Founder Interview
How Talkpush Passed $100K a Month in Revenue With 30 to 35 Customers in 2018 (Interview with CEO Max Armbruster)
- Interview Date
- May 8, 2018
- Interviewee
- Max ArmbrusterFounder and CEO
Company Metrics at Interview Time
Customers (2018)
30+
CAC (2018)
$11,000
CAC Payback Period (2018)
6 months
Team Size (2018)
35
Historical Snapshot
These numbers were reported by Max Armbruster during the interview recorded in May 2018 and are a historical snapshot, not current figures. See Talkpush’s current numbers.
Key Takeaways
- 01Talkpush passed $100K in monthly revenue in April 2018, up from $40K a month a year earlier, and had 30 to 35 customers
- 02Average selling price ranges from $1,000 to $3,000 per month, going up to $5,000 to $6,000 for larger accounts
- 03CAC is $11,000 with a six-month payback period
- 04Team grew to 35 people across offices in Manila, Delhi, Mexico, San Jose Costa Rica, and San Francisco
- 05Company was founded in late 2014 and started as an IVR voice-based recruitment tool before pivoting to messaging and chatbots
- 06Revenue from existing customers is growing roughly 10% net, with one or two logo losses in the prior year
- 07Max raised approximately $1.5 million in total funding because he is not an engineer and needed to build a technical team
- 08Sales team of six or seven people focuses on enterprise accounts with no paid marketing spend at time of interview
- 09Talkpush bots were interviewing between one and three thousand candidates per day, and over one million candidates in the prior year
- 10Two years in, Talkpush's head of engineering found Max rather than the other way round, he thinks through Angel.co
Company Metrics at Time of Interview
| Metric | Value | Source |
|---|---|---|
| Customers (2018) | 30+ | Founder interview, May 2018 |
| Average Selling Price (2018) | $1,000 to $3,000 per month | Founder interview, May 2018 |
| Team Size (2018) | 35 | Founder interview, May 2018 |
| CAC (2018) | $11,000 | Founder interview, May 2018 |
| CAC Payback Period (2018) | 6 months | Founder interview, May 2018 |
| Net Revenue Expansion (existing customers) (2018) | 10% | Founder interview, May 2018 |
| Sales Reps (2018) | 6 | Founder interview, May 2018 |
| Total Funding Raised | $1.5M | Founder interview, May 2018 |
| Year Founded | 2014 | Founder interview, May 2018 |
| Candidates Interviewed Per Day (2018) | 1,000 to 3,000 | Founder interview, May 2018 |
| Candidates Interviewed Total (prior year) (2017) | Over 1 million | Founder interview, May 2018 |
Growth Breakdown
Revenue
Max stated that Talkpush passed the $100,000 per month mark in April 2018, up from $40,000 per month approximately twelve months prior. The company prices on a volume basis tied to the number of candidates processed rather than per seat.
Customers
Talkpush had 30 to 35 enterprise customers at the time of the interview, with average selling prices between $1,000 and $3,000 per month and some accounts reaching $5,000 to $6,000 per month. The focus is on high-volume employers who need to process large numbers of candidates.
Team
The team stood at 35 people, distributed across Manila, Delhi, Mexico, San Jose Costa Rica, and San Francisco. Max noted that Asia carries the largest headcount and that the Latin America office was growing rapidly.
Funding
Max raised approximately $1.5 million in total to build out the engineering team, having started the company in late 2014 without an engineering background. A sales team of six or seven people had recently been onboarded and no paid marketing spend was in place at the time of the interview.
Growth Strategy
Founder-Led Sales First
Max described himself as the number one sales person for a long time before building out a sales team. He deliberately sequenced customer success before sales, and sales before marketing, to make sure the model was proven before investing in a marketing machine.
Enterprise Focus on High-Volume Employers
Rather than selling per seat, Talkpush prices on candidate volume, targeting employers who process thousands of applicants. This allows the company to grow revenue within existing accounts as hiring volumes increase.
Messaging Platform Integrations
Talkpush began as a voice-only IVR product, and when Facebook opened its API for chatbots it was one of the first recruitment chatbots built on Facebook Messenger. Max's case for messaging apps such as Messenger, WhatsApp and Line is that they capture text, audio and video, giving recruiters a fuller picture of each candidate.
Talent Sourcing via Angel.co
Max's head of engineering arrived two years after he started Talkpush, and Max stressed that the engineer found him, he thinks through Angel.co, where he said there is a lot of great talent. His message to other entrepreneurs was to keep their eyes and ears open, because the person who takes a business to the next level can come from anywhere.
