Amid the setbacks of COVID-19 in 2020, email marketing automation SaaS Sendlane has experienced its most growth yet. In August, it earned $420,000 in total revenue, which is a significant leap from the $150,000 in MRR it grossed in 2017.
Today, Sendlane hyper-specializes in e-commerce, but that wasn’t the case when it launched in 2015. Back then, its target customers were small businesses in the content creator space; however, this demographic led to fast churn and little velocity for the company.
After CEO and co-founder Jimmy Kim analyzed data and surveyed customers in 2019 to assess the best path to longevity, he and his team rebuilt its platform, dubbing it V3. It now uses deep data to learn how to take customers to the next level, beyond name and email.
“Everything we do is very behavioral, data-driven and [allows] the merchant to be able to make these decisions and drive everyone down to a true, personalized experience,” Kim told Latka in an interview.
Sendlane’s 38-employee team includes nine engineers and seven quota-carrying sales reps who have to hit a$4,000 MRR every month. Kim based that target on the company’s CAC, average revenue and other metrics that determine how to maintain profitability.
This came after Kim’s “first sales team completely failed,” which made it necessary to lay off the entire team and create a new foundation for a replicable sales process — one that nailed down cadences, outreach strategies and more.
Besides restructuring its sales process, Sendlane also redesigned its pricing model: In 2017, the company had 6,500 customers paying $30 per month to use the tool. Now, 1,650 customers pay $255 per month.
Source: GetLatka
In 2018, Sendlane raised $3 million in an equity round. As the company exploded this year, Kim says he’s taken on debt “to continue to capitalize and keep lots of money in the bank,” a decision he believes is well worth the risk.
According to the CEO, the borrowed capital spans the course of a three-year, revenue-based term where investors take up to 9% of earnings per month, meaning Sendlane will pay 1.3X the original loan.
Still, Kim finds the debt route more beneficial than selling shares of equity, saying it offers a faster payout, and founders get to keep more control of how they spend the money to achieve more growth.
The pandemic hasn’t impeded Sendlane’s growth in any capacity.
Its website generates 300 qualified leads per month, plus the sales team closes 60% of their demos and has an ACV of $8,600 on closed deals. Most impressively, Sendlane’s website has a domain rank of 71.
Kim’s secret? “High-quality content.”
What is Sendlane’s annual revenue?
In 2020, Sendlane anticipates generating $5 million in ARR.
What is Sendlane’s monthly revenue?
In 2020, Sendlane generated $420,000 in MRR.
Who is the CEO of Sendlane?
Jimmy Kim, age 39, is the CEO and co-founder of Sendlane.
Transcript Excerpts
The options to weigh — do a debt round or raise equity?
“I think it’s all goal-orientated. … If I wanted to go buy a bunch of companies and start acquiring some companies, then I’d probably go take a raise out, because that makes sense. But if I’m looking to grow the company and start adding headcount, I think it’s much easier to take in $500,000 or something like that [in debt] and be able to float the growth and get you there. I actually like the pressure, too, of not having too much money in the bank. I definitely learned a little bit of a lesson with my last raise where, when you take in a lot of money as a bootstrap founder … that pressure of trying to grow starts getting pushed on you.”
Grow your domain authority through high-quality content
“[We’ve been] really focusing on just getting great content in the world and then having our little content engine where we’re advertising out with all our content, getting more people into it, and putting them through a flow and funnel. One of our biggest strategies we really changed was, instead of going out and trying to advertise the product or advertise the demo, we started advertising content; really high-value, good content, actionable. Basically, we were able to drive our cost per acquisition down by almost 3X. We were able to reduce that by really focusing on the content side and letting the content speak for itself.”
Calculate churn for different facets of the business
“Overall churn [for the] entire company [runs] about 4% on the revenue churn. About 8% on the logo side, on the overall company. But if we hone down on the revenue where the sales team’s operating, which is what we call our pro or enterprise level, we’re churning about 17% annually on that. And we’re doing net positive retention, so we’re doing about a 105% net positive retention there.”
