Genius Affiliate Strategy Helps Bootstrapper Hit $27,000,000 Revenue
Summary
TLDRRebecca Shc, the founder of Flowes, shares her journey from selling MailChimp templates to launching Flowes, an email marketing platform designed for small businesses. With no outside funding, Flowes achieved impressive growth, reaching a revenue run rate of $27 million within 18-19 months of its launch. Shc emphasizes the importance of understanding customer needs, community building, and the power of affiliate marketing. The company's success is attributed to its focus on product quality, customer-centric approach, and strategic marketing.
Takeaways
- π Rebecca founded Flowes, an email marketing platform, which grew from $20 million to $27 million in annual revenue within a year.
- πΌ Rebecca and her co-founders bootstrapped the company, starting with a $90,000 investment and reaching profitability without external funding.
- π Flowes' initial growth was fueled by pre-selling the product through customer interviews and understanding the market need before coding began.
- π The company leveraged affiliate marketing and word-of-mouth referrals, which now account for over 30% of their inbound traffic.
- π― They achieved a high revenue per employee ratio of $540,000, demonstrating efficient business operations.
- π‘ Rebecca emphasized the importance of building a product that resonates with customers and solving their pain points, which was key to Flowes' success.
- πΌ The company has over 880,000 paying customers, showcasing the scalability of their business model.
- π Flowes' growth strategy includes a focus on organic search and a strong community, which has helped them dominate in their niche.
- πΈ They have a low customer churn rate of around 2% per month, indicating high customer satisfaction and product-market fit.
- π οΈ Rebecca highlighted the significance of having a strong cash cushion for a bootstrapped company to ensure longevity and adaptability in the market.
Q & A
What was Rebecca's business before founding Flowes?
-Before founding Flowes, Rebecca was selling MailChimp templates and had a business selling templates for professional photographers, particularly wedding photographers.
How much revenue was Rebecca generating annually from selling MailChimp templates?
-Rebecca was generating between $400,000 to $500,000 per year from selling MailChimp templates.
What prompted Rebecca to start Flowes?
-Rebecca started Flowes after recognizing a gap in the market for beautiful, brand-representing email marketing solutions that were not being served by existing legacy players like MailChimp, especially for small businesses and solopreneurs.
How much capital did the three co-founders invest in Flowes at the beginning?
-The three co-founders invested a total of $90,000 in Flowes at the beginning.
What was the initial pricing strategy for Flowes' first paid plan?
-The initial pricing strategy for Flowes' first paid plan was $19 per month, which was a 50% discount for the first year. The full price was $38 per month.
What was the role of affiliate marketing in Flowes' growth?
-Affiliate marketing played a significant role in Flowes' growth, contributing to over 30% of their inbound marketing. They had a strong affiliate program where affiliates could earn $19 for each new customer they referred.
How many paying customers does Flowes have currently?
-Flowes currently has over 80,000 paying customers.
What is the revenue run rate for Flowes today?
-The revenue run rate for Flowes today is about $27 million, up from $20 million just a year ago.
How does Flowes handle customer churn and understand why customers leave?
-Flowes captures exit data through surveys when customers churn and also conducts child studies with their user experience research team to understand the reasons behind customers leaving.
What is Rebecca's advice for founders looking to start in the tech space?
-Rebecca advises founders to have the courage to jump into the tech space and start a tech company sooner, as she believes getting into tech sooner would have been beneficial for her own journey.
Outlines
π Launching a Successful Email Marketing Tool
Rebecca, the founder of Flowes, shares her journey of creating an email marketing tool that simplifies the process for small businesses. She initially sold MailChimp templates, earning up to $500,000 annually until competition like Canva emerged. Despite the shift, she leveraged her customer base's feedback to develop a more integrated solution within MailChimp. This led to interviews with her audience and a collaboration with Honeybook's team, culminating in the launch of Flowes. With no external funding, the company has seen impressive growth, now boasting over 80,000 paying customers and a revenue run rate of approximately $27 million.
πΌ The Evolution of a Business Model
In this segment, Rebecca discusses the transition of her business model. Initially thriving with the sale of Photoshop templates, the business faced challenges with the rise of SaaS tools like Canva. This prompted a strategic shift towards creating a more integrated solution for email marketing within platforms like MailChimp. The recognition of a gap in the market for beautiful, brand-representing email designs led to the conception of Flowes in 2017. The co-founders, including Martha from Honeybook, contributed $90,000 to bootstrap the venture, focusing on the underserved small business segment.
π€ Co-founder Dynamics and Equity Split
Rebecca elaborates on the co-founder dynamics and the equity split at Flowes. With three co-founders, they decided on an equitable distribution of shares, considering the initial investment and the effort put in by each founder. They were committed to remaining undiluted and ensuring that any future equity offered felt meaningful. The co-founders were not all full-time from the start, with some joining fully later, but they were united in their vision of bootstrapping the company without external funding.
π¬ Customer-Centric Product Development
This part of the interview highlights the customer-centric approach that Flowes took during its product development. Rebecca and her team conducted numerous interviews with potential customers to understand their needs and pain points. They tested pricing and positioning, offering a beta version of their service at a discounted rate. This hands-on method allowed them to gather valuable feedback and adjust their offering before officially launching their platform.
π Viral Marketing and Community Building
Rebecca shares the story of Flowes' explosive growth, which was significantly propelled by a viral marketing campaign and the power of an engaged community. A friend's positive testimonial andζ¨εΉΏ of Flowes led to a surge in trials and organic promotion across social media. The company's focus on founder-market fit and a viral loop in their product design contributed to their rapid expansion, emphasizing the importance of community and word-of-mouth marketing.
π Scaling Revenue and Customer Base
The conversation shifts to discuss Flowes' revenue growth and customer acquisition strategies. Rebecca explains how the company scaled from $20 million to $27 million in revenue, attributing much of this growth to organic search and a strong affiliate program. She also details the company's approach to upsell, introducing a new product called 'Checkout' to complement their email marketing tool, and their commitment to remaining accessible and affordable for small business owners.
π οΈ Building a Product that Resonates
Rebecca emphasizes the importance of building a product that resonates with customers' needs. She discusses how Flowes' success is rooted in understanding and addressing the specific challenges faced by small business owners. The company's focus on community and the founder's own experiences as a small business owner have been instrumental in creating a product that stands out in the market.
