone and so we started looking into SEO and as we as we dug deeper into that we kind of saw this space where more small you know entrepreneurial business owners kind of like us couldn't afford the big guys to pay SEO you know five thousand dollars a month and up and so we kind of saw this hole there and so what we decided to do then was make a business of that and create these do-it-yourself SEO tools because they were free tools all over the place so we decided to put it all in one system and to make it you know a tool set with a bunch of reports and things that would let just the average you know website owner be able to do something themselves so that was oh five what have you scaled to today in terms of total customers using you yeah so you know it started slow of course but we we're now over 200,000 active customers that's great yeah so that's significant so as most of that growth come from partnerships with VIGS of the world yeah yeah most of that comes with partnering with hosting companies but we we do do a lot of direct customers as well yep and I mean am i doing the math right if you have two hundred thousand paying customers at that RP we just talked about I mean you're north of five million a month that means that generally accurate uh well I I don't I don't see all the numbers you know the finance guy does that but um but yeah you can do math so let's say Carmichael you're the CEO you know your frickin revenue numbers that's like an easy number not some complicated payback period equation yeah so so we do fine for ourselves we we keep our operation lean where we're about we only have about twelve employees total so programmers and customer support what's nice with working with the hosting companies is that they handle some of the customer support before it comes to us yeah I just want to make sure I get your your general size accurate I mean some people sometimes give me customer numbers and it's actually free and paid right so I'm just looking for paid customers and I can generally just if that's the case take that 200,000 number times 25 and I mean you guys are about sixty million dollar run right that would be the math is that is it accurate so yeah the two hundred thousand those are all paid customers and so some of them you know are maybe on the cheaper side and and some of the you know there's a there's a revenue share with hosting companies as well so there's some you know there's some numbers to fiddle with there but yeah I mean but even if we go down to your minimum price at 20 19 20 bucks a month that's still four million bucks a month in revenue even if you're paying these guys of 50 or 60 or even even a 80 percent cut it's still a healthy business for you yeah yeah so so can you are you able to I mean how did you land these kinds of partnerships with the big distribution channels because there's a lot of tools like this are you just a better BD guy than any of them um you know maybe I the you know the first one that we landed was with so one of my business partners is Danny Ashworth and he was he started Bluehost itself and then Bluehost got bought out and so the company that bought them out that was our that was our first hosting company that we were in endurance international group yeah yep yep did you deal with Jo barn how her was he the guy that let it I I don't think so okay that was it's a we've had Jo on he was he's been the a guy there at AIG for years and years and then just left after he helped with the Constant Contact acquisition oh okay I bet you buddy knows him yeah I probably so keep going off the story there so your partner Bluehost sold the EIG yeah so I mean that was that was the start of a you know that first hosting company and so and so that that was you know where we got started and we're working with you know a few others that were in trying to get more of course Michael I'm not following there so your partner sold is coming into EIG and you said that's where you started what do you mean that's where you started did he leave the company and enters that's where we started with AIG so he was no longer with you know with AIG and so he joined with us and that's that's where that relationship with AIG started and are you just in their mojo marketplace or do you have a deeper relationship with them that others don't have so we're in their in their reg flow so so that that scales well for us because that's you know right where people are signing up it skills very very nicely I've I've I've interviewed other CEOs that have that have been tested in that registration flow and if you can basically prove over a cohort size that you can add a dollar or even a dollar to average cart checkout size it starts to get interesting and they start to put you in more and more places where it makes sense yeah absolutely it's the same reason why 5-hour energy is on the endcap right before you check out it every register right yeah high price point very small square you know you know whatever they call it retail space taking up it works alright so maybe what's interesting here so I have interviewed a few people in this space kind of domain space domain tool space where they are over aggressive in what they comp the channel partner I'm talking like some of them will pay a hundred percent of revenue every single month and then they have to figure out how to upsell those customers other products to make their own money how aggressive with you are are you on the kickbacks you're paying to channels so we've never had to be that aggressive we we've done mostly 50 50 or even 60 or 40 60 and a lot of the hosting companies they don't want us to upsell the customers because they're they're their customers and so you know if if they wanted less or if they wanted more than you know we kind of have to side with that but we haven't had to do that at this point okay so is it fair so I've asked you what your CAC is I can just take your average price point divided by two assuming your majority cost on CAC is 50% to a partner um sorry I'm not