Major key: Profit off a solution to your competitor’s pain points
“A lot of our competitors will have that model, plus a CPM model, plus this model, and they’ll start adding a lot [of cost]. I understand the business side, but we find that customers just get irritated by most of them. Half the time the customers do come to us. … because they paid this huge chunk of money and they have these CPMs and these caps, and they end up feeling really limited on that side. … We sat back and said, ‘You know what, we’re going to be the unlimited guys and just stay on the unlimited side.’ … We want to allow customers not to feel that pain point. So we’ve kept the pricing simple.”
Full Transcript Nathan Latka: Hello everyone. My guest today is Jimmy Kim. He’s a digital marketer, turned tech founder. Built a platform in 2013 to solve his own problems, which eventually turned into a business in 2015. That business, folks, is called Sendlane.com. He’s living it up in sunny, San Diego, California. Jimmy Kim, you ready to take us to the top? Jimmy Kim: Yeah, absolutely. Thanks for having me back. Nathan Latka: Thanks for coming back on. It’s been, gosh, 18 or so months. For those that missed the first episode, quickly, what’s Sendlane do? Jimmy Kim: We’re email marketing for e-commerce. Nathan Latka: Yeah. Okay. That’s different than last time. So you are now hyper-specialized in e-commerce. Tell me about that decision to go niche? Jimmy Kim: Correct. Correct. Oh, in 2019, we looked back at all our data. We surveyed our customers, looked at all the data around LTV, ARPU, and just really figuring out what our customers are really like and what looked like the good longevity for the future. And we made a big decision in 2019 to rebuild a platform, which we’ll call V3 now, that’s now live. In 2019 it went live and hyper-focused and hyper-specialized on e-commerce, on really deep data. And how we can take someone to the next level beyond name and email. Nathan Latka: What did you feel was broken where you felt you had to make that choice? You did an analysis and you said we have to specialize in a niche, let’s go e-commerce. But what was broken that made you do the analysis in the first place? Jimmy Kim: Sure. I think the top level is very easy. To find a customer. Let’s just start at the customer level, what we were serving before, a lot more of the content creator space. It was just a more difficult market to find. And we found that the size of these customers tended to be much smaller. So you would have to get more velocity under your belt in order to do it. And they churned a lot faster because a lot of them were just starting businesses. They’re a little bit more immature as a business as well, too, a lot of times. And there was mature businesses as well, too, but a lot more on the lower end side of things as well, too. So that’s how it all started for us. Starting to figure out that our customer side of things weren’t exactly a fit for what we wanted to do for our future. Nathan Latka: I see. We’re recording this down here on September 15th. Give us an update revenue-wise. What’d you do in August in total revenue? Jimmy Kim: We crossed a little bit over $420,000, roughly. Nathan Latka: And that’s pure SAS? Jimmy Kim: Pure SAS, correct. Nathan Latka: Wow. Okay. So that’s great growth because when you came back on in November of 2017, you were just flirting with $150,000 a month. So you’ve almost three X-ed over, call it, 29-ish months. Nice growth there. Have you bootstrapped or did you raise? Jimmy Kim: We did raise in December of 2018. We actually raised some money then as well. So we raised $3 million. Nathan Latka: Okay. And that was equity or debt? Jimmy Kim: Equity. Nathan Latka: Okay. It was equity. Have you used any debt to drive the business growth as well or no? Jimmy Kim: Yeah, actually. We actually use debt to… We’ve been with Lighter Capital a couple of times now with a couple of different traunches, actually just as recently as the company exploded this year. A lot of our growth happened in 2020 this year. And as the company exploded, we took on a little bit more debt, just to continue to capitalize and keep lots of money in the bank. Nathan Latka: A lot of SAS founders don’t understand what it means to take debt as a SAS founder. Can you educate them at a high level why you did it? Jimmy Kim: Yeah, absolutely. I mean, it’s very simple. There’s two things that come into play. One, the timeframe. Going to raise money takes forever. Doing debt can take five, seven days. That’s the number one. And number two