πΈ Profitability and Financial Strategy
In this segment, Rebecca talks about Flowes' financial strategy, highlighting the company's profitability and cash cushion. She explains the decision to reinvest profits back into the business to ensure long-term stability and the ability to weather any potential challenges without external funding. The discussion also touches on the company's approach to acquisition offers and the importance of staying true to their mission and vision.
π The Power of Community and Product Excellence
Rebecca reflects on the dual drivers of Flowes' success: a strong community and an excellent product. She discusses how the company's story and bootstrapped approach resonate with its user base, many of whom are small business owners. At the same time, she acknowledges the product's ability to deliver on its promise to help these businesses create professional, brand-aligned email marketing campaigns.
π Measuring Growth and Churn
The final part of the interview delves into the metrics that Flowes uses to measure growth and customer retention. Rebecca discusses the importance of understanding why customers churn and how the company uses this feedback to improve its product. She also shares insights into the company's customer acquisition cost (CAC) strategy and the payback periods they find acceptable for their marketing investments.
Mindmap
Keywords
π‘Email Marketing
π‘Bootstrapped
π‘Affiliate Marketing
π‘Word of Mouth Marketing
π‘Revenue Run Rate
π‘Customer Interviews
π‘Product-Market Fit
π‘Viral Loop
π‘MVP (Minimum Viable Product)
π‘Organic Search
π‘Upsell
Highlights
Flowes, an email marketing platform, was bootstrapped by Rebecca Shc and her co-founders with an initial investment of $90,000.
Before launching their first paid plan at $19 per month, Flowes had already sold several $19 per month plans based on mockups and customer interviews.
Flowes' revenue run rate grew from $20 million to $27 million within a year, reaching $10 million in 2021.
Over 30% of Flowes' inbound marketing is driven by affiliate marketing and word-of-mouth referrals.
Flowes has over 80,000 paying customers without any outside funding and a team of 50 full-time employees.
Rebecca Shc's background in graphic design and template creation for brands like Lincoln Park and Rihanna influenced Flowes' product development.
The initial idea for Flowes came from the difficulty Rebecca faced in implementing MailChimp templates, identifying a gap in the market.
Flowes' co-founders decided on equity split based on the amount of money each founder put in and the effort they were putting into the business.
The company's first marketing campaign involved a co-marketing strategy with Rising Tide Society, a community serving small businesses.
An unsolicited email from an influencer friend unexpectedly went viral, leading to a surge in Flowes' trials and sign-ups.
Flowes' viral loop in email footers and forms has been a significant factor in their organic growth and customer acquisition.
The company's affiliate program offers affiliates $19 for each new customer they refer, which has been a major channel for inbound traffic.
Flowes has a strong organic search presence, with many affiliates generating content that drives traffic to the platform.
The company's product, Checkout, was launched as an upsell to their email marketing service, seamlessly integrating sales funnels.
Flowes' pricing strategy is designed to be unbeatable and accessible, with a focus on not penalizing customers for growing their list.
The company's onboarding flow is streamlined to quickly get new users to their 'aha' moment with minimal friction.
Flowes has a team of around 20 engineers, reflecting their commitment to product development and innovation.
Rebecca emphasizes the importance of building a product that people love, which she believes is more critical than just focusing on SAS metrics and strategies.
Transcripts
flowes makes email marketing easy as pie
from 2011 to 2014 she was selling
MailChimp templates doing $ 400 500,000
per year ultimately canva and other
tools came in and so templat stopped
selling as well but she still had a
great built-in base that said hey we'd
love to build you know this inside of
MailChimp and make the flows easier that
prompted her to start going and
interviewing folks from her audience
pairing up with a team at honeybook and
eventually launching the three
co-founders put in $90,000 total uh back
on launch date before they launch their
first paid plan at 19 uh bucks per month
they eventually got going and today over
30% of their inbound is powered by
affiliate marketing and Word of Mouth
marketing they have over 80,000 paying
customers Revenue run rate today is
about 27 million bucks up from 20
million just a year ago and their $10
million a year was back in 2021 which
they hit just it's crazy 18 19 months
after launch all here's a cherry on top
with no outside funding and just 50
full-time employees for $540,000 of
Revenue per employee hey folks if we
haven't met yet my name is Nathan ladka
I launched and sold my first software
company back in 2015 and went on to
write a book about it which you guys
made a Wall Street Journal bestseller
purchasing over 30,000 copies thank you
so much for that after the book I
launched this show and went went on to
create founder path.com I raised a large
fund to do non-dilutive deals with B2B
software Founders so far we've invested
in over 400 software Founders totaling
$150 million here in 2024 we're doing
three to four New Deals per week so if
you're looking for Capital and don't
want to give up Equity go sign up at
founder path.com for free to get your
offer all right let's jump into the
interview hey folks my guest today is
Rebecca shc she is the chief brand
officer and founder at flowes launched
the company over six years ago after
being very active in sort of the graphic
design template space from 2011 to 2018
we're going to learn her full story
today Rebecca are you ready to take us
to the top
I so ready let's do it I am stoked
you're here I met you via Greg head at
saso a week ago and you know I rarely
get surprised but he goes you've got to
meet the Rebecca I'm like well why do
you have to meet her and he goes well
she's bootstrapped and she's doing a
crap ton of Revenue so I don't want to
bury the lead what are you at today in
terms of Revenue uh we are hovering
right around 27 million AR this is
incredible okay and and just so people
get a growth rate before we dive into
your product your background design
templates Etc where were you exactly one
year
go um I oh my goodness I feel like I'm
being put on the spot um I believe we
were at
around we're hovering around 20 okay so
sort of 20 now up to about 26 27 yes
that's great growth okay guys keep
listening we'll hear how she drove that
growth growth without raising VC even
while her competitors raise a bunch of
VC but Rebecca first how did you get
into this space six and a half years ago
oh my goodness well I mean we can go way
back so I think I think um my first job
out of college actually it it goes back
to that I was hired at this company to
be the designer for um the merchandise
for a lot of top brands so I was
designing for Lincoln Park and Rihanna
and Cheryl Crow this was my first job
out of college so that was pretty cool
and I I would I was living in LA and I
would go to Hot Topic and I would see my
designs all over um the t-shirts behind
the clerks I'd be like oh I I want to
buy a few of those and they're like well
why do you want to buy those like those
are a lot really different bands and I
was like oh I designed them and they
were like we don't believe you it's like
no really I did and uh from from there I
I fell in love with being able to design
for a lot of different brands and
especially marketing design and uh brand
design and doing like a lot of different
styles um that would excite different
people in different verticals and from
