The SaaS Podcast
How a Marketer Turned His Own Pain Into a 7-Figure SaaS Business – Rick Perreault 
How a Marketer Turned His Own Pain Into a 7-Figure SaaS Business
Rick Perreault is the co-founder and CEO of Unbounce, a software platform that enables marketers to create, publish, and test landing pages. The company was founded in 2009 and is based in Vancouver, Canada.
Key Talking Points
- How Rick came up with the idea for Unbounce and how he convinced 5 of his buddies to join him on this journey.
- How Rick did customer development to validate his business idea before he even knew it was called customer development.
- How being non-technical turned out NOT to be a weakness and why Rick believes it actually helped him be successful.
- Why Rick feels they should have said no to a lot more ‘exciting' opportunities for the years.
- Why charging more for their product resulted in a lot fewer customers but a lot more revenue.
- How it took Unbounce 5 years to go from zero revenue to over $7.2 million in revenue this year.
Host: Omer Khan
Guest: Rick Perrault
This is the ConversionAid podcast, Episode 25. Welcome to the ConversionAid podcast, where we help software entrepreneurs to take their business to the next level. Each week we interview proven industry experts who share their strategies and insights to help you create software that sells. Here is you host, Omer Khan.
Omer: Hey everyone, welcome to the ConversionAid podcast. I am your host, Omer Khan and this is the podcast for software entrepreneurs and companies who want to grow their business to the next level and create software that sells. Today's interview is with Rick Perrault. Rick is the co-founder and CEO of Unbounce, a software platform that enables marketers to create, publish and test landing pages. The company was founded in 2009 and is based in Vancouver, Canada. Now Rick is a first time entrepreneur, who took a pain that he was having as a marketer with landing pages and decided to go, solve that problem for himself.
We talk about how Rick did customer development to validate his business idea, well before most people even knew what customer development was and we also talk about how being non-technical actually turned out to be an asset for Rick and how it helped him to be more successful in building the business. Unbounce has gone from zero revenue to over 7.2 Million dollars this year and we talk how he and his co-founders took that journey and why charging more for their product was one of the smartest decisions they ever made. With that, let us bring on Rick. Rick, welcome to the show.
Rick: Thank you Omer. Thanks for having me.
Omer: Now before we talk about Unbounce, tell me a little bit more about you personally. Who is Rick, when he is not working?
Rick: Who is Rick when he is not working? I think I am still an entrepreneur, but I spend my time in a garden, trying to grow the perfect tomato! So when I am…and it also asked me to still think about Unbounce, but just…yeah, getting my hands dirty, so it is something my wife and I like to do.
Omer: Have you found that perfect tomato yet?
Rick: No, I'm still working on that.
Rick: You know, growing tomatoes is actually quite hard!
Omer: I've no idea about that. [Laughter] Okay, now before we dive into more details, we would like to kick things off with a success quote to better understand what drives and motivates our guests. What is one of your favorite quotes?
Rick: You know, I worked for a gentleman that…his office was pretty spartan and he had, on his white board, for use, the three or four years that I worked for him, he had the words, “Unrelenting Razor Focus” and that was a reminder to him every day to just stay focused on what was really important and that was actually the only thing I ever saw in his white board and that was something that stuck with me, as I moved on in my career afterwards; is, you know, to really kind of stay really focused on what was really important and I think that's, to some degrees, has been really helpful during my journey at Unbounce.
Omer: So let us start by giving our listeners a better understanding of Unbounce. Who are your target customers and what are the pain-points that you are trying to solve?
Rick: I am the target customer. In fact, that's how we got to where we are today. Back in, you know, I had the privilege early on in my career working with some really smart marketers who realized or who knew that if we would send targeted traffic to a landing page, a dedicated landing page as opposed to just some generic web page, generally your home page, your conversion rates would be much higher. Unfortunately, those were back in the days and to some degree, that is still the case today, where the website was not the domain of marketing. It was controlled by the IT web developers and so, as a marketer, we would have to go outside our department to get landing pages made for campaigns and you know, go work with a IT department.
