How Testimonial Reached $4,000 MRR and 100+ Customers as a One-Person SaaS (Interview with Damon Chen)

Introduction and Background

Nathan Latka

00:00Hello, everyone. My guest today is Damon Chen. He's a software engineer turned to into a bootstrapping SaaS founder from building side hustles to quitting his full time job to making his current cost called testimonial.to, which enables you to collect video testimonials. Damon, you ready to take us to top?

Damon Chen

00:17>> Yes. So Okay. This is

Nathan Latka

00:18this is when did you have the idea? When did you launch?

How Testimonial Was Built and Launched

Damon Chen

00:22>> I launched testimonial.to back in last year, right before Christmas. And it's not my, you know, I didn't build testimonial.to for my first product. I actually built several product before Testimonial. So the Testimonial is like a pivot. So because back last year, you know, I took some personal leave, it's unpaid leave, so before my leave, you know, I was employed by Cisco, and I got my paycheck, you know, biweekly paycheck, and I have no urgency to

00:54>> make any money, you know, make any revenue out of my product. But you know, and last year I took my personal leave, unpaid leave, so I have this kind of urgency to make my money.

Taking Unpaid Leave Instead of Quitting Cisco

Nathan Latka

01:06Did you quit Cisco full time, or could you still go back?

Damon Chen

01:09>> I like, you know, I took some unpaid leave, you know, but unpaid leave is like, you know, I have no paycheck, but you know, I'm still covered by the medical because I have a two year old daughter at home, so I would think that, oh you know what, instead of taking the much riskier leaf, quitting completely, so why not just I take some unpaid leave in the middle and let's see how things go, and I can

01:35>> just make use of the unpaid leave to to to to, you know, put more effort onto building testimonial, and see if that, you know, if that takes off, and I can, you know, step, you know, take a leap further, and you know, quit my job, and start really full time working on testimonial. That's what So D

Nathan Latka

01:52I'm Minute's a big, it's a big risk. How much money were you making per month from Cisco before you decided to take a break?

Damon Chen

01:59>> My, you know, total package is close to 200,000 US dollars. Okay. I was there So

Nathan Latka

02:07you were doing like 15 to $16,000 per month in total income that you gave up?

Damon Chen

02:12>> Yes.

Nathan Latka

02:13Okay. So pressure's on. Testimonial is now here. Alright. So let's talk about testimonial. What are customers paying you for? How are they using you?

Damon Chen

02:21>> So my customers' demography is pretty spread, so because you think about testimonials, if you run any business, you're running a podcast, right, so you want people to know, oh, they're happy customers, my listeners are really happy about my Nathan's podcast, and I think if you're running podcasts, you need some testimonials from your listeners, and every business I would say if you, you know, my existing customers are from ecommerce merchants, they're from you know, info product makers

03:03>> like you, right, and some SaaS founders, SaaS product, and also need Testimonial. So

Customer Count and Pricing Plans

Nathan Latka

03:10would How say customers do you have today that are paying?

Damon Chen

03:15>> I have a little bit over a 100 active subscribers right now.

Nathan Latka

03:19Are they all paying?

Damon Chen

03:21>> They are subscribers, yes. They pay monthly or annually.

Nathan Latka

03:25And what do they pay per month?

Damon Chen

03:27>> The pricing is $60 per month, or $480 per year. This is for the premium plan. I have a high tier plan, what I call the ultimate plan, that costs $180 per month, or $1,440 per year.

Nathan Latka

03:49And Damon, so what's the big number? What was monthly recurring revenue last month?

MRR Milestone: Crossing $4,000

Damon Chen

03:53>> Last month was a little bit less than 4,000 US dollars, but this month and, you know, two days ago, I just crossed 4,000 US dollars MRR.

Nathan Latka

04:05Is a podcast? Is that a Nathan Latka podcast exclusive? That's the first time you've shared that?

Damon Chen

04:11>> Yeah. This is absolutely the first time I shared it.

ARR Goal for End of Year

Nathan Latka

04:14Amazing. Well, congratulations. This is exciting. So so what do you wanna grow at monthly recurring revenue to so that you'd feel comfortable leaving your Cisco job with a young kid at home?

Damon Chen

04:24>> Mhmm. I was I actually set my goal to, you know, a 100,000 by end of this year, and hopefully I can grow the business to 200,000.

