How HighLevel Reached $36K Revenue and 10 Agency Customers in 2018 (Interview with CEO Shaun Clark)

Introduction and Guest Background

Nathan Latka

00:00Hello, everybody. My guest today is Sean Clark. He dropped out of college to start the world's largest answering service and then left after twelve years to start an accounting company, sold that, and is now helping marketing agencies close more leads to customers through automation. He lives in Eugene, Oregon, married with a six year old son. Sean, are you ready to take us to the top?

Shaun Clark

00:18>> Absolutely, let's do

Invoice Sherpa: Accounts Receivable Automation

Shaun Clark

00:19>> it. Awesome.

Nathan Latka

00:20All right, so the company you sold was, I believe, Invoice Sherpa, correct?

Shaun Clark

00:23>> That's correct.

Nathan Latka

00:24So is that like a FreshBooks competitor?

Shaun Clark

00:26>> No, it was accounts receivable automation, which sounds really boring, but basically it just helped small and medium businesses collect money that was owed to them. And by automating all kinds of outreach to the customers and just basically bothering people until they paid their bills.

Why Shaun Sold Invoice Sherpa

Nathan Latka

00:40And why'd you sell it?

Shaun Clark

00:42>> You know, I grew it from my kitchen table to about 1,000 customers. And I just wasn't sure kind of where to take it and where to go with it. And right about that time, somebody came in and said, Hey, we'd love to buy you out. And it was enough money that I could move on to my next adventure, but not enough that I could retire on a beach. So I said, Alright, let's do it.

Nathan Latka

01:01What'd you grow revenue to before you sold it?

Shaun Clark

01:03>> It was about 40,000 a month.

Nathan Latka

01:05Okay, so healthy. That's good.

Shaun Clark

01:07>> Yeah, not not too bad.

Nathan Latka

01:08And you didn't use any his brokers, you had just a strategic or someone reach out direct?

Shaun Clark

01:12>> Actually, did. I got a cold call from a broker.

Nathan Latka

01:16Thought Which that

Shaun Clark

01:17>> was like, Latona's, I believe. Okay. And I thought it was funny because I thought the guy was nuts and I told him he just said, Well, just name a price. And so I named a price that I thought was a little crazy, and he came back with a couple offers.

Nathan Latka

01:28Wait. What your crazy price?

Shaun Clark

01:31>> Oh, I think my crazy price was like $400 or something. And then, he actually came back with a couple of people who are willing to pay something something close to that.

Invoice Sherpa Revenue and Sale Details

Nathan Latka

01:42Well, that's but that's like that's not a I mean, if you're doing $40 a month, I mean, you're doing $500 a year. That's less than one x ARR. That's not crazy.

Shaun Clark

01:49>> Know what the heck I was doing as well. So for the record, I was I was I was probably surprised just due to my naivete, not necessarily

Nathan Latka

01:56Got it.

Shaun Clark

01:57>> Due to the number. So, yeah.

Nathan Latka

01:59So you sell

Shaun Clark

02:00>> that company. I that it was a good education.

Nathan Latka

02:02Let's talk about high level now. What's that company doing? Is it is it the SaaS company?

Shaun Clark

02:05>> Yeah. Absolutely. Yeah. A 100% SaaS.

Nathan Latka

02:08Okay, so walk us through what it does.

Shaun Clark

02:10>> Yeah, absolutely. So what we do is we basically work with marketing agencies who generally focus around lead generation or just companies who do a lot of lead generation. And the whole goal is we help double the number of customers that they pull in from the same leads that they're already generating.

Nathan Latka

02:24Okay, interesting. And are people, I mean, is this a campaign driven thing? People turn it on and then they turn it off, is your churn high?

Shaun Clark

02:31>> No, churn is not high because generally the marketing agencies, we sell it to them at an agency level or at a larger company that generating a lot of leads. So this is something going to be doing constantly. And we don't sell it on a per client basis, we sell it on a per agency basis. So they can continue to use it so long as they're operating and generating as an agency.

Nathan Latka

02:48So what is churn like last twelve months revenue churn?

Shaun Clark

02:50>> Zero.

Nathan Latka

02:51Zero, you haven't had any downgrades or no cancellations?

Shaun Clark

02:54>> No, not at all. Although we're still really small and we're still growing. So I anticipate that that will at some point happen. But for the moment, we're delivering a lot of value.

Nathan Latka

03:01When did you launch the company?

Shaun Clark

03:03>> About six months ago.

Nathan Latka

03:04Okay, so okay, very new, 2018 era.

