Trackur Revenue & Valuation (2018)

hello everyone my guest today is andy beal he's the original online reputation expert today he's the ceo of reputation refinery and tracker bill is an online reputation management consultant award-winning blogger professional speaker and co co-author of the critically acclaimed book radically transparent all right andy are you ready to take us to the top let's do it all right good now you've also worked on a recent book called rep 30 days to a better online reputation as an amazon best seller many people would say if this guy's company so successful he wouldn't waste time writing books why do you do both i've always liked writing i like teaching so i kind of like the work that i do to learn about the industry that i'm in and then the writing the books is kind of like uh scratches that itch of teaching uh so i i i don't i i don't have the chops to be an actual teacher so writing is kind of the next best thing for me so tell me more about reputation refinery uh what's the business model uh the business model for that was actually out of necessity i've been in the reputation management space for quite a while and i started having a lot more people contact me asking for reputation management services you know they needed to repair their reputation or they needed advice on how to build a good brand and it got to the point where i just couldn't stop saying no so a few years ago launched reputation refinery just to take on a few select uh you know literally a handful of clients at a time that i feel i can genuinely help so that's the the the reason for a reputation refinery and these that is a is it an agency or is it a software platform that's an agency so reputation refinery is actually providing uh consultancy services to brands tracker is a software platform and that was that's over 10 years old now and that's actually a social media reputation monitoring dashboard okay which one makes you more money believe it or not reputation refinery probably has the better profit margins whereas tracker because it's a sas product it runs on its own so i guess tracker in a way because i can kind of go off for the day and tracker still does its thing reputation refinery kind of relies on uh my time and my team's time so yeah so how does it have i've never heard an agency have higher profit margins than a sas product uh well okay maybe not higher profit margins maybe i reworded that wrong maybe just higher profits well even profits because software doesn't have human costs typically whereas agencies you're basically billing human time which has higher cost yeah but reputation management is one of probably one of the most in demand services that are out there because a lot of people a lot of companies a lot that come to us have really serious issues like you type their name into google and they have you know negative things on the first page and it would have been cheaper for them to focus on building a good reputation from the outset but they haven't and so it's kind of like uh you know just to be clear i get that i completely what you're saying it's a huge space but software companies typically have gross margins of 85 percent agencies rarely have margins greater than 50 percent so i'm curious how you're getting a higher margin on your agency model than you are your sas company that seems backwards to me but it's you know i don't have a lot of employees i do a lot of the work myself because i only work on like four or five clients at a time so uh that's kind of the way it works whereas uh you know the software um you know it's probably got a higher profit margin but the profits from the agency side is actually higher okay yeah just to be clear you you make more money there is more revenue in the agency on a percentage basis which is what gross profit need to margin these margin numbers are the software thing is more productive it's makes you more money with less cost yeah okay got it got it got it we're clear now we're on the same page so so let me ask you a question why why not go all in on building the more efficient software business that can help more people at scale versus keep you know continuing to do the agency stuff doesn't interest me it's um when i built the software it was out in this it was again out of necessity so there was no affordable product out there that could offer social media monitoring that was easy to use and affordable uh everything was costing ten thousand dollars a month and i wasn't gonna pay ten thousand dollars a month so i decided to build something um and i realized well i i assumed that you would build software and it would all just run and it would be easy to scale but software you know you get a lot of bugs you have to um you know there's a lot of even though it's a self-service software there's a lot of customer contact points um it's just ongoing things so the actual scaling it up scaling up any business doesn't appeal to me i'm kind of more of a you know i'm more of the mexican fisherman i just want to kind of do enough so that i can you know make a living do the things that i enjoy doing so i usually have three or four projects running at any one time and those keep me busy they diversify my interest because i like i said i enjoy writing i enjoy consulting i enjoy a little bit of the software but i don't want to take i don't want to get investment i don't want to have a lot of employees