So I am sure you can appreciate how challenging that would be because IT works much much differently than marketing does and so that was actually something I saw time and time again everywhere I went and at one point, I realized, I just need this tool that does, drag and drop, adding image, add some tags, add my ‘Call-To-Action' and boom, publish it live! Don't have to talk to anybody; something as easy to use as MailChimp or WordPress. Yeah, I just…it needed to be simple. And that was really the pain I had and were unable to solve. When I went out to solve it, I thought there must have been a solution out there, so I reached out to my marketing peers that I had worked with at some point or I knew and now also the same story.
It's like, “Now, it's just been pain-point,” and then, “We haven't found anything; we got to work with developers or we hire an agency and it is really expensive.” So I just got this same story over and over and over and when I looked out at the market place, the only thing that…there were pieces in the enterprise market or enterprise CMS that solved a little bit of what I was trying to achieve. But you know, any company that doesn't have their pricing page on the website is probably well out of range of what we were looking for. And hence, that is really where the idea for Unbounce came about.
Omer: You know, I am so tired of people asking me what landing page software they should use. Tell me why people should pick Unbounce over the other options that are out there?
Rick: I think flexibility, you know; certainly, when we went out to build Unbounce, one of the things, the pains we had or I had early on was actually I really wanted something…I am actually a Designer by trade, so it was really important to me that I had the flexibility to build something really beautiful, create something right from scratch, if need be; not working with a rigid template system, but something like a blank canvas and then create something that really matched our brand. And now, that was actually something that was…you know, we started with that premise and that's actually something that's I think separated us to some degree from a lot of the companies that you would see, that are out there today. But I think more importantly, I think something that we have done is really well is, actually focusing on building a kind of this really good, holistic experience and not just with the software, but with our support and our educational material, every touch point with Unbounce
You know, we really strive to make that a really delightful experience and we've invested a lot in our customer success team that, if anybody who is listening, that is an Unbounce customer, who've ever had to get support can testify that our team is definitely very fast turnaround, full support and very helpful, you know. So that is, this is the complete package I think, is something we've invested in and I think that is definitely a success apart from a lot of solutions that are out there.
Omer: So what were you doing when you came up with this idea or had this need for this software?
Rick: Working in a marketing department, needing landing pages, yeah, working on, I spent…prior to Unbounce, I worked in-house mostly for other marketing teams, generally more on the creative, the web aspect, the creative side, so responsible for the design and the performance of landing pages websites and generally, you know, the overall creative direction of a campaign. I worked my way up through the, kind of, design field into creative director position and that is what I had done for a long time and that is what I had the need and had worked with people who were actually really really smart and were…realized that landing pages just worked really well, so that is really how I came through here. I've never been an entrepreneur before; this is actually a…I had a need, went on to solve it, that is really what, how I got to where we are today.
Omer: So what happened? Were you…? You know, you've got this idea, did you then say, “Okay, I am going to go and quit my job and…?”
Rick: Sure. Yeah, let me tell you a little bit about the story then. So actually it was almost exactly that. When I realized..So I guess that when I went out looking for a solution, I was doing consulting work for a company at the time, so it was…I was fortunate. At that moment in time, I wasn't positioned in this kind of, you know, I wasn't getting part of pay-roll, as part of company implied; I was actually working for myself as a consultant on this particular project and that was in early…that would have been in late 2008 and then by early 2009, I was at the point where I had realized that, you know, I talked to a dozen marketers and I knew. It was like, “Okay, I want to start here. They had this pain, they can't solve it,” and then I went out to do…I guess what we call today, “Customer Development” but before I went out, I was kind of, I had this hunch that I was on to something, but I really wanted to go and kind of really prove it to myself before I quit everything I was doing, making money, to actually try to get this thing built.
So I spent in early 2009 just doing. I remember using Facebook Ads, targeting marketing…in Facebook, the advertising platform, you could actually target ads for people who specific job title, so I came up with a survey and I, you know, the ads like ‘Do you have trouble making landing pages? Click here and learn,” like, you know? And I had a survey and I asked, I posted, I did see advertising built to survey and survey gives more. I remember I had 42 responses with people who actually gave me an email address or phone number to write them or call them, to discuss the pain they were having.