No Paid Acquisition
At the time of the interview, customer acquisition came mostly through the direct sales team with no spend on paid channels such as Facebook or Google. Max planned to build the marketing function only after the sales motion was fully refined.
Best Quotes
“We're a SaaS provider. And what we have is a recruitment software, which is using messaging and chatbots to interact with candidates. So imagine, you know, like a Slack a Slack for recruitment. Where we're changing the recruitment software experience in the same way that Slack, you know, kind of changed communication between companies, where we're injecting messaging between the candidates and the employer.”
“We started the company. It was actually an IVR, so it was all voice. We would make phone calls and collect the voice for for candidates. And then two years ago, when Facebook opened its API for chatbots, we were one of the first recruitment chatbots to build on the Facebook Messenger platform.”
“Our our price points, I know, like, you like numbers. So our our revenue is about... We we passed the 100 k mark.”
“Our average selling price is between 1,000 to 3,000, you know, it goes up to $5,000 to $6,000 a month.”
“I know you love numbers, so I got them right here. 11,000, yeah, 11,000 CAC and an LTV of around 62 right now.”
“No paid stuff so far. It's... You know, I'm going against the model, which is saying you build marketing before sales. And in fact, I'm going reverse. I'm doing custom... I build customer success team first, Then now I'm building the sales team. And then when I've got that perfectly ironed out, I'll I'll work on building the marketing machine.”
“I wish I could tell me back then to learn how to code so I could I could get that... The the initial product out a little faster in the initial days of Talkpush.”
What Happened Next
This page captures Talkpush as it stood in May 2018, when Max Armbruster said revenue had passed $100,000 a month for the first time that April, with 30 to 35 customers. The figures here are a point-in-time snapshot from that conversation, not current figures.
View Talkpush’s current profile and metricsFull Transcript
Chapters
- 0:01Introduction and Company Overview
- 0:24What Talkpush Does and How It Makes Money
- 1:59From IVR to Facebook Messenger Chatbots
- 2:42Revenue Milestone and Pricing Model
- 3:21Customer Count and ARPU
- 5:10Founding Story and Building the Engineering Team
- 7:22Team Size and Distributed Offices
- 7:56Churn and Net Revenue Expansion
- 8:53Sales Team and Customer Acquisition
- 9:24CAC, LTV, and Payback Period
- 10:02No Paid Marketing: Customer Success Before Sales
- 10:21Glassdoor Acquisition and Job Board Consolidation
- 11:27Famous Five: Books, Tools, and Habits
- 12:53Advice to Younger Self
Introduction and Company Overview
Nathan Latka
00:01Hello, everyone. My guest today is Max Armbruster. He's the founder and CEO of a company called Talkpush, the leading messaging recruitment platform. He's a serial entrepreneur and has sold his last three companies, most recently a recruitment SaaS company. He has seventeen years of international experience in The US, Europe, and Asia, and has held strategic roles at SAP, CNET Networks, and AT Kearney. Max, are you ready to take us to the top?
Max Armbruster
00:23>> Absolutely. To the top and beyond.
What Talkpush Does and How It Makes Money
Nathan Latka
00:24Very good. I love it. Alright. Talkpush. Get us up to speed. What are you guys doing? How do you make money?
Max Armbruster
00:29>> Well, we're a SaaS provider. And what we have is a recruitment software, which is using messaging and chatbots to interact with candidates. So imagine, you know, like a Slack a Slack for recruitment. Where we're changing the recruitment software experience in the same way that Slack, you know, kind of changed communication between companies, where we're injecting messaging between the candidates and the employer.
Nathan Latka
00:58Yeah. Now look, lot of candidates when they come to an employer and they wanna go, I mean, anything they use recruiting wise is usually setting the first impression. So automating that is not an easy thing and potentially scary slash dangerous. I mean, how do you manage that?
Max Armbruster
01:12>> Well, the first thing is, you know, today, if you start from the starting point of today, the way people apply for jobs is, you know, they go to a career website, they send in a resume, and then they don't hear back a lot of the time. So what we've built is an experience which is real time and where instead of sending a resume, what we're collecting from people is the data that the employers really want to
01:35>> know. Like, who are you? Tell me about yourself and stuff like that. And I bet if you asked any recruiter,
01:44>> what would you rather have? A resume or would you rather be able to listen to five minutes of this candidate telling you about himself? I think most people would choose the latter option. So there's audio... Are there
Nathan Latka
01:55audio files or, like, little voice recordings? Is that how it works?