following you there that's okay yeah so if someone signs up with you for 20 bucks a month and I ask you what's it cost you to acquire that customer did you have any other costs besides the cut to the potential partner with the hosting companies no with our direct customers you know obviously there's there's marketing and you know kind of that overhead but but with the hosting company you know it's it's a it's a split and they're of course finding the customers yeah I mean I'm I'm going on a limb here but I imagine most your growth those coming from those channel partners if you have two hundred thousand yeah stars yeah yeah yeah so again Mike my question on those is is it just you know someone comes to you for 20 bucks a month you're paying a kickback of 10 bucks a month to ever brought you the customer or there any other costs and they're associated with getting that customer besides the kickback there's not okay no other than our own overhead but yeah yeah well that way yeah that wouldn't necessarily ack-ack that's maybe like you're talking like sgna stuff sure yeah interesting so tell me more in terms of how you've capitalized this business and grown it it bootstrap for you raise capital we bootstrapped actually okay yep that's oh that's great why do you why do you say actually on the end you just assume everyone raises these days well I do assume that that's cuz it seems like everyone does but but yeah we bootstrapped it from the friendless start so yeah and I I'm a programmer myself so I I built you know the first you know several versions of silhouettes do mostly by myself and then as we've grown of course we we've hired more programmers and and done more than that so and there's you there's the guy you brought in from EIG as there are there other co-founders or just you too so Aaron Stewart is your night original co-founders and then and then Danny came in yeah okay but do you think you guys imagined think of Danny like a co-founder right yeah yeah yeah okay so three of you guys and there's an additional what nine people on the team or additional twelve people on the team yeah an additional nine people oh hey there in Seattle very cool so by the way I love it one of the things I like to calculate as a revenue per employee you guys are gonna be giving the current leader which is file board or run for their money if you've got 12 employees doing for mo bucks a month in revenue so congrats on that it's a suit sound like a super efficient operation we're trying how do you resisted the urge to grow expense I know I know this is gonna sound stupid but how have you resisted the urge to grow expenses um well I mean I think Aaron and I have you know we started back in 2005 together and we've always been bootstrappers I mean even before that when we started things and so we've always wanted to just keep everything lean and I'm you know myself kind of just a minimalist guy and so anything I can do lean I will and so I guess that kind of runs through the culture of our company even being that lean have you been able to drive good growth I mean what is your growth been over the past 12 months would you say so uh I guess I don't have any specific numbers for you but you know our growth our growth is happening it's it's probably slower right now that we've you know we've we've acquired several partnerships and such and we're we're always working for new partnerships but it has been a little bit slow in the last year in terms of adding more partnerships at them sorry in terms of growth of growing your your revenue your tune or thousand customers are you general I mean oh you're doubling year-over-year when you think back thirteen months ago were you doing two million then and you're four million now I mean do you have a general sense of that um so I honestly I don't have any specific numbers for you so I I can't just throw those out unfortunately but you know my buddy Park and I like cuz we have about 5 million people who listen they're gonna they're gonna hit you pretty hard on Twitter they're gonna how is a founder not know if they're growing or not well I do know we're going in and the way that the you know working with the hosting companies and with you know even our direct customers you know we have most of our customers on a yearly plan and so you know year after year those customers are you know Reesa Reesa scribing and so so there's there's some automatic growth kind of built in to you know the the way that the business is built that's not growth Oh Michael if people re subscribe that's staying flat you didn't have to add people on top of that to have growth sure sure sure but then and then the growth is then from all the new signups that we're getting you know month after month right so you know we are we are growing I you know just don't know if a number I mean you must have some sense I mean it might not be exact number but do you generally know if you've doubled over the past year or your flat over the past year or you have literally no clue well over the over the past year we've grown probably between 2 and 5 percent is okay is what I was saying yeah okay so that's pretty I mean that's that's not monthly right that's annually right yeah so I mean you know that's I love that you're bootstrapping but many but many companies who have raised ago my gosh we would get killed if we only grow 5% cuz they have to like double every year but you guys have full control the company it's a great place to be there's cash flow it's 2 to 5 percent consistent your your growth and you're totally happy with that yeah yeah I mean you know we get happier as we make new partnerships and get new customers but yeah exactly what talking about churn turn is typically tough especially in the SMB space what's your turn look like so maybe made me be a little bit more specifically of what you're actually looking for well such I mean churn right which is it's a pretty typical SAS metric which is just how many customers are you losing are they sticking with you once they sign up yeah