Nathan Latka

04:34A $100,000 per month by the end of the year?

Damon Chen

04:36>> No, no, no, annual recurring revenue by end of

Nathan Latka

04:38the But they're gonna say wow, you've got big growth over the next five months.

Damon Chen

04:42>> I think it's a doable plan, and you know, don't wanna set my expectation extremely high, because you know, if I didn't reach the goal, you know, I'm just kinda disappointed, but I kinda set the goal to some realistic number. I'll make sure that I reach it, and I think based on the current trajectory of the growth,

05:06>> I would have high chance to reach $100,000 You're

How Damon Acquires New Customers via Twitter

Nathan Latka

05:10at $4,000 per month right now. It's June 9. You've got four or five months to get up to $10,000 per month. Let's see if you How can do are you getting new customers today?

Damon Chen

05:20>> For now the major, I would say that,

05:25>> yes, it's kind of like I do everything on Twitter, and so this is my major distribution channel. So I actually

05:38>> don't have any other marketing channels. So I don't have any cold email outbound. I don't run any paid ads. This part I'm pretty proud of myself. Maybe I think in future because for now I have

05:56>> recurring revenue coming, and I probably can just leverage, reinvest my revenue into different marketing channels. So for now I think this is a good thing for me because I gain most of my customers from Twitter. And also I would say this is kind of a bad thing because it's like a single point failure. So I cannot just rely most of my marketing effort on just a single distribution channel. I should do more. I should leverage, you

06:24>> know

Nathan Latka

06:25Why do you believe that, though? I mean, if Twitter's working for you, know, everyone believes always you need to do more, and do more, and more channels, and more spend. If one channel's working for you, why not just triple down on that one channel and get more from that same strategy?

Damon Chen

06:38>> I would say that the recurring revenue is still, you know, pretty small. It's a small number, 4,000. And, you know, but I would say most of my big customers for Testimonial, if they sign up the ultimate plan, most expensive plan, are from SaaS companies. And I would say, you know, apart from Twitter, I would say LinkedIn is another big distribution channel. I should really, you know, spend more effort and explore a little bit more. So for

07:11>> now, I just, you know, because I'm a solo founder, I'm a bootstrapper, and you know, my time

Nathan Latka

07:15You is really own a 100% right now, right?

Earnest Capital Investment and Ownership

Damon Chen

07:19>> I got a tiny investment from Earnest Capital, and but I still own

Nathan Latka

07:24How much still is your earnings?

Damon Chen

07:26>> I'm not sure if I can disclose that number, but it's it's it's it's it's a small number, and I just, you know, sacrificed a little bit of my equity to Earnest. So that's that's all I can say.

Nathan Latka

07:38Well, won't you be able to share it? I mean, it's your company. I mean, is it less than a $100,000?

Damon Chen

07:43>> It's less than a $100,000.

Nathan Latka

07:44Okay. Okay. Got it. Why did you decide to do that? Like, did you actually need outside capital to to do this?

Why Damon Took Outside Investment

Damon Chen

07:50>> I don't need any capital. I don't need any monetary, you know, fundings. But all I need is the resources. As I said, I'm a solo founder, and my background is technical, and I'm totally new, but I'm totally newbie for marketing and sales. And for now I'm still watching, you know, go to YouTube and search, oh how to do marketing one on one, and I'm still watching those kind of videos. So I need resources more than the

08:20>> money. So I think Earnest Capital has a great, has really large pool of really successful entrepreneurs, founders, so that whenever I need any help, whenever I need any resources, warm intro to my target audience if I need any, and I think, you know, Earnest could help a lot.

Nathan Latka

08:39Have they helped you at all to date outside of the money? Have they emailed you to their list, for example, or things like that?

Damon Chen

08:45>> Yes. Yes.

Nathan Latka

08:46And how did

08:47that did that drive in new customers?

Damon Chen

08:49>> I think that yeah. It it did drive new customers.

Nathan Latka

08:52That's great. Well, then there's good value add there. Now would you ever bring in a cofounder?

Advisor Darren Westell and Equity Partnership

Damon Chen

08:57>> Cofounder, I I actually thought about that, but, you know, I'm still in the progress on getting a partnership, but I haven't found any co founder yet. But one lucky thing that I did in the past, Mark, is that I found a really good friend of mine from Twitter, and he agreed to be one of the advisor on board for Testimonial.