there I sort of I fell in love with um
this idea of creating for lots of
different brands and I started another
company that was a recurring Revenue
company but it was just it was just a
little um that I had online where I was
selling templates for professional
photographers and I would get all these
phers Photoshop templates that's right
yeah and I would create a lot of
different types of templates like
pricing and branding for these
professional phot wedding photographers
especially and then I started getting a
lot of requests for MailChimp templates
but I wasn't able to actually make a
MailChimp template that wasn't really a
thing it was either like you had HTML
and then you had to package it with
images from Photoshop you had to export
and then you had the copy like the um
the the written pieces of it and you
would have to paste these emails
together into MailChimp and I sold that
as a package but every time I sold a
MailChimp template the next day I'd get
an all cap super angry you need to give
me a refund email from the customer
saying like I could not Implement these
designs in MailChimp and this this
happened from about 2010 to 2014 and I
was like wow that is a big gap in the
market of people needing really
beautiful email marketing that
represents their branding and it's not
being served by the Legacy players but I
was like that's someone else's problem
surely there's going to be a squar space
of email that was 2010 to 20 you said
2010 to
2017 14 14 14 when was what was your
best year Revenue wise selling those
templates are we talking like 50 Grand a
year or like 500 Grand a year or more
maybe it was it was between four to 500
Grand a year okay so this wasn't like a
small business I mean this was plenty
for you to live on have a great
life yeah I mean it was it was it was
really Nifty I would say though that
with the onset of canva and a lot of SAS
players coming into the space the demand
for these one-off Photoshop templates a
decrease so it wasn't super sustainable
but it was something that uh that
created a really nice little lifestyle
business okay so what happened in 2014
canvas's coming in your templates are
selling less you've identified this key
need you haven't built a product for it
yet what happened in
2015 so between about so we the the idea
of flus I would say it was conceived in
2017 so I had this template shop and
then I also started to pitch template
shops to other influencers um so I was
just just making a lot of creative
output and templates for a lot of
different brands in different uh spaces
and to different audiences but in 2017
that's when I met my co-founder Martha
um and we got together and she was
working in a company a CRM called
honeybook which is CRM for small
businesses so she had a lot of overlap
with her um with her Market seeing the
photographers who a lot of them use
honeybook and she was seeing the exact
same problem where we would see these
huge influencers that were making
millions of dollars a year and had the
most beautiful Instagram feeds the most
gorgeous websites and their emails were
freaking ugly like to be completely
honest and so she saw from her side and
she saw that the uh these amazing
influencers were so Savvy with every
part of their business email and they
were struggling I saw it from my side
and we were like somebody's got to do
something about this so what was her
role at
honeybook um I believe she was working
in business development okay yeah
because I mean that was I'm just going
back and our we can do this live when we
have 3,300 episodes we had Oz Alan May
4th 2021 on the show one of the honey
book Founders and yeah yeah the data he
shared I mean they were this wasn't a
small company I mean they broke seven uh
they broke uh 10 million bucks of
Revenue uh in 2021 now over 30 million
bucks of Revenue but it sounds like she
was on to something even back then
because in 2017 when you met they had
already I mean they raised a bunch of
money so she certainly understood what
it was like to work for a VC backed
company how did that influence how you
guys split equity on day one as
co-founders and how you thought about
funding your first million of
Revenue yeah well we actually have a
third co-founder to trong who is in
Vietnam and he's our technical
co-founder and so um we we split up the
the equity um between the three of us
going forward and then we also put aside
an employee pool so from the beginning
it was just the three of us and then um
we also had uh some set aside for
employees but we we always knew that we
wanted to um remain undiluted and keep
as much of our shares as possible and
also make sure that anybody that we
brought on and offered Equity too would
feel like really bought into the company
and so that was um a big part of not
taking on VC now Rebecca did you guys
have the tough conversations early on
about are we all equal are we not do we
just do 30% each didn't have a 9% ESOP
pool I mean how did you you know you
probably can't share specific
percentages but generally speaking is
everyone equal or was it clear someone
was putting in cash and so they got more
Equity or something like that um I can't
share specifics but I think there were a
lot of interesting conversations around
the topic and we decided to split things
up based on um how much money each
founder was putting in at the time
because we fully bootstrapped and it was
out of our pockets and then about like
at the the amount of effort that each
was putting in at what stage y was
everyone convinced and ready to be
full-time on day one or did some people
keep a side gig for a little bit until
fles hit some
traction uh so Martha and I were
completely full in um at the beginning
and obviously she was working full-time
at honeybook and we were very diligent
about making sure that I that there was
no overlap in that time there um so that
she was basically Moonlighting and desk
and pulling a eight hour day in the
evenings um after work so um she and I
were definitely like full-time 100% from
the beginning and then our technical
co-founder um had his other company
going at the same time and went
full-time um within about a year and a
half of the company launching okay
that's great um I know you can't give
individual numbers but can you share
what you guys all in together put into
the company to fund it to get it going
was were talking like 50k or like 500k
or Millions can you share that
$90,000 oh great okay so you guys put in
90 grand and then what tell me how you
get the MVP launched and when you close
your first
customer oh my goodness so um I love
telling the story because I think a lot
of people are almost confused about how
we had product Market fit even from day
one but the truth is that we actually
had a viable product before we touched a
line of code and I know that sounds nuts
but when we were first starting Martha
and I had crazy amounts of customer
interviews like we probably spoke to 100
to 200 people from from our target
audience because it was just the water
we were swimming in right it was the
people that we were already hanging out
with and it were my customers and people
that she had relationships with through
honeybook so she and I were what are
what are those people people you sold
MailChimp templets to two years prior
what were those people their job titles
yeah so it's almost like the new
creative economy right so a lot they
call them solopreneurs but a lot of them
are photographers service providers
coaches Educators um people with salons
Spa Services masseuses uh creative
Services Graphic Design Services um so
it's like this sort of whole economy
that was overlooked by traditional
Silicon Valley people who have small
businesses and I think it's not super
attractive to a lot of SAS companies
because they want to go after the big
whales of of getting these uh large
Enterprise turn too much I don't want to
sell something to them they're not going
to keep things
exact exactly and Martha and I were like
