How Wombot Hit $750K ARR as a 1-Person Team with 300 Value Added Resellers (Interview with CEO Mike Hall)

Introduction and What Wombot Does

Nathan Latka

00:00Folks. My guest today is Mike Hall. He's a serial entrepreneur, innovating easy to use, highly effective marketing tools for local businesses at his company called wombot.io. Mike, you ready to take us to the top?

Mike Hall

00:09>> I'm ready. Let's go, Nathan.

Nathan Latka

00:11I know you joke. You said, Nathan, I was little bit late because I was getting out of my McLaren, and my audio wasn't connected. It has a slight flex, which we love, but it's working.

Mike Hall

00:18>> I I love flex on the McLaren every day. And just to flex even more, two weeks ago, I was in New York City in Manhattan when they unveiled the new Artura supercar McLaren. So McLaren invited me there. The president of McLaren was there, and and I got to I got to complain about the the maintenance issues. Well, you're

Nathan Latka

00:33a car guy then.

Mike Hall

00:34>> Oh, I I love cars, man. Absolutely.

Nathan Latka

00:36Amaze so that's why you do SaaS, profits to put into cars?

Mike Hall

00:40>> That's pretty much where it goes.

Nathan Latka

00:41100%. Amazing. I love I love the honesty. Alright. What is Wombot? What are people paying you for?

Mike Hall

00:46>> Okay. It's word-of-mouth bot, which basically is an automated system to get online reviews. But in the end of the day, the value that we're selling is business growth on autopilot for local businesses. But we have two types of users. We've got local businesses, but we've also got a partner program, is really blown up the last year and a half, where we have resellers selling the application, and they rebrand it for their own, and they keep 100%

01:09>> of the revenue. It's completely new different type of strategy. We're seeing if it works here.

Nathan Latka

01:14So I guess, tell me, well, let's reverse engineer first. Last time you came on, I think you said you were doing like $450 k in ARR or something like that?

Mike Hall

01:23>> I really can't remember. I know it was about two years ago, something like that.

Nathan Latka

01:27What are

Current ARR and Monthly Revenue

Nathan Latka

01:28you at today?

Mike Hall

01:30>> For ARR, right around 750,000 right now. It might even be a little bit more at the end this year, but we're doing a little bit more than 60,000 per month right now in total.

Nathan Latka

01:39That's great.

01:40And that's all revenue you get. You don't have to pay a bunch of that out to your value added resellers, right?

Mike Hall

01:45>> Well, yes, I do have a marketing guy that gets a percentage on different things he brings in, but when it comes to the resellers, it's completely separate. So I keep 100% of that revenue.

Nathan Latka

01:55So how do you make So from a value added reseller, how do you make money from them?

VAR Pricing and Reseller Economics

Mike Hall

01:59>> Okay. Well, right now we charge them 199 per month. Okay? But I give them 50 locations to resell. We have resellers all over the world right now that are reselling it for anywhere from $99 a month to $499 per month. So we have guys making 10 to $20,000 per month on reoccurring revenue, but they're going out and doing all the effort and and the work of selling it, which is not a lot of work to sell

02:22>> Wombot, number one. But but the the the thing that makes that an attractive business model from my standpoint is that it's a very efficient sign up and customer acquisition, you know, process. We don't talk to them. We don't do demos. They go through funnels and everything else, and they sign up and, you know, we have a free trial so they can sign up to and and the cool thing is is last year and a half, we've

Ideal Partner Profile: Salespeople

Mike Hall

02:43>> really kind of boiled down our our our ideal user, our ideal partner, and that the partners end up being salespeople. Okay? We had a bunch of different types of folks, marketing companies, and different things that would sign up. But salespeople, they don't have to be technically, you know, advanced. They just have to be able to So that's really our sweet spot, and we're just now really starting to crank that up.

Nathan Latka

03:06But Mike, how many of them how many VARs do they pay you? $199 a month?

Mike Hall

03:10>> What is that? The beginning part?

Nathan Latka

03:12How many value added resellers do you have today?

Number of Value Added Resellers

Mike Hall

03:15>> A little bit under 300. It was a little under 300 in total.

Nathan Latka

03:18300. So I can take 300 times $200 a month. That's where you get $60 k a month in MRR.

Mike Hall

03:24>> Yes. But some of those are on we have like a three month plan for we have different distribution platforms, but some of them go through like where they get $99 a month for the first three months, things like that. So so it doesn't add up exactly. And and also too, we do have a a pretty substantial churn rate. I hate to say it, but it's a fact. So but which it's always still growing.

Churn Rate and Partner Retention

Nathan Latka

03:44But How big?

Mike Hall

03:46>> I it again, when it comes to direct users like businesses, it's it's very small, like, you know, maybe two or 3%. When it comes to partners, from the last year and a half, I can't even give an exact number, but it's it's too much. It's like maybe twenty twenty some percent. It's a lot. But the thing is we were not concentrating on salespeople. My marketing guy that does a great job, you know, getting free trials in

04:10>> for the partner side, it came from the MLM world. We had a lot of MLM people in there. They come with a lot of problems. And, you know, what that ended up happening is they were trying to sell it to resell it to resell it. They weren't actually but but but they but they ended up finding some terrific salespeople that that really, you know, took off with it.