From IVR to Facebook Messenger Chatbots
Max Armbruster
01:59>> Yeah. We started the company. It was actually an IVR, so it was all voice. We would make phone calls and collect the voice for for candidates. And then two years ago, when Facebook opened its API for chatbots, we were one of the first recruitment chatbots to build on the Facebook Messenger platform. And what's great about these messaging apps like Facebook Messenger, WhatsApp, Line Messenger, and all the other ones is that you don't just collect text. You've
02:25>> got you've got text, audio, video, whatever you want. So you can really... You know, you can get a real full picture for the candidate and listen to them. And, you know And what's worth the task force.
Nathan Latka
02:37Yeah. What's your pricing models? Is it success based or is it pure play flat rate SaaS model?
Revenue Milestone and Pricing Model
Max Armbruster
02:42>> It's a pure SaaS model. We we invoice... I mean, our our price points, I know, like, you like numbers. So our our revenue is about... We we passed the 100 k mark Oh, great. Revenue wise. What month was that? Monthly. Just this month. And
Nathan Latka
02:59And this is in... We're recording this in... What is it? 05/10/2018? Yes.
Max Armbruster
03:05>> Yeah. April. Let's say April April 2018. Yeah. And and our average selling price is between 1,000 to 3,000, you know, it goes up to $5,000 to $6,000 a month.
Nathan Latka
03:16Okay.
Max Armbruster
03:17>> So so we're very focused on the enterprise segments.
Customer Count and ARPU
Nathan Latka
03:21And how many customers right now?
Max Armbruster
03:24>> 30 plus. Thirty, thirty five.
Nathan Latka
03:26That's good. Well, I mean, you... You've got... I mean, if you take $100K, right, divided by 30, your ARPU is actually about 3,300 per month, right?
Max Armbruster
03:34>> That's right. That's right.
Nathan Latka
03:36And what are they paying for? Like, what's the difference between a thousand bucks a month and $10K a month? How do you drive expansion revenue?
Max Armbruster
03:42>> It's about volume. So because we we create so much automation, you know, the problem is in a traditional SaaS, you sell per seat and, you know, like a $100 to a $100 per seat. And and we've experimented with those models a little bit. But the reality is one recruiter who works on our software is able to do five, ten times the volume that they usually were able to do. So, you know, we would be able to
04:04>> sell seats, but it wouldn't be too many seats. So we're focused on the volume. And and so we looked roughly at the number of candidates that are being interviewed by our platform. When I say interviewed is a candidate that went through the whole loop of, you know, answering questions from the chatbot and telling about who they are and and so on. And and so, you know, roughly, we've... Our our bots our bots, our software interviews more
04:30>> than between one and three thousand candidates every day currently, over a million last year. So so yeah. So that's what they pay for. They pay for that based on their volume, and and we're focused on the really high volume employers.
Nathan Latka
04:44And what's growth rate look like? So you're at past a 100 today, taking you back a year, where were you at?
Max Armbruster
04:50>> I... We were we were at 40 k. So... Yeah.
Nathan Latka
04:54It's more than double. That's pretty good. And bootstrapped or have you raised capital?
Max Armbruster
04:59>> I'd I'd love to say it's all bootstrapped, but no. That was not the case. We... I I had to raise $1,500,000.
Nathan Latka
05:07Why'd you have to raise that money?
Founding Story and Building the Engineering Team
Max Armbruster
05:10>> Well, because I'm not an engineer, and I gotta... Yeah. I had to build something. So I was the number one sales guy for a very long time, and, obviously, that's a great skill to have when you're launching a business. But but I needed I needed a lot of a lot of help on engineering. And it took me a long time to to actually build the team that we have today. It took me, you know, from the
05:31>> from the moment I started to
Nathan Latka
05:33Which was what year?
Max Armbruster
05:35>> Like, 2014, late twenty fourteen. And before that, I had already, you know, sort of worked on a prototype. And it it took me two years from that time to finding my head of engineering. It took me three years to find my head of customer success. And, you know, that's kind of a message I wanna send out to all the entrepreneurs out there that, you know, recruitment is such a hard task and that is so critical and
05:57>> that you never know where your your... You know, the next messiah is gonna come, but you gotta keep your your eyes and ears open because there's somebody out there who's gonna come and really help your business get to the next level.
