How Trackur CEO Andy Beal grew Trackur to $180K revenue and 100 customers in 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...