no like this is almost a secret this is
a secret superpower that it's an
underserved part of the economy and it's
a huge growing sector of the economy the
small business segment and if we can
nail it um then we will then we'll
really been on to something so we
immersed ourselves in this customer
segment and I just remember it was pref
figma so I had my Envision mockups and I
would go in and be tweaking it and we
would be going walking them through
flows and having them go through sort of
like a fake Builder experience and at
the end asking uh would you be willing
to pay for this and they were whipping
out their credit card saying when can I
buy this so we had a really clear idea
of our vision and what the wait did you
close it did you if if if if okay let's
say I was one of those we actually did
we actually did we did so what what
landing page let's say let's say you
give me The Envision board it feels
almost real because it's an Envision it
feels like a real flow and at the end
you say Okay Nathan Mr hair salon guy
are you willing to pay 30 bucks a month
or whatever to pay and I say yes do you
do you to make sure they're not
bullshitting you and telling you what
you want to hear do you say okay here's
the link go swipe your card now or what
did you
do oh well so basically we had
one-on-one interviews so either in
person or on Zoom or I guess Google
meets at that point um and we would walk
them through the flow and then at the
end Martha would ask them the question
how much would you pay for this and we
would put a few numbers of pricing in
front of them because we were also
trying to test out pricing and
positioning and at that point they said
$19 a month that was what we landed on I
think we were anchoring on something
around there like $38 a month um because
that's actually our full price cost but
we offer 50% off your first year and our
special beta deal that um has long since
passed was you could get 50% off for
life if you sign up for our Beta And it
that just it worked so well um and so we
we offered the 50% off deal um and
people were loving the $19 a month price
point it was kind of unheard of to have
unlimited subscribers and unlimited
emails especially at that low price and
compared to like the major players or
the larger players like they they charge
you so much when your list gets big so
uh yeah we we had people signing up and
the service that we offered because we
didn't have a software was me just
designing their emails in Photoshop and
then plugging it into something that
could be sent so it was almost like a
design service um and then the the
platform development and the selfs serve
onboarding experience came Downstream
from that okay so how many $19 per month
plans did you sell before you said Tron
hurry up we got to launch a freaking
website that actually
works well we he was uh he was there
helping us and also managing the
engineers to help us build it um but we
I think by the time trong went
completely full-time we were in the
several thousand range of subscribers of
me of paying members wow okay okay got
it so I mean a th000 paying 19 bucks
you're making 20 grand a month before
you have a working website that was all
on Vision flows basically and you doing
custom work on the back side yes yes
that's right incredible okay okay okay
okay so when did you when did you email
all the list and say okay it's live go
to flow.com log in and create your first
thing we've pre-up loaded the designs we
already did for you so you see them in
your dashboard click the thing start
sending like when was that moment wait
I'm so sorry I just realized so we
didn't have the pay we didn't have that
many pay customers without a website in
a platform so we had maybe 50 50 people
who had signed up with their card before
we built like the entire self-service
flow but we I think the reason why it's
a little bit hard to pinpoint exactly
when that moment was is because we had a
lot of in between where we had a website
up and people were signing up but the
software had a lot of um like hum High
touch interaction from Martha and Ne to
actually give people any kind of viable
experience yep yep yep yep no that makes
a ton of sense and would when so when
did you say that would have been was
that in 2018 2019 when the website was
fully fully working yeah I would say it
was so we we had our plan launch in
August 12th of 2019 and then a month
before that we had our explosive uh sort
of pre-launch launch which I can get
into in a second because I think that's
the most fun part of the story but I
would say starting in early 2019 we
actually had a
website yes so I have it pulled up
August 16th 2018 at says flow desk it's
not fancy it's just black in the upper
left with a period there's some weird
sort of oval shapes in the background it
says beta ax is coming soon it says oh
man it says design beautiful campaigns
made with love for small business owners
and there's no login it just says enter
your email for Early Access okay tell us
about your pre-launch launch oh my
goodness so yeah thank you for taking me
fact on the trip to memory Lan there's
been so many iterations of the website I
completely forgot about that but I love
it um and we did have people coming
through through that that form at that
point um so we were planning a big
launch for August 12th and we had
planned um a co-marketing campaign with
a community called Rising tide society
which um was actually owned by honeybook
but it was a community that served the
small business world and a lot of our
target market were part of the rising
tide Society about 880,000 people so
that was sort of our big marketing
campaign but leading up to that a month
before a good friend of ours who is in
influencer was beta testing the software
and she was like you guys this is
absolutely incredible I just love flowes
and she asked if she could send out a
newsletter using flesk and move over
from convert kits so we were like yeah
we don't know exactly what's GNA happen
and hopefully you know the software will
work and everything will who was it was
it like Marie forio or Amy Porterfield
or one of these types uh one of those
types but it's actually Natalie Frank
who's um who's now our head of marketing
but uh she's also very good friend
Martha and me and she had an incredible
personal brand with a lot of followers
so she had 15,000 people on her mailing
list at that point and she shot that
email out and she plugged flesk at the
bottom with more than just our little
viral flitter that says made with love
and flesk she actually put uh a footer
at the bottom that said um if you're
loving the design of this email check
out this new service by my friends flesk
and during that time we had that website
up and we were getting maybe two to
three people people trickling in a day
just who heard about us organically or
through the great V and we we went
through why combinator startup school
and like the word was just starting to
get out a tiny bit about us in our very
close friend circles but when she
started when she so it was about two to
three a day in our slack Channel and we
had a channel that was telling us how
many trials were com through as soon as
she sends the email within 30 minutes
we're getting 50 trials or more an hour
within 24 hours we were tutorials were
popping up all over YouTube within 48
Hours it was all over Instagram and
social media and it just completely
exploded it like self- launched and
since we have a viral Loop in the
Footers of our emails and on our forms
I'm a very high touch point with um with
the with a lot of the emails that are
going out like it it was sort of like a
perpetual motion machine that just kept
going and going and it exploded so by
the time we had the large marketing
campaign plan a lot of people were
already using us it was it was just one
of the most incredible moments in my
life
that's amaz well Natalie's background
I'm going off for LinkedIn co-founder
Rising tide Society in June 2015 then
