How Retention.com Reached $23.8M Revenue and 87% Gross Margin While Bootstrapped (Interview with Founder/CEO Adam Robinson)

Introduction and Overview of Adam Robinson

Nathan Latka

00:00You could potentially call him the king of LinkedIn. We're getting into how he bootstrapped his company to $22,000,000 of revenue at retention.com, and most recently launched a new product for b to b called r b to b, which he's grown from nothing. No MRR in the beginning of this year. So he's now adding, not not not grow to, but he's adding 60,000 of new MRR per month on average for the past three months. Please tell me,

00:20welcome to the stage, Adam Robinson.

Retention.com Origins and 2023 P&L Setup

Nathan Latka

00:27Thanks for being here, man. Are you pumped? I'm very pumped. Did I script the intro at all? Those are the right metrics. Right? Perfect. Alright. Make yourself comfortable. Make yourself comfortable. Let's jump in. So, you weren't always a b to b guy. Right? Retention.com launched in what year?

Adam Robinson

00:43>> Retention.com so it's called GetEmails.

Nathan Latka

00:47Okay.

Adam Robinson

00:48>> November 2019 was when we launched it.

Nathan Latka

00:502019. Yep. And you had a conversion, event where you converted to b to b, which we'll jump into. But just to set up the next twenty minutes, I got Adam to give me his p and l. So we're gonna jump into his profit and loss statement from January 2024 this year. The next five or six minutes after that, we'll talk about lawsuit marketing on LinkedIn. I made that up. Is that nice?

Adam Robinson

01:07>> Beautiful term.

Nathan Latka

01:08I think it's good. We can't make it more regret. Has there been a counterclaim? Has there been any

Adam Robinson

01:13>> I wish, unfortunately.

Nathan Latka

01:16We'll see. They they won't do it. Alright. So we'll get into that. And then I always look for just who is beating the market. When you look at free to paid, can you guys just think I'm gonna ask you to answer this. Think about what you guys would consider Wes, let me ask you, Wes. What's a good free to paid conversion rate? So freemium to paid conversion rate on average?

01:35Three to 5%. Right? That's probably what you guys are seeing. Right? A good conversion from trial to paid, free to paid is about three to 5%. How the hell is this guy getting a 10% conversion rate from free to paid? We're gonna jump into it. Alright? Give him round of applause again if you're excited for those three bullet points. Alright? It's gonna be good. Let's jump into the p and l first. Right? P and l first.

Lessons from Scaling Aggressively in 2023

Nathan Latka

01:54So this is from 2023 where you learned a bunch of lessons. Why did you go so aggressive, and then what did you learn and pull back?

Adam Robinson

02:01>> So, really, the reason I went so aggressive is because I was sharing an office with Dave Rogue de Moser and the Jasper AI team. And for for two years before they started that company, and we were all stuck at, like, $23,000,000 ARR. They were out of money. They created their their literally, their final step up to the plate, they're just like, this is it. We're gonna try one more thing, zero to fifty million ARR with, like,

02:26>> an island of six people in twelve months. And then they went and raised a bunch of money, and they hired a bunch of people. And the craziest thing, when you're sitting on the other side of an office from somebody who is stuck in the exact same place, you're like, well, I can do that too. Mhmm. So I tried to do it too. Thank God I didn't raise money.

Nathan Latka

02:44So just to be clear, when you scale from six to 50, you didn't raise. You just used your own profits.

Adam Robinson

02:48>> We were we were 12,000,000 ARR with six people. Mhmm. And I basically just took all the free cash and put it into trying to create what I viewed as, like, the unicorn company and, like, honed it in an ICP thinking it was gonna, like, completely solve this churn problem. Mhmm. Long story short, a lot changed in 2023 for a lot of people, me included, our company included, and the churn problem did not really get solved.

Nathan Latka

03:13Six six employees, 12,000,000 of revenue. Do the math. 2,000,000 of revenue per employee.