i don't want all the headaches that come from it yeah it makes sense let's spend real quick about a minute on tracker then spend the rest of the time on your other stuff cause it sounds like you're more interested in that anyway on tracker it sounds like people pay you per month it's a software product what do people pay on average per month well it varies from 97 to 447 i would say most people come on board at the 97 a month plan but we have agencies that go with a higher plan because it's white labeled um and then we have apis as well that we sell which are a little bit pricey a little bit different okay so but if you just take your total customers about it by your revenue is it a fair average about 100 bucks a month ah probably about 150 bucks a month 150 bucks okay fair enough and that when did you launch that company the tracker 2007 2000. okay so it's been around a while it's been around a while it's has some it's and what have you scaled it to in terms of total customers we have about 70 000 uh registered users um so yeah and you know most of the majority of those are using our free product we have you know in the hundred range hundreds range that are actually paying yeah so i mean even if you just have a minimum of a hundred right times 150 buck 150 dollar that's like a healthy business doing about what 15 grand a month top line we do pretty good yeah we don't discuss uh numbers publicly but it does pretty good i mean it's uh you know we have low low uh uh costs because it pretty much runs itself at this point so i only have one or two developers that are kind of working on it and right now it's so low maintenance we're working on a you know some new api so why don't so how many members of your team are focused exclusively on tracker uh i've got one guy right now okay one so like let me ask you an interesting question here right this reminds me of brand yourself uh you know we had him on recently as well he was very much like where you were running an agency plus software he decided to go all-in software and now just very little agency i mean why not take what you've built here which is a healthy software company with historical seo value hundreds of customers north of 15 grand a month in revenue why not sell it to somebody that will scale it and then make an agreement that anyone that comes into their ecosystem they have to introduce to your agency as well yeah i mean if that if that strategic relationship was to materialize then i'd be open to that we've had similar discussions in the past uh we came close on one deal that kind of just didn't quite kind of work out why did it fail uh he couldn't raise the funds so got it got it got it got it how do you value a company like tracker in terms of what the the actual cost or what's happening well yeah so look i mean this is i think an interesting opportunity for you this uh this podcast audience really serves m a people it's eminent i mean we've had companies come on and the day after they're selling i mean for 20 30 million or they're raising a bunch of venture capital and when you think about how you value tracker if someone wanted to make you an offer for it what numbers start to be interesting for you uh really once you get to seven figures i mean even uh you know low seven figures is probably the interesting you know point for us to kind of make it worthwhile i've sold companies for thirty thousand dollars that i've built for two thousand dollars and then i've sold some for you know six figures and i've not sold anything for seven million or you know seven figures but i have been involved in teams that have um again it's you know maybe i'm a little bit different than you know i know some of your guests that you come on that have that you have come on because i'm not i earlier in my career i chased the big exit right so i chased the you know the the act you know being sold and you know all the stock options and all that kind of stuff and it really wasn't satisfying so now i kind of spend a lot more time chasing the lifestyle that i i want to live in fact in my net another book that i would write would be the lifestyle entrepreneur because i think that there's a lot of us a lot like me that really want to have just enough to kind of uh you know to subsidize and pay for you know traveling and hobbies and you know i play a lot of tennis i see that you we should play family tennis yeah yeah i mean where are you i mean raleigh so we've got some good tennis courts here we have yeah listen i have a lot of friends in the research triangle i'll get two of my tennis players to come out we'll play doubles um in warm-ups i'll decide if i want you on my team or if i want to play against you how about that that's generally what everybody else does too i'm just kidding no um so real quick wrapping up this before we go more on the agency i mean if you're doing 15 grand minimum a month that's 180 grand a year you can pretty easily sell a company i don't know what your churn and all that is but pretty easily sell that for a quarter of a million right and then it's not a distraction and by the way whoever buys it will go all in and scale it and basically grow the exposure of that which then feeds off to you and your agency which it sounds like you enjoy but you wouldn't sell for a quarter of a million you want seven figures which is backwards to the advice you just gave which is you're not looking at