SMB SaaS <3% Churn, $5M Raised, $200k MRR Helping SMB's Manage Relationships with Hatchbuck CEO Don Breckenridge

don-breckenridge-jr

In Episode #449, Nathan talks to Don Breckenridge, a life-long entrepreneur and the founder of Hatchbuck. Listen as Don shares how he made Hatchbuck a successful company and the struggles he endured to bring it to life.

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Famous Five:

  • Favorite Book? – Good to Great
  • What CEO do you follow? – N/A
  • Favorite online tool? — Lean Canvas
  • Do you get 8 hours of sleep?— No
  • If you could let your 20 year old self know one thing, what would it be? – “I wish I had mentored earlier”

Time Stamped Show Notes:

  • 01:41 – Nathan introduces Don to the show
  • 02:00 – What is Hatchbuck and how it generates revenue
    • 02:05 – Sales and marketing software that helps small businesses grow their revenue
    • 02:11 – CRM + email marketing
  • 02:39 – Price point starts at $59 a month
    • 02:50 – Subscription model as recurring revenue
    • 02:55 – Discount for semi-annual and annual subscriptions
  • 03:17 – Price increase is based on number of users and contacts
  • 03:55 – Average revenue per customer per month
    • 04:10 – When customers see results, they’ll start to use more of the product
  • 04:23 – Launched in 2012
  • 04:40 – Don had a SaaS company prior to Hatchbuck
    • 05:10 – The business was running smoothly
    • 05:20 – Don saw the need for SMB apps that could actually help businesses
  • 06:04 – Number of current users
    • 06:20 – Average number of users per customers
  • 06:40 – First year revenue
  • 06:58 – Self-funded before raised capital
    • 07:10 – Raised over $5 million
  • 07:28 – Series A or series B
    • 07:45 – Their investors are great supporters
  • 08:18 – The market of SaaS is an attractive business to invest in
  • 08:30 – Under $2M revenue in 2015
  • 09:00 – MRR computation
  • 09:32 – Churn
    • 09:59 – Have a product customer fit
    • 10:16 – “We tried to focus on who our customer is”
  • 10:51 – Gross customer monthly churn
    • 11:15 – Around 3% churn
    • 11:34 – In SMB, there’s an average of 3-4% churn
    • 12:00 – Hubspot 0% revenue churn
    • 12:25 – Companies that has negative churn that are not MSB
  • 13:00 – Fully inbound marketing
    • 13:10 – Produce a lot of content on the web
  • 13:40 – CAC ratio
    • 13:50 – “If your MRR churn rate bounces around, it starts to be really difficult”
    • 14:25 – Healthy ratio
  • 14:44 – Lifetime value
  • 14:48 – Acquisition cost
  • 15:00 – Paid media
    • 15:10 – Marketing courses, Google Adwords
  • 15:29 – Don is based in Missouri
  • 15:34 – Team size is 30
    • 15:40 – Some remote employees
  • 15:55 – The $5 million funding
    • 16:06 – “We’re always raising funds”
  • 16:32 – Goal for the company
  • 17:10 – Monthly revenue growth
  • 17:35 – Connect with Don through Hatchbuck.com
  • 19:05 – The Famous Five

3 Key Points:

  1. Find a space to fill.
  2. Aim for positive results – that is what will make customers hold onto your product.
  3. It’s never too late to learn.

Resources Mentioned:

  • Toptal – Nathan found his development team using Toptal  for his new business Send Later. He was able to keep 100% equity and didn’t have to hire a co-founder due to quality of Toptal  developers.
  • Host Gator – The site Nathan uses to buy his domain names and hosting for cheapest price possible.
  • Freshbooks – The site Nathan uses to manage his invoices and accounts.
  • 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.
  • Hatchbuck.com – Don’s company
  • Show Notes provided by Mallard Creatives