January 2024 P&L Breakdown and 87% Gross Margin

Adam Robinson

03:18>> I'd highly recommend doing that if you can, by the way.

Nathan Latka

03:21But why do why the reason I want you on stage, why do we feel so insecure about all the other ones raising and think we need to go play that game when we're crushing it?

Adam Robinson

03:28>> It's human psychology. Weird. It's just it is a strange thing. I I thought I you know, I really lost my religion during this period, and I feel like I've gained it again, but I wouldn't be surprised if I lose

Nathan Latka

03:40it again. Let's talk about

Adam Robinson

03:41>> It's just so there's so much pressure to do it. Yeah. You know? It's it's from all angles.

Nathan Latka

03:47Yeah. I think Founder Path might launch a service where it will will say, Founder Path invested $1 or Founder Path invested in the retention series a at a billion dollar valuation, and it'll just be for a dollar. And it'll be for point o o one shares, but it gives you the headline you want to to go put out into the world. But

Adam Robinson

04:03>> But I I didn't know it's headline. I think it's just like, it it it's everything, man. It's what do you mean you only have six employees? Oh, yeah. It's a cute company. Yep. You know? It's it's just everything. And, like, I don't know. It it just takes a lot for your ego to withstand everything that's trying to make you a bigger vanity metric company.

Nathan Latka

04:22I feel this all the time on metrics. Like, how many you guys have felt slightly potentially insecure about metrics in the past? You're like, I need a bigger team. I need to raise more. I need to hire it's rare. It's honest. We can be honest in here. It's how it works. So here are the lessons he learned when he lost his religion. Let's move forward now to where you found the religion again. So what break down

04:36your p and l here in January 2024.

Adam Robinson

04:38>> Yeah. You know, it was a little while ago, but,

04:42>> you know, we're making a lot of money Mhmm. Profit

Nathan Latka

04:46This is nice.

Adam Robinson

04:47>> Which when you find your religion is what you're happy about ultimately.

Nathan Latka

04:50Mhmm. What made this so efficient? I mean, when you look at the gross margin of 87%, even that is above most SaaS companies at 75, 80%. And then the bottom line, you're taking a run rate of $6,000,000 of net income home internally.

Adam Robinson

05:01>> Well, we're a data company. So the margins, I think, are typically better than SaaS as you keep scaling. You know, you kind of have this, like, wonderful quality where you compile a lot of data at SaaS margins, and then you don't really have to increase the spend on that data if you do it the right way and you kinda make the cost fix. So that's that's why the COGS is so good.

G&A Breakdown and Retention.com Standalone Numbers

Nathan Latka

05:22What was the g and a? Break that down. 346,000 on g and a in January. What was that?

Adam Robinson

05:26>> General Probably just like executive salaries and,

Nathan Latka

05:29like,

Adam Robinson

05:30>> you know, stuff like that. Okay. That's my that's my

Nathan Latka

05:32executives do you have on

Adam Robinson

05:33>> there? Six Okay. That that are probably in there.

Nathan Latka

05:37Okay. And this is all just to be clear. This is retention.com. No r b to b yet.

Adam Robinson

05:40>> The the r b two b was still very much an idea. It wasn't

Cease-and-Desist and Lawsuit Marketing on LinkedIn

Nathan Latka

05:44Yeah. It wasn't a thing. Alright. So let's keep fast forwarding, getting into, I call it, lawsuit marketing. And, really, it's a bigger question about transparency and telling authentic stories even in public forums. So imagine, you know, you get this cease and desist that everyone sees on the right from well, you tell the story. Who'd you get the cease and desist from?