is I feel like people give away equity too easy and too fast. It’s worth a lot more money than the little bit of money that they’re giving you today for the future of the company growth. So for me, I’d like to hold back only on big milestones and when we really need to. And I think that’s where we think about debt a little bit more. I look at it as, if I have a plan that I can take that money and make more money than I’m paying on interest rate, then it’s worthwhile that way. And it’s much smarter in that way because secondarily, you don’t have anyone extra telling you what to do with that money, or you don’t have people also looking at that money and trying to figure out exactly how you’re spending that. And to let you keep control as well, too. Nathan Latka: How do your equity holders, your equity investors, I believe they were Zing Capital. How do they feel about debt? Jimmy Kim: They’re okay with it. They understand the need and use for it and they understand that, as long as we’re taking it and using it smartly and using it for a reason, then they’re okay with that as well too. I mean, they offered a follow on, but we actually held off on that for the reason that we’d rather hold equity. And if we go to another round in the future, then we’d rather be able to come into that clean. Nathan Latka: Yeah. So, I mean, if you go do another run in the future, how do you, as a CEO and with your leadership team, decide do we go and do a debt round or do we go raise equity? Jimmy Kim: I think it’s all goal-orientated. Where was their goals? How’s their profitability numbers? Where are we flirting with? What do we want to get into and how do we want to spend that money? So, if I wanted to go buy a bunch of companies and start acquiring some companies, then I’d probably go take a raise out, because that makes sense. But if I’m looking to grow the company and start adding head count, I think it’s much easier to take in $500,000 or something like that, and be able to float the growth and get you there. And I actually like the pressure too, of not having too much money in the bank. I definitely learned a little bit of a lesson with my last raise where, when you take in a lot of money as being a bootstrap founder and then taking in some money, it definitely tried… That pressure of trying to grow starts putting pushed on you. When you have the money, it makes it easier to do that. But ultimately if you don’t hit the right levers, then you go back to square one really quickly too, as well. Nathan Latka: Yeah. Now this is debt. I mean, you have to pay it back, right? So, to your point, you have to be smart about where you’re investing the dollars because you’ve got to get a return. Help founders understand if they’re thinking about taking debt. I mean, how are they going to pay it back over what period of time? What’s the cost of the capital typically? Jimmy Kim: Yeah, absolutely. For us, with Lighter and them, we worked with them. It’s a three-year term. It’s revenue-based. So it’s based on your revenue and it’s tiered buckets based around your revenue and, depending on how much you’re making, they’re taking a percentage up to about 9% or eight and a half percent of that revenue per month. And then coming down from that, obviously as you hit milestones. But essentially you just got to plan better and make sure that you’re bringing the cashflow in on top of it. And knowing that you have to look at how much does that money go as far as paying back the debt and when the money needs to be coming back in? So you got to be looking at the long scope of the picture of your customers. So if you spend 500 grand here, you’ve got to make sure that you’ve recovered your 500 grand and start making money with it down the line as well, too. So, you have to think longterm, but you also have to have a plan for it. Nathan Latka: And there’s a lot of revenue-based financing options in this space. Lighter Capital’s obviously one of the larger ones. Help people understand how much, how many months? You said three years, 8.5% to 9%, et cetera. But there’s also usually a repayment cap. So if you take 500K you got to pay back some multiple of that. Can you explain how that works? Jimmy Kim: Yeah, absolutely. It’s obviously it’s, I think for us, it’s a 1.3 X, roughly. So essentially over a three-year term, we’re going to pay 1.3 times more than we took as money. And it’s essentially just spread out over that revenue. So the good thing about revenue-based financing that I like is, if you do have a rough month, because maybe you’re heavy on