Nathan Latka

04:27Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually. Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect

04:50your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna

05:14get a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here, Right? So the teal is what a VC would pay. Yellow is what private equity and red is if you sold the whole thing outright. Now what's cool about this is this is

05:36not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction, 1,200,000 seed round, 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're

06:02going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at, and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. Alright. We're gonna go back to the YouTube video here in a second, but if

06:24you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into the

06:50interview. Mike, when you add up all the volume of all the revenue your VARs make together, do you know what that is? What they charge their customers?

Mike Hall

06:57>> No. I I was talking to somebody yesterday about this. My my guess is somewhere around a 500,000 a month, maybe a little bit more that they are bringing in directly to themselves. But again, I have no way at this point, and we don't have enough time to tell you exactly why. I used to be able to track it, now I don't just to make it easier on them.

Nathan Latka

07:15Why not take why not try and take like I mean, can you not take 10% of that?

Mike Hall

07:19>> Okay. So I I watched one of your shows the other day. I I forget the app's name, but I have it on my phone. I contacted them. My next step is to have an integrated payment processing platform and to capture a percentage of revenue. It does two things. It's gonna make it easier for new partners. They don't have to go out and get their own Stripe or PayPal accounts to do reoccurring payments, and we're gonna capture

07:39>> more of that revenue. So You nailed it. The the that plus sales enablement tools is the path forward. So, you know, our current revenue, even if we didn't grow our user base and we had sales name with tools to sell to these partners, I'm thinking would more than double the the current ARR. Yep. So so those are the things I'm trying to work on at this point in time. But but it's still it's still in its

Payment Integration as Next Growth Lever

Mike Hall

08:00>> infancy, man. We we have a couple of investors, some guys that did really well. One one guy does 70,000,000 a year in a software company. Another guy sold his software for $84,000,000.

Nathan Latka

08:11And How much have you raised?

Mike Hall

08:13>> None right now. So I I I'm just kind of at that that point that they're doing due diligence. We'll we'll we'll see whether or not I want, you know, or not I want, but we'll see whether or not it goes forward.

Nathan Latka

08:21Mike, how much capital do you need?

Mike Hall

08:26>> It's it's I I I mean, if I had somewhere near a million dollars, I I think I could do a lot with that.

Nathan Latka

08:32Do need that all right away? Or could you do like 200 k today?

Mike Hall

08:35>> No. It it wouldn't be right away. So there there's, you know, holes in the butt. There's a few problems I'm trying to solve development issues. I've had the same developers for seven, eight years. They're great guys, but

Nathan Latka

08:45I How many full time today?

Zero Employees and Contractor Model

Mike Hall

08:47>> It's it's not maybe like one you can kinda say is full time. But we we don't I don't have any employees. I don't have any full time staff. I do everything through partnerships.

Nathan Latka

08:57Do you code? No. So how do you get the how do you make sure that the the things keeps working for all these 300 value added resellers? All the white labels?

Mike Hall

09:04>> I I I have, developers that are basically on call every day. So it's but but but they're not full time. So let me ask that specific thing full time. I have developers at any time of the day, I could contact them and they will look into the problem, they will fix the bug, and it's usually fairly quickly.

Nathan Latka

09:22Well, Mike, mean, look, one thing I'd encourage you to think about, don't know if you know this, but like, you know, Founderpath, my other company, you know, our whole goal is to help founders get to 5,000,000 in ARR, totally bootstrapped with a 100% control. We could give you take your MRR today times five. Right. We could give you 300 ks today. Like we wire it tonight, tomorrow. Where would you spend the money to get drive growth?

Mike Hall

09:41>> Well, there's a couple things. So the development side for integrating a payment process, which we already have Stripe, we don't use that connect for, know, what would you call it? We don't use the connect for, you know, partner payments. So that would be have a one development side. The other side is to have a targeted marketing campaign directly towards salespeople. And I have a number of things that are pretty much ready to go. But content is

10:09>> a big hurdle. So that would be one place where the revenue would be spent. And just on getting the development off to par, really, think. Which the development process might take three, four months to get everything set

Growth from $294K to $750K ARR

Nathan Latka

10:23Who are you using? What's the Dev Shop you're using right now?

Mike Hall

10:26>> I I don't wanna say their name, but they're they're offshore. So Where where which country? It's it's in India. And they are like a larger organization. And actually, when I went to New York, when I told you that the guy flew in that that I've been dealing with for years.

Nathan Latka

10:39Is it Cody Toss?

Mike Hall

10:40>> No. No. But if you have any recommendations, please let me know.