recruited in October to honeybook as
head of community right because she has
such a a great Community right and then
she effectively used that Rising tight
Society then promote flowes which is
what what really sort of made you guys
take off and then now obviously she's
full-time but this really goes to the
power of building a a community I mean
it's such a moat you can play Queen
maker is what we'll call it you can play
Queen maker on any stof where you want
right I think so and I I think that's
like a big secret to it as well I think
had founder market fit which is
something that not a lot of people talk
about um but we had product Market fit
before we touched line of code and we
had founder market fit like literally
from day one since we we signed the uh
the um incorporation papers it was like
we we not only understood our audience
but we actually were one of them like I
I felt the pain as a small business
owner with my template shop of not
having an amazing design forward super
userfriendly email tool to promote um my
template offering so I think
understanding not just understanding but
being one of our customers was a huge
advantage and were you always email or
did you have a bit of a type form
potentially play early on you weren't
sure if you were going to be a survey
tool or an email tool was it always
going to be email it was always email
just completely clear beautiful simple
email marketing it's been our thing
since day one so by August 2020 the
headline says email marketing easy as
pie and now it says put your email in
and actually try it not sign for B to
actually try it so people get in and
start going I want to touch on a couple
of things here the first is a lot of
people have problems trying to um
engineer what is called the viral
coefficient right you explained it
already it's the powered by sort of
thing right this is very powerful now
some people say we can't do this because
we don't have a software tool that is
like one to many right they don't have a
Natalie right where it's one to many
what would your advice be to them and
can you quantify the impact of your
powered by how many new trials do you
get today from click-throughs on your
premium powered by
product well um that one we get over 30%
of our total inbound traffic from the
viral Loop and from Word of Mouth
referrals which are sort of interlined
because our VI we have a really strong
affiliate program and Martha made sure
that we launched with that which is we
can touch on that in a second because
that's a big recommendation of mine but
uh we had um a give 50% off to your
audience so the coupon code would be
distributed through the people that used
in love Flo us through our Affiliates um
and you would also get $19 a month so
you basically give $19 a month to your
audience because the full price is$ 38
and get $19 so this is super simple
messaging give 19 get 19 and then um the
viral flitter isn't just taking people
to sign up for flesk it's taking people
to sign up for flesk for the affiliate
page of the person who sent the email so
that it provides a strong incentive for
people to keep that footer turned on um
and also an incentive to keep sharing
about flota so I would say for people
who don't have a huge one to many
audience I think Partnerships and
affiliate programs can be huge because
even if you yourself haven't built a
large audience you want to tap into and
leverage people that do and you can do
that by offering them a lot of
incentives and I mean everybody wants to
make money right like I think that's
that's the case and so by offering um
really strong affiliate incentives you
can tap into other people's audiences as
long as they love your product I think
the first first thing though is making
sure you build something that people are
even excited to talk about yeah look
this is interesting because I just
interviewed the CEO of sem Rush Eugene
and he said one of the big mistakes they
made early on is sem's early affiliate
program was 40% in perpetuity on monthly
receivables right so or sorry monthly
contracts and that that killed their
margin by Nature they could only have
60% margin because 40% was going to the
affiliate you've you've structured this
very nicely where it's still a great win
for everybody but it doesn't impact your
margins right give your audience 50% off
flow desk right and then and then the
affiliate is paid $19 just every time
someone signs up from their
recommendation just one time $19 correct
correct that's awesome so so how much do
you know this how much how much did you
pay out how much did you pay out to
Affiliates in 2023 last year oh my
goodness I don't have that off the top
of my head but I am pretty sure it's in
the millions because uh so so much of
our traffic comes in through Word of
Mouth yeah it's really really major
channel for us and it's something that
we're really doubling down on and
investing in because it's like if you
search for flowes even on Google you'll
see all of these blog posts and YouTube
videos evangelizing us and I like we're
we're really like Blown Away by the
amount of love and investment we've
gotten back from our community in us and
so we want to reinvest in them as well I
think it's really important to to do
that like it's like our one of our
biggest sources of of traffic well and
these things are by rosan .co.uk The
Ultimate Guide to flow desk meet the
email marketing platform I'm obsessed
with and then it's the full link and
then right there smack daab and then
it'll get 50% off flow desk right there
it is Boom um it and yeah this is great
so how many how big is the program today
how many Affiliates did you pay at least
a dollar to in the last 30 days and a
range is fine I I wish I am I had it
like thousands or is it like tens it's
thousands and do you see Power laws you
know do your top 30 Affiliates generate
80% of your affiliate Revenue yeah it
looks like a lot of the standard um
graphs that you see where it starts out
with a few that are at the very top and
then goes down but um we're one one
thing that's sort of blowing us away and
that is a little bit unusual is that we
get a lot more referrals from like
smaller high like more frequent smaller
referrals than other companies do so
most companies they have almost all of
the referrals coming in from a few big
players and almost nothing from everyone
else and for us the distribution has a
much longer tail your long tail is more
substantial than the average correct
really interesting okay 27 million books
of AR today how many paying customers
does that make we have over 880,000
that's wild okay so 880,000 paying
customers and besides the affiliate
traffic and the powered by what's your
second most powerful growth Channel you
grew from 20 million last year to 27
million
today um I I believe that it is organic
Search interesting what keyword do you
know you've just dominated it drives you
a lot of your
traffic uh
I I think it's again it's like a long
tale like I think it's a lot of little
things like we have we we just have so
many Affiliates generating content um
and I I I guess that goes back to the
affiliate Channel though um and we also
have a pretty strong paid arm as well um
but I think that I believe that's I'm
not sure about the numbers but it's not
generating um anything like our
affiliate yep yep okay so 8,000 paying
customers at 19th 19 a month is what is
that I think that's like 1.5 million per
month times 12 months is 18 million so
you have some people paying more than
$19 per month what do you upsell how and
how do you upsell yeah absolutely so two
ways so actually the $19 a month um it
we had a cuto off in 2021 of our adab
beta Campaign which which was wild and
we had a ton of people coming in there
to lock in their lifetime beta but now
what we offer is 50% off for your first
year um which is also a very enticing
deal I mean it's still a super good deal
and even so our full price is $38 a
month so we have a lot of full price