the front end of the year or the back end of the year with your revenue, allows you to float that money a bit. Obviously there’s a catch-up period if it becomes a problem. But they’re basing it off of your current revenues, which makes it, obviously if you’re growing, you should be able to achieve and grow past that really quickly as well too. Nathan Latka: Got it. So just to make that really clear, if you raise 500K from one of these RBF firms today, and you have a 1.3 X repayment cap, basically that means you’re going to be paying $650,000 over whatever the term is, three years, based off eight to 9% of your monthly recurring revenue? Jimmy Kim: Correct? Nathan Latka: Okay, Jimmy, let’s hard turn here. Let’s go to product. Sendlane, what have you released over the past three years? Jimmy Kim: Oh man. A lot. We released our V3 platform, which was the hyper-focused on e-commerce. Then we started going really deep into e-commerce instead of going wide, where a lot of our competitors are trying to add a lot of little communication platform to do things. We got really deep into email. Just my love of email and just being an email marketing expert myself, I could see so many use cases to really drive revenue at the deepest level. So, everything we do is very behavioral, data-driven, and allowing the merchant to be able to make these decisions and drive everyone down to a true personalized experience. So, we take, for example, you integrate to Shopify right now and you get a hundred points of data on the customer instantly. You can live segment it right on our platform and really drive a true behavior, based around the information that they’ve given you. Location to revenue to what they purchased, what category. Down to if it was shipped or not. I mean, we cover all sorts of different points. Nathan Latka: Interesting. And how many customers are using the tool now? Jimmy Kim: We have about 1,650 customers, roughly. Nathan Latka: Jimmy Kim: Yes, absolutely. So they’re paying about 255 bucks roughly, a customer now. We were probably, I think on the last one was what? 25 or $30 probably. Nathan Latka: 24 or 25. Jimmy Kim: Or maybe somewhere around there. Nathan Latka: Yeah. Jimmy Kim: Yeah. So huge difference [crosstalk 00:08:57]. Nathan Latka: You’ve 10 X-ed the average ACV. Jimmy Kim: Yeah. Nathan Latka: Interesting. And, okay, so we understand capital stack, we understand you’ve driven customers. Last one was from 2017, but when did you launch the company? Jimmy Kim: So we launched the company in 2015, January, 2015, technically. But for real, when I jumped into the company fully hands on, when I exited my other two companies was August of 2017. Nathan Latka: Okay. August, 2017. And how many people do now have on the team? Jimmy Kim: We have 38 people now. Nathan Latka: Jimmy Kim: Nine. Nathan Latka: Nine engineers. Okay. And any quota carrying sales reps? Jimmy Kim: Well, we just started ramping right now, but we had two as of last month and now we’re at seven as of this month, with the VP of sales as well too. Nathan Latka: So break that down. The first sales hire and especially scaling those early SDRs, early AEs, is not easy. You have to put a quota in place and you’re guessing early on. How’d you make that first quota guess? Jimmy Kim: I’ll back up and tell you a story real quick. My first sales team completely failed. And when I talk about that, is I did launch a sales team, I hired people. I thought I could bring in the big logo guy and the VP guy, and really scale this team and he, or she would go off and hire their team and we’d get it going. And then my quota was based around, because that first… Before I hired that first sales person it was all me. I was selling everything. So I assume if I could do this then 50% is what I would assume a quota should be for a sales person as they’re coming to the company. Well, a lot of the processes, a lot of the things were broken through that. Jimmy Kim: And we ended up having a big lay off of the entire sales team in 2019. And we realized, and I realized that, hey, look, we didn’t have a good repeatable foundation and process in place. And I realized that that was the problem to begin with. So I actually buckled down from September of last year and essentially became the salesperson with one other guy. And we repeated the process and nailed down everything from cadences to how the process works to how do we find people? How do we outreach to people? And we really laid it down over the last 10, 11 months. And then, when we got to a good process, we hired