So I reached out, you know, I wanted to talk to people that weren't my network, like your friends and your family, will always say “Yeah, good idea, go do it,” but complete strangers? And that to me, that was some really good validation that this pain was quite universal, and I am with that. I started doing some research; realizing there wasn't much out there in the, kind of an SMB market. I looked at my strengths and I looked at the products that I did like and one of the things they had in common was the self-service model. I really liked that as opposed to building something that had a big sales team, trying to sell it. I had no experience there, so what we could capitalize on, you know, my design background and to focus on something that could be self-served and in the SMB market.
So that all kind of started to make sense and really started to pour together and on June 22nd of 2009, and after realizing that, I remember my apartment was just full of sticky notes on every wall, everything from what the product must look like, what it means to achieve, who we might bring in as early founders and I realized that this was going to be a pretty big project. So on June the 22nd, I had invited, what would become the future funding team to lunch and they were all guys I had worked with at some point or another in my career, all had a wide variety of skill sets and I pitched them the idea. And on August 14th, so about two months later, we were in my apartment, incorporating the company and writing our first lines of code and we put up our blog that day. They had all pretty much dropped everything they were doing and we went on this journey and that is where it all began.
Omer: How did you figure out using Facebook Ads to basically do the, sort of, customer development interviews? You know, this was before the whole kind of ‘Lean Startup' movement and so how did you figure this stuff out?
Rick: I don't know. You know, I might have said this to somebody, you know; I need to reach other marketers and somebody might have pointed to me, “Hey! Facebook allows you to run a advertising, where you can target people by job title,” and I was like, “Exactly what I need, thank you.” And I think that is how I probably went about it.
Omer: How much did it cost you to run those ads?
Rick: You know, I don't think it was very much. I get to ask that question…I have been asked that question before and I want to say was, “I might have spent a couple of hundred dollars. It really wasn't a lot of money to validate to get this…,” and I think I would…that plus the survey, in fact, I think even the survey gives numbers. SurveyMonkey I used; it was one of the other..I think I was able to use that for free, you know and I want to say I definitely spent less than $200.
Omer: And then so, once you had these email addresses, how did you, what did you ask these people?
Rick: Well, how did they go about getting landing pages made? Is landing pages important to them? So actually this is the survey, what I had this information, so I was pre-qualifying if people didn't think, marketers didn't think landing pages were important and didn't use them, you know; I think I asked them why, but I was really interested in the ones that said, “We know they are important, but they are really expensive or time-consuming to get done and our IT department is uncooperative and …,” you know, just… So then I reached in, I wanted to just see what they were looking for, and I hear the story. I would get on the phone or I will get an email, I'll just…and it all said, “All we need is the smooth tool we could use.”
So I was looking for people who actually, really understood that they were leaving money on the table, by not using landing pages and you know, felt that pain. So I really wanted to understand what a solution looked like for them and actually I want to validate whether the pain was real. There is no point of going out and quitting a job and going down this path of building something, if the pain isn't really universal. So that was confirming the pain was real, for everyone who kind of…everyone like me, marketers and who are doing online advertising, they are definitely…there was a real measurable amount of pain.
Omer: You see most people, or I would say most geeks would've probably gone out and spent 6 to 12 months building something, and then gone out and may be talked to somebody, right? Or may be put up a landing page and…[Laughter]
Rick: You know, and I get asked that too and I think the reason…I am not a developer. So in order for me to…I actually had to go viral and I had to find a way to validate this. Well, I couldn't prototype it and I couldn't get…, you know, I am not going to get some really smart people to spend some time on this if there is no validation whatsoever. So I really needed to go out and find a way to validate this without building something, because I am not a developer. So that was my approach, was to get feedback from other marketers, who were eventually our target market and yeah.
Omer: Okay. So you got together with these co-founders, the guys who became your co-founders, and pitched this idea to them. Did you have a clear idea of what that product should look like or were you still at the stage of,” There is an opportunity here; people are telling me they need something.”
