Giving Up on $1MM+ Consulting Business For $1B+ SaaS Idea

Khalid Saleh

In Episode #277 Nathan interviews Khalid Saleh, co-author of the bestselling book Conversion Optimisation. Khalid’s an expert on conversion whose company, Invesp, has grown companies from tiny startups to giant powerhouses. Listen as Khalid and Nathan talk leaving a salaried job, turning a consulting business into an SaaS giant, and running a global fundraising round.

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Famous Five:

  • Favorite Book? – The Lean Startup
  • What CEO do you follow? — Alex Turnbull
  • What is your favorite online tool?— Evernote
  • Do you get 8 hours of sleep?— Hell, no!
  • If you could let your 20 year old self know one thing, what would it be?— That I need to be laser-focused. There’s opportunity everywhere – you just have to focus on it.

Time Stamped Show Notes:

  • 01:20 – Nathan’s introduction
  • 02:20 – Welcoming Khalid to the show
  • 02:35 – Invesp makes money by consulting on conversion optimisation
  • 03:00 – Companies pay a monthly retainer for ongoing optimisation services
  • 03:45 – Charge a minimum of $8,000 per month
  • 04:00 – Companies stay 15-24 months on average
  • 04:25 – Invesp was founded in 2006
  • 04:35 – Made around $15-20k in their first year
  • 05:00 – Khalid was 31 when he left his salaried job to launch Invesp
  • 05:20 – “An amazing employee but difficult to manage”
  • 05:40 – While working for Motorola, Khalid noticed the problem of conversion rates
  • 05:52 – Gave up a $200k salary as one of the top software architects in America
  • 06:30 – Khalid’s wife is one of his business partner
  • 07:00 – 4 partners in the company
  • 07:35 – Moving into providing a SaaS platform for conversion optimisation
  • 08:30 – Made close to $700k in 2014 – the year they decided to take fewer projects
  • 09:15 – “It’s been a gamble to focus on software development”
  • 09:30 – Initially wanted to make an AB testing platform…but decided to move into other products
  • 10:35 – Several companies are interested in funding – but many are asking for more equity than they want to give up
  • 11:01 – A VC in Russia was willing to give $1.5 million for 45% equity
  • 11:20 – “He said I could probably get the same offer for 25% in San Francisco…but it’s a different market in each country”
  • 11:55 – The SaaS business will be a product that’s offered by Invesp
  • 12:40 – Connect with Khaleed at the Invesp Blog or on twitter
  • 15:30 – The Famous Five

3 Key Points:

  1. If you want to expand, be willing to move sideways and think creatively about where your business can go. Consulting doesn’t scale the way SaaS can.
  2. Think very carefully about how much equity you’re willing to give up in a fundraising round.
  3. Interest means nothing without conversion. Optimising conversion rates for your business can boost your growth enormously.

Resources Mentioned:

  • Freshbooks – The site Nathan uses to manage his invoices and accounts.
  • Host Gator – The site Nathan uses to buy his domain names and hosting for cheapest price possible.
  • Leadpages – The drag and drop tool Nathan uses to quickly create his webinar landing pages which convert at 35%+
  • Audible – Nathan uses Audible when he’s driving from Austin to San Antonio (1.5 hour drive) to listen to audio books.