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How He Patiently Bootstrapped To $4.5m in Revenue In Legacy Space
SaaS Interviews with CEOs, Startups, Founders
That would be about $345,000 a month in revenue.
Yeah, that's what we're in.
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Hey folks, my guest today is John Brayke.
He created a tool called Promise,
which was created as a single solution
that could support the growth and complexity
of a multi office IT full service business.
They achieved this to us about highly respected
integrator by developing industry best practices.
Check them out again at PRO
John, are you ready to take us to the top?
All right, so on your website you say
the company is the world's best CRM help desk
and professional services automation software.
What does that mean?
Tell us about a customer who's paying you.
So what happened, maybe just understand
a background that I used to be one of our customers
effectively, and so I really understand
the business that our customers are experiencing
and the issues, the problems, the challenges, and so forth.
And so the product was really built
with best practices in mind.
You think about a services based business
that also does the technical.
Do you name one?
John, as you tell the story, so it's a real story.
So the company that I was involved with
was called Unice Lumin.
And it was the third largest Cisco partner in Canada
and it did an array of services
from, you know, if you think about it from a consulting
design implementation and post implementation services
or what's now called managed services.
And so if you think about a company
that's doing service based business,
most of their profitability comes from
their services, not from the product sales that they do.
And so it's really critical when you do
in a service based business to really manage your utilization
and make sure that you're not losing money because you're doing work
that didn't get built.
In addition to that, as you're growing,
in our experiences, we grew from 30 million to 50 million
to 70 million and so forth.
And every time we grew, and a fairly good clip,
it really put a burden on our cash flow.
And so it's really important to be able to think about
how your billing customers, how fast your billing customers
and so forth.
So all of those best practices were integrated into promise.
In addition to that, if you look at most people in the market,
they're using two, three, sometimes four different products
to cobble their business together,
whether it's in the sales process,
the ordered mint process, the delivery project service
and the ticketing side of the service,
And what we wanted to do is have a single place
where every time I updated something,
it updated across the whole system.
So John, if an agency is listening right now
with 100 people working at the agency,
they can use promise.
So all their reps and all their workers
can manage their time, their inputs,
what clients they're working on,
how many hours work, things like that.
So you never miss a billable hour.
And all those good.
And when did you leave that bigger company
to launch promise?
So there was a parallel process
or cutover for a few years.
But in 2011, I went full time
to just drive the promise business.
And are you 100% owner of the promise business
or does that agency own a bunch of the business?
I'm a majority owner,
but there's a secondary owner as well.
Was that an investor?
Did you raise money or have you viewed the draft?
No, we actually took money that we had
from other businesses and used it to do our own investment.
So it's an actual partner, not an investor.
Is that partner?
Are they also a customer of the tool?
No, they're not actually in the business anymore.
They're off doing some other things.
So they're just really acting in the port,
but a board of directors.
Okay, but you own, call it 60, 70% they own, 40, 30%
and something like that.
So you launch us in 2011.
Tell me more about these customers.
These big agencies that use you today on average.
So what sort of a sweet spot up that they pay you
per month to use the technology?
How much did it pay?
A per month?
Yeah, sweet spot.
So, well, if you look at it, it's based on a seed license.
And there are two seed licenses.
There's a field license or technical license.
And a full license for these salespeople and the admin people.
And so you're looking at it on average,
about if you've led those two rates together,
about $59 a month per sheet.
And how many seeds is your average customer?
The average customer is about 40 to 45.
Okay, so you're talking, these are like sales motions
where you're selling $2,32400 a month plans.
And do you have a big sales team?
What's your team look like today?
How many folks?
No, there's only about three.
And we do a lot of through marketing and referral.
And like all of our sales are done remotely.
We don't have to visit the customer sites,
which is kind of interesting in a COVID world.
And the sales cycles anywhere from about a month to about four months,
Our customers range from the low side about 10 users
and the high side about 150 as an average.
But what they do and their instructors.
So we have people that are in the IT integration business.
We have people that are pure MSPs or managed service providers.
We also have a group of physical security and fire.
Suppression and fire security and fire alarm system companies.
They all have the same common problem.
They sell equipment.
They need equipment and the labor.
They have to deliver the equipment and the labor.
And then they want to be post implementation support.
And that's really the speed spot for stuff.
And that account that's 150 users.
I imagine that's your largest account.
What does that ACV represent?
Is that like $100,000 a year contract?
That's about right.
And have they been with you since the beginning?
Most of our customers have been around for five plus years.
In that case, some of the larger ones have been around for almost 10 years.
And where we lose customers is actually sometimes they get butter.
They go out of business.
Usually the smaller ones.
How many customers are you working with today, John?
So we would have, I guess approximately about 150, 200.
Okay, that's a lot.
You're managing 150 customers at 2300 bucks a month with a team of three people.
No, no, no.
That's the salespeople of three people.
Oh, what's the total team?
Oh, the total team's 15 plus another five that are subcontract on the, like, so that if you're,
it breaks kind of into support.
Like customer service and so forth.
They implementation training and the other part of it is the dev development.
We're always doing updates and releases.
Sort of, you know, adjusting to what's the need for an marketplace.