Adam Robinson

06:02>> So just 2023 was was hard for retention.com. The ecommerce space in general was going through a difficult time. I thought we were gonna get revenue expansion. We were getting a ton of contraction and, like, cancellation and stuff. And these guy we we were using their tool to sort of compare it to what our b to b might be, and these guys come in and they're like, it's six months before the contract expires. They're like, we're gonna

06:23>> triple your price and hang up the phone. And and it's just I was so upset about that, like, just being beaten down to nothing, right, from from this market we serve. So I was like, you know what? Fuck these guys. Like and and I kind of just put this shit post out and sort of described what they did. And then I think this is an old playbook. If somebody does something like that to you, you send

06:45>> them a cease and desist, and they apologize. They say whatever. But, like, we're kind of living in a different world today, and I have a different view about this stuff. I mean, I just immediately saw that, and I was like, oh my gosh. My lawyer will let me post this. This is the single greatest PR opportunity for a company that is three weeks old that has ever existed in the history of the world. Because I'll go

07:06>> from a LinkedIn guy to every single Sixth Sense customer knowing exactly what we do at r b two b.

Nathan Latka

07:11Yeah. But you had to have this conflict in your head of marketing, Adam, and risk mitigation, Adam. The risk mitigation part, you rely on your lawyer. No good lawyer would ever say yes to you doing this. You did it anyway.

Adam Robinson

07:23>> So he he said, basically, I'm like, what is the maximum Penalty. Penalty. Right? And he's like, well, I mean, all this is nonsense. But, like, if they sue you, which they can, maybe you're in court and you pay a few $100, 3 or $400 over, like, three years or something. And that takes a long time.

Nathan Latka

07:39And your thought was worth it?

Adam Robinson

07:41>> Totally. I mean, with without a doubt.

Nathan Latka

07:43There you go.

Adam Robinson

07:44>> And he's like the lawyer is funny. He's like, I would never do this or recommend it, but I understand the method to your madness.

Nathan Latka

07:52Yeah. You know? Yeah. It's it's that a lot of people talk about I wanna be a founder led brand, and I wanna sort of tell the stories. But then you had you get August through a PR machine, and you end up with fluffy crap at the end that no one can resonate with. Raise your hand in here if you've ever received a cease and desist anytime in your life for anything. Raise your hand high. Okay. You

08:08can relate to this. You're all laughing because the things he's saying is the same things you felt when this hit your inbox, and that's what makes it relatable. And a little part of you is now like, you know what? Maybe I should go try r b to b. Right? That's sort of right? That's sort of how it goes. How do you convert that? And you guys can see the engagement right over how many do you know

08:24impressions? Do you have it memorized?

Adam Robinson

08:25>> Oh, man. It was, like, yeah, several 100,000.

Nathan Latka

08:27Several 100 okay. So 1,600 likes, right, engagements, 913 comments, 100 hundreds of thousands of impressions. How do you turn this kind of marketing to cold hard r b n b, ARR, cash?

Adam Robinson

08:38>> So that post was incredible. You know, I think that strangely, like, the reason if you look at my stuff, hardly any of it is sales content. Mhmm. You know, maybe one out of every 10 posts, I'll put some, like, hard CTA at the bottom of it. But I don't I don't know why, but, like, just putting this stuff out and and I do understand what I write, who the audience is that it's activating, so to speak

Nathan Latka

09:08Yep.

Adam Robinson

09:09>> And try to keep a good mix there. But, like, I think most of the magic is just this visit my website link. You know, they see me writing interesting stuff. They see me telling this, like, unbelievably, brutally, honestly transparent, you know, stuff about the journey, and they're just like, what's this guy do? Mhmm. Yep. You know? And then they keep seeing posts. I'm sure after you click that visit my website, LinkedIn and the algorithm keeps serving

09:30>> you more of the stuff. So I can't say that I know why I'm doing it, but, like, it's just working so well that I, like, continue to do that. And I I do think that it's it's the way of the few it's like people don't wanna be sold to on social media. I really don't think so. I think the beauty of organic content is that you are bringing people along on this journey and, like, you are

09:52>> building community around these ideas, and you are forming relationships with people through commenting. And that just the reach is so large, the audience keeps growing, and that begets website traffic that converts.