Rick: I had a fuzzy idea. Yeah, I kind of had an idea, like I said, I started this thing, I needed something that was self-service, that it would be easy to use for someone like me, so it couldn't require any coding or it really needed to be as easy to use as PowerPoint and that is what we kind of…that was the kind of a mandate, and then when you got to build a landing page, when you look, most landing pages looked like in one of the elements, so you needed to have the ability to put some imagery, need to have the ability to have some big headlines and needed the buttons and clicks, it needed Forms, though the very first version of Unbounce didn't even have Forms! The one we …first version like the market plan, but you know, I knew that these things would be required, so there was…yeah, we kind of had an idea, but we…that was about as far as it went.
One of the things that I'll say early on was can you imagine Unbounce today without A/B testing? I mean…but early on, the first version, that wasn't the pain we would know, actually the first version. When I did the customer development, it was, in my head, it was…well, what we do is, we'll build this builder and then we'll integrate with the Google Website Uplauncher, which is free and marketers can use that. So the idea of actually building A/B testing into Unbounce didn't actually come about until we…I think actually we might have already started building it, when I started getting feedback from marketers, saying actually visual website optimizer really really hard to use and we need to go on developers to use it, so therefore defeats the whole purpose. So we…yeah, you know, it definitely evolved a bit, but we understood we needed to solve this pain, mutable in a way that would be self-service and high-tech, had certain key elements to it, but what are…I didn't have the whole product sketch stowed in wire frames, I guess is what I am trying to say.
Omer: How did you go about building the first version of the product? Did you, you know, did you bring on people who could do that kind of work or did you have to ply developers?
Rick: Yeah, the founding team, there were 6 of us in total – three engineers, and one of the other partners looked after kind of the operations of the business; one looked after…and then all like who looked after, as I said, the day we found the company, we put up our blog, you know. You can talk a little bit about that, why we did that, but yes, we had three engineers focused on three different areas of product and one who is our CTO today, looked after the platform that tests will all sit on; one of the engineers focused on the application environment and one focused on the ad which included the A/B testing engine and one focused on the, you know, the WYSISYG drag and drop adder. And yeah, that's really worked on this. We went from, I guess, founding the company in August of 2009 to early 2010, we had a really rough beta that people could actually go in, add-in image, edit some text, and put a button.
Omer: Were you guys over-working on the business full time, during that period?
Omer: So how are you funding the business?
Rick: Credit cards, bank accounts, yeah, and we boot-strapped it; until early 2010, we raised some…once we actually had a…I think we were in beta or we were either in beta or just about to launch and we raised kind of like some friends and family, former colleagues. We had all pooled some capital together and that got us from, I guess, a launch to some sort of profitable, self-sustaining… and then soon after we raised a small venture loan with a Syndicate of investors.
Omer: So it's, you know, Eric Ries could do a case study on you guys, right? Just in terms of sort of like a text book case study on how to go and do customer development, customer validation.
Rick: We certainly…yeah, I mean, we did, it was fine. I read the…reading ‘The Lean startup' and actually I have had the opportunity to meet Eric and talk a bit and so much about that book, reading it was, “Hey! That is what we…we are doing that.” We didn't really know we were doing; we just, you know, the thing was, it's like…again, I think it goes back to the fact that I wasn't a developer and I needed a way to validate these ideas and the pain without actually building something. And then, when it came to building something, we knew we had to get something to market really quick, because we didn't have a lot of capital; we didn't have a lot of it right away; there is no…you know, line of credits only go so far and we really needed to get some out to market and really start generating revenue really quick and I don't ask for ex-Google; it's not like we…you know, this was only the first time we've done this, so we didn't have any…didn't even know what a VC was! Seriously!
I mean, the whole idea of raising venture capital, I mean, up especially here in Vancouver, it's not like we've grown up in this environment where, “Oh, you've come up with this great idea and you go talk to this firm or that firm,” or if you are lucky enough to…you know, have achieved success previously, it's a lot easier, and that was…came from that, so we just knew we have to, that we couldn't risk or afford building anything that wouldn't be valuable. So we worked with our customers actually, really early on in the beta and it was clunky; there was no way that, in a lot of ways not usable, but then in over a few weeks, customers, “Hey, I am going to run a campaign,” or “Is that okay?” and then, “Yeah, yeah”; actually, they weren't even customers yet, because they weren't paying. And yeah, I think it was at some point in, during summer of 2010, one of our users said, “You know what? I pay for this at this point.” And it was like, “Boom!” Pricing page went up! [Laughter] Then Recurly and we went, and I think in our first month, we had 4 paying customers.
