How Vidalytics CEO Patrick Stiles grew Vidalytics to $697K revenue and 250 customers in 2024.

hello everyone my guest today is Patrick Stiles he is a high school dropout turned serial entrepreneur he started eight companies and has been the CEO of a public one he sold several million with video online plus frustrated with the existing video platforms so he found that his current company Videla Dexcom which is the highest converting video platform for online marketers he also wakes up to the eye of the tiger every day you don't a mess of this guy Patrick are you ready to take it to the top yeah man let's do it all right how do you know it's the highest converting video platform for all my marketers yeah well that stuff that we Peter split tested internally or we've had our users do so they come back with that data sometimes we can't always publish it but that's where we're getting that interesting and and walk me through what are they converting what's your typical customer your perfect fit customer what are they using you for so a lot of like so our ideal clients right now are direct response marketers people that are really video centric in their businesses they tend to be SMB so they're small businesses but they're able to do you know hundreds of thousands or even millions of plays a month so it's a little hinge that swings a big door in their business so that's why we've kind of built this tool for them because it has the aggressive features and tools for converting visitors and understanding how that works inside of the videos interesting and give me a general sense of what on average one of these customers pay you per month well our average is a hundred bucks a month but it can go up to a thousand for some of our users okay and then put this on a timeline for me when did you launch the company so we launched about a year ago okay good so fairly at 2017 mm-hmm and bootstrap today you're on money bootstrapped it how's that feel it it can be intense but you know it's rewarding to have that freedom so I'm a big bootstrap guy I've talked to investors I haven't found the right fit so I'm not really counting on that Avenue how committed are you how much money of your own money have you put in it's six figures okay good but less than a million yeah it's like okay but Stillen what was the public company you ran all right so actually I'm currently the CEO of that company it's gray cloak tech um it was a SAS Kunda before I showed up and then I have a background in health companies so we started some things some businesses in the CBD space so is that what that companies it has nothing to do with fiddle it X nothing at all okay got it wait so why why hold that spot why not like get out I wouldn't want to be public sea of a publicly traded company all they admin to work that comes along with it yeah well we're still bootstrapping bid oolitic sand you know it was an opportunity that made a lot of sense to me at the time it was enticing so you know I went for it and that's kinda how I got involved in that you know what I mean hearing you say is you get a salary there and that's kind of a nice buffer for you while you get bit a little off the ground that's part of it but I also have an equity stake in that public company that's that's sizable so and then I actually do on a supplement company as well that's still running in the background I see how much trailing twelve months how much rubber do that public company do um I don't have that number in front of me but it's not very much well like less than a million be sick like yeah less than a million wait why is it public right well I didn't take it public but I started the CBD company that was acquired to buy it in an all-stock transaction so it's a penny stock thing so it's not like a Nasdaq like you know high-flying kind of public company so it's its stock price right now is below a penny so it's a it's more of the kind of wild wild west as far as public companies go interesting okay interesting by the way if I was in that position I would also put that in my bio it sounds really really good but it's nice to understand the economics behind like why it's that way right so I do know that diet and nutrition in the supplement space a lot of these guys make Bank off video a/b testing so it makes perfect sense to me why you ended up where you're at today and it's cool to see you going into the SAS space did you just hear from friends the margins were way better than supplements and said I got to get in uh no so I've had a supplement company for last eight years and I tried I've started several different health companies and it's just always an issue with either merchant accounts with traffic compliance you can also run into some government agencies with three letters in their name yeah and some things like that so SAS is just you know it's way more scalable it has the perceived value of a physical product but at the end of the day it's basically an info product it's intellectual property on a server and it doesn't have those compliance issues and then also I'm kind of geeky I like tech so I was building custom tech in my supplement companies and that's kind of how I found my CTO and how I felt fell into this space okay so you in in your kind of founder relationship your the business guy not the developer right interesting and your CTO is he or she is doing all the coding yeah that's great interesting yeah him in a team yeah yeah well what's the team size today so the team size is 5 - those people are contractors that are we but we've hired and fired 20 people to build this product okay uh why why what I'm trying to forget to phrase that question what why do you lead with our we hired and fired 20 people to build the product well I mean if you hire them and they're good why not keep them Patrick my ending question there was yeah my question at the end there was if you hired him and they were good why not keep him oh they weren't good but yeah or their job ended you know like say like UX design and we like build out the platform and stuff like that we don't need to keep cranking out like new pages and things like that so see there's a kind of per project kind