When Modigie, a SaaS company in the outreach and data accuracy space, set out on its mission for success, it had to take the path less traveled. With no funding or outside help, they have managed to achieve remarkable results – their ARR has grown to an impressive $1.7M, and they have raised over $300K without giving up any equity.
Ken Hoppe of Modigie sat down with GetLatka to shed light on how revenue skyrocketed in just three years, how to manage a company pivot successfully, and how a difference in client targeting can drive revenue.
- Over $140k in MRR
- Only 6 full-time employees
- Used debt funds from Founderpath to hire Sales Rep with a $1.2M quota
Pivoting helps Modigie hit $1.7M in revenue
As with most startups, Modigie didn’t fully realize its vision from conception. “We originally thought the idea was we were going to add mobile numbers to help companies at BDRs and SDRs add mobile channels. [At first], we thought that was the problem to be solved,” explains Modigie co-founder Ken Hoppe. “We had no idea how bad and inaccurate the contact database was [that] they were acting on.”
$140 MRR targeting enterprises
Once Modigie realized accurate sales contact information was more valuable for sales teams, they became aware of who their real buyer was. “If I step back and look, I originally thought our buyers were sales leaders, but our true buyers are rev ops.” By using a revenue impact model, they are able to close larger accounts averaging $140 MRR.
Modigie customers pay $80k a year on average
In addition to changing its business model, Modigie also tweaked its pricing structure. The consumption-based model works off the number of API calls. As clients request more functionality, they increase their API calls and, in turn, increase the fees charged. “You’re trying to find a scalable, repeatable model that helps maximize profits.”
Under 30 customers driving all revenue
Modigie isn’t focused on large volume to drive revenue. Instead, they specialize in a high-touch, low-volume sales strategy servicing under 30 customers a year. The change in business model and pricing structure has caused a small number of SMB companies to churn, but Hoppe doesn’t see an issue yet. “What we’re really excited about is these larger companies that are continuing to re-up.”
How Modigie acheives $500k LTV
A handful of clients drive most of Modigie’s yearly revenue. They’ve moved to an annual contract model with enterprises where clients commit to a year of service and pay a high-ticket price to have access to the software. “By the end of this year, we will probably have three companies that have spent half a million with Modigie.”
When Hoppe first talked with Modigie, the company aimed to land a client for at least $10k a year. However, today they consistently get clients over $100k.
6 full-time employees run the company
Hoppe and his co-founders didn’t need much help to achieve their success. As sales-oriented entrepreneurs, he and one of his co-founders drive most of the client growth within the company. To help run day-to-day operations, the company has taken on six full-time employees to manage the $1.7M in revenue.
Modigie Raised a Founderpath of $315k
The success Modigie achieved hasn’t been without help. In June of 2022, they raised $315k of non-diluted capital from Founderpath. This was to be paid back over the course of 24 months. “It gave us some runway to hire our first sales leader,” explains Hoppe. “He has a healthy pipeline for 2023 that we’re very excited about.” The sales rep currently has a $1.2M quota to help Hoppe and company.
A 70% increase in revenue from 2021 to 2022
Hoppe, along with his co-founders, founded Modigie in 2020 during the pandemic, and has had a quick rise to success. In 2020, they made $300k, but their initial goal was to sell mobile channels to sales teams. When they pivoted to a SaaS company in 2021, they increased revenue by 70% to just shy of one million. They almost doubled their growth again in 2022 to 1.7M.
Ken Hoppe has a net worth of $550k
Hoppe splits the majority of the company with two other co-founders. Although they have raised the non-diluted capital from Founderpath, they have yet to take on any outside investment.
“I talked with a good friend who runs an industry venture, and I ran some models by him, and he said there’s no reason you need to take traditional venture capital.” Hoppe holds on to a net worth of around $550k.
Favorite book: Hoppe suggested a relatively unknown book by Tony Ulwick called Jobs To Be Done. The book served as inspiration for how to think about solving problems instead of just building technology.
CEO he follows: Modigie believes in collaboration and partnership, and Hoppe looks to fellow entrepreneur Jason Zintak from Sixsense as someone to follow.
Favorite online tool: Hoppe and his team still believe in the basics and rely heavily on Google Suite for collaboration tools.
Situation: The 54-year-old has been married for over 23 years, and together with his wife, they raise two daughters. Hoppe aims for 7-8 hours of sleep, but it typically ranges from 6-7.
Something he wishes he knew at 20: “I’m a late entrepreneur, and I wish I would have taken action sooner in my career when I identified early problems, and that really sticks with me.”