another sales person. I think March, April of this year. And we basically repeated that process, made sure that he could carry it, get to his numbers. Jimmy Kim: And then we were starting to grow our sales team right away. So then I went out and found a great VP of sales with tons of experience under his belt, five exits and all that good stuff, and brought someone into the team. And now we’re at a point of scaling and it’s been just a different journey per se. And I kick myself because I wish I would have figured that out before a year ago. And I would’ve saved probably half a million dollars of burn that I spent, trying to grow that sales team and losing it. Nathan Latka: After you let that first sales team go and you buckled down with one other person on your team, you said you wanted to make sure he could run a repeatable process and “hit his numbers.” What was the target? How much new MRR did you want him adding per month? Jimmy Kim: Sure. His MRR was roughly $4,000. That’s what he needed to hit. Nathan Latka: Okay. Interesting. And get me in your brain there. Why 4,000? Jimmy Kim: 4,000 came out to 567,000 in ARR in a year. And we backed out all the data and realized that, based around our metrics, where the company was, what our average revenue, what our CAC was, we knew that that is where they needed to be in order to maintain profitability over about an eight month period. To start seeing the payback fully reoccur in the company as well, too. So we started to understand the metrics and data. So I got into velocity, I got into a little bit of everything in order to make sure. So I got really deep into the sales playbook in the world. Nathan Latka: So 4k quota per month for one sales rep. If they do that back to back for 12 months, they’ve essentially added 50,000, a new monthly recurring revenue to the business, or 600,000 in new ARR. Do you follow a traditional commission structure? You pay out about 30%. Jimmy Kim: We pay out a little bit more on the commission structure. Pay about 40 actually. So we go a little bit more aggressive on it, just because the volume, it’s a velocity game a little bit more for us. So when you have velocity, you want to keep them entertained. Especially if they’re bringing in deals that are $500. I feel like giving them that little bit extra bump makes them feel a little bit stronger about their success as well, too. And I want everyone to crush my quota too, by the way. So these quotas are life. My reps are crushing my quota, which is a good thing. Nathan Latka: How many of your seven quota-carrying reps will beat quota in September of 2020? Jimmy Kim: Probably two, considering I’ve only have… The five of them are brand new as of [inaudible 00:13:17] so only two will probably hit it. But those two are the guys that have had, and they will crush the quota. Nathan Latka: And how long will it take the five to ramp up to where they’re beating quota? How many? Jimmy Kim: What we saw, about three, four months. Nathan Latka: Okay. Not bad. And when you say 40% commission, if I am one of your new sales reps and I close 4k in new MRR, you are saying that I’ll get $1,800, about 40% that month. How long will I get that 40% commission on those new accounts I brought in? Jimmy Kim: Well, it depends. So it’s monthly or annual. So if they get monthly deals then we pay out full there. And then annual, they get a percentage of the chunk, they get a little bit less. They get 5% chunk of the annual payment. So if they come in monthly, they get 40% of the first months payment and if they bring in annually, they get 5% of the entire annual chunk. Nathan Latka: Oh, I see. So they really, every sales rep starts from clean every month. They’re not building a commission stream over time? Jimmy Kim: Correct. Nathan Latka: Interesting. Jimmy Kim: They’ve got the sales cycles and everything else going, but it’s a very black and white commission stream right now. Nathan Latka: Yeah. I mean, the nice thing about that is that it’s simple. I imagine you must get a little pushback though, from sales reps going, “I’d love to get commissions longer than just the first month.” Jimmy Kim: Yeah. Well the point is them pushing to an annual deal. Nathan Latka: And get 5%? Jimmy Kim: Correct. Of the annual payment. Nathan Latka: Yeah. Interesting. Interesting. Okay. And so let’s go through your funnel for a second. So I’m on the site. I click request a demo. You ask for first name, last name, phone number, et cetera. About how many people are filling out this demo request, whatever, over a day or a week