WP-OK B.V. Revenue & Valuation (2024)

hello everyone my guest today is daniel basana he was born in italy but now living in the netherlands and is founder of a company called wpok where they help small businesses with their wordpress sites daniel are you ready to take to the top let's go okay so this is great so is this a sas play are you an agency it's uh well actually none of the two it's more of a productive service it's a prototyping service yes it's a productive service productized service got it so do you have a sat like tell me how you build a customer tell me a customer story customer story so we are specialized as you say in managing wordpress sites so most of our customers they maybe they build the website themselves or they they got it built by a freelancer or some agency but then at a certain point they realized that either took too much of their time to take care of wordpress and do all the small changes maintenance security etc or they were not happy with the previous uh with the previous uh provider previous people influencer or agency helping them with the website and and have you walked me through what you've built the company to today so how many customers are you working with so now we are managing around the 200 websites that means uh 150 active customers because we have customers and some agencies that have multiple websites we service in total over 500 customers since we started and we started 2015 so launched and launched in 2015 had 500 customers you have 150 that are still active today that have not churned and what do they pay you per month on average so an average it's a so we have three different plans and the basic one is 49 euros every figure i give it's it's in euro sorry but i'm based in the netherlands and uh yeah 49 99 and 149 these are the three different plans we have and they serve different purpose like the the lower one is just let's say just maintenance and security the middle tier it includes unlimited edits so unlimited website changes and it's more for uh yeah um website that let's say if the website has advanced features like uh woocommerce or they sell on online courses or it does some advanced functionality then we have an advanced plan that it's a 149. and so daniel when you take up all these pricing plans and your 150 customers how much revenue did you do last month so we just reached the 15 000 15k in mrr one five or five zero one five one five k member and uh so let's say almost 90 of the revenue are from from the subscriptions we still have some like one-time service like uh malware removal service for example this is a one-time thing and we do have some upsell that are more like developer developer hours that we sell to our existing customers and daniel take them back take me back to those early days in 2015. how did you get your first couple customers do you remember yes so there was a time in my life where i i started doing freelancing in wordpress because it was let me say the low hanging fruit because i've always been a technical person in a completely different field that is network security so completely different but yeah i i i know how to deal with customers and i always been like a support guy so i started doing fluency myself and i realized two things first one is that i really hate to build websites uh all the like design and communication part is really was really not nice for me but the second thing i realized is that small companies uh they have a desperate need for for support and yeah proper support you know the type of support where you always reply to emails on time you're quick in fixing what they what they need to be fixed and to do small changes i mean there is a big need for that and that's where i decided to start uh focusing on that so i would say the first customers were people that i did freelance that i feel yeah i did i did some freelance work for and uh do you remember what total revenue was back in that first year in 2015. oh from the from from the support wp okay that was not yeah maybe i don't remember but it was not the only thing i was doing at the moment i was keeping more also some online online businesses uh i was also working on some other online businesses so at that moment yeah i was doing different things but after 2016 i decided to focus more on on wp okay why is that there's a lot of founders listening right now that have a bunch of side projects that are juggling you decided in 2016 to shut down everything else and double down on wp okay why make that decision so okay the decision for me is when i start when i quit my company and start to build my business i want to make money online and i was really into buying and selling websites kind of flipping websites and i had this dream like okay i need 20 websites my own websites you know that may generate some money each of each of the website and i'm going to be live happily ever after the reality for me was very different because when i when i started following six seven projects i was completely bad i i had a problem with focus and most of these websites really were not nothing to be proud of i mean they are they were legal but uh this type of i had this feeling like this these are websites that are trying to make some money like affiliations and money with ads here and there but i didn't really feel like a project that um that i really like and wp okay for me it's the business that i like to build because again i feel like i'm a support guy as a as a background and are you building are you building a business are you building the business by yourself how many people are on the team today yeah and they i found it myself and i am the solo proprietor uh i have six uh technical guys that are taking care of the tickets that are coming in every day then there is one guy that is doing the sales part and uh since a couple of months i have