Nathan Latka

10:02Let's pause there for a second. How many of you or what would you guys be willing to pay for, let's make the math easy, a thousand leads into your business. Right? So they're they're signing up for a lead. You know, it's a lead. It's a qualified lead, marketing qualified lead. You know, they're they're doing a demo. Just in general, what are you willing to pay for a lead? It might be $10, it might be a thousand

Converting LinkedIn Attention into RB2B Leads

Nathan Latka

10:19bucks. Just on the count of three, yell out what you're willing to pay for a lead. One, two, three. They heard like a 100, a thousand, 5,000, like there's a big range. Most of us, when we're wanting to pay this amount for leads, we think we need to have, like, the beautiful tech stack and tracking has to be perfected and let's let's test it a bunch of times in all this. When he talks about converting on

10:39LinkedIn, this is it. Okay? It's a free tool. It's a Google Form link. You drop it in. You rock and roll, and there's 1,600 leads here.

Adam Robinson

10:48>> That that was prelaunch. Yeah. We

Nathan Latka

10:50Yeah. So this is the start of our b to b.

Adam Robinson

10:52>> Totally. A thousand This is the launch. Yeah. That that that close to that post dropped three or four times, and it literally generated

Nathan Latka

10:59And you can see the proof. 1,600 1,630

Adam Robinson

11:02>> In hundreds of discovery conversations too. That was the most incredible part of it. It's like, I'm such a student of four steps to the epiphany. And, you know, that guy's saying, like, oh, cold call 50 people a week. Like like, Santosh and I were getting on the phone with, like, 10 people a day between the two of us for, like, six months. So we really had a good idea of what we wanted to deliver at launch.

11:20>> It was amazing.

Nathan Latka

11:21So TLDR here. Again, a lot of people would be like, let's do a product hunt launch and see what happens back in the day. It's like, look, you can get more leads and and more opportunities to communicate with customers doing it and following this kind of storytelling on LinkedIn with strategies, simple call to action, drop into Google form, don't overcomplicate things, it's working for you. You gotta get them in the funnel. Right? You gotta build, sort

11:38of this conversion metrics. And as you were doing all this, as you're posting more b to b content, you were thinking a lot about sort of, look, I think LinkedIn should work like this. Here's what it actually should be. Maybe pick one thing on here that was the biggest surprise for you and go deep on it.

Adam Robinson

11:51>> So the activation to me has been the biggest I mean, as Wes said, everybody that I speak to, they're like 35% script installs. Dream, you know, three to 5% paid conversion. And and, look, the churn's kind of a disaster. We need to solve that somehow.

Nathan Latka

12:06How bad is it?

Adam Robinson

12:07>> Like, 10% a month. It's it's we just had an agency, like, cancel 80 accounts and put them under one account, it looks like it's even worse than 10% a month. But, like, it's like a nine month LTV. Santosh is not worried about this. He's like, we can do you know, we can have tangential products that other people in other departments use, and it's still super early. Mhmm. But it's very bad. But the activation in the free

RB2B Conversion Funnel and Free-to-Paid Metrics

Adam Robinson

12:28>> to paid conversion is so far beyond what I had expected. And I believe that it's that way because the content is targeting such a tight audience of the right people on LinkedIn, and it's just leading to that. You know?

Nathan Latka

12:41Should we look at the funnel really quick? Conversion metrics?

Adam Robinson

12:44>> Nobody wants to see metrics.

12:46>> Nobody wants to see metrics.

Nathan Latka

12:47We'll we'll no. He's like, yes. Okay. Yeah. Look. This is these are metrics. Right? These are metrics. Pretty cool. August 8 to September 6, this is just till yesterday, basically. Right? You can see 3,000 new trials, almost 10% conversion rate to new customers. What does your paywall look like? How are you doing this?

Adam Robinson

13:02>> It's just like a credit based system. Mhmm. You know?

Nathan Latka

13:07Because you're it's a it's he didn't say SaaS. It's there's not a pricing page with monthly recurring fees. It's, like, pure usage based tied to

Adam Robinson

13:15>> a bucket of transactional. Yeah. Exactly.