customers now so that um increased our
arpu quite a bit and then in addition to
that a year and a half ago we launched a
new product called checkout which is a
super simple way to get um a sales
funnel up with like a beautiful designs
and it seamlessly integrates with our
email product and so that is an upsell
as well you just see like these loud men
in the space selling you say I want to
beat Nathan Barry can burit and now I
see Russell Brunson at clickfunnels I'm
gonna take it to him too huh is that
what happens
here uh with the going against king
verit or going up against no I'm I'm I'm
only half joking I mean what how did you
know that this I mean sequencing with
product launches is very important you
start with email how did you know that
the best next thing you should focus on
is sales
funnels our customers are requesting it
honestly like everything that we build
goes back to what people request and we
just released a public road map so
people can up vote and downvote but
we've always had a very strong arm
around places where people can submit
their user requests we also have a very
vocal community on Facebook where we can
get real time feedback from our users
about the pains that their experience
and what they're asking for so we never
build just for the sake of building or
for the sake of making extra money or
trying to have an upsell we build
because we are all about obsessing over
what our customers want from us and then
bringing as much value to them as
possible oh my gosh Rebecca your pricing
page on this is so funny it says I'm
like I'm G to catch her on something
here I'm going to find how she upsells
and it says stop getting penalized for
growing your list and it has one of
those draggers those of you listenting
in your car it has one of those draggers
right like how many subscribers do you
have and I'm expecting like the flow
desk price to go up as I like drag the
number of subscribers up to 100,000 the
left side says flowes email marketing 35
bucks a month the right side said it's
everybody else and I drag the dragger
from 5K on my list up to 100,000
everybody else goes up to $700 per month
Rebecca and fles stay at $35 per month
this is like um this is like goes
against all conventional wisdom about
driving net dollar retention and all
this kind of
stuff yeah I mean you would think but
then I also think that there's the
Netflix model right which we were sort
of inspired by which is something where
it's like brings so much value and
especially like at the $9 month back
when Netflix had uh a little bit of a
different model that we are like we want
to make the price so unbeatable and so
enticing and have like the most
accessible possible model ever that
people can't say no to flowes desk it's
like if it's super simple to use it's
more beautiful than the other Solutions
out there and the pricing can't be beat
like how could we lose so that was sort
of the bet we made and I think it was
very resonant for these small business
owners too who struggling right like you
think about someone who has like a small
bakery in San Francisco and they're
waking up at 4:00 in the morning to make
croissants and they don't want to have
to worry about their email they want to
be able to make money and send a
communication to their customer when it
matters without a lot of friction and on
top of that we don't want them stressing
about all the stuff that it takes to
build a small business and then thinking
well if I'm successful and I get more
subscribers then I'm going to have to
get charged more as well by my email
Subscription Service like that's just
just it it makes logical sense yeah
Rebecca I just real I totally lost track
of time I'm like so into this uh do you
have a couple more when's your hard stop
how much time do we have yeah absolutely
let's keep going okay you have who
designed your on I'm just I just
onboarded because I was curious what
your onboarding flow looks like most
onboarding tools there's nine million
buttons to check you can only really do
one thing to your onboarding I click
check out I click sign up it says
welcome to the template Library checkout
is selected on the left and then the
first thing it says sell a digital
product with a big pink design I
scrolled down and it says open a
registration for an event or sell a
course like you've clearly sort of
intentionally restricted what the
options are on the onboarding flow
because you know your audience so well
how important is that for your
activation rates oh my goodness I think
it's critical right because I mean we we
talk about onboarding a lot and my take
on it is why would you put anything
between your user and the aha moment and
we know that the aha moment for our
customers was when they see a template
that resonates with their brand and
speaks to the youth case that they're
trying to solve for so so why would we
put anything in between that moment
where they sign up and the experience of
realizing that this is a tool that
understands
that this is so cool let's talk a little
bit more about people and scale so you
mentioned you some paid spend how much
do you spend per month on paid about do
you know oh I think we spend around 700k
a quarter okay 700k a quarter and do you
do this in-house or is there an agency
that you really trust that handles most
this for you we're working with an
agency well we we have a we we have a
growth team but we also work with an
agency I can't say how many how many
agencies did you go through before you
got to the one that you're on today and
what question would you recommend
someone listening if they're going to
spend 20 grand a month on ads how should
they quickly get to the right Agency for
them what question should they ask
oo I think that it's really important to
have an agency that we went through
several and I think but it's it wasn't
because they weren't good or it was just
that we needed different things at
different stages and so I think when
you're a larger company you're going to
look for an agency that is able to bring
you a lot of data have like strong
account managers that are um they're
able to set up a lot of systems for you
and work cross functionally with your
team and also be able to understand your
market and almost and and go broad but
then F tune because a lot of times as
you get to a more mature stage with your
ads you have a lot of think creative
you've tested already and then uh and
then you want
an and then you want an agency that can
help you to fine-tune um what that
creative looks like and go after target
audience um but in the early stages I
think it's really important to find an
agency that's just going to get you off
the ground with testing and throwing a
lot of tomatoes on the wall and seeing
what sticks and not worrying about
optimization because at the very
beginning you just want to know if you
have a viable product who your audience
is who it's going to speak to and if you
have an agency that's like really large
and super detail oriented and able to go
in and refine um the the the way the
audiences are built out in the creative
then that's probably too heavy-handed
for for a company just getting off the
ground but I do recommend working with
an agency if you're GNA spend that kind
of money because otherwise it's very W
are there any websites you recommend
people can go to to find an agency like
did you use f or and hire eight agencies
and give them a test and see who worked
and then hire the one that work well or
how did you what was your
process um I think that we went with
recommendations and that's my
recommendation to the audience as well
to go with the recommendations that uh
that that people are in especially in
your space to like try to find an agency
that specializes in the audience that
you know as your target market so for us
it's really important to have an agency
that understands the small business
customer segment because they behave so
differently from larger companies they
also behave very differently from uh