Nathan Latka

09:30Did you give them equity?

Damon Chen

09:31>> I gave him equity.

Nathan Latka

09:33Okay. Okay. So how do you do mean, that's the smart strategy. Right? It's a good way to get people close to you without, you know, paying them a bunch of money. What did what did you ask him to do for you in exchange for equity?

Damon Chen

09:43>> I will sync up with him every especially it's early stage, He just onboarded, and he will have a sync up meeting with me every week or biweekly, and he will lay out I mean, marketing he's

09:58>> genius, and he run a multimillion dollar business in England, and I think, you know, he runs a marketing platform, and I think he would do a really good job to laying out a marketing strategy for me on Testimonial.

Nathan Latka

10:17Who was this?

Damon Chen

10:21>> His name is Darren Westell.

Nathan Latka

10:23Okay, and what was his company?

Damon Chen

10:25>> His company is pager.co, and it's a platform for marketing agencies, recruiters to, you know, get their business.

Nathan Latka

10:36Yep, So

Damon Chen

10:37>> it's not, I would say it's not really a big business. It's, you know, multimillion dollar business. And, but I think that's exactly what I need. So I would say in future, I have confidence that I bring Testimonial to multimillion dollars in next, you know, I would say three to five years. And, you know, I need the person in front of me, you know, three, three to five years in front of me, instead of, you know, he's

11:06>> a founder of, you know, NASDAQ listed companies, and gave me advices. And those advices are not really, you know, hands on advices. So I would say, you know, I need Darren's advice. I mean, he probably a few years in front of me, and his advice would, you know, I can take his advice into my, you know, real execution. And if I execute it well, and probably, you know, in the next three to five years, you know,

11:35>> I could bring Testimonial to multimillion dollars.

SEO and Viral Embed Strategy

Nathan Latka

11:37On June on June 8, tweeted about ranking high for a certain keyword on Google, right, for the word testimonial, and you're now getting organic inbound. How did you do that?

Damon Chen

11:48>> There's actually no dedicated content. I didn't really wrote any

11:58>> testimonial related blog posts. I would say one big advantage for Testimonial is that if you are one of my customers and you use Testimonial, and you will for sure send the link to your existing customers, and they will just open the testimonials link to record their video testimonial, or they can, if they're shy, can send a text testimonial. And that drives, you know, definitely drives traffic to testimonial sites, right? Another thing for testimonial is

12:32>> people can embed all testimonials to their website. So the embed is kinda like, you know, once they embed all videos from testimonial and that would definitely, know,

12:50>> I'm not sure, I'm not SEO guy and I think, you know, that if they embed something from Testimonial to their side, and I'm not sure if that that that's a

Nathan Latka

12:59that qualifies for backlink. Just to give you credit, you're you're getting backlinks, right, because you have an embed tool, so your viral coefficient is high. Right? And also your time on-site is probably really high. If people are sending a link out like their e commerce brand is sending a link out to their buyers to record testimonial and that buyer clicks the link and records a video, they probably spend two, three, four minutes Yeah. On the testimonial

13:19link Yeah. Totally. Totally. On Google. Right? Totally. Yeah. This is why you're outranking HubSpot, right, for the word testimonial and you're a start up with $4,000 in MRR. Mean, is obviously super impressive, so kudos to Thank

Damon Chen

13:31>> you.

Nathan Latka

13:32Is the traffic converting well? How many new customers are you adding per month?

Damon Chen

13:37>> New customers, I was a new subscriber. Month I added 30 new active subscribers. And this month till now I added

13:49>> 11 as for That's great.

Nathan Latka

13:51Any plans to raise more capital, maybe more from Earnest or somebody else, or you want to stay bootstrapped?

Damon Chen

13:59>> I have no plan as for now, but I think once I lay out, know, together with my advisor, we lay out a good marketing strategy, and also, you know, lay out the roadmap for new features, and I will, you know, reevaluate to see if I need external resources. For now I can just, you know, if there's some,

14:26>> you know, too much work to do on some new feature investment, new feature development, I'll just, you know, get on to Upwork to hire some freelancers to do the work.

Nathan Latka

14:37How much that is have spent so far building a product, like on Upwork developers and designers, etcetera?

Damon Chen

14:43>> I spent zero.

