Unstack Revenue, Valuation & Funding (2020)

hello everyone my guest today is grant deakin he is a serial entrepreneur and the founder and ceo of unstacked the no code content management platform designed for marketers to build and scale digital businesses without developers we love them but they're expensive prior to unstacked grant was a co-founder and cpo ceo of grapevine and a new influencer marketplace with 200 000 plus creators which was acquired in 2018. all right grant you ready to take it to the top yeah let's do this first off congrats on getting a company sold in the influencer marketing space in 2018. i know a lot of these companies now that are just sort of flat or stuck at like 5 10 in a r how did you get out i mean you played that right i think the market was changing really fast a couple things we saw um obviously the wild garden platforms facebook instagram youtube uh we're changing the rules all the time uh that's actually part of like why i'm uh excited about unstack so i think for us you know we wanted to uh position the business for exit with a company that could you know continue to unlock the value um with some of its other assets and things like that yep and this was this was ideonomics right back in 2018 yep and they it was like i think a 2.4 million acquisition deal they so the interesting thing about them they had actually already owned uh a significant stake in the company so the the final price was was a bit higher um but that was sort of what you know to buy out the company as a whole own subsidiary uh that was around the purchase price yeah so just repeat that back to you they might have already owned 20 to the company so they were really buying 80 the other 80 for 2.4 million so the valuation was actually higher along those lines yeah interesting okay let's now focus on new business right so on stack when did you launch it what year uh we really got it going uh early 2019. uh my co-founder and i uh kind of came out of the gate full time in may so we've been at it you know about 15 months okay 20 yeah mid-2019 and i mean what was the sort of how did you build the conviction to say you know what i'm going to launch another company it's going to take three to five years the rest you know my life to do this we'll give you the conviction well one i think i'm a glenn for punishment but i think i think putting that aside for a second you know i love building you know products that help people uh with with grapevine it was all about you know those creators had very limited options for monetizing their audience and so we gave them kind of especially when we started we gave them a new way to really unlock value from their audience um towards the end of that though you know i wanted to start thinking about serving a constituency that i really identified and cared about and that's entrepreneurs founders and marketers to a large extent who are kind of like the unsung heroes of a lot of these organizations um i've built a ton of websites on a ton of different platforms i've built full marketing stacks you know soup to nuts uh and scaled up some pretty pretty big you know digital presences um and the consistency i found whether it was for me or for any sort of entrepreneur out there is like you start putting together a bunch of tools inevitably like you get stuck like things kind of evolved to be like a frankenstein sort of system and then you're pulling in like contractors and consultants who are like touch and go we've all kind of you know been in that situation before so i kind of set out to be like hey i really love this persona you know the founder of the marketer how can i build sort of like the ideal like platform that i would want if i was starting something new and that's kind of like the genesis that you know started on stack and we had um we had a few other entrepreneurs that were like hey i would use this like you know when can i get it and so that kind of kicked things off so how did you get your first 10 customers uh first-time customers were probably just through like my personal network you know talking to people who are kind of oh i have this pin or hey a friend of mine actually just asked me about this like let me connect you um it's been fairly grassroots since the beginning so a lot of our customers come from uh referrals you know obviously we're doing a lot of content marketing but uh referrals have been a huge driver for us uh how do you incentivize referrals so originally we we didn't you know it was sort of like a goodwill loyalty thing um i think as we kind of built some of that goodwill and like earned that trust with our customer base we actually rolled out a a lifetime sort of recurring referral program um so there's a 30 uh lifetime uh recurring revenue share for customers that people refer to us now interesting so how much like last month how much do you pay out to affiliates because that 30 cut that's pretty new that program so i think uh small dollars you know maybe maybe you know 500 bucks you know i think we just rolled it out uh this summer uh but it's uh you know i think people really like it we're seeing a lot of people sign up for it and then going back to the other strategy that you mentioned early on content marketing you're starting to gain serious steam with with terms like best sas websites or beta page or sas websites things like that you're moving up in the ranking which are driving you sort of new clicks per month do you i mean is this intentional or is it sort of accidental well i mean we're using our own platform to dog food growing our own sass business right so we're very much like in it with our customers who are also doing the same thing um and so you know for us we're just practicing what we preach you know focusing on smart content you know we look at content twofold like especially now you know it's all about educating you know our audience you know building trust with them but then also the long tail that you know starting to rank for the terms that our customers are you know out searching for um so obviously we're in a space where there's you know there's a lot of competition on certain keywords we try to be smart about where we start and and kind of increase our ambition you know over the long term for for higher volume higher comp uh competition keywords yeah well i think your best performing pros post our favorite b2b