Shaun Clark

03:06>> Very, very new.

Nathan Latka

03:07How many customers today?

Shaun Clark

03:08>> Right now we only have 10 agencies that we're working with.

Nathan Latka

03:1110 agencies, okay. How'd you sign up these first 10? Where'd you find them?

What HighLevel Does

Shaun Clark

03:14>> All just bootstrapping and we integrated with a couple of software marketplaces as well. And they sort of just found us. And then we started realizing, Oh, wait a second, maybe this is a good market. And we started just outreaching to them directly. And we just found that there was a really natural fit from what we were selling to what they were needing. It was very surprising.

Nathan Latka

03:35Which marketplace did drove you the most of those agencies?

Churn and Business Model

Shaun Clark

03:38>> Well, ironically, was So we were selling to direct customers at the time. Was Doctor. Krono, and we had a medical med spa that we'd done business with. Their agency reached out to us and said, Hey, can you guys do this, this and that? And we said, Oh yeah, absolutely. And they said, Well, if you can do that, I know 100 other guys who need this. And so that really, we pivoted at that point and we've just

04:00>> been driving at that direction, kind of adding new features as we go.

Nathan Latka

04:04But what marketplace? You said you integrated with software marketplaces. Oh,

Shaun Clark

04:07>> Doctor. Chrono.

Nathan Latka

04:08Oh, it's called Doctor. Chrono.

Shaun Clark

04:09>> Sorry, it's a medical HR, I'm sorry. Yeah, they have developer's marketplace or an apps marketplace that really helped us get some customers early on.

Nathan Latka

04:16Interesting, really interesting. Okay, good. And how many, sorry, what do the customers pay on average per month?

Shaun Clark

04:20>> $300

Nathan Latka

04:21Okay, so you're doing about $3 a month right now?

Shaun Clark

04:23>> You got it.

Nathan Latka

04:24That's good. And 0 a year ago, obviously, right?

Shaun Clark

04:26>> Yeah, exactly.

Nathan Latka

04:27That's great. And you said you're bootstrapped, I assume you put some of your own capital into this. How much have you? Yeah,

Shaun Clark

04:31>> it's all self funded just out of the out of my previous sale and as well as my say, just personal savings.

Nathan Latka

04:37How much have you put in today?

Shaun Clark

04:38>> I would say about $100 so far.

Nathan Latka

04:41Does that make you nervous?

Shaun Clark

04:42>> No.

Nathan Latka

04:43Are you married?

Shaun Clark

04:44>> Yes.

Nathan Latka

04:45Does it make your wife nervous?

Shaun Clark

04:47>> No. She

04:51>> runs her own business and she's much smarter than me. So with her without me, she'll do fine.

Nathan Latka

04:56That's funny. All right. What's the team look like today?

First 10 Customers and DrChrono Marketplace

Shaun Clark

04:59>> So we've got myself, another developer, I'm a software developer, I've got a software developer partner who's living in Qatar right now. And then we've got a couple of contractors that are doing things like design and front end work and so forth.

Nathan Latka

05:11Okay, so two remote and then everyone else's contract?

Shaun Clark

05:14>> You got it.

Nathan Latka

05:15That's awesome. Okay, very good. And then Churn, it's too easy to talk about those cohorts. I mean, do go from 10 customers to 100? Where think they're going to come from?

Shaun Clark

05:23>> I really think it's gonna be through the affiliate model. So somebody that I really admire from a So a couple of people you've had on, Brendan King from Vendasta and also I can't remember his name, the gentleman from ClickFunnels.

Nathan Latka

05:37Yeah, Russell Brunson.

Shaun Clark

05:39>> Thank you. Very similar models, very similar customer base. So we're going to work with those agencies. We help these lead generation agencies actually raise their retention because we're able to help them actually close a lot of the leads that they're bringing their customers. Whereas right now, lot of those customers, those leads just kind of die on the vine because the customers don't do a good job actually following up on the leads and we automate that whole

06:01>> process. And so as a result, we're a huge value add to those agencies.

Nathan Latka

06:05Yeah, that's interesting. Good. And so these agencies, I mean, how many customers are they typically using your software on?

Shaun Clark

06:11>> Generally, it's about, it's anywhere from 10 to 20. I mean, every agency is different sizes, right? And we're early on, so we're starting small. And so the agencies we work with, again, are going to have a stable of 20 customers, but we generally are for the agencies that we target, we're really targeting people who are not necessarily the business of creating a beautiful website or a beautiful Facebook page or whatever. They're about driving you actual leads.