or a month, whatever time period you want to use? Jimmy Kim: We’re bringing in currently inbound about 300 qualified leads from our website or from our website through corporate and internal onboarding demos. So either through there, or if they sign up for a trial and they go ahead and fill out all the right markers, it gets over to their sales team and then our sales team reaches out. Nathan Latka: And over what period of time? Jimmy Kim: 24 hours. Nathan Latka: Daily. So daily 300? Jimmy Kim: Yeah. Oh no, no, no, not daily. Monthly 300, roughly. Nathan Latka: Got it, got it. Okay. Per month. Got it. And so how many? You now have seven sales quota-carrying reps. How many demos are they doing per month? Jimmy Kim: Our goal is to get to one demo per month for each of them. Again, because a lot of them are new right now, they haven’t gotten there obviously right now. So we haven’t gotten there, but the goal is… Not per month, one demo per day, per business day. So 20 demos a month is their goal. Nathan Latka: Okay. Got it. So 20 demos per day, and then you’re hoping that they close how many of those? Jimmy Kim: We’ve been on pace right now. We’re closing 60% of our demos. So when we get on a demo, we’ll close at 60%. Nathan Latka: Okay. Got it. So if they’re going to close 12 accounts at an average ACV of, call it, 200 bucks a month. They need to either do more than 12 accounts or sell at a higher price point than 200 to hit that 4,000 quota? Jimmy Kim: Correct. Nathan Latka: Interesting. Jimmy Kim: The sales team right now is running about $8,600 ACV right now on their closed deals. Nathan Latka: On average? Jimmy Kim: On average, correct. Nathan Latka: Interesting. And how many… Are they usually upfront? Jimmy Kim: No, 20% out front right now. And the other 80% are monthly still. Something we’re working on shifting at. Nathan Latka: Yeah, that’s still healthy. I mean, $8,600 average ACV on these closed accounts, what is that? 700 bucks a month on average? I mean, that can grow quickly. Interesting. Very cool. What else should we know about the business that I haven’t already asked about? Jimmy Kim: Nothing really. I think some of the things that we’ve really just been focusing on in the company. I think last years pain exposed a lot of things and we’ve got our churn controlled. We’ve got- Nathan Latka: What’s churn? Jimmy Kim: So two sectors, I like to be… Overall look, I’ll do two ways. Overall churn, entire company running about 4% on the revenue churn. About 8% on the logo side, on overall company. But if we hone down on the revenue where the sales team’s operating, which is what we call our pro or enterprise level, we’re churning about 17% annually on that. And we’re doing net positive retention. So we’re doing about a 105% net positive retention on there. So our revenue churn is not there. It’s just all logo churn on that side. Nathan Latka: Interesting. So on that cohort that you do, you do have touch on there as a demo. You clearly have expansion revenue to get over a hundred percent net revenue retention. What are you typically upselling? Jimmy Kim: Oh, we’re not upselling. It’s natural growth. So it’s all subscriber or contact count. So based around contact count, growing. Any good business that we bring in that grows will naturally be able to expand over time. Nathan Latka: Yeah. You’ve got a really nice contact calculator on your pricing page, where if they go from 25,000 contacts to 50,000 contacts, they can move the thing and see what the change in price point is. Jimmy Kim: Yep, exactly. Nathan Latka: Do you like this model in terms of pricing or would you make any changes? Jimmy Kim: It’s simple. A lot of our competitors will have that model plus a CPM model plus this model. And they’ll start adding a lot and I understand the business side, but we find that customers just get irritated by most of them. Half the times the customers do come to us. We started recently taking a lot more on the higher end. So the Oracle Bronto’s, the Doc Digital’s list track type users. That’s literally their pain point that they get frustrated about, because they paid this huge chunk of money and they have these CPMs and these caps, and they end up feeling really limited on that side. And for us, we own our own infrastructure. So we don’t care. It doesn’t actually cost us more money to send more emails out, outside of simple server usage. Jimmy Kim: So we sat back and said, “You know what, we’re going to be the unlimited guys and just stay on the unlimited side.” And we obviously don’t want to be abusive, but