Nathan Latka

14:45Okay. So you don't use Upwork to hide don't what you just

Damon Chen

14:51>> So the funny thing is that I did use Upwork for my past products, but my past products are pretty much all related to video stuff. So I have Upwork freelancers on doing some front end UI design stuff for my past products. For Testimonial, I didn't use any because I can just, you know, reuse their existing work for my past products. So for Testimonial I didn't use any Upwork resources.

15:28>> Funny And thing is that Upwork suspended my account

15:34>> for the whole year, I mean for 2021, and I don't have any access to access my Upwork account. But recently they just unblocked my account so I can continue to use Upwork to do more I saw that.

Nathan Latka

15:47Yeah. We're running short on time here. So last thing I want to give you an opportunity to talk about, there's a lot of people that don't understand how Earnest Capital works. Okay. So explain, can you explain to us in case other people wanna use Earnest, how does Earnest money work?

How Earnest Capital Works

Damon Chen

16:02>> They invest, let's say they invest a 100,000 US dollars for let's say 60% equity. And you know, you probably get a term sheet, say in the next few years, if you generate revenue and you just return three x of the $100,000 which is $100,000 just returned back to Earnest. And it's like it is also buying back your equity from 60% to, know, let's say in the end, you just need to give them 2%. So

16:37>> this is how they play the, you know, the investing game. So they would get

Nathan Latka

16:45a 3x return, but still keep essentially 2% of the company for giving you the upfront cash.

Damon Chen

16:50>> Yes, yes, yes. So they still get a tiny portion of the equity, which means that, you know, they invest in you and they, you know, they have the motivation to further help you, you know, go going beyond.

Famous Five: Books, Founders, Tools

Nathan Latka

17:05Mhmm. Very cool. Alright, let's wrap up here with the famous five. Number one, what's your favorite My

Damon Chen

17:11>> favorite I don't read too much book, but you know, I recently the most recent book I read is Zero to Sold. Obviously, you know, you heard about it from Arvid Kahl, and I bought his second book, Embedded Entrepreneur, and I'm reading it right now.

Nathan Latka

17:27Good. Number two, is there a founder you're following or studying?

Damon Chen

17:33>> A founder I'm following, one of,

17:39>> I would say Kenneth Cassel is my favorite founder that I'm following, and he's doing he started from a gas station worker to a really successful entrepreneur and

Nathan Latka

17:51What company is he building?

Damon Chen

17:53>> He built slip.so. A platform Slip, slip.so, and it's a platform for developers to sell their courses.

Nathan Latka

18:05Number three, what's your favorite online tool for building testimonial?

Damon Chen

18:14>> For testimonial, all videos and hosting are hosted on Mux, and I pretty much use MUX for every of my video related products.

Nathan Latka

18:26Number four, how many hours of sleep do get every night?

Damon Chen

18:29>> Last night I slept, I went to bed at 11PM, and I woke up at 8AM this morning, so I slept nine hours.

Nathan Latka

18:40That's great. And what's your situation, married, single, kids?

Damon Chen

18:43>> I am married, and I have one kid.

Nathan Latka

18:45One young one. And how old are you?

Damon Chen

18:47>> I'm 32 years old.

Nathan Latka

18:4932. Damon, last question. What's something you wish you knew when you were 20?

Advice to 20-Year-Old Self

Damon Chen

18:54>> I wish I you know, when I'm 20 and all I want is to get a full time job for my dream company, which is Cisco, and I landed a job at Cisco. I wish there are actually quite a lot of other opportunities, like, you know, building side hustles, right. I wish I knew knew more about, you know, building side hustles and all this kind of, you know, passive income or, you know, not, you know, the incomes, the money

19:24>> that are not offered from an employer. So I wish I knew more about that.

Nathan Latka

19:29Guys, testimonial.to, a 100 customers, $4,000 a month in revenue, about $50,000 in annual recurring revenue right now. His goal is to pick a $100,000 in ARR by the end of this year. He gave up a $200,000 salary at Cisco to take unpaid leave to see if he could build this. Got a little extra help from Earnest. We'll see what happens next. One man show right now. Damon, thanks for taking us to the top.

Damon Chen

19:50>> Thank you very much, Nathan.

Nathan Latka

19:53One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it. And the buyers try and make a deal live. It is fun to watch every Thursday, 1PM

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