Nathan Latka
06:07Max, there's a lot of people like you, great business people, great salespeople, but they get stuck at the beginning because exactly what you said. They they don't know how to hire or find or get to the right engineer and much less figure out how to pay that engineer because you haven't... You know, you're just starting. So your first... You said it took three years to get your head of engineering. What were you selling before that? Did
06:24you have a product?
Max Armbruster
06:25>> Yeah. We we had a product. Initially, it was a prototype that we had built with... You know, I I initially hired some freelancers, then I hired one engineer, two engineers. We had some turnover. And then, you know, two years in, yeah, I found I found Roma, our head of engineering, and, you know, it's been it's been pure bliss ever since.
Nathan Latka
06:43That is a... I have to tell you, nobody likes to talk about it, but that is typically what happens. It's like a freelancer from top talent. You spend $5 to build an MVP. You close three customers. They break the MVP. Then you have to go... You know, you go to your local college, you hire two cheap interns who... You know, you think you can get by on. You realize they're not good enough. And then, you know,
07:02two years in, you have more sales than you can afford an engineer and maybe raise some capital.
Max Armbruster
07:06>> So true. So true. And and the and the miracle thing about this whole thing is that the guy found me. You know? Even though I'm I'm supposed to be the expert in recruitment, the guy found me. So How'd find you? I think it was on angel.co. There's there's a lot of great talent there.
Team Size and Distributed Offices
Nathan Latka
07:22That's interesting. Angel.co. Very good. And what's team size today?
Max Armbruster
07:27>> 35 people.
Nathan Latka
07:28Okay. Where... And where's home? Where's home base?
Max Armbruster
07:31>> Well, we're we're a very distributed team. So we've got four offices already. One in Manila, one in Delhi, one in Mexico, one in San Jose, Costa Rica, and then San Francisco. So where we have the most headcounts is in Asia today, and our our Latin America office is growing rapidly as well. So, I mean, home base for me is an airport lounge.
Churn and Net Revenue Expansion
Nathan Latka
07:56Tell me about last few economics questions here before we wrap up with a famous five. Tell me about your churn.
Max Armbruster
08:02>> Churn, negative revenue churn, five, ten percent. So we're growing our our accounts. And, yeah, I regret we lost one or two logos last year. So, you know
Nathan Latka
08:11When you say negative 5% revenue churn, you mean it's net negative revenue churn, and it's... Net negative is negative 5%?
Max Armbruster
08:18>> I mean, yeah, there's double negative. I don't know. We're growing we're growing our installed base. So revenue is growing 10%, just keeping the existing... With the existing customers.
Nathan Latka
08:30Okay. And then what's what's revenue churn? What revenue do you lose?
Max Armbruster
08:35>> Well, I'm I'm giving you the sum. Okay.
Nathan Latka
08:38You're giving me the I'm giving you the net. Got it. Got it. Got it. So you might you might expand 10%, lose 5%. So your net is positive 5% in terms of revenue Okay. Good. That's right. That's healthy. And and what are you spending to acquire these customers?
Sales Team and Customer Acquisition
Max Armbruster
08:53>> Well, we're, you know, for... Initially, it was me doing sales, and now we've got a team of six people, six, seven people that we've recently onboarded. So so that's mostly the the model. You know, with enterprise, when people are spending $10,000 to $30,000 a year, they wanna be able to meet someone, shake their hands, and, you know, do the deal. So so we're we're we're building our sales team.
Nathan Latka
09:17And What's the fully weighted CAC? I mean, would you say it's like, you know, you know, $10.10 grand, $30, $10K to $20K?
CAC, LTV, and Payback Period
Max Armbruster
09:24>> I I I know you love numbers, so I got them right here. 11,000, yeah, 11,000 CAC and an LTV of around 62 right now.
Nathan Latka
09:32That's great. How do you calculate that LTV?
Max Armbruster
09:35>> Oh, I asked my finance manager.
09:40>> Yeah. I mean, we we did a... I I don't have the math in front of me, but it's That's okay. Yeah. It's a discounted model.
Nathan Latka
09:47And and you're about to say payback period before I cut you off?
Max Armbruster
09:50>> Yeah. Six months.
Nathan Latka
09:51Six. Okay. That's that's really healthy. Where are you spent... This money that you're spending to acquire the customers, the $11K, is that mainly commissions and things on your sales team, or are you doing any direct paid stuff for leads on Facebook, Google, etcetera?
