Split off into its own product in January 2018, Trainual raised $6.75 million in Series A funding the following year
Trainual paid $300 to acquire a customer paying $100 per month, leading to a payback period of 3 months
Tripled customer count from 3,000 to 15,000 in the first two years
A small business owner gets no rest.
Between managing staff, answering customer inquiries, looking for new prospects, and developing the product, there’s no time for your own life.
Especially when the staff you hire comes and goes, and you’ve got to start everything all over again in terms of training.
Enter Chris Ronzio, founder and CEO of Trainual. He came on the show in 2018 to chat with Nathan about the company’s history and the amazing growth they saw in their first year, revealing some fantastic bits of wisdom in the process.
Not Ronzio’s First Rodeo
Before he was 25, Chris Ronzio was building and running a multimillion-dollar video production company, and after selling that off, he started a consulting agency to get small and growing businesses organized.
Because as mentioned, small businesses have so much going on every day that it can be impossible to take a breath and look at the big picture.
Ideally, though, every small business would document their processes so that current and future staff would know exactly what to do, every time.
And so when Ronzio’s team built an internal process management tool for their own use at the consulting agency, the problem and the solution clicked together instantly. It just so happened that it came at the time when he was thinking about trying SaaS.
The Spinoff Product Takes Off
So the deal here is simple. Much like Google Docs, a person or team of people log in to a web interface where they can write down the steps in a process.
But instead of padding out whitespace to get all the pictures lined up perfectly on the page (we’ve all been there), users flow from step to step, each one able to be signed off on by a peer or supervisor to check that the process is well-thought-out.
Ronzio sums up the ideal process in just three words: “You develop the system, document it, and delegate it.”
Because every business owner wants more time for themselves and more time letting the business run itself. And so a couple of well-placed Internet campaigns made Trainual grow with surprising speed.
A Whirlwind First Year… 8% of Website Visitors Sign up for a Trial
Trainual was formally split off from the consulting agency in January of 2018. It started out entirely bootstrapped, and in fact although there were some customers that knew about it already, it had to build a customer base from nothing.
And it did – thanks to the classic strategy of the free trial to subscription model.
About eight out of every hundred people who visit the site end up signing up for the free trial, which requires a credit card. Five of those eight keep the subscription past the two-week free trial, though naturally a couple of those are likely to have forgotten about the subscription and ask for a refund.
But that doesn’t actually happen that often. Trainual keeps metrics on which accounts are being used and which are likely to be canceled, and in fact at the time of the interview was working on an entirely new analysis platform for customer retention.
Interestingly enough, removing the credit card gate (in other words, allowing people to sign up without a credit card) didn’t generate a whole lot of signups. Most people willing to put their credit card down are willing to pay for it anyway, they just want the two weeks free before they start getting charged.
Profit After 3 Months of Subscription… $180-$300 Customer Acquisitions Cost (CAC)
Trainual has an interesting pricing model based on “buckets” of users. With single-user licenses, people start license sharing, but lots of places balk at paying similar prices for every single employee that needs to be on the system – generally, all of them.
Therefore, there’s one rate for one number of employees, and another rate for a slightly larger group, and so on.
The CAC (Customer Acquisition Cost) was about $180 per trial user, and just under $300 per paying user. At the time of the interview, the company was making profit after three months of subscriptions.
Raising Money For The Future… $6.75M in Funding
A big question about the CAC for businesses in their early years of growth is scalability. If you can spend $300 per subscription now, does that mean $300,000 is going to be a thousand subscriptions? How about $300 million?
At that time, they hadn’t yet held their Series A funding round (which they did in 2019 for $6.75 million dollars).
That’s because their revenue, while impressive at $50,000 monthly, wasn’t quite enough to entice the kind of capital that could really make a big difference. Instead, they were investing profits from the company back into growth and using credit card debt to cover the rest.
Equity and Acquisition
As Ronzio considers growth, he’s got to look at different options for where the cash is coming. He prefers debt, but if there was a strategic partner who could open up new markets and take the company in interesting directions, he’d go down the equity path as well.
And it’s never too early to start thinking about acquisitions! Since Trainual is designed specifically for the niche of small businesses who don’t have a streamlined onboarding process, Ronzio would definitely be interested in partnership with others in the small business space like Bamboo or GoDaddy.
About the CEO Chris Ronzio
In addition to running Trainual, Chris Ronzio is also a motivational speaker and author of “100 Hacks to Improve Your Business.” He has a regular column on Inc.com as well, where he shares insights on making processes more efficient.
Favorite Business Book: Rework, Jason Fried & David Henemeier Hansson
Following CEO: Clate Mask, another Arizonan and founder of Keap (a marketing automation product formerly known as Infusionsoft)
Favorite Online Tool: Personal fitness tracker app Strava, because “building me has really helped build the business.”
Hours of sleep per night: Seven
Family Situation: Married with two kids
Advice for 20-Year-Old Self: Set Bigger Goals.
2018 (founded January, 50k MRR in December)
2019 350k MRR (Latka interview)
2018 (founded, bootstrapped)
2019 6.75mm Series A (Crunchbase)
2019 15,000 (trainual)
Yassir Sahnoun is the founder of YassirSahnoun.com. He helps SaaS companies like Castbox and FluentU attract sales using content strategy, copywriting, blogging, email marketing, & more. If you want to up your content marketing game, you can schedule a free discovery call with Yassir by clicking here.