Textingbase Revenue (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 at now we have a an engineer up in Maryland who does back in work in programming we have a programmer down in Orlando a user interface professional in Orlando an attorney that I'm married to and myself okay so call it for five total correct okay and what is the take me through some of the kind of the growth story here so you have 500 customers how are you finding these customers targeted mortgage providers and real estate providers so I like targeted a you or the conference's for them or LinkedIn forums or what oh no we started out with emailing blasts you know and using different email lists through third-party providers that have those lists I started using personal connections and with the personal connections actually used our product so I started loading in my connections into texting based keeping in touch with them for holidays and using the product to stay in touch with people and that's really blossom so mostly email and texting so what's a website somebody can go to to find the one of these third parties that will kind of tell you what lists are for sale if they wanted to find you know to copy us in our strategy great question I stopped using that provider awhile ago we actually started building our own list about three years ago there's a there's a provider that I used for years I just can't remember don't remember okay okay but that's how you started you be paid X amount of money to get access to these lists and then you convert those people in and now you're doing that what's the combination of building your own press the combination of your own personal stuff yes okay very cool what about so obviously it cost money access to his list what is your customer acquisition cost it's gone from about twenty eight dollars and forty seven cents down to eighteen dollars in gram range I'm in mostly because we started compiling our own data you know there's a real push of mine to get our own data so we didn't have to you know pay a penny of an email and look like relative to that kak so like how long the customers stay with you is about two point eight seven percent but you know monthly or annually my monthly rewind a rewind a a year and it was much higher I think it was closer to eight eight percent for for a month a year ago so we're changing things around and keeping people longer making them happier if you start the year with a hundred customers and you have three percent gross turn per month you're gonna lose about thirty but what is it thirty six of those by the end of the year correct got it and and what do you soon lifetime value is on these guys paying fifty bucks a month it's a little too early because we've been out for about eighteen months to understand how long we're gonna keep customers of what it what an average customer is yeah plus we're getting ready to raise our costs here or a minimum price here in the next couple months and we just did in the beginning of the year you know right now what I'm seeing and what I expect is that people will stay with us if we're making them money we tend to become a lot more more um you know people tend to like us a lot more once they start to make money with our product we don't have contra so you know we'll see it's a different type of model because I don't lock people in I'm hoping that the product does that does that for the last month what did you spend just on Kate acquisition last month was the higher month because I did actually pay for clicks I started pay-per-click for the first time but I didn't have any data costs so we paid I think eight hundred and some dollars last month for from ear fifty-four pay-per-click cost good now is your total kind of digital ad spend was that yeah okay very cool and what about like the cap table do you own a hundred percent of the business or was that two hundred sixty two grand that you raised an equity round where you gave some to investors gave some to investors you know I've kind of set my minimum at a fifty point one I know it's fairly useless because you have loading shares and you can keep control that way so I'm aware but that's sort of my target I have about twenty point five percent of the company available for a capital raised right now and the rest is allocated to investors and and the people that are building the product everybody building the product owns part of them apart of the product just be clear you have 50.1% twenty point five percent is allocated towards your next capital raise and the other call it twenty nine point five percent is dedicated towards kind of employees and if I could pick equity pool correct yes guys big news last month was a huge month for the company I recently acquired which was WWE top inbox comm I liked the company so much when I met the person who created it it lets you send emails later on Gmail set up reminders likes news almost to keep your inbox clean do things like send Auto follow-ups and do open tracking so you know when your emails get opened it's great if you're in sales CEO are trying to be more productive so listen I bought the whole company on the spot and I want to tell you how I did it I've showed the deal by the way two big smart people private equity firm species and they're dumbfounded they go Nathan how did you do this we've never seen a deal like this how did you do this so I did an unbelievable deal and I want to show you the income report so for me to send you the income report go to WWE topic inbox comm click the red button that says install this on Gmail and when you do that my email will appear it'll appear in a little Gmail pop-up window send me an email and I'll reply immediately with the income report and you can see I'm buying and growing small b2b SAS companies that's ww2 top and box comm totally free to try and use WWE top inbox comm very very cool Eric let's wrap up here with the famous five number one with your favorite business book you know it since the US I just read the bill got the Bill Gates book Steve Jobs book a different guy but he was in there tried to get through a lot I read more articles these days somebody just read the the jobs by oh yeah okay good number two is their CEO you're following or studying right now yeah actually who's one of my one of my business partners so you know he's been connected he was actually in in his room Sun Microsystems started so he's have done a lot of things throughout the years run a publicly traded company and I've got the opportunity to be mentored and asked questions from him number three what's your favorite online tool like acuity scheduling my favorite online tool for cute lucky to be scheduling man I don't I don't I don't even know I'm gonna have to use a lot of my own besides your honest that's a cop-out answer but but that's you know I don't know I'm gonna have to think about that your business like whether its payroll or your own managing own marketing spend or time tracking or email or yeah gusto is one I use a lot for payroll and saves me a lot of time it's takes me about five seconds to run payrolls I like that number for how many hours of sleep to eat every night I have a newborn so I'm gonna say about four how many kids total 11 year old and a one-year-old okay and you said you're married and how old are you I am 43 years old all right Eric last question take us back 23 years what do you is your 20 year old self new oh I wish my 20 year old self knew to make better choices on who I surrounded myself with a lot of the people I thought were winners that had my best interests in mind certainly did you know I was loyal to a lot of people that I may may have been better off not being loyal to but I don't regret it you know got me where I am but that's what I would probably tell my 20 year old self barity balance focus on one thing get it done and and stop being so scattered to try to be the best at everything that's what I would tell my girls up there are you guys how it from Eric beans he launched texting base he's now up to almost 500 customers each paying 50 bucks a month so about 25 grand in monthly recurring revenue he's managed to get as churned down to three percent per month his TAC is only 18 bucks with his great so they're growing his gross margin is 78% even considering that he has to pay messaging fees point oh six cents to his text messaging providers again focused on helping these customers do text message marketing at scale he still owns 51% of the company the rest the cap table stuff among employees and a portion of it 20% to the next Kappa raise they race to earn 62 grand so far Eric thank you for taking us to the top you're a great man thank you so much thanks for having me if you enjoyed today's episode with Erica go back and listen to Andy Esther he found with a fin tech company and Kimmel Nashawn said Nathan I will never raise capital again and it's not because he's stupid tune in to find out why I was yesterday's episode