So we do a new release every two to three months actually.
But John is my, is my math, right?
Can I take 150 customers times $2300 a month on average to get your monthly revenue or no?
Yeah, that's about right.
Where are you getting new customers from?
How are you growing?
So a combination of summer furls from existing customers.
So we have a program with existing customers that they refer us.
And the other one is we do, the nice thing about our business is we know who the target customers are.
And so we have a pretty strong list of about 4,000 prospects where we know their names.
We know the people in the company.
And so we can market to them and call them and so forth.
And it's really about a cycle that somebody's, you know, you call them up a name.
I'm not interested.
I don't have a problem.
A year later, they're not happy with their current solution.
And so you just have to keep on remarketing to them and over time.
But those 300 or so or 3000, I should say prospects drop into the sales bucket.
And just to be clear, Johnny, you've done all this bootstrapped right outside of that other partner.
You have it.
It's all bootstrapped.
Yeah, pretty much.
We've had a lot of good cash flow.
And we had our own investment from some other businesses that we sold.
So we've never really had a good side in the marketplace.
Yeah, no, you're very profitable. The biggest expense typically is asking me is head count.
And so we always look at revenue per head.
And you have top 25% tile revenue per head up about 276,000 dollars.
If it's a 15 person team doing 4.1 million in ARR.
So makes him please sense to me why you're so profitable.
Good mathematician there.
Yeah, well, I'm just, I want to get credit where credits do.
I mean, that is why you're able to scale as because you do so much with such a small team.
Tell me more about plans for 2022.
Do you have plans to stay private?
Do you have any, if someone offered you, you know,
10 million off cash upfront to sell the business to you sell today?
Well, I think that what I've learned from some previous businesses that I've owned is a train time at any time.
But I would have been fortunate to be discriminated to discriminate and make sure that the buyer,
if there was a buyer, and we're not looking specifically for one,
but you never know something I might call you up.
But the important thing for me is to say, we'll let buyer deal with both the employees and the customers.
You know, you see some buyers who are all kind of financial buyers who want to strip the company down.
And you've seen this in the marketplace where there have been some major acquisitions in the past with our competitors.
And the result is that the service capability drops way off.
Can you name one or two of them?
Well, those connect why I said a major problem when they had a major investor coming to buy the company.
And it took them a month, maybe a year and a half to really recover from that.
So who would be the provider for you? Can you name a company?
Um, not really. There's a, you know, I guess you could argue sometimes you're competitive,
but usually it's about somebody who might be in the adjacent market and looking for the synergy.
So if you think about it, if you're familiar with solar winds or what's now split up into two companies.
And there's a enable, which is the other side.
So these are our men, men, there's our grown, modern, men, who want to keep their customers and provide more services to the, their base of customers.
The other ones are some of these companies like a growness and so forth that are providing a whole suite of services to manage service providers.
You know, they're providing security, they're providing hosting and so forth.
And so by providing additional stuff like the whole sort of workflow system in the back end.
That just means more revenue for them and more stick stickiness with their current customers.
That makes a lot of sense, John.
Let's wrap up here with the famous five number one favorite business book.
Oh, um, I think that, um,
There's a, I love innovation and the innovator dilemma and the innovator solution are kind of a series.
By too often, they're just phenomenal about how do you think about it always innovating.
And what's the methodology for basically being successful at innovation?
Number two is there a CEO you're following or studying.
Um, actually, I really like the psychology like everything's about people and there's a wonderful book by psychologist or neurologist.
Um, it's the book is called behave.
And it's, um, by, um, our serpentsky.
He's a professor.
I think I'd have a Harvard and just a phenomenal read.
It's an easy read.
He's a little bit funny, but once you read his, if you really understand people, customers, you know,
how we, we, we think and behave and learn.
And that's really critical.
Like one thing I want to mention is that in the software world,
what's really critical is user adoption.
And for the most part, companies do a really poor job at it.
And so that's why we studied people like so when she's, uh,
information so that we could say, hey, we don't want to just buy the equipment or the software.
We want to be able to take advantage of it.
Let's move forward here.
Number three, uh, a favor online tool for building the business.
I'm not sure that I have one.
Number four, how many hours of sleep did every night?
I have to do pretty good.
I do like six to sometimes seven.
And what just a situation John married single kids.
I'm divorced and I do have three girls.
Three kids and how are you?
How are you?
Something you wish you knew when you were 20.
Everything that I know now.
More about people, people in situations that, uh,
you know, what with age comes wisdom.
And it's pretty powerful because you,
my favorite expression is that life is a wonderful teacher.
The only problem is it gives you the test before the lesson.
And, um, so I like making mistakes because I think you learn much more from mistakes than you do from successes.
Guys, there you have it.
John Monch promised PROMIS.com back in 2011.
He's helping agencies track billable hours both on machines and equipment and also humans to make sure nothing
leaks through on profit margins stay high.
He's doing about $300,000 a month and revenue a year ago.
And now $345,000 a month healthy growth, 150 customers totally bootstrapped between love.
15 folks on his team, three sales reps rest mostly engineering as he looks to continue to scale.
John, thanks for taking us to the top.
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