so so we four in terms of renewals were somewhere around 65 and 70% of those renewals and so they stick around they stick around for a long time yeah a lot of learn a lot of that you know if they're a hosting company it's if they end hosting then they end with us but you know but other than that the customers that are with us directly it's it's usually about 55 to 60 percent yeah yeah I mean so look if you're if you're retaining 60 70 percent every year means you're churning 42 you know thirty to forty percent they'll stick with you for a minimum two years or twenty bucks a month right that's pretty I mean that's what is that two hundred forty bucks and no more than that 480 bucks in lifetime value it's pretty healthy yeah yeah yeah interesting um I mean if I'm a IG and I'm seeing how much I'm growing your business I'm going well it makes total sense to just buy these guys and take the other 50% that they're keeping right there only giving us 50 percent I mean why haven't you sold the EIG yeah that's a really good question so we we obviously haven't but but you know break it down for me obviously you can't say what you're actually doing what breakdown the pros and the cons because it seems totally I mean probably makes it makes total sense to me yeah and that you know I don't know where where they're at as a company you know but for for us you know we we like having the control we like having the opportunity and and the upside to it but of course if we had an offer for something you know you know who would say no to a good offer so yeah I mean how do you think about though what a good offers I mean I imagine this is a business that's pumping out cash flow for you guys the three founders and maybe up that revenue share plan with the team but I mean how do you think about what a good offer would be I mean what's your decision tree look like you're an engineer I'm sure you have a decision tree for this kind of thing I don't I don't have a formal decision tree but you're married right I am you know let me ask it this way if you're doing 4 million bucks a month right now now gross it sounds like you're probably doing half back because you have a hard cost of 50 percent to the channel partner so call it 2 million right or 48 million annually let's say let's say EIG offered you two XS so let's say a hundred million bucks if you had to sit down at a dinner table tonight with your kids and your wife and say guys honey I just turned out 100 million dollar acquisition offer do they kill you probably ok so hunter melon is your number then no I am serious I'm being kind of funny but I am actually serious how you how you and your founders would consider offers with something that's so profitable yeah I mean I mean it I mean it would it would come down to you know that's a good offer or not I yeah but Michael you understand what that's not helpful for anyone listening right no one understands what that means [Laughter] more helpful like treat yourself like an algorithm the only reason an algorithm gets smarter by understanding its inputs so for for you to get a great outcome what inputs are like are you feeding into your brain to figure out is this great or not yeah I mean I mean part of it would be you know if us as partners were we're ready to move on to something else and that that was enough to you know to put us past that you know I think it I I don't think it's a it's a it would be overly complicated I think it's just that you know the offer hasn't come yeah yeah so you're not an acquisition talks right now with anybody no interesting if you can't would you ever consider raising capital um yeah if the right partner came in with you know with with with something that would you know give it you know take us to the next level yeah absolutely yeah all right let's wrap up here Michael with the famous five the first one what is the last book that you read the last book that I read so I've been reading this book called actionable gamification so I've been really interested in just the concept of gamification kind of as you know on the business side personal side it kind of applies everywhere it's by you Kai chow good number two is there a CEO you're following or studying not not necessarily I you know I was I read last year the Zappos book delivering happiness by Tony Hsieh I so I mean if I would pick one that would be it number three besides your own what's your favorite online tool for building a business um you know it's kind of simplistic but I like Google Docs and Google sheets we just use them all over the place it's something really simple but they're super useful and number four how many hours of sleep to eat every night four to six would be okay in a situation married kiddos how many I've got four kids so four I I do a lot at home so I kind of kind of skip on the sleep a little bit how are you Michael I'm 38 okay last question what do you wish your 20 year old self knew um probably probably focus on one thing you know when I when I started out as an entrepreneur kind of like doing a bunch of things and so I would probably say try to focus on one thing solo SEO founder Mike Lisa's it would have focused on one thing launched its company back in 2005 and has resisted the urge to raise or sell with his partner Aaron and their third partner coming out of AIG after he sold blue host to the the company is now serving over 200,000 customers they've amassed that amount of customers mainly relying on channel partnerships with hosting companies each of those customers pay on average 20 bucks per month at a minimum so about 4 million bucks per month there and revenue or about 50 million bucks annually obviously the big cost is the cut back to the channel partners but still healthy 30% logo turn annually maybe up to 40% depending on the cohort healthy LTV at about $480 super super high revenue per employee which I love they've done all this very efficiently with a team of 12 totally bootstrapped up there in Seattle Michael thank you for taking us to the top hey thank you