Omer: This was back in when? 2010?
Rick: That was in 2010.
Omer: Okay. So looking back at those early days, what do you think was one of the biggest mistakes that you've made?
Rick: Trying to do too much; trying to be a bit of everything to everybody. Let me elaborate a bit. And this goes back to ‘Unrelenting Razor Focus.' In the early day actually, when I originally envisioned Unbounce, I would say, you know, “Unbounce will be a $100 a month. Marketers, you know, they will put a credit card down, pay for it,” but when we actually came out with the product, when we were kind of live, it was like the pricing at the last minute was like, “No, no, we need cheaper pricing,” and you know, then we had a $10 plan, a $25 plan, all that, so we were…And then marketing page, if you just need to get a webpage up, you can use Unbounce; it'll cost you 10 bucks a month. So there was a bit of that, definitely on that end, but equally as important, we stopped a lot of cycles to take on, you know, koral phones us up or a bigger brand. “Hey, we like what you are doing, but if we had this, this and this,” or “If you build some landing pages for us, we'll pay you,” and that, you know, from these bigger companies and so all this stuff is attractive early on, but it really is just a… I would like to say an attractive distraction, from what you are really trying to do, and we fumbled about for about a year, taking calls from big companies and realizing at some…yeah, taking calls from big companies and having meetings. “Well, if we only built this feature, we can get this company and may be we could just hire a sales person who is good at developing.” You know, just a waste of time.
And then on the low end, you know, we get people who would phone us up, and you know, phone us up six times because they don't know how to use the computer, but they know they need a webpage and we finally get them there and then it's like, “Well, they need help with marketing,” and then they churn two months later. When we, at some point, start taking calls from enterprise companies or you know, having that knee-jerk reaction there and say, “No, you could be on-board same way as everybody else,” and when we dumped our $10 and $25 plans, and really stayed focused on the marketer, the business just started to improve. Revenue took off actually, and then from a functionality point of view, a lot of the people who wanted, you know, paying us $10 a month, they wanted us to integrate with Facebook, while customers who were paying us a $100 wanted us to integrate with Adwords. Well! [Laughter]
So you get a lot of…you really got to focus on, you know. You pick your persona or your profile of your ideal customer and go after him, and don't get distracted by the bottom of the market or the top of the market or some place that you can't do everything and we still can't do; we still can't do everything. If the needs of somebody, the enterprise, somebody who is calling you up, and you know, want some of your attention, their needs are going to be probably a lot different than somebody who just needs one webpage and is willing to pay 10$ a month and they are going to have different needs and you can't satisfy both, so you really got to pick your…
Omer: So give me one example of a particular situation where you guys kind of may be pursued an opportunity and then in hindsight, looked back and said, “Well, that was a waste of time!”
Rick: A $25 price plan! We had it for years; we had it probably for the first, I guess, 2010 to 2011. Early 2012, we actually got cohort analysis. Here was another thing and then someone realized, on average, a $25 price plans churn after 4 months, so they pay us about a $100 on average. It costs us a $150 to acquire a customer, and it was like a light bulb went off, just like, “Take that pricing off right now,” and we did! We just…the metrics and then, you know, we just, “It all works,” like the math starts to work out after a while, so definitely not measuring and holding to our belief that if it's…we would see lot of volume on the $25 price plans, you know, we get dozens of trial starts every day and many of those are turning into customers. So we just saw this volume, but we actually didn't do the analysis, you know, who is actually sticking with us?
So today, it's like we were really kind of focused at that professional marketer; they are paying us a $100 to $200 a month, they have low churn rates, they are with us for a long time, and the question is, when they do call us, they are actually really, you know, they are really challenging us to kind of really push the limits of the product and…yeah. So we really stayed…that was definitely one area that was a mistake.