from consumers yep talk to me real quick
on team how many folks are full-time
today uh right around 50 okay this is C
five Zer are
full-time yes it's just wild to me how
many Freel do you how many how many
contractors do you pay at least a dollar
per
month oh I think it really depends month
to month but probably in the five to 10
reach that's just this is just wild to
me 27 million divided 50 is $540,000 of
Revenue per employee it's insane saying
what are you doing with all the profits
every month do you take it out or do you
reinvest it you just let it build up in
the bank account put it in treasuries I
mean what do you do we reinvest and uh
right now we're we want to make sure
since we are bootstrapped that we have a
strong cash cushion so that if anything
were to happen not I hope that it
doesn't but that we we create a long
runway for ourselves in case uh yeah
because we just feel like we don't we
don't have that um you know like a lot
of companies have a they feel like they
have a cushion with the VC backing and
we don't have that so we want to make
sure that um if something crazy happened
or something changed with the industry
or we had to make a complete pivot that
we have the resources to retain our team
and make sure that we do the right thing
to ensure the survival of the company
are you have you bought any companies
would you consider I'm an inorganic
growth in the future
m&a um I we have not and I think if an
opportunity presented itself for us to
find a company that did something very
specific that we wanted to integrate
into our company and the financial
numbers made sense and even more
importantly the people side of it made
sense I think we would consider it but
none of those opportunities have have
Arisen for us so far yeah are you
comfortable sharing how profitable you
are per month are we taking like 20% to
the bottom line
50% uh I'm not exactly sure but we are
very
profitable good that's a great answer
we're so profitable I don't even look at
it every month I just know we're
printing money uh we are very profitable
what's the largest acquisition offer
you've turned
down oh my goodness we you know what
we've been very um we've been very
disciplined about not entertaining the
offers um that have come so far just
because they haven't made sense for us
not even and we have so we've never even
gotten to the point where we've had the
discussions about um the and getting
into the weeds of the finances because
we just really believe in the mission
and the vision um that we are building
and we still feel that we have a ton
left on the table and so an acquisition
doesn't really make sense for us at this
point we want to remain independent and
keep serving our customers love that
love that um you don't have quota caring
reps at this price point right no
AES what is that yeah you don't have
like a an account executive you hire and
say your job is to go sell 10 customers
$1,000 per year plans and you get an x%
commission yeah no we don't have a sales
team it's all completely self-served
yeah I love that so how many of the 5050
would you say are
engineering um I believe we have a like
right around 20 Engineers give or take
yeah that's that's wild I mean this is
interesting okay is there any I look I I
see so much of this sometimes I Fall In
The Trap of asking the same questions
every founder but when you then meet a
unique founder you forget to ask the
unique thing so like is there something
that I haven't asked that you know has
been critical to your success that you
want to touch
on well I think we've touched on it but
I just wanted to say like I think
there's the sort of like the Silicon
Valley founder space and the SAS space
and there's a lot of data and numbers
but the truth is that I think success
comes when you build an amazing product
that people love and the SAS portion of
it is is just sort of your monetization
strategy and it's it's like when it you
know you build something in a
subscription model makes sense but at
the very core of what we do we listen to
the customers we spend a massive amount
of time with them we had a vision and
practically a product before we touched
the line of code and then everything
came Downstream from that and you just I
don't think that's a very common thing
to hear um in the SAS space but I think
it's critical that's that's like how you
create something that's truly valuable
to people that you want to pay for and
no matter how you try to tweak numbers
and Shuffle around data like if you
don't have that one core piece a product
that people love and that really solves
a pain then none of the other stuff
matters how much of your 880,000 paying
customers do you think pay you because
they love and respect your story and
they and they want to be like you and
they want to be in your orbit and in
your community and at your events versus
they just believe that you know your
technology allows them to create a blue
button with a certain border color and
drag it and left align it like the
technology of the whsy wig Builder that
you built is better than everybody else
so Community versus better Tech what's
the bigger
poll oh I think think it's honestly I
think it's both I think we have a lot of
um female small business owner members
and so I think um our founder story
resonates with them especially the
bootstrap piece because a lot of the
small businesses that use us love to see
that we didn't take funding they're not
able to take funding and so we've kind
of been like why should we take funding
when our customers don't have access to
the same thing it's like we really
relate to them and then I do think we
have an amazing product like we did
something that no one else figured out
which is how to make these beautiful
visual emails that allow small business
owners to keep in the in box with the
bigname brands with resources that they
don't have like most you know if you
take a company like anthropology they
have a million-- dooll marketing team
and uh small business owners don't have
access to resources to be able to do
that so we've been able to do that make
it really easy for them and I think like
that's a huge I think that's like a
larger and larger component of it
because at the beginning it was
community-led and a lot of the people
that were signing up and early members
knew us or knew us through the Great
Vine or we're friends of friends but at
this point our user base is getting so
large that a lot of them are sort of in
the outer spheres of our community and
breaking into new bubbles so they don't
even know our founder story sorry a lot
of words that's great do you get
depressed when when a logo cancels how
many people how many logos canceled in
April uh a logos yeah like a customer
how many customers canceled and how do
you how do how do manage you care deeply
about your community how do you manage
like not getting depressed every time
you see it $38 per month account cancel
oh I just muted the slack
channel that wasn't the answer I was
expecting okay so you just muted the
SL that's hysterical no no but um at
this point obviously like we have very
low turn rates um what is it 2% a month
I knew you're gonna ask me yeah
something I think it hovers around that
yes um but you know at scale obviously
when you're talking about 80 to 100
thousand people on the platform that's
not a small number per day but I think
actually um as much as I I was kind of
half joking about the sock Channel um I
think it takes a it takes a lot of
courage to go and talk to those people
and understand why they're turning and
so that's something that we we've built
a really strong muscle around is
capturing exit data on you know when we
survey them when they turn and also
having um our user experience resarch go
and speak to these members and do a lot
of children studies so that we really
understand the reason that they're
leaving and try to uh address the issues
that they're bringing up like like
literally everything we do at the