sas websites 2019 edition that thing's due for an update and you know double down on the traffic you guys are getting from that you also do we've got one uh but yeah but uh yeah yeah you've done some other sort of great sort of hacky smart things right since you know over the past 15 months on in july of 2020 you launched on product hunt you got 3 900 or 300 upvotes that is not easy i'd say that's tough one percent easily on product hunt how did you i mean that doesn't happen by accident so how did you sort of strategically plan that launch so we actually had a i wrote up kind of a brain dump of everything that we learned and did and everyone we talked to and feedback we got um you know i think even at one point you know ryan hoover gave me some direct feedback like hey this is too markety like you need to kind of like taper it back and so we we tried to be really considerate uh from from all those conversations and we put a lot of work into it um so you can get all that on our on our site you know all the tools and tips i think a couple things that like really worked well for us where is it by the way sorry where where is that is it on the blog do you know the blog title you put that out under yeah slash blog slash product hunt playbook oh yeah got it let me just read let me just tell people how successful this was real quick so yeah 3300 up votes you got 16 000 unique website views and you got 600 new signups and a nice bump in mr what was the bump like a couple thousand mrr yeah that's about right actually uh the interesting thing about product yeah so all that's true we also got i don't know if i mentioned this in the article there's a lot of some like a overwhelming amount of uh inbound vc interest from that so if that's something that you're exploring as a founder like we weren't expecting that at all um so that was one thing we also got a few different uh like pr write-ups from it as well and like another competitor in the space wrote like a huge article like uh you know about us and comparing us so there was some nice like overflow from some of that as well that's interesting um okay got it so so there's an mrr bump there so walk me through sir what this costs to use people can sign up for free and then what's the average customer paying per month yeah so it ranges anywhere from free as you mentioned up to um you typically around 99 we're doing a lot of experimentation with pricing we have you know larger like enterprise companies who are spending quite a bit more we have agencies who have kind of you know uh local licenses that you know are kind of in the sort of 500 plus range a month but generally you know when we're selling the founders uh selling the marketing teams or product teams within larger companies they're probably around 100 bucks a month yep and about how many customers you have today uh today uh we're still pretty early in our journey we've got uh we're just around 200 customers 200 customers okay i mean look i mean that's a traction's traction right you can argue with that so that puts out about 20 grand a month in revenue so the the so currently we're probably just about half of that about 10. uh and so the reason for that is you know when you sort of blend it out i would say like we're seeing more and more people go towards that hundred dollar plan as we've rolled out a lot more features into that plan things like stripe integration revenue attribution amp content amp pages but uh where we started you know we saw especially with product on the ground swells around like the 29 to 49 a month so they're getting that blended average yeah smart have you bootstrapped this or raised uh so the way that we look at it is you know we're thinking pretty long term and for a platform play like we wanted the latitude to kind of you know take some time and everything like how are people going to build this or the next build digital businesses over the next 10 years so for that we felt like some venture was the right path for us so we we put about a million dollars into the business uh around the time that we went full time probably june july last year you put in or you raised from vc we raised it we raised it yeah i mean i participated but yeah we it's sort of your traditional pre-seed round see grant knows i love bootstrappers which is why we get the minute long sort of hedge before he says and we raised capital i don't mind it though some businesses is right for some it's not right for it just depends what you're going after yeah i think like like if you're sort of in the potential like category creation business or thinking about like how could we be sort of an anchor player in our space um you can do it bootstrap but it's it's a little bit more challenging you know so i think to have kind of the firepower to go it alone uh vc can be a helpful uh hand in that so so let me now break break this down right so so million raised 120 000 an aor run rate today when you raise i assume you did that on what like a safe was it unpriced uh yeah it was unpriced uh we actually did it as a convertible note um and uh in terms of that we're like a five million cap yeah yeah pretty standard stuff um on okay and um walk me through how you think about burn today so how much are you burning per month to drive growth yeah we burn 40 grand a month right now uh that's like gross that's an off an offset you know uh by our growing mrr so 30 000 net yeah and so are you cool with that i mean is that sort of you're comfortable with that for a while yeah i mean i think like when you take some money in outside capital and like it's an interesting balance of like well how fast do i spend it and i think when you do that you tend to get a little bit of pressure like hey you should be spending that fairly aggressive to like get to conclusions or like you know learn things um on the flip side i've been in other companies where we raise money and we we threw money at problems without really understanding like the root drivers of those problems so people will throw cash at it you know to buy customers when they're not ready they'll throw money at at headcount when they're not ready or don't know the real problem they're solving so i think it's it's finding that balance i think for us like 40k month is like a pretty lean uh pretty lean and mean sort of operation yeah and really runway doesn't care about right so i mean