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

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:

1. It takes time and patience to build a business, be sure that you're prepared for it.
2. Create your own solution to the problem and don't be surprised if you end up solving multiple problems along the way.
3. 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