company goes back to listening to our
customers including the ones we leave so
I guess um the the high level is like do
I get depressed no because it's just I
think it's part of the business um and I
also see it as an opportunity for us to
improve and how aggressive are you on
the CAC side for the paid marketing Stu
stuff or are you willing to spend 3
months of fees to acquire the customer
upfront or what do you like to optimize
for there what would make you
uncomfortable in terms of payback
period I believe that we like to
optimize for nine months um but I'm not
totally sure because I'm not I I don't
run that part of the business yeah yeah
yep yep y but but if that was the metric
38 bucks a month time 9 is
$342 is what you'd spend to acquire that
customer and then they stick obviously
longer than that because your monthly
turn is only two months so the math
obviously works there but that's
obviously super exciting and all these
strategies feed each other um very cool
let's wrap up here with the famous 5 we
went way over but it's rare you get a
great story like this so thanks for
indulging me actually Rebecca I forgot
what year did you pass a million Revenue
do you
remember oh
20 2020 like I think January like six
months after we launched okay and do you
remember what you finished the year
after that at 2021
I remember like the 10 million number I
think that was in the 10 range you went
from one to 1 to 10 in your first 18
months yes that's really freaking that's
crazy bootstrap you went wow 1 to 101 to
10 million of AR over the first 18
months that's powerful you think is that
right you think am I saying that right I
I think so or do I have a second to yeah
look look yeah you have you have a
dashboard take your time I'll make small
talk with the crew while they're you
know parking in their garage listening
to the finale of the episode and all
that jazz but um I'll summarize some
stuff just because I think guys some
unique takeaways here that you learned
from Rebecca so far I mean the fact that
she already pre-sold so much of this by
capturing demand through user interviews
back in 2017 and 2018 there just huge
Advantage like if you know you want to
get into software one day and you know
what customer you want to serve you're
already halfway there just start
interviewing them learning capture that
stuff and then eventually you know if
software is the way to solve their issue
you build a software product and you you
have a like Rebecca before you know it
um so that's a good a good takeaway
there Rebecca I'm also curious what what
dashboard you are loading right now do
you use any tools to measure uh M growth
yeah we use
recurly um but it I'm it's asking to
enter a lot of a
we I I actually wish my VP product were
here because um Leman she's absolutely
brilliant and she's the data geek around
here and we have a lot of different
tools to measure um but the one that we
started with at the very beginning was
re curly and they are um a payment
processor for SAS companies and I really
enjoy their analytics because they make
it easy to look up metrics while you're
on a podcast
so that's awesome well it's nice I mean
you have competitors in the space that
publish a lot of their stuff uh
privately so it's kind of I mean
publicly so it's kind of cool I imagine
yours are all private and you can sort
of go hey we're actually beating them
even though the world doesn't know about
it we're beating them
yeah and I mean I think we Martha and I
have been on a lot of podcasts in the
last few years so everything is sort of
out in public if you trace back our
steps um but pinpointing okay this is a
little bit mobile not optimized she's
zooming she's
zooming yeah years all right past
18 so looking at it
um it look looks
like let's see we hit yeah
one
so 1 million Mr would be 12 million AR
and we hit that right around uh
2021 yeah that's it that's it wow and
2020 was uh you finished uh at 83,000 of
Mr Right or right around there a million
run
rate uh in 2020 we had anaz 2020 we had
a lift from the pandemic it was a really
difficult year but in terms of our
growth
uh I'm not sure no that's this is so
great no it's great look it's a you get
the idea a lot of growth here no outside
Capital it's really impressive so
Rebecca thanks for taking time let's
wrap up here with the famous five number
one your favorite Business
book
oo I have so many
um actually I'll name one that I
recently read it's called surrounded by
idiots um and I really enjoy it because
it teaches you uh different
communication Styles and how to work
within an organization which is a skill
that I've been working on a lot myself
number two is there a CEO you're
following or
studying um I've always been obsessed
with Steve Jobs I think he's absolutely
brilliant like I read the book um and
I'm always looking up more anecdotes and
quotes and videos about him I know that
he's passed away but I just think his
philosophies on design and Tech the
intersection of design and Technology
wildly inspiring in any era besides
recurly what is one of your favorite
online tools that maybe you pay a lot of
money for inside of a
flowes oh I love figma I mean I think we
live in it as a designer it makes
collaboration so easy and it's it's sort
of like it's so ubiquitous to our
process I don't even notice that we use
it it's wild just always there it's wild
how many you can build flows on that
thing that it looks like a real product
you can give demos it looks like a real
thing and no one knows there's no
there's no engineering there yet it's
amazing it's incredible anyone who's
starting a company in this day and age
has no idea how hard it was even eight
years ago to get your ideas out into the
world and test though yeah there's no
reason you can't pre-sell today when
you've got tools like figma we put it
that way yeah all right how many hours
of sleep number four how many hours of
sleep do you get every night I make sure
to get at least eight that's great and
situation married single kiddos are you
comfortable sharing yeah I'm married um
no kids yet but uh hopefully
eventually hopefully one day that'll be
good and Rebecca are you comfortable
sharing how old you are yes I turn 39
next week let's go happy early birthday
last uh last question something you wish
you knew uh when back when you were 20
years
old oh that's a good one
um there's so
many I think getting into Tech sooner
actually I know that sounds a little bit
crazy but uh I've always been uh on
computers but Just Having the courage I
think to jump into the tech space and
start a tech company sooner um would
have been like if I could older me went
back to 20-year-old me and said that I
think I would uh I would have
appreciated that advice guys there have
it from Rebecca uh flow desks makes
email marketing easy as pie from 2011 to
2014 she was selling MailChimp templates
doing $400 $500,000 per year ultimately
canva and other tools came in and so
template stopped selling as well but she
still had a great built-in base that
said hey we'd love to build you know
this inside of MailChimp and make the
flows easier that prompted her to start
going and interviewing folks from her
audience pairing up with a team at
honeybook and eventually launching the
three co-founders put in $90,000 total
uh back on launch date before they
launched their first paid plan at 19 uh
bucks per month they eventually got
going and today over 30% of their
inbound is powered by affiliate
marketing and Word of Mouth marketing
they have over 880,000 p customers
Revenue run rate today is about 27
million bucks up from 20 million just a
year ago and their $10 million a year
was back in 2021 which they hit just
it's crazy 18 19 months after launch all
here's a cherry on top with no outside
funding and just 50 full-time employees
for $540,000 of Revenue per employee
check it out flowes do.com Rebecca thank
you for taking us to the top thank you
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