776: TextingBase Shares Margins, Cap Table, Valuation, More

SaaS Interviews with CEOs, Startups, Founders

Nathan Latka

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

4.6 • 683 Ratings

🗓️ 8 September 2017

⏱️ 19 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Eric Beans. He’s the CEO of Texting Base and before that, he was the CEO of Appuix. He was also the former co-founder of Premier Mortgage Capital and the author of Changing the World Through Texting Software. He was in the production as the producer and writer of LA Style Magazine and he’s “Chef Beans” on Daytime.

Famous Five:

Favorite Book? – Steve Jobs
What CEO do you follow? – Brett Kingstone
Favorite online tool? — Gusto
How many hours of sleep do you get?— 4
If you could let your 20-year old self, know one thing, what would it be? – “Make better choices on who I surround myself with”

Time Stamped Show Notes:

02:00 – Nathan introduces Eric to the show
02:43 – Eric wasn’t really a chef and he made food for the person who was running the show
03:01 – Texting Base is a personalized, mass communication platform for texting which is similar to email
- 03:17 – It looks like it is personally written
03:23 – Texting Base charges monthly depending on the quantity of the messages
03:33 – Texting Base is a SaaS business
03:38 – Minimum charge which is also the average is $50 and will go up depending on the number of messages
03:55 – Customer number is almost 500
04:09 – Average MRR
04:21 – Texting Base was bootstrapped and raised $262K
- 04:47 – They had investors like Kimberly Partoll and Brett Kingstone who was a former CEO of an IPO company
05:29 – Gross margin is 566%
06:33 – 14% of the cost structure is Texting Base’s messaging fee
06:52 – Server costs is around $900 a month
07:14 – Processing fee is 2.5%
07:47 – Gross margin is around 79%
08:05 – The higher the volume, the lower the charge Texting Base gets from the provider
- 08:09 – They had a contract for volume
- 08:23 – They negotiated with Twilio directly
- 08:35 – Volume should be at least 100K a month
09:18 – Eric started Texting Base in 2012
- 09:21 – Eric needed the product—no one had it so he left banking and started the business
- 09:37 – It took 3.5 years to launch
09:49 – Team size is 5
10:12 – Target customers for Texting Base are real estate and mortgage providers
10:21 – Texting Base uses email blasts to reach their clients
10:56 – Eric has used email providers until they started building their own list
11:24 – CAC was $28 and now it’s around $18
11:47 – Current churn is about 2.87% monthly
12:23 – LTV is still a bit early
12:57 – Texting Base doesn’t have contracts with customers
13:08 – Last month, $850 was spent on PPC
13:32 – Eric gave some equity of the company to the investors
- 13:53 – The people who are building the product also have equity
15:25 – The Famous Five

3 Key Points:

It takes time and patience to build a business, be sure that you’re prepared for it.
Create your own solution to the problem and don’t be surprised if you end up solving multiple problems along the way.
Your network can bring you places; nurture your relationships.

Resources Mentioned:

Simplero – The easiest way to launch your own membership course like the big influencers do but at 1/10th the cost.
The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
GetLatka - Database of all B2B SaaS companies who have been on my show including their revenue, CAC, churn, ARPU and more
Klipfolio – Track your business performance across all departments for FREE
Hotjar – Nathan uses Hotjar to track what you’re doing on this site. He gets a video of each user visit like where they clicked and scrolled to make the site a better experience
Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible
Audible– Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books

Show Notes provided by Mallard Creatives

Transcript

Click on a timestamp to play from that location

0:00.0	He launched texting base.
0:01.4	He's now up to almost 500 customers, each paying 50 bucks a month, so about 25 grand in monthly recurring revenue.
0:07.2	He's managed to get his churn down to 3% per month.
0:10.2	His CAQ is only $18, which is great, so they're growing.
0:12.9	His gross margin is 78% even considering that he has to pay messaging fees.
0:17.6	0.06 to his text messaging providers, again, focused on helping
0:22.0	these customers do text message marketing at scale. He still owns 50.1% of the company.
0:27.6	The rest of the cap table is split up among employees and a portion of it, 20% to the next
0:32.3	capital raise. They've raised $262,000 so far.
0:35.2	This is the top, where I interview entrepreneurs who are number one or number
0:40.1	two in their industry in terms of revenue or customer base. You'll learn how much revenue they're
0:46.0	making, what their marketing funnel looks like, and how many customers they have. I'm now at
0:51.8	$20,000 per talk. Five and six million. He is hell bent on global domination. We just now at $20,000 per talk. Five and six million.
0:54.5	He is hell bent on global domination.
0:56.5	We just broke our $100,000 unit sold mark.
0:59.0	And I'm your host, Nathan Latka.
1:02.0	Many of you listening right now don't have time to listen to every B2B SaaS CEO that I've interviewed.
1:07.0	If you want to get access to the database I've created with year-over-year growth rates,
1:11.2	customer accounts, margins, and many, many other data metrics and data points, you can go
1:15.6	to g-et-l-l-a-com.
1:18.6	Here's the thing, though, this database, I keep it to myself.
1:22.1	It's so freaking valuable.
	...

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