06:33>> So we have really good coverage in those agencies and we generally can take about 80 to 90% of their customer base and do something pretty awesome for them.

Nathan Latka

06:40Interesting. You had a lot of options kind of what you could do after you sold EnvoySherpa, why decided to get into this space?

Shaun Clark

06:45>> You know, I worked with a lot of small businesses every day, and I was in the I heard a lot of different pain points And one of the things was always about marketing and sales. And I naively thought I could go into the marketing space and sell direct to customers. And I found that to be really tough sledding, compared to my previous business. So when I, you know, I just love the idea of helping small businesses

Pricing and Monthly Revenue

Shaun Clark

07:12>> grow. And if I can do that in any kind of way, that's what I

Nathan Latka

07:14want to do. Yeah. So you've got high level, it looks like you do like a lot of things like reviews, text message customers, appointment Yes, it's a

Shaun Clark

07:22>> management product and it's really grown into more of like this. Yeah. So we've got the reviews side of the house, the booking widget sort of side of the house, but the whole idea is leads come in, we automatically do multi channel drip out to them. And what that means is we send automated emails, text messages, phone calls, and voicemail drops, and we engage those leads until they respond. And at that point, we bring the sales teams

Team Structure

Shaun Clark

07:44>> in, and then we give them all the tools they need to do things like manage the opportunity, book them in for appointments, send out the reminders, and then even do the reputation and the reviews on the back end and help them just do a better job on the SEO side.

Nathan Latka

07:58Interesting. Very cool. And I see you have the magazine behind you. You're getting the magazine.

Shaun Clark

08:02>> Yes, I do.

Nathan Latka

08:03How are we doing? Is that the second issue of Latka magazine or third?

Shaun Clark

08:07>> I'm not sure because it's the first one I've gotten, but

Nathan Latka

08:10What do you think?

Shaun Clark

08:11>> I love it. I'm a huge fan of you, and I've I've listened to you for years now. It's it's an honor actually just to be talking to you. So it's it's very cool.

Nathan Latka

08:18Well, I'm thrilled that you're coming on. It's wonderful. Yeah. The magazine is a big test, but I there's something nice about holding something physical with a ton of SaaS data in it. And so we're gonna

Shaun Clark

08:28>> see It feels very GQ to me, which I love. It's kinda like the GQ of SaaS, I feel like. Yeah. So if you're if you're kind of a business nerd like me, then it's it's a cool thing to have.

Nathan Latka

08:38That's awesome. You know, that's that's my new that's my new tagline, GQ of SaaS. Right?

Path to 100 Customers and Affiliate Model

Shaun Clark

08:43>> That's that's I I feel like that's kind of your MO as it is. Like it. I think it fits.

Nathan Latka

08:48Awesome, Sean. Let's wrap up here with the famous five. Number one, what's your favorite business book?

Shaun Clark

08:53>> Oh, good degree.

Nathan Latka

08:54Number two, is there a CEO you're following or studying right now?

Shaun Clark

08:58>> Yeah, probably Brendan King from Vendasta.

Nathan Latka

09:02Number three, what's your favorite online tool for building the company?

Shaun Clark

09:06>> I would say besides my own tool.

Nathan Latka

09:09Yeah, besides your own.

Shaun Clark

09:10>> Yeah, definitely. Probably like Slack is great.

Nathan Latka

09:12And number four, how many hours of sleep do you get every night?

Shaun Clark

09:15>> Six and a half.

Nathan Latka

09:17Good. And what's your situation? Oh, I know you have a wife. Married. How many kids? Any kids?

Shaun Clark

09:21>> Married, one child's boy, six years old.

Nathan Latka

09:23Okay. And how old are you?

Shaun Clark

09:25>> I am 36.

09:26>> 36.

Nathan Latka

09:27Last question. What do you wish your 20 year old self knew?

Shaun Clark

09:30>> Start start earlier. Go go harder.

Nathan Latka

09:34Guys, start earlier. Go harder. Sold his first company now building high level to help small businesses with reviews, text messaging, and even appointment scheduling. They now have about 10 agencies using them paying $300 a month. Those agencies sell through to SMBs doing about $3 per month right now. Got his first couple of customers by integrating with a software marketplace, DrCrono, which is a medical HR kind of developer marketplace. He's bootstrapped the company off money he made

09:58from a call it a $400,000 to $500,000 sale of invoice share, but team of two right now are building the company in remote locations, zero churn so far. Sean, thanks for taking us to the top.

Shaun Clark

10:07>> Absolutely, anytime. Thanks, Nathan.