1392 $104m in ARR and Bootstrapped?!?! How?!

SaaS Interviews with CEOs, Startups, Founders

Nathan Latka

Ceo, Entrepreneurs, Founders, Software, Business, Entrepreneurship, Saas, Startups

4.6 • 683 Ratings

🗓️ 17 May 2019

⏱️ 19 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Time Stamped Show Notes:

00:00 – Nathan's introduction to today's show

00:25 – Why Kellogg was named top CEO by Glassdoor

00:45 – How Madwire has grown to 600 employees

01:25 – Why they operate on a hybrid SaaS and professional service model

02:30 – How they view revenue per employee and prioritize it

03:15 – Why they are doing $175k in revenue per employee today

03:30 – How Madwire is doing $105M in ARR right now

04:00 – Why they help small businesses with marketing at scale

04:50 – How they are serving 10k active customers at this point in time

05:05 – Why their average new account is paying around $1,500 each month

05:45 – How Madwire has scaled with $7.5M in outside funding

06:15 – Why they are cash flow positive

06:35 – How they are still growing 40% year over year

07:45 – Why they track churn in two unique ways

10:00 – How they receive payback within 3 months on a $3k CAC

11:10 – Why they are landing customers entirely through digital channels

12:10 – How he started the company with his father in 2009

13:45 – Why they've set aside stock and equity for top performing employees

14:40 – How they are targeting an IPO in the next few years

15:30 – Why they would look to IPO in two years

16:30 – The Famous Five

JB Kellogg is the co-founder of SMB marketing platform, Madwire and Marketing 360. JB was named the Top CEO in the country by Glassdoor in 2016.

Company website: https://www.madwire.com/

SaaS Metrics:

Founded: 2009

Customers: 10,000

ARPU: $875 (monthly)

Annual recurring revenue: $104 million

Founded: 2009

Funding: $7.5m

Team: 600

Transcript

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0:00.0	Hello, everyone. My guest today is J.B. Kellogg. He's the co-founder, co-CEO, and CEO of a company called
0:07.0	Madwire and Marketing 368, tech-enabled marketing company combining integrated marketing software and
0:12.4	technology and professional marketing services, the talent through one powerful platform. He was named
0:17.4	the top CEO in the country by Glassdoor in 2016. J.B., are you ready to take us to
0:22.2	the top? Absolutely. Thank you for having me. How does Glass Door do that? Top CEO, what's that mean?
0:28.3	It's based on employee feedback. So the reviews and the different feedback forums that they can
0:33.5	respond to through Glass Door, they just capture that analysis every year and then compare that
0:39.2	against other CEOs out there and essentially just kind of rank them top down based on the
0:43.4	feedback and the ratings on that. And how many teammates do you have? We have about 600 people now here.
0:49.7	So pretty good days. So you just bribe the hell out of them, right? That's how it works.
0:54.2	I wish it was that easy. No, they proactively kind of do it. I mean, we, employee reviews every year.
1:00.9	We do kind of annual reviews or biannual reviews. And generally, we'll ask them, hey, if you
1:05.1	haven't put your feedback on Glass Door, please do, you know, here and there. But other than that, you know, it just kind of comes through naturally. That's great. Of the 600, you have two very different business models with very
1:14.8	different margin structures. You have SaaS and then you have professional services and kind of,
1:19.0	you know, on the marketing side, the talent side. Break down the revenue for me. What percent of
1:22.8	SaaS? What percent is professional service? Well, it really is very much of a hybrid.
1:28.9	You kind of need both.
1:33.3	You can't necessarily do, like, for example, we don't have customers essentially that are 100 percent service or 100 percent SaaS.
1:36.0	It's kind of a combination.
1:37.7	So it's a little bit, you know, difficult when you look at it that way.
1:40.8	But the margins actually are actually pretty similar. With our service-based
1:44.9	businesses, our services, the margins right in that 60 to 80 percent range. What we've done is
	...

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