chasing the big exit anymore um yeah but there's more you know there's just a number of factors to it right so i don't you know it's like if it's if it's working if it's just if it's generating income um and your number is a little bit off we're we're talking about just you know generalization with your numbers but you know i'm high or low it's uh you're a little bit low so i got it if it's generating income then i'm not i have no motivation to sell it it's just there right so i can hold out for whatever you know the price that i feel is more than just what shows on the the you know the the p l's right so it's more than just the numbers it's the what's been put into it seo you've talked about it's the brand we've been around for over 10 years so it's a very recognized brand very strong uh lots of references from mainstream media you know been a lot of tv shows and you know quoted in the media that kind of stuff so there's a lot of uh intangibles there that for me just and also just the fact it's like hey i don't need to sell it it's like you know again i'm not chasing an exit nothing i do chases an exit it's just all about what interests me and i enjoy you know i enjoy the the parts of tracker there's some stuff that i don't enjoy but yeah so so you know what you know so it's like if i was building it because i wanted to sell it and then move on to the next project i've done that and i've done that but by the way nobody does that nobody when they on day one of the company says i'm building this to sell it tomorrow nobody does that it's all some kind of no there is nobody on day one that goes i am only doing this even though i hate it it's no fun i hate this i'm building us to sell it yeah there are who you've not interviewed in that clearly but i mean there are the people that you interview on your show the people that uh you're absolutely right the people the people that you interview they're the ones that like hey uh we were in this from that this is my blood sweat tears but there are a lot of people out there that like see an opportunity see that they've got they see that there's a an up a market there they have the resources and they build it and say okay this is something i could probably build and then sell now at the end though they never my point is they might go in as an opportunist to say wow i can build revenue here and i can pay myself a lot of money make a lot they never go in saying i'm going to sell this now sales offers comes along and eventually they take the deal when it makes sense but no i i have never met any entrepreneur that goes in saying i'm only building this to sell that is my only goal with this i have interesting i i would i would love to chat with him i've never seen that be the case most people they see an opportunity they want to make money they want to grow revenue they want to get rich that way a good sales offer comes along and they take it i'm i'm not i'm not saying you've not met those people but i'm saying i have met those people so i mean they do exist i just uh i think that they probably don't get to the scale of success that warrants coming on your show so you probably just don't get to chat with them yeah um interesting um let's shift over to your other stuff you're working on books you've written a lot of books we have a lot of people that might be software ceos that are thinking about writing a book to get more market share right more thought leadership tell me about your books are they self-published or did you work with a publisher first one was publisher wiley okay um second one is self-published the things have changed since the first book first book was 2007. if you self-published it was all vanity press it was basically saying that you had failed as an author and any way you could get your book out was to publish it yourself or it was some kind of like thing that should have just been an ebook but these days i would say definitely go the self-publishing route because you know the services are out there i used amazon um you can basically hire your own editors hire your own graphic designers for the cover and you can write it now if you go that route don't expect it necessarily to be a you know on the best sellers list unless you're willing to pay a firm to kind of inflate the numbers certainly you can't just be a real best seller you have to pay to inflate everything well a lot of people do there's a there's a system to it let's put it this way if you want to be on the best sellers list unless you are very well known and you're working with a you know publisher that's pulling out all the stops then you've got to get the right sales at the right time at the right channels in order to get on the best sellers list and that that takes money and if you want to make that investment fine but uh otherwise for me like as you kind of indicated it's a great lead generator it positions me it just cements my position as a thought leader in the space i enjoy writing now and then um so it kind of helps me to kind of get stuff down on paper so i mean listen what i'm hearing is obviously publishing is changing you work with wiley on the first one you didn't on the second so you didn't enjoy working with them or it didn't work out they didn't bring they didn't help you with distribution the advance wasn't big enough whatever you didn't enjoy it so so i mean the reason i mean many people would say i want to work