How Teambuildr CEO Hewitt Tomlin grew Teambuildr to $9.5M revenue and 1K customers in 2024.

hello everyone my guest today is hewitt tomlin having worked in sales and marketing for three software startups for many years he decided to launch a software company with his college roommate with a decision to bootstrap without any outside capital they've got a strong passion for sales and athletic performance and the company has grown to nearly 10 employees and over a million bucks in ar the company is called teambuilder.com hewitt are you ready to take us to the top that's right yeah all right what's it come okay so it's teambuilder.com what's the company doing and how do you make money well we're a software as a service company which there are a lot of those out there but at the time when we built it software as a service wasn't uh as popular of a model and as former collegiate athletes we actually saw that our strength coaches you know performance coach was writing our workout programs on excel printing out paper packets and handing it to us and when we did a little bit of digging we found out that the entire industry used excel on printed paper because at that point it was just like an industry standard well my roommate and teammate at the time was programming and i was interested in business so we just kind of put our heads together and said this would be a fun project and like a lot of companies that you see today the project evolved into a product and the product evolves into a company that's great i love that and you just passed you said 10 employees in a million bucks in ar that's right yeah we've been in existence for about five years now and uh we just reached that threshold but as a bootstrap company we did not seek any outside capital to date we have not raised a cent an outside capital or any kind of capital we've been bootstrapped the whole time and launched in 2013 you said five years ago yeah five years ago that's great so so walk me through and sorry so a million bucks in ar and how many customers today oh we're probably reaching close to a thousand about a thousand okay so so break down like one of their stories for me what are they paying you for specifically well um let's take our average customer this is a high school uh a high school strength coach and this high school is probably certified and has a master's degree in kinesiology or physiology but that coach nonetheless is in charge of training competitively 300 athletes so anytime you have a 300 to 1 ratio there's going to be some inefficiency there and by principle my workout programs are more effective for someone if they're individualized for that person but if you think about individualizing 300 programs that's just not a possible task our software helps that coach write more individualized programming by basically saving them time and effort in the actual process of assigning and prescribing training programs but also collecting data through our digital interface so that data is not written on paper on a whiteboard it's collected on the app really simple we can populate charts and graphs and then we can reassign their athletes new kind of goals based on their performance without a coach manually having to do this for each athlete interesting okay and is the kind of high school use case a really strong use case for you that's your main demographic massively because uh high schools typically if they're able to afford a strength coach they can only afford one um and they have typically dozens if not hundreds of athletes so that's a very typical use case yeah you see the same thing in small colleges and then you think of a bad use case think about a well-endowed collegiate program like in alabama when you're that well endowed you have the money and resources to just fix those problems with brute force you could just hire a lot of people and throw a lot of bodies at it but you know that's not the case and for the rest of the market that's where we come in that's great now what about churn so when someone starts paying you is it pretty sticky what's your revenue turn over the past year that's the name of the game for any sas company and we're no different so um churn for us means that we have to constantly provide new value that's where we believe that a sas product is not something you build once and sell over and over again our product team is in-house it's not outsourced and we have to deliver on new features take customer feedback if a customer's not being listened to it's hard for them to shell out the same amount of money year after year so how good are you doing at this what's that what's the retention if if no one touched customer retention meaning if no one was in that role um then we would churn out 20 of our customers but the fully dedicated customer success manager someone whose role is retention we actually reduced that churn to 10 per year so we retain 90 of customers year over year that's good so 90 and that's on a logo basis and a revenue basis um that's on a revenue basis okay that's great that's really great so 90 revenue retention and then talking about getting these new customers so what's the sales process look like we're purely inbound and that stems from the fact that we're bootstrapped we don't purchase a lot in terms of web ads we don't acquire a lot of leads in terms of web ads we try to stay away from that rabbit hole so we focus on customers or content generation bringing people to our top of funnel and then basically building a large audience that way so a lot of our content generation is done in-house but also by our customers a lot of our customers are happy to write blogs they're happy to do interviews and share their expertise and then we brand it and then leverage it into uh content that attracts you know people to our website and so i mean if you ignore paid spend because it looks like you're not doing a ton of paid spend but if you like your you look at your fully weighted customer acquisition costs to include any sales people marketing people onboarding people etc what are you spending to get you know to get one of these new high schools paying um that's that's our sales demo it's an online demo it's not different from what we're doing now if we can get a coach to spend 30 minutes with us on the phone and to do an online screen share demo that's the number one tool in our toolbox that creates the highest conversion so when a lead kind of reaches the part of the funnel where we feel like sales can maybe schedule a demo with this person that's what we zero in on and then once we get that person on the demo typically we've sold them but the sale is not over they then have to go to someone on their end and get funds approved and we've been through that process so some of our sales collateral that we hand our prospects after the demo is actually sales collateral that doesn't directly speak to them per se but it speaks to the person above them usually an administrator and it talks to them in business language return on investment cost savings efficiency um so it's kind of a two-pronged sales process one up front for the prospect and then for the decision maker in the background yeah no you would i understand that so so when you look at that sales person right and that that function that you're repping every single month right so if one sales rep is doing 20 demos and they're closing 50 percent you can back in you know you get the salesperson's salary you can back into what your cac is based off the efficiency of that person so i'm trying to get a sense of how efficient are you guys we're probably dialing in at with sales qualified leads converting about 25 to 30 percent of them okay so do you have one you have 10 people right now how many of them are sales we only have one sales person okay once and so how many new customers are you adding per month we're probably adding i'd say we're probably adding somewhere between 40 and 50 new customers a month okay so if we have 40 so right now you're at a million bucks and called arr you got a thousand customers i think that comes out to about 83 bucks a month if you're adding 40 new customers per month at an 83 a month price point right that's like three grand essentially in in kind of new sales if you look at what you pay your sales rep it's probably i imagine their salary i don't know what it is we don't have to disclose that but it's either higher or lower than kind of three grand per month i mean do you look at that kind of efficiency yet or are you guys too early really to be like tuning those turns no i i do look at those but if we interpret those things literally if we search for our roi on every decision and try to quantify it i think sometimes you lose the forest for the trees i can tell sometimes when we're acquiring customers at a really really high clip and it's not worth it and we test those things out and we back off really quickly and then we know when we do it efficiently so your figure is not far off but there is a lot of stuff that goes into lead generation before then and then every sales process is not that easy some are longer than others um so there are some things that kind of distort that cac um but around the same ballpark we always stay conscious of it we have no choice for a bootstrap company we can't you know acquire customers really expensively um no no i get i mean i get that that's why i'm asking right so the only way for you to accelerate growth without raising additional capital is for you to fine tune this this cat it's get your payback period really low it's but first you have...