And likewise on the other side, we spend some time with…you know, we used to spend time with big, big brands and call and say, “Listen, we want to speak with your CEO and CTO,” and you know you would have three calls with them, they would want to do NDAs and it is just, but then they never adopt. And today, what we found, looking back at all that, that was a waste of time. But today, we treat everyone the same. So if big enterprise, Fortune 500 Company calls us up, we tell them, “Listen, you know, we don't sign NDAs. You can't talk to the CEO, because that doesn't…is not going to work. We are just not equipped for that.” So nine times out of ten, they sign up anyway and use the product, just like everybody else and that is what we want.
Omer: That is interesting. So you had a lower price point plan because you thought that that would attract more customers, and when you took that away and charged more for the product, you had people actually sticking around for longer…
Rick: The revenue went up!
Omer: The revenue went up, and presumably that was because the price point was doing a better job at targeting the people that you really wanted to attract towards this product.
Rick: That is correct. So even though the volume of accounts went down a little, the value per customer went up. So I am going to say probably around the time when we made the switch and dumped the sub $50 plans, and even today, we kind of really focus that $50 a month plan, towards kind of startups or early stage companies, but sub…we dropped all those plans. I think our average revenue per customer per month was sitting at around $30. Today it's around $80!
Rick: So the value of the customer has increased significantly and what is important though, I would ask from a support or success team, we realized when we had had a hard time scaling this team, because it costs so much to give this support to these lower plans, and we want to give a great experience. We are trying to build a great brand, and you can't do that by not providing great support, so by eliminating those plans, thus eliminating a big portion of our support burden, our team was now able to go from moving from being reactive to actually being proactive. And now actually, the team is now divided into four key areas in educating and on-boarding and technical support and they do a much better job today than they would ever had been able to. We are able to afford to offer some really great support today, because we just don't have the support burden that we had, when we had those little plans.
Omer: So you had this idea, you turn that venture into a product and then launched it as a paid product and you had your 4 paying customers in the first month. Let's talk a little bit about what you did to acquire more customers? I am interested in talking about may be one marketing strategy that you used which turned out to be pretty successful and let us talk about one which may be, you know, you looked in hindsight, was a waste of time or may be just was…was just too expensive for you to acquire customers that way.
Rick: Well, I'll start with that, Sales; a Sales team. So early on, you know, we had always been approached, “Hey, Hire me and I can sell this to bigger clients,” and again, that was a distraction, but it also didn't work because what the bigger clients always wanted was, you know, actually the Sale, we had actually heard, that you get a twice of what we hired somebody, brought somebody in our trial to do Sales, ” and I said, ” You know, we are going to open a…I am going to open my rolodex” and they came back and said, “Well, actually I can't sell this until you have this, this, this and this.” And in each scenario, every client was almost different. So for us, that was definitely not a channel.
What we did do very well though, one of the things that we recognized early on is that, we weren't entering a market. There was no landing page platform market that we were just coming into with a better or faster or different product, so we had to…how our customers are going to find this? It is not like they are looking or searching on Google for a landing page platform, you know, because they didn't exist. So what we did, they want as our blog and we figured the only way we're going to get really good, some good attraction is we got to get in:
A) We got to make it easy for customers or people who have this pain or are interested in A/B testing and landing pages and conversion rate optimization, we got to make it easy for them to find us.
B) We need to get people who are in this space, but far readers in this space, talking about us. We need to get them on-board; we need to build allies.
So we focused on the blog. In fact one of the first, one of the co-founder wasn't an engineer; was actually a marketer, who wrote and by the time, you know, in the first…even before we had Unbounce, the product came out, we probably had a hundred blog posts and really, we focused on quality. And so that people are actually reading this stuff, and say, “This is actually, really good,” and sharing it. And then…so today, that's actually still a high-quality, really…you know, just really good content is something we focused on.
So that we were involved for the blog, is where it started, but then it was the ebooks and you know, don't forget, most people still aren't on Twitter; they use emails, and that is something we learned that, asking somebody for an email address to download an ebook on, you know, “The Ultimate Guide to Whatever” and it works and if they are interested in a subject matter, you can send them a trial to come and take a look at your product, and there is a good chance they will be interested. So for us, it has always been around content. We've not had success around Sales, we've not had success with performance, so only kind of Paid Advertising. We've not been successful there though yet; just as we speak, we're actually trying yet again. It seems to come down to content and that is something that we've done really really well!