with a publisher because they're gonna help me sell more books you're saying no that's not the case uh for the average author yeah that's not the case and i think that's a big uh misnomer that the you you know the publisher is going to pull out all the stops to help you sell the books yeah they get you into the bookstores yeah they get you in the different distribution channels but unless you're a you know politician or a movie star something like that big name they are relying on you to use your network to get the book sold um so that they you know that wiley was great to work with i loved working with all the editors loved the resources they provided but the actual promotion was down to me so in order to get these these big publishers interested in you some people say well if you don't if you need them to commit to a big advance they have more on the line they're more likely to go to go to work for you so based off what you know about advances what size in advance do you think an author needs to get to really understand that as a signal from the publisher that hey we will help you market the book it's a good question it's probably not in advance that i would ever see so i mean we're talking like 100 10 grand a million probably maybe closer to the 100 grand i would say that's probably a significant input anything less than that and they're probably more likely to rely on you to do the publication yeah it's an easy it's a decimal error right off for them if it doesn't work yeah all right interesting okay cool so books are doing how many so the wiley book how many copies have sold and when what year was launch year 2007 i don't know in the in the low thousands i it wasn't like a best seller okay and the same with ripped okay and and how are you how are i mean is this a basically glorified business card for you is that what makes you sit down and take the time to write it it's good question uh yes and no i think that for me yeah it's probably generated more in consultancy contracts than it has in book sales so yeah it's a you know it's a here's who i am here's what i'm known for business card maybe not quite that but yeah along those lines all right andy let's wrap up here with the famous five the first one what's the last business book that you read uh the last business book that i read was probably the lean startup um now i was expecting you ask my favorite business book so i got that answer so which is what's your favorite tim sanders which is love is the killer app if you've not read that book it's a fantastic book it's all about basically being a love cat and sharing everything you have with others in order to kind of uh it's almost like calmer for business if you like number two is there a ceo you're following or studying right now always following richard branson he's been a hero of mine since i was young um scott uh scott wingo uh ceo of spiffy right now but also previously channel advisor he's local guy really good good guy um and been a good mentor to me and he's a good guy i think for anybody to follow maybe not on a lot of people's radar but a good guy scott wingo yeah and that was back if you guys want to hear scott's episode that was back on episode 910 we had him on great guy really really smart uh number three uh andy what is your favorite online tool for building your business so uh excluding all the social media tools because i think that's a little bit cliche to throw those in um i really like uh zendesk which is a really good customer relationship tool i like cashew for um the accounting and and you know just sending invoices and things like that i think those are two affordable tools that a lot of people could uh benefit from using number four how many hours of sleep to eat every night a lot i sleep pretty good so like i said i'm living about eight or nine depends i don't go to i don't go to bed too late and what's your situation married single you have kiddos uh just married and my wife and i we like to travel we uh play a lot of tennis together so good and how old are you i am almost forty four four nine almost four holding on to 43. last question take us back to your 20 year old self what do you wish she knew well i've already kind of hinted to it and i definitely would have told my 20 year old self to read the story of the mexican fisherman and if you if your listeners are not familiar with that then just go google it it'll be easy to find but basically uh you know when i'm young when i was young i was chasing after that exit chasing after those stock options and i really didn't bring me the happiness that now where i've got lots of different things that interest me i'm not chasing after the dollar i'm chasing after almost a a semi-retirement kind of plan reed mexican fisherman earlier that's the advice andy wishing you today is a nice kind of dual threat going tracker software platform launched in 2007 now doing north of 15 grand a month in revenue basically running itself it does less revenue though than his agency which obviously consults on reputation management and online reputation management which is doing well he does consulting gigs there uses his books to drive those sales andy thank you so much for taking us to the top and guys if you want to learn more from andy go check out rept it's his latest book 30 days to a better online reputation andy thanks so much for taking us to the top thanks nathan appreciate it