how much cash you saw in the bank uh we spent about half of it yes i mean so that puts you at you know eight nine ten months of runway something like that i mean and and we're you know continuing to grow obviously which which slows that down or allows us to kind of maintain it but add more resources to try to try to push things faster how much new mr did you add last month uh i'd have to double check i think we probably added like 2500 okay okay good i mean so more than 10 month-over-month growth yeah one thing that was been interesting going back to product hunt was like uh and i know you're big on cohort analysis and like our we don't have our numbers totally perfect and figured out but we did see that like the the churn from that particular cohort was significantly higher than our overall churn from from all other cohorts so something to be thinking about yeah i mean i don't think product hunt is as bad as appsumo i think the appsumo cohort is always like the really high churn i mean they don't even convert to annual or monthly plans usually product hunt is is i think great for a lot of other things besides getting customers you touched on a couple of them it's sort of publicity and it has a lot of other side effects i mean you're testing on the right things though talk me through your team today how many folks yeah so we're 10 total seven are full-time uh we've got six of our ten are engineering and product um i'm kind of like a half breed because i'm running the business on the day-to-day but my background's actually in product and and i did a stint as a ux developer so i currently run our product as well um and then we've got we just brought on uh zac rigo who's our vp of sales and marketing was previously at word stream and uh gm of their agency business over there so zach just came on we've got uh chris cardone who's our head of customer success we've got inside sales team so um that's sort of what the team makeup is today is there any of these reps quota carrying uh it's something like we're trying to figure out like if you look at our business today it's not really like there's not a model that like that really works for isr so our focus has really been in like you know uh creating those wow moments for for like new customers that are coming in the platform and like really thinking about retention and expansion uh more than like just closing new business isr's inside sales rep yeah yeah talk to me about churn what's gross turn like monthly yeah so again i think like overall uh i probably say like three to four percent monthly right now on on the growth side uh and i think we have some things to figure out there like one of the things in our business that we're trying to figure out is what that what that sort of retention and like expansion strategy looks like for users because where you start certainly isn't where you finish right like you know six months online most of our customers are will double their traffic you know double their leads every every you know five or six months right and so like we're trying to figure out how to how to grow with them um and offset you know some of that gross churn um i think the other thing too we're looking at is like how do we improve our pricing model you know like we for example today we're very much a like just free and then like three tiers right with like different features bucketed which is kind of like an old-school way of looking at it there's no usage metrics in place right now so we have a lot of experimenting to do to kind of get that right and i think ideally like just really try to align with the customer to make it super easy for them to get going and then like grow with them over the long term and do you have a general idea of what cac would be you know what do you spend to get a new hundred dollar a month customer yeah i think right now we're probably spending three to four hundred probably closer to 400. i think that can come down uh we haven't done a lot of paid uh surprisingly facebook has worked better than adwords um there's some interesting things we're trying there uh i think one i recently learned about was you know just the ability to upload your customer list and do some look-alike around that so we're we're cautiously optimistic that there could be some upside there for us on customer growth yep good stuff grant let's wrap up here with the famous five number one favorite business book uh i have a few um seven powers by hamilton weber is probably one of the top yep that's a good one number two is there a ceo you're following or studying uh there's a bunch uh what one of the uh guys on our board is a guy named ralph foles he's not currently a ceo but he was the ceo of a company called wordstream here in boston so it's uh if you can if you can get someone you're following to also be a mentor or sit on your board even better um and he helps you pick off key employees from his old company i guess well that was actually coincidental i i've been i've been having lunch with zach for over a year um but uh but yeah i mean they they know each other too so it doesn't hurt yeah number three what's your favorite online tool for building your company besides your own uh obviously our own but i've actually grown to really like um uh bare metrics and and profit well just kind of getting into the the actual unit metrics of our business you know and figuring out kind of where to tweet the dials and what's your situation married single kiddos i am uh happily married no kids no kids and how much sleep are you getting each night i got to get eight that's good and how old are you 33 33 last last question grant what do you wish you when you were 20 uh big things take time be patient guys there you have it unstack really a tool for founders to get going for really anything they need for the business but mainly sort of a cms all-in-one sort of tool they raised a million bucks their net burn is 30 grand a month they're serving over 200 customers today doing about 10 000 in monthly recurring revenue up from nothing about a year ago when they launched we'll see what happens next grant thanks for taking us to the top thank you one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas 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 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation 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