No Paid Marketing: Customer Success Before Sales
Max Armbruster
10:02>> No paid stuff so far. It's... You know, I'm going against the model, which is saying you build marketing before sales. And in fact, I'm going reverse. I'm doing custom... I build customer success team first, Then now I'm building the sales team. And then when I've got that perfectly ironed out, I'll I'll work on building the marketing machine.
Glassdoor Acquisition and Job Board Consolidation
Nathan Latka
10:21I like it. Hey. It seems to be working for you. Last question. Glassdoor, 1,200,000,000. Is that overpriced?
Max Armbruster
10:27>> No. Wow. It's such a great asset. I mean, it's it's the one sort of marketplace that figured out how to get people to come back to it all the time. So I think think it's a wonderful asset. I'm a little bit...
Nathan Latka
10:39You that same price. You you think it's a fair price?
Max Armbruster
10:41>> Yeah. Yeah. If I had 1,200,000,000, I don't know what I'd do with it. But, yeah, I think I... Maybe I'd do that. I don't know I don't know what their revenue is. Do you know?
Nathan Latka
10:48I don't.
Max Armbruster
10:49>> No. So... Well, I don't know.
Nathan Latka
10:52I should consolidate the CEO on.
Max Armbruster
10:54>> The consolidation of this of this job board industry is is a little bit scary for employers, though, because, you know, they really only have, like, a handful of people to choose from these days. So Who? You know, the employers, they have to advertise either with, you know, Google or Indeed or or or LinkedIn. And there's basically only three or four vendors now that cover the whole market. So it's a little bit scary for them, and I
11:18>> guess it's it's a simplified sort of landscape. And and for now, companies like Glassdoor will continue to operate independently, but they have less choice. So it's a little scary.
Famous Five: Books, Tools, and Habits
Nathan Latka
11:27Alright. Last few questions here. One word answers. Number one, what's your favorite business book?
Max Armbruster
11:32>> Favorite business book. I love The Most Human Human by Brian Christian. And I'll give you another one, which is on my desk right now. High Output Management by Andy Grove.
11:45>> Yeah.
Nathan Latka
11:46Number two, is there a CEO you're following or studying right now?
Max Armbruster
11:48>> I love reading Joel Gascoigne from Buffer, and I love, you know, someone who was on your show, Laura Roeder from MeetEdgar, two people I I follow.
Nathan Latka
12:02Yep. They're good. Number three, what's your favorite online tool for building the business besides your own?
Max Armbruster
12:07>> Yeah. We we were addicted and still are to WhatsApp for desktop. It does everything that Slack does, but for free. And it's got a small edge over Slack, which is you can send audio notes to your your people.
Nathan Latka
12:22So you
Max Armbruster
12:22>> can send it all
Nathan Latka
12:23So much easier.
Max Armbruster
12:25>> And and people, you know, when you when you send a voice, people can feel personality. They can feel empathy. They can feel that you're... They can feel things. So so that's a huge advantage, and we we love WhatsApp for desktop.
Nathan Latka
12:37Number four. How many hours of sleep do get every night?
Max Armbruster
12:40>> So I used to be on five. I I think now I'm I'm on six because the business is doing better.
Nathan Latka
12:44That's good. And what's your situation? Married, single, have kids?
Max Armbruster
12:48>> Married with Labrador.
12:49>> Labrador. No kiddos yet.
Nathan Latka
12:50And how old are you?
Max Armbruster
12:52>> 40 years old.
Advice to Younger Self
Nathan Latka
12:53Alright, Max. Last question. What do you wish your 20 year old self knew?
Max Armbruster
12:56>> You know, I wish I could tell me back then to learn how to code so I could I could get that... The the initial product out a little faster in the initial days of Talkpush.
Nathan Latka
13:08I had a feeling you were gonna say that. Launched in 2014, again, Talkpush, helping people scale their recruitment, make their HR teams more efficient by using their chatbots to get the first couple conversations going with potential applicants. They're now at 35 people. Remote team have 30 customers paying on average $3K or more per month. They're doing about $100K right now per month in revenue. That's up from $40K per month just twelve months ago. Net negative revenue
13:31churn of 5%. Super healthy. They're paying about $11K to acquire a customer with a six month payback period. Great economics. Max, good luck. We're rooting for you, and thanks for taking us to the top.
Max Armbruster
13:40>> Thanks, Nathan.