Omer: So let us talk about the Paid Advertising because I hear a lot of companies or start-ups talking about, you know, “The Paid Advertising route doesn't really work for us” and often I think it can be a question of, “Do they really have the expertise to be able to effectively run Paid Advertising campaigns?” Now, you're a marketer, right? So tell me a little bit more about, from your perspective, why that hasn't worked for you?
Rick: I think, for us, atleast today; we haven't found a way to make the cost work. We are just …and actually, interestingly enough, so we just ran a test campaign. Oh, what did they tell me? “I think we got one acquisition after spending about $1600!” You know, that's not really good ROI, especially like I said, right now, it costs us on an average about a $150 to acquire a customer, so we are way off here, and we've got somebody working on this stuff and what we did find before, that we are just restarting this again. We are determined to get in here and try, but what we did find the last time we did it, and once we eventually found, you know the right things that were working for us at the time and got cost of acquisition down, it wasn't actually even attracting really good customer.
Rick: Yeah, so for us, that is all I can say there. I don't know why that is, whereas I do know other businesses that actually are just killing it with, you know, advertising, Paid Advertising and that is one other largest channels that I get, you know, entrepreneurs coming to us quite often wanting, looking for advice on; they have grown their business today on some paid channels and now are looking to some kind of more softer channels like, say ‘Content Marketing' and are asking for some advice on that. So I don't know why we've never…it's never really worked for us; like I know, from a price point of view, it has never worked, but I don't know why it has been more expensive, significantly more expensive for us to actually really be competitive on the Paid Advertising piece.
Omer: Now one thing I also wanted to ask you was about starting a business with 6 co-founders. Now this is probably a question you've been asked before, you know. How did you guys make decision, right? It just seems like too many cooks in the kitchen!
Rick: There was some of that; there was… we all had some moments; it would have never worked, had we never worked together before, I guess I would say. I mean, every single one of us were connected somewhere. In fact, most of the team I had known for 10 years or more, so and we had a lot of, you know, we already had blow outs and big fights previously, so we are used to that. So that made things a lot easier, that's for sure. But that was challenging, you know. Sometimes I like to say the best thing is, starting the business, it was, the best thing about Unbounce is it had 6 co-founder and worst thing about Unbounce is that it had 6 co-founders! [Laughter]
But I'll say, there is no doubt in my mind that had we not taken the approach we did, you know, in bringing us all together to do this, we knew Unbounce would not be here today. It was such a big undertaking that was…that we just never had the capital or anything to …with higher bunch of people at the time. It really…yeah, it would have never worked, so it was…definitely a lot of challenges. It is…think of family life; it's brothers and sisters, it's family kind of thing, like that. But you get through it; you get through it and you try to do your best to make decisions that are in the best interests of the company or the 6 of us, in our case, in the early days…
Omer: At what point did you take on the CEO role?
Rick: I guess Day 1 was…yeah.
Omer: Okay. So you guys had already created some kind of structure and sort of like a decision-making, sort of framework as opposed to let us just … so that you make every decision.
Rick: Yeah, correct. I mean…, and sometimes you know, yes, we had the structure, we generally all had our expertise and our area focused, but that said, it didn't always, the working contentious issues that would come up, where, you know, the 6 of us would get together and people would want to vote. But we all have our strengths and weaknesses, and in the early days, we fumbled around that a little bit, but over time, we kind of, we found out what we were good at and where we actually had some really good, some valuable insights to bring to the table and in other areas, where we just learned to be quite on the issues, because yeah, so we just…It is not easy, but building a business isn't easy, no matter how you go about it. So we had our own unique set of challenges because it was 6 pretty opinionated co-founders! But I am sure the alternative would have been equally, if not, more challenging.
Omer: Okay Rick, so we started this conversation by talking about where the idea for Unbounce came from and then we've taken this journey together on how you guys turned that idea into a successful product. Let us talk about the business today. What sort of revenue are you guys doing?
Rick: We are doing about…so we ended October with about 7500 customers that generated 