How Speak2Leads CEO Sammy James grew Speak2Leads to $690K revenue and 50 customers in 2019.

hello everyone my guest today is sammy james he started meshing uh mashing up tefoni with ivr 30 years ago to create new revenue for radio and tv he helped create the first ad-supported internet radio station and first song recognition application for terrestrial radio pre-smartphone and was first to convert an internet form inquiry into a phone call now he's building a company called speak to leads to convert form leads into calls sammy you're ready to take it to the top do my best all right so is this the pure play sas company it is i mean you could call it a cast company which means communication as a service because we blend sas with communication with telephony telephony how you pronounce telephony just for those of you who have been making that mistake so uh so when i talk about sas right what i really mean is sas is a recurring revenue stream that's predictable that allows you to make better hiring decisions things like that so cass that's whatever you want to call it doesn't matter to me but generally speaking it's a recurring revenue stream that's predictable and easy for you to build on sure okay um very good so put this on a timeline for me when did you launch the company uh speak to leeds uh was incorporated uh february uh 2010. okay 2010 and give me a general sense of kind of where your head was at that point did you you know have to make this work you quit your corporate put all your money in kind of thing or what no actually i was running a full-service uh ad and agency and uh doing a lot of you know traditional uh marketing uh from broadcast and then of course online because this is during the transition back then you know a few years after google launched really uh so web forms were just starting to become a thing about 13 years ago and um and so our clients were asking for a solution because their their sales teams were saying hey you know this internet thing is really a pain in the ass is we hope it goes away we don't like people inquiring via a form it's difficult to get in touch with them and they were literally throwing the lead in the trash because they were the leads were being distributed via like a copier you know they were just they would print them out and distribute them and anyway uh being a traditional sales rep i guess they did weren't comfortable with having to pick up the phone and calling the lead so that's what they came to me to complain about as that started to become more and more pervasive and that was about 13 years ago as i said so i said well why don't we just turn the form into a phone call and then the sales people will be happy and so i set about doing that you using a very primitive you know kind of uh uh language i think was asterix at the time you know for for telephony and i'm not a programmer but i'm just somebody who who loves uh tinkering with you know what's possible and um so anyway developed a prototype it worked really really well so hey sammy sorry i don't want to get out of ourselves here and i want to get a bunch in so just real quick so 2010 you launched the company the first line of coders written i assumed then as well how much did you spend on the mvp before your first dollar revenue [Music] uh i don't know not much you know maybe maybe ten thousand dollars or something like that just just just are you are you a developer did you develop the initial lines of code no no i'm i'm i'm a guy with ideas okay so who so you you were able to pay a developer just ten thousand dollars i hired a contractor and just paid him by the hour and just and just you just worked it just slowly worked it's over over time develop the product by the hour with a contractor yeah so sam that's my question right so you you were able to spend 10k on this contractor right to build this entire mvp and then you that 10 grand enabled to get your first dollar of revenue yeah okay when was first dollar revenue how long did it take to code um maybe you know six months um it was very basic but uh we got you know one of our clients to volunteer a friendly client and he volunteered to to be the guinea pig and yeah so then of course it evolved i mean then we blew the whole thing up once we realized this was viable as a business on my mind thinking everyone was complaining about not getting enough leads and needing better quality leads and and my thought was always well what are you doing with the leads you're getting and not really taking full advantage of what the opportunity presented you know uh by a lead is so that's that's where i kept focused and um and so that that's that was uh basically the great so you launched the mvp in 2010 uh you get your first customer you obviously go through some pivots like every company does give me a sense today how many customers are you serving very few um probably direct maybe 50 okay um and then we have some resellers maybe 20 okay we all have sub accounts under them yeah okay and give me a general sense so people are understanding okay i get this my sales team wants to be able to you know pick up the phone call right when the form is filled out your technology helps make that a seamless process what are people paying on average per year to use this technology that you've built we charge on a per lead basis and so i'd say the average the average client spends about 800 bucks a month and it depends on so we charge on a cost per lead flat rate all in everything all inclusive you know for that so the telephony everything else we are going through a whole new restructure in terms of our pricing right now and and so uh we will be raising our prices that's that's kind of the strategy going forward because we got to get out of the dead zone we have very small some very small clients that are kind of killing us in terms of our you know support and operation side and we've got to we've got to move move away from that and and just go up market a little bit i mean but 800 bucks a month i would say takes you out of smb range well thing is i mean that's comprised by clients that are spending ten thousand dollars a month and some that are spending 150 and we i just want to lop off the bottom part of the of the market it's just they just take too much time and so i mean i know you're going to ask this question what's our cac and basically it's zero because we've done no marketing and not i'm not proud of that it's not like smart what's your team to size today how many people six i've got a you know a cto a customer success manager and then you know for three people on that team and me okay is anyone are there any sales people with traditional quota no okay so there's like three people essentially doing something related to customer onboarding support marketing and you right and then my cto yeah yeah so by the way like you have no direct cac you're not running facebook ads but you do have a fully weighted cac it's those three salaries divided by new customers that worked out to about 400 bucks yeah yeah so good so so so fair enough uh 400 bucks and then take me back into you said you had one in just your cto do you have any more engineers or just one no we do basically a hollywood model i hire people as i need them so we have a you know we have a development team but they're not on on you know they're not on payroll they're just contractors have you bootstrapped the company or did you decide to raise capital uh bootstrap but i did i did raise some angel money and uh through uh a team that came in that was gonna help me grow the company uh and so basically took the angel money used part of it to pay their salaries you know plus options and it didn't really generate anything i mean it helped when we when we rebuilt the platform because there was an engineer a sales guy and an operations guy and the the engineer earned earned his sami so how much did you raise from the angels 250 okay and what year was this 2011-ish yeah okay so they're still on the cap table today uh yeah as far as options go yeah and they have 10 years to exercise so you know they'll probably be off pretty soon yeah okay well that's not a good thing that means they are looking at the company saying it's not worth converting the options it's not growing very fast yeah that's okay yeah it's not growing it hasn't grown fast it's been just steady well my point is if they believed in you if you look i have options in a ton of companies i'm an alpine bunch of funds i always will exercise options if i believe in the founder always so i mean them not actually i don't understand why you would brag about that being a good thing that they want exercise options i'm not saying it's a good thing but i mean i'm not saying they haven't but uh that they're not gonna exercise the options but it's okay with me if they don't i'm not going to be i'm not i'm not going to take that as a bad sign yeah well by the way it's not good or bad it just it just is i'm just curious how why you led with you know you know i hope they don't or doesn't look like they will um talk to me about churn so when you're selling on a per lead model like this i mean churn is usually a big issue because people have more leads...