Nathan Latka

10:44No, this is the number one thing we help founders with that use Founderpath when they take money from us. We help make sure they've got amazing engineers. And a lot of time it's an outsourced engineering firm that we've already vetted that we have other founders that are paying for. So we know it's good quality work. So we can chat about that offline, but this is great. So $60,000 a month. Now, if you're doing, call it 60,000

11:00a month today, what were you doing exactly a year ago? Do you remember?

Mike Hall

11:04>> It was probably about 20 some, maybe 24,000, 25,000, something like that.

Nathan Latka

11:08Oh, that's a lot of growth.

Free Trial Volume and Conversion

Nathan Latka

11:10So I mean, how have you doubled in the past twelve months? What changed?

Mike Hall

11:12>> Well, like I said, David Dubs, who does a lot of the marketing side, he was really going towards, you know, which I hate MLM side, but he was going through it. But we were having five, six hundred free trials per month. Okay? And I think at the height, it was almost 700. So we kind of ramped it up for a lot of free trials. We have an affiliate program so that they get paid and things like

11:32>> that for referring others. But those 500 on average might end up being 40 new paying users, which is great, but then because of our churn rate, it was up down kind of growth. But the beginning of the year, it was starting to go down, think because of Christmas, things like that, MLM kind of thing again. And then I gave dubs a hard time, boom, he found some bigger guys to go out there and advertise it, and

Webinars and Salesperson Partners

Mike Hall

11:57>> went up properly. But like I said, at this point in time, we're not having great growth like today. But what we're doing, I'm getting rid of the churning disputing type of user partner, and I'm bringing on the salesperson. And the salesperson Would

Nathan Latka

12:13you sell the whole business today for for a million dollars all cash upfront?

Mike Hall

12:16>> No. Not for a million bucks. No.

Nathan Latka

12:182?

Mike Hall

12:19>> No. No. Probably not. Like, it would be like like, it's it's so easy to grow this thing. Like, and and it's from my perspective, like, it's clear now how to go go forward. And the problem is that there's so much opportunity. Mean like we're selling to salespeople. I just did a webinar last night for two hours, had a bunch of our salespeople on there. We got this guy from Australia. He's been doing commission only sales his

12:41>> whole life, very successful guy, lives on a resort, but he says the best opportunities ever seen. He's signing up five to six local businesses per week at this point in time. And again, he's capturing 100% of the revenue. And like I said, our partners are flocking to people like him that are publicly saying things on his Facebook group because they're just hungry for sales enablement tools. So there's some missing pieces here that I'm trying to put

13:07>> together this year. But, you know, sales enablement and capturing some of the revenue that our salespeople partners are, you know, getting from local businesses for sure.

Nathan Latka

13:16Alright, Mike. Sounds good. We're out of time. Let's wrap up with the famous five quick answers here. Number one favorite book.

Mike Hall

13:22>> Jay Conrad Levinson and Guerrilla Marketing.

Nathan Latka

13:25Number two, is there a CEO you're following or studying?

Mike Hall

13:28>> I'm not. I'm not.

13:30>> No.

Bootstrapped and Investor Due Diligence

Nathan Latka

13:31Number three, what's your favorite online tool for building Wombot?

Mike Hall

13:35>> Did it I you know, there's there's so many right now. I I I really don't have it. I'm I'm sorry, man. I wasn't ready for, like, the the the fast five. I I I like Wombot for growing a business. Business growth and all of that.

13:45>> Too many.

Nathan Latka

13:46Number four. How many hours of sleep do get every night?

Mike Hall

13:47>> You know, between four and eight. It all depends on what's going on that day.

Nathan Latka

13:51Alright.

13:52And situation, married, single kids?

Mike Hall

13:53>> I'm married, you know, happily here in Tennessee.

Famous Five Rapid Fire Questions

Nathan Latka

13:56How many kids?

Mike Hall

13:58>> One son. We got one son. One kid. That's why that's why I'm here in the middle of the Alright.

Nathan Latka

14:01Very cool. And and how old are you?

Mike Hall

14:03>> I'm 41. I'm too old.

Nathan Latka

14:0541. Question. Something you wish you knew when you were 20.

Mike Hall

14:10>> Just to to start a software business because when I was 18, I went to one class for HTML. I should have just kept going with it and continue to learn how to code. Because I I love to build stuff. So with software, the building blocks are free. I'm building a house right now. It takes forever. And but with software, if you know how to code, it's free. Guys,

Nathan Latka

14:32wombot.io helps small businesses grow. He doesn't wanna deal with all the sales work. So he has over 300 value added resellers that sell his product. He does not take a cut from them right now, but they make about $6,000,000 a year through his program. That's his estimate. He makes about $60,000 a month because each VAR pays about $200, $300 bucks a month for the software. That's he's doing $60,000 a month right now, up from $25,000 a month

14:52just a year ago. Totally bootstrapped, which we love. And he's a one man wrecking machine. All consultants building this tool, which we love. Mike, thanks for taking us to the top.

Mike Hall

14:59>> I appreciate it, Nathan. Talk to you soon.

Nathan Latka

15:02One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. 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 one

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