Nathan Latka

13:17The bucket of credits.

Adam Robinson

13:18>> Yeah. It's charging a SaaS for leads, is part of the reason why it's high churn.

Nathan Latka

13:22So give me an example of, like, if I wanna buy a 100 credits from RB2B, what would that cost, and what am I getting for that?

Adam Robinson

13:27>> So the freemium offer is 200 leads per month, and it's like the LinkedIn URL into a Slack channel. And then for integrations and email and everything else, it starts at $99 a month for that. And then sort of if you want a thousand, it's maybe like $300 a month. Mhmm. Mhmm. You know? We get an average of this is not on there. Average of $2.70 per month.

RB2B Pricing, Credits, and Average Customer Value

Nathan Latka

13:45270 per month is the average new customer. Yep. Yep. And are you doing any any pay I guess, actually, let's just keep working on this for a second. There's a 100 expansions there as well. Is that just people saying, this is amazing. I want more leads, so give me a

Adam Robinson

13:55>> big I I would describe that expansion as rightsizing. And that churn number is terrible, but, again, that includes, like, 40 accounts that

Nathan Latka

14:02Yep. This guy can't Yep. Yep. Well, I mean, you can see the total revenue growth in the upper Yeah.

Adam Robinson

14:06>> I mean, the problem is if you double that, then there's not you know?

Nathan Latka

14:10Why is it I mean, Santosh has experience here. He was high up at Apollo. He was high up at ZoomInfo before you recruited him. Why is he not concerned about a nine month lifetime value and high churn?

Adam Robinson

14:20>> We're so young. You know, if you so Nathan Barry has a public barometrics dashboard just like this for ConvertKit. If you go back to when he was at these revenue levels Mhmm. His churn rate was 10%. The next year, he was at 10,000,000 ARR. It was 8%. Now he's, like, down to three. I'm never gonna get there unless I add a system of record type product to this.

Nathan Latka

14:40Is that fixed up?

Adam Robinson

14:42>> I think other products first. I don't know what the system of record would be. So I talked to the Clearbit team, the Clearbit Reveal team. They said churn was a disaster for that product, and the only thing they could do to lower churn was get other people using other products in other departments Okay. Because it just becomes more difficult.

Nathan Latka

15:01You know? What are you building right now that you haven't announced yet?

Adam Robinson

15:04>> I mean, I don't know. We need to, like I think we need to get salespeople using something. Mhmm. Like, this is a marketer Mhmm. You know, tool. So it's something related to sales. I have no near term, like

Nathan Latka

15:16You buy it or will you buy it or build it?

Adam Robinson

15:17>> You're playing

15:18>> a cast? Build it.

15:18>> You'll build it.

Nathan Latka

15:19Mhmm. Okay. That was quick.

Adam Robinson

15:21>> I'm so scared of I'm I'm so scared of

Nathan Latka

15:22buying stuff. Who else is scared

Adam Robinson

15:23>> of the m and

Nathan Latka

15:24else is scared of the m and a process? You don't wanna go buy us with work integrations. I don't wanna deal with it.

Adam Robinson

15:29>> Yeah. I'm I'm scared of that.

Churn, LTV, and Lessons from ConvertKit and Clearbit

Nathan Latka

15:30Alright. That's fair. That's fair. Anyone curious about anything else on this in terms of the funnel? We talked about top of funnel. We talked about conversion to new customers. We talked about expansion and churn. Let's go back here just to get our bearings again. This is retention.com. So you see revenue is slightly decreasing here.

Adam Robinson

15:46>> It's going up again, by the way. That was q one twenty four.

Nathan Latka

15:49Okay. Alright.

15:49>> What are

15:49you at now at retention?

Adam Robinson

15:50>> Twenty three twenty twenty three point eight.

Nathan Latka

15:54And is this green bar inclusive of the growth of r b to b?