of hire yeah yeah yeah either yeah their completed their job or they didn't cut it got it and and fast for so 20 you launched about a year ago fast-forward to today how many customers are you serving now so we have about 500 users okay and how many they were paying ah I'd say last in half okay so call maybe 200 something like that somewhere in that range okay and why do you walk me through what a user gets we're like how much can they get out of the platformer before you make them pay well we killed our free plans and nothing so all they can get right now is a two-week trial without pain okay guys so you've got you've got 500 people you're sorry you've got 200 that are active paying customers which means you've got 300 or so on a trial right now and about you know in some time where the next 14 days they'll have to decide whether to pay or leave no no no no sorry those 300 people a lot of them are actual free plans we had a freak freemium model that we tried for a while and then we just kind of killed it off we didn't think that it was working okay okay I'm confused so how many people are paying you today on a monthly basis uh you know I don't have that exact number and I also don't want to get too specific with some of those numbers so I would say less than half so it's it's gonna be in that 250 or lower the range okay 250 well but by the way I like these numbers because people appreciate they always say Nathan you always have CEOs that are too far down the line it's not actionable for me I want to get someone that has just turned revenue on cuz I'm about to launch my first paywall so the more transparent gonna be the more valuable it is for my audience I know that for sure so I appreciate you doing that so look 250 folks if you got him paying a hundred bucks a month I mean well you're somewhere around 20 grand a month right now in revenue yeah I mean we're below that but yeah it's in that range okay like can we say between 10 and 20 um yeah below 10 yeah so it's it's gonna be around that 10 mark okay ten mark good that's good by the way like I everything starts to zero right so like I appreciate you saying that even if it's uncomfortable to say so around ten grand right now walk me through what the first sign up was like the first paid was it something I went through a trial then you converted him or what did that first sign up feel like that first sign up was somebody that just found his poem a Facebook ad we're dabbling in paid traffic about a year ago and it was and when we launched the product a year ago it was just video analytics since then we've kind of pivoted a little bit to add a lot more things that have to do with more conversions on the front end and not analyzing the videos after the fact so it's a more robust platform so at that time that person was just really blown away with our analytics and you know that was enticing and that's kind of what ever experienced was that some of the people that found us and really liked us for geeky and really kind of data inclined but for the market that we wanted to go after which was you know internet marketers we found that it wasn't quite kind of sticky enough to get that traction so so after we kind of had that data early on after the first few months of launching a year ago we decided to kind of pivot and start building these other features into the program into that into the software yeah I mean when I think about what you do and I take a quick glance at the website what I immediately think is like Wistia people use Wistia for this we're how are you trying to position yourself different from a company like Wistia yeah so right so was the Econo is like the big company that we go after they're like the use case or the competitor that everybody knows so it's kind of something that we chew off of yeah um and I mean we actually have a compare page on our on our site that goes you know that compares our features against Wistia and we have maybe like you know several dozen and they have like you know maybe three or four of those so we're building a lot a very different feature set and like Wistia they have things for you know like integrating with supports or recording in your brows or in things like that but like I said earlier a lot of our users are really kind of like video is like the single thing on their website that is converting visitors into buy-in visitors into buyers so we're building things in there like an exit pop like or not an exit pop but at exit thumbnail which is a thumbnail that the user never sees until they pause the video also execute where they can opt into the video and watch it later from their desktop a lot of people are finding that people don't convert on their mobile phone so getting people to jump over to desktop is a big challenge for for a lot of marketers so things like that and then our analytics just blow them away and then on top of that we cost less mm-hmm yeah interesting okay very good give me give me give me since a churn churn is obviously critical in this kind of business what your turn so our logo turn is about 5.7 okay yep that's a logo turn for a month yeah that's I got that that's an average got it and so when when people do leave why are they leaving um you know what we have found is that a lot of the people that are turning are have a very low monthly ARPU so they're probably just not getting value out of it like they're not using it they're still trying to kind of figure out their conversions the people up the scale that are paying us more money are definitely not earning nearly as much right really why price it okay with that pattern that you're seeing you know you have a $19 a month plan you go up from there why not do the opposite why not say this is like ten thousand bucks a month it's the ultimate platform for someone spending more than a million bucks a month on paid ads yeah for for me provide personality I don't want to build a business where I have to build a sales team at least not right now so it's more kind of like a lifestyle thing and also like you know then I would have to go up against people like vidyard and you know Brightcove and i kind of like these bigger companies and try