How Textingbase grew Textingbase to $1.2M revenue and 500 customers in 2024.

he launched texting base he's now up to almost 500 customers each paying 50 bucks a month so about 25 grand and monthly recurring revenue he's managed to get his churn down to 3% per month his TAC is only 18 bucks which is great so they're growing his gross margin is 78% even considering that he has to pay messaging fees point oh six cents she was texting providers again focused on helping these customers do text message marketing at scale he still owns 50 point one percent of the company arrested cap table slope among employees and a portion of it 20 percent to the next cabarets they raise 262 Brandon so far this is the top where I interview entrepreneurs who are number one or number two in their industry in terms of revenue or customer base you'll learn how much revenue they're making what the marketing funnel looks like and how many customers they have Nathan many of you listening right now don't have time to listen to every b2b SAS CEO that I've interviewed if you want to get access to the database I've created with your where your growth rates customer counts margins and many many other data metrics and data points you can go to GE T LHC ka kaam here's the thing though and this is that database I keep it to myself it's so freakin valuable and to preserve the quality of the data and make sure that the people that have access to it have a true advantage I'm only letting 10 companies on each month so we're full this month but you go to get lakh accom to get on the waiting list for next month and look there's big people on the waiting list I mean the biggest Macy's you've ever heard of you've probably heard of them they're big private equity billions and billions under management so it's an impressive waiting list go get on now and get black accom this episode seven seventy six coming up tomorrow morning I interview master class founder David and I simply David will you win the online course wars hello everyone my guest today is Eric beans he is the CEO of texting a base before that he was the CEO of a company called app the UI X he was also the former co-founder of premier mortgage capital along with author of changing the world through texting software he's also done production is the producer and writer for la Style magazine chief beans on daytime Eric are you ready to take us to the top yes chief beans on daytime mean chef beans that's very cool okay so why do I go from cooking to texting base which I assume is texting software yeah I was never really a chef I had the the person who ran that show I made food for heard about 12:00 at night and I think her tastebuds may have been a little bit inflated at that particular moment in time so she invited me on the show I did it there was a lot of fun that's very cool so what is texting Basin how do you make money base is a is a personalized mass communication platform for texting it's actually very similar to what you do on the email side so we scheduled messages create groups and reach out to people from local numbers so the magic of our system is it will seem like you wrote messages personally to a lot of people assuming you write it the right way and then it becomes a bi-directional chat we make money by charging people a subscription and they get a certain amount of messages per month for that subscription to use the product so it's a pure SaaS model just good SAS model there and what if you'll pay on average per month 50 is our minimum plan and people pay up to you know thousands depending on whatever usage they have to they have to do on average that what would you say across your customer base is 50 our mean is 50 people go with the min plan kind of build up from there when they need it and how many customers are you serving currently oh we yes we're we're growing pretty quickly and you know trying to attract any keep on going in that direction so all is well right now not going away and I mean can I do the math 500 times 50 assume you're doing about twenty twenty-five thousand bucks a month and recurring revenue correct that's a very solid Virginia Tech madman yeah another hokey on the show that's good now Eric have you bootstrap this or if you raise capital both started bootstrapping and got the MVP out raised capital and you know it's been a combination of self grind and a little bit of money on the outside how much have you raised today total it's very specific guys it's a friends and family round grandma wonders put an extra to hunt 2 grands so that's bring it to 62 Crump I wish my family has the ability but I didn't go to them I actually went to friends people I work for them business and then a couple outside investors we have the former CEO of AOL is is one of our investors that Kimberly part told ok and we have former VP of HSN and we have a guy Brent Kingston who is a former CEO of a publicly-traded company is one of the investors we've got a nice potpourri of people from different niches that we can leverage to help get us where we're going now most fast companies have a gross margin of you know 85 90 % because the only costs above the line are server expenses and maybe processing fees I imagine with texting you tie into something like Twilio and have a fixed cost structure what is your gross margin about five hundred sixty six percent basically and when I say basically you know you have to move you have to sort of it's hard to pin down because of their server cost and the variable cost associated with it but the raw margin is about five sixty six and that actually goes up margin is typically a percentage between zero and a hundred what do you mean 560 600 66 percent of our of our actual costs I'm miss reading higher I asked asking it so so basically I'll walk you through it if our cost per message is about point zero six of a penny and we're charging four cents a penny you know that's kind of mean fortunately text yeah for sensitive for sensitive text let me let me drop like that real quick so way if you're making twenty five grand per month get much in that month are you spending on that point oh six cents about thirty $600 somewhere around there okay got it so that's like call it 50 it call it 14 percent of your cost structure currently is that messaging fee correct okay and in what other costs you have above the line server software employees just above the line not not sgna not like employees or marketing spend etc well our server cost Rawdon between three hundred and eighty dollars and now they're gonna be more because we're actually running two concurrent server infrastructures while we do some additional reporting over so our server costs right now we're running about $900 a month okay so the worked oh but that's 3600 plus 900 so 4,600 bucks per month what other cost you have above the line what about processing fees on on money you know it's it's your standard you know three three percent processing you know 2.5 depending on whatever we're actually running through there but you know our costs are our costs are pretty low it's a nice business model overall got it's 2.5 percent processing fee on 25 grand what is that like you're like five hundred bucks something like that okay so you've got about fifty five hundred bucks that's costs above the line that are required for you to run your business to get that 25 grand in revenues so I mean you're still pretty healthy there I mean that's that puts you at what about seventy eight seventy nine percent gross margin something like that yeah well I know a lot of these companies that are built on top of texting the biggest thing that eats into their profit is the fee is that fee they have to pay to send out the text to the provider correct how did you get your how'd you negotiate I mean is 0.06 cents low how'd you get such a low rate so we actually signed a contract for volume the more volume you do the lower your costs are but we we've the traditional cost Court is 3/4 of a penny and because we got over a certain threshold we negotiated with Twilio directly and we're able to reduce our monthly of cost per per transaction down to 6/100 basically right yeah yeah that's incredible going from 3/4 6/100 what volume did you have to commit to to get that kind of deal thousand dollars a month in the next level the next iteration there's actually tiers at a thousand at five thousand so our next iteration for we're gonna get an additional break is that the $5,000 a month level so you currently paying about a grand per month to get down to that point oh six cents we committed to a minimum that's our minimum so really doesn't affect you know our overall but that's that's just our $12,000 a year is what we've committed to Twilio and then you know as we get to the next level we're not that far away we'll be able to sign in another contractor to continue to lower our lower our costs and give me more the back story here so what year did you launch this company in um I started in 2012 I was in banking I needed this product nobody had it so I left banking and started building it of course you know I knew building a business was gonna be twice as long and twice as much so I factored that in and then still ended up being twice as long and twice as much as my doubling so um it took about three and a half years and part of that because my team we had to take on additional projects just to be able to fund them and pay about what is your team...