Adam Robinson

15:56>> That r b two b wasn't around yet because I was

Nathan Latka

15:59Well, q no. Q one twenty four. Like, are you adding on that q one twenty twenty four the r b two b revenue on top?

Adam Robinson

16:04>> So r b two b launched March 1. Mhmm. So that didn't have any r b two b revenue.

Nathan Latka

16:08Oh, I see.

Adam Robinson

16:09>> I see. So if if you were to put q two and q three in, it actually if you retention.com really hasn't grown. If you stack r b two b on top of it, then it's growing again.

Nathan Latka

16:17I see. I see.

Adam Robinson

16:18>> Which maybe that's my future.

Nathan Latka

16:19So what do you do? Do you shut down or how do you get your team excited about working on retention.com, which is clearly a less exciting product than r b two b?

Adam Robinson

16:24>> Well, I mean, that's the thing. It's it's making $11,000,000 of profit this year, so it's exciting for the founders. The weird thing about human psychology is that even if something is making you $11,000,000, if it's not growing, the thing that's growing from one to two is more exciting. Mhmm. So, like, I think just I've been, like, having that conversation with everybody on the team that I can. Mhmm. And, you know, sort of saying, like, look, like,

What Adam Is Building Next for RB2B

Adam Robinson

16:54>> this is the it's the fuel behind everything we're doing. Like, we continue to launch more products. Like, it it this is a tremendously important business. It's 85% of our revenue. It's a 120% of our profit right now. Like, it's just what we should care about. It's just when anyone talks about something that's zero to one or one to two, it for some reason, it's more exciting. It's like a baby is more exciting than, I don't know,

17:15>> an 80 year old.

Nathan Latka

17:16You maybe. I don't know. Hopefully, no one's 80 here, but you you can see here though, just to back up these numbers. Again, May, there's only five k of MRR. Right? And you can see today now 200 k of MRR, and you can see the green table below how much new MRR added per month on average, like, 60 per month. In fact, it's only September 6. You've already added 10,000 of new MRR in September so far.

17:35I pulled this screenshot last night. So, like, my big questions when I see patterns like this, just founders in general, but, like, when I'm not with you and I'm thinking, what's Adam gonna do? But I'll say it to your face now. It's like, okay. Churn's really high. He's got a rocket ship, really strong marketer, like Russell Brunson esque. Like, can he convert that attention into sticky revenue that keeps printing money?

RB2B MRR Trajectory from May to September 2024

Adam Robinson

17:55>> I hope so.

Nathan Latka

17:56Yes. Yes.

Retention.com Revenue Update and RB2B MRR Growth

Adam Robinson

17:58>> I certainly hope he was able to, by the way. He was able to grow that business, which was not that dissimilar from Leadpages Mhmm. To, like, several 100,000,000. Leadpages, because of churn, stalled out at 17. Mhmm. So I'm hoping that I can use some of his sort of tactics of, like, you know, content courses, community, something like that, and, like, maybe monetize some of the free users that we're just marketing for us right now into actually

18:24>> paid and lower churn than the product itself.

Nathan Latka

18:26And, guys, there you have it again. 6 $12,000,000 of revenue with six employees, 2,000,000 of revenue per employee, then said, you know what? These Jasper guys are great. I'm a little jealous. Let me try it. He tried it.

Adam Robinson

18:37>> He stay just at 12,000,006 employees. Improvise. It's not worth it.

Nathan Latka

18:41He doesn't like that. He goes back to being disciplined, launches a brand new product using controversial marketing tactics on LinkedIn that are working very, very well. The question now is, can he take this sort of explosive momentum and keep it going into additional product lines, selling to additional personas, keep the profits there? Guys, give it up for Adam Robinson at r b two b.

Closing Reflections and Summary

Adam Robinson

18:59>> Thank you. Thanks, Nathan.

Nathan Latka

19:00Enjoy that? Yeah.

Adam Robinson

19:01>> Good. Great. Good. Good. Good. Interview.

Nathan Latka

19:03Thank you. Thanks, man.