uh there's some dedicated customer success and are you profitable today are you burning cash no it's profitable and how do you manage profits how do you manage how do i manage profit do you pay it back up to employees as a dividend do you keep it yourself do you reinvest in the business no so i mainly invest in the business last year we closed with six percent profit but uh yeah it was it was i mean nothing spectacular but was okay because every everyone is paid including i pay my own salary and uh i paid bonuses every quarter i paid bonuses to to the uh guys in my team how do you structure daniel how do you structure the bonuses there's a lot of early stage founders doing 15 000 a month listening they want to give their team some love but they're like we're not making enough revenue yet to do that how do you do it yeah that's a good one because i spent quite some time trying to figure out what was the best thing for me i heard people talking about profit sharing and that didn't convince me at all because the profit is not really under the team control you know it's i i want to be free to handle the profit as i want so at the end i decide every quarter to allocate it's it's roughly one percent of the revenue i divide this among the people the people in the team and i put together an algorithm that takes in consideration how many hours they work for for it for me how long they've been in the company what's their role because we have one team leader uh we have wordpress support guys and we have some junior member of the team so let's say putting these things together uh calculate how to distribute this uh this money and i'm really glad that i you know i don't have to think about it it's just i put the numbers in and uh and so it comes out so in 2020 how much revenue did you total last year revenue we closed at 170 170 000 k and what do you think you'll do this year okay well it looks uh it looks like i think we can close around to 30 to 250 what because i see the every month the mrr is growing you think you can hit monthly recurring revenue by december of 30 000 a month by this 30 000 a month uh that's double i no i don't think it's it can go that high so you did 170 000 last year how much do you think you can do in 2021 in i i would say between 230 and 250 oh 230 is what you said okay 200 350. got it very cool yes and have you done all this bootstrapped or did you raise what's up oh we love that nice work any plans to raise or you want to stay bootstrapped i want to stay bootstrapped to be honest i love that have you are you looking at any acquisition offers right now not not actively but yeah i can see maybe in a few years can be can be something uh something interesting to consider talk to me a little bit about your churn smbs are notorious for churn what turn do you see in the business so in the last year we got around 4.5 to 5 percent so you churn you turned five percent over the whole year yeah a little bit less between four yeah four point five to five percent but is that monthly churn or annual return this is a i took the last uh yeah in the last year so it's a three year it's per year that's super low churn for the smb space per year but even if i if i take the the churn from from the last three months yeah this is the number the number i see it's under four last month uh yeah it's it's under five percent oh yeah but sorry so if you're churning four or five percent per month that would mean on an annual basis it's more like 50 or 60 percent churn um okay but then i then i'm saying wrong it's per month got it so you have about five percent churn per month yes okay so that's that's more in line with the the numbers that i usually see but also not bad now you mentioned earlier you sell you have expansion opportunities what sorts of things do you upsell to your customers so the moment we have uh like custom work because the the maintenance plan the management plans they they include changes on the website but everything that it's more in the development side it's uh it's an extra so we we upsell that now we have a seo package but we have we have been quite shy with that to be honest so it's something we just start to to introduce and to propose to some kind of selected customers but this is something that can grow because there is definitely interest in the seo the seo in seo services and uh yeah this is this is what we um what we off we offer at the moment got it very good daniel this is great stuff we're obviously rooting for you let's wrap up here with the famous five number one favorite business book favorite is it's uh clockwork number two is there a ceo you're following or studying i really like brian castle or castle number one everything he does number three what's your favorite online tool for building wpok i would say help scout number four how many hours i sleep to get every night eight okay yes and situation married single kids married without kids no kids and how old are you i'm 41 41 last question was something you wish you knew when you were 20 yeah i think i would i would have liked to understand a bit more about marketing because i was very geek and technical at that at that point of my life and everything that i did there and every project i started back then it lacked the like marketing touch and the selling mindset guys wp okay launched in 2015 as an agency they've now helped over 500 small businesses manage their wordpress sites they did about 170 000 in revenue last year daniel has bootstrapped the company paid out profit sharing though to his team to keep them incentivized six of them building the company they hope to grow to about 230 000 a year this year in revenue daniel we're rooting for you thanks for taking us to the top thank you very much 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 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