want to also allow customers not to feel that pain point. So we’ve kept the pricing simple. I think we’re going to continue to keep it simple, but it’s something that we’re still continually talking about. Nathan Latka: Last couple questions here, back in August of 2019, according to Ahrefs, you ran a pretty aggressive paid campaign. You are ranking for 41 to 50 keywords. You then abruptly turned that off. What happened with that test? Jimmy Kim: It was just a matter of… August. Did you say August 2019? Nathan Latka: Yeah. August of 2019. And Ahrefs is sometimes wrong by the way, so that you maybe weren’t running any ads. But it’s showing that you ran a bunch of ads in August of 2019. So about a year ago. Jimmy Kim: I think I kicked off a bunch of ads. Maybe that’s what it is. I think I kicked off and started running them at that point. So that’s when, in August, September is when we started making a lot of shifts in the company. So we will probably pull down a ton of ads, relaunched a bunch of stuff. We also relaunched it with the new site. So that’s probably what it is. Our last site came up right around August of 2019, roughly. So if that’s when we put up the new site, it’s probably when we had a new Google SEM service, new Facebook ads and did a lot of new advertising, just refreshed that. Nathan Latka: To touch on SEO for a second, because you’ve got a great domain rank of 71. How have you grown your domain authority? Jimmy Kim: Yeah, complete content marketing focus. Really high quality content. Really focusing on just getting great content in the world and then have our little content engine where we’re advertising out with all our content, getting more people into it, and putting them through a flow and funnel as well, too. So one of our biggest strategies that we really changed was, instead of going out and trying to advertise the product or advertise the demo, we started advertising content. Really high value, good content. Actionable. And basically we were able to drive our cost per acquisition down by almost three X. So we were able to reduce that by really focusing on the content side and letting the content speak for itself. Nathan Latka: Can you name one of those pieces of content that does really well for you that you run ads to? Jimmy Kim: Yeah. The newest one that we… One of the newer ones, I mean the big book of funnels for example, is one of the ones that we have. Or the definitive guide to abandoned cart. The segmentation book that we just released. So we’re releasing a lot of these very core-focused, actionable books that we’re putting out there. And then essentially what it’s doing is we’re driving leads at about two, $3 a lead. That’s where we’re pulling up leads at. And then from there we’re getting about one in 10 is a sales qualified lead. And then naturally we’re bringing one in 10 of those people. 10% of those people are actually signing up for a trial, too, over the 30 day period. And then we’re naturally converting about eight and a half percent of those people. Nathan Latka: Super interesting. Yeah. I’m on the Sendlane resources page. Big book of funnels. It’s basically a nice cover. It makes you really curious and it asks for first name, last name, email, current size. And are you in the market to buy a new email marketing tool? And you’re saying you pay two to three bucks to get a new opt-in here. And then if you get 10 of those, so you pay 20 bucks to get 10, one of them will convert into a qualified lead and that helps fuel your sales reps demos? Jimmy Kim: Correct. Nathan Latka: Fascinating. Jimmy, you’re doing all that. You’re all kinds of tests, man. This is great. Jimmy Kim: Well, I’ve always been the data guy, so I’ve been just drilling into data and trying to figure out how to make better decisions for the company, always with it. Nathan Latka: Where would you put your overall weighted CAC right now? To get a new $250 a month account you’re going to pay what? Jimmy Kim: Yeah. So, the numbers don’t make sense because our team has been lean and we don’t spend a lot of money. So last month or two months ago, was last time I really… Our CAC was 254 out of 250. So they don’t make sense right now. So at this point, because we didn’t have a sales team, we didn’t have a marketing team. As of July we had one person in marketing and me. So now we have three people. We’re obviously out there hiring a VP of marketing now. So we’re getting to a point where we’re going to start growing that. And I know our CAC is going to go up a lot. Nathan Latka: What are you comfortable