to get into more kind of the enterprise space I use the own of recruiting firm that was my very first business and I would close deals for 20 30 grand a pop yeah yeah but I was married to the phone and I hated that so I want something that you know kind of has that space and I really just kind of believe in direct response and buying traffic and being able to you know grow that way so makes sense well this next number then you have to have since your direct response guy what's your CAC what do you paying to acquire customers yeah so I don't have a CAC number to share with you right now we target about a three month payback if possible but a lot of our users now have either come from masterminds networking referrals or from affiliates okay well look at 30 so what do you pay an affiliate 30% of first year sales or what I it can be 40% reoccurring for life in some cases for life yeah yeah what we would like to do is move towards more a CPA model where it's like a flat fee up front like you know a couple hundred bucks or something like that for a pain user um but you know it just kind of depends on what that funnel looks like and whatever and you know what it backs out for making money for the affiliate so if you target a three-month payback period and your average customers paying 100 bucks a month you're what I'm hearing you says you're willing to spend up to 300 bucks to get that customer in the door yeah that's where we're playing right now and testing things out that's great and where where's the company based well we're remote but I'm out Denver Colorado remote okay good so not everyone's in Denver they just spread throughout the US or internationally as well International that's great walk me through some of your growth channels I mean how much are you spending per month right now on all you're paid outlets to drive growth so right now we don't have any paid ads running we killed those off when they weren't profitable and we in this was back when we kind of had just the analytics built into the software so then from there we started building other features in you know and I've worked with my network to get you know users on it and then once those people started you know sticking upgrading you know referring people that's when we kind of knew that we had something we revamp the website kind of did like a like a relaunch in a way and now we're taking that out to pay traffic as we speak interesting there you go any metrics on lifetime value yet or no it's too early it's gonna be north of a gram but you know it's it's also a bit speculative and not the most useful metric I like to go with robust as far as a metric when I'm buying like for as far as advertising as far as the kind of Holy Grail how long you want to keep bootstrapping as long as I can I mean is the answer but you know it yeah but but if if I'm in a position where I think that money is gonna make me grow much faster and it's gonna solve my problems then you know I'd absolutely take it if I found the right partner are you raising right now no okay if you did raise what and it was from the right partner what will you try and raise that valuation wise I talked to some venture capitalists this was a bit ago when our revenue was lower um but you know I've had several venture capitalists say that we could do like a safe no doubt a three million cap yeah yeah yeah that's that's that's pretty standard for this kind of thing it's an interesting space a great product let's wrap up here out with the famous five number one what's your favorite business book ready fire aim number two is there a CEO you're following or studying right now probably ed O'Keefe I mean as masterminds ed O'Keefe ya Dums in the health space yeah yeah number three what's your favorite online tool for building your business uh it's not online but Scribner is my absolute favorite software are you big writer yeah oh really books or what copy just God just landing you're one of those guys that puts together 30 freaking pages on one landing page right you scroll for miles right yeah people do it though right they get hooked in and boom they're sold by the end yeah I mean if it converts you know if you have a if you have a self-liquidating offer then like who cares how long it is or what it looks like right you know anything like that with this self liquidate what's a self let seems like a car salesman it's gonna turn people off what's a self liquidating off remain self liquidating offer is the sexiest thing in marketing it's where you're acquiring customers and your day1 money is covering acquisition cost yeah got it so so all of you that got turned off that term really what he's saying in sexy terms is your payback is instant same thing very good all right number four how many hours of sleep are you getting every night oh eight to nine and what's your situation married single kids married no kids no kids in how old are you I today I'm 34 34 oh it's today's your birthday today is my birthday congratulations Patrick that's exciting I see you're turning 34 you're 34 now no no no I'm 23 boy okay sorry that was the bad questions the same thing you just turned 34 today got it yeah good you have a year now at 34 yeah awesome all right and last question what he was you're new and you're 20 um that you don't have to learn or do everything yourself that there's plenty of people out there that want to partner up and not be an entrepreneur you're centered themselves so go on find a team guys there you have a build a team you don't have to do everything yourself he did a lot of direct response stuff sending a lot of traffic to videos then realize there's no good product for this let me go build it do this in 2017 put in you know six figures of his own money build fiddle it excurrent Lee now serving over 250 paid customers doing about ten grand per month there bootstrapped economic wise doing about five percent logo churn per month paying about three hundred bucks to acquire a customer so a three month payback period assuming lifetime buy on these guys is about a grand but still early team of five based remote across the US Patrick thank you for taking us to the top go man thanks so much