though, in terms of payback period? You’ll go up to what? 12 months? Jimmy Kim: About eight months. Eight months is my goal. Is my mindset of goal. Max, I want to go to eight months payback. Nathan Latka: All right, Jimmy, let’s wrap up here with the famous five. Number one, favorite business book. Jimmy Kim: Ooh. That’s changed a lot lately. Crossing the Chasm has been my favorite book lately, because that’s what I just did in 2019 until now. Nathan Latka: Yeah, it’s a good one. So you considered going from 2 million to 5 million, that was really your crossing the chasm moment? Jimmy Kim: Well, it was switching complete verticals, launching a new platform, saying goodbye to old customers and also say hello to new customers. So a little bit more even than that. And finding new product [crosstalk 00:22:35]. Nathan Latka: Number two, Jimmy, is there a founder that you’re really following or studying right now? Jimmy Kim: I can’t say that I’m following anybody very, very closely right now. I would say that I would look at my mentor as, my coach mentor. I worked with this guy named Brett Fox. I don’t know if you’ve ever heard of him, but he’s a big Quora contributor, but he’s been coaching me and helping me all year. So I would look at him as someone I’m looking up to currently right now. Nathan Latka: Number three, besides your own, what’s your favorite online tool for building the company? Jimmy Kim: Right now? It’s OmniGraffle right now. I don’t know if- Nathan Latka: Omni what? Jimmy Kim: OmniGraffle. Nathan Latka: Graffle. I haven’t heard of them. Jimmy Kim: It’s a mind map tool. Basically allows you to build out your mind maps around flows and everything that you need to do. Nathan Latka: Number four, Jimmy, how many hours of sleep are you getting every night? Jimmy Kim: Six. Nathan Latka: Okay. And situation. We know you have two kids, married? Jimmy Kim: Yeah. Married, two kids. Nathan Latka: And how old are you? Jimmy Kim: I am 39 now. Nathan Latka: Jimmy Kim: Focus. Focus on one thing and stop trying to do 900 other things. I think that’s been my biggest learning lesson right now is just you focus on one thing. I’m not talking about just focusing on business, but even taking the business and focusing on one vertical or one niche and really being focused on it, would have been a lifesaver difference in the businesses that I’ve grown. Nathan Latka: Guys, Sendlane.com has just passed $5 million in annual revenue. You heard it here first. Up three X from November of 2017 in terms of run rate. The big change, they went focused. They hyper-focused now on e-commerce sites and the email marketing needs of e-commerce brands. Average customers paying $255 per month, serving over 1,650 customers. They raised some capital to do it. 38 people in the team so far. Just now scaling up their sales team to see if they can get some repeatable process there to drive additional MRR growth. Jimmy, thanks for taking us to the top. Jimmy Kim: Thank you for having me. Nathan Latka: One more thing before you go. We have a brand new show every Thursday at 1:00 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 backend dashboards, their expenses, their revenue, ARPU, CAC LTV, you name it. They share it. And the buyers try and make a deal live. It is fun to watch every Thursday, 1:00 PM central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2:00 PM central. To make sure you don’t miss any of that, make sure you click the subscribe button below here on YouTube, the big red button. And then click the little bell notification to make sure you get notifications when we do go live. I wouldn’t want you to miss breaking news in the SAS world, whether it’s an acquisition, a big fundraise, a big sale, a big profitability statement or something else. I don’t want you to miss it. Nathan Latka: Additionally, if you want to take this conversation deeper and further, we have, by far, the largest private Slack community for B2B SAS founders. You want to get in there. We’ve probably talked about your tool if you’re running a company. Or your firm, if you’re investing. You can go in there and quickly search and see what people are saying. Sign up for that at nathanlatka.com/Slack. In the meantime, I’m hanging out with you here on YouTube. I’ll be in the comments for the next 30 minutes. Feel free to let me know what you thought about this episode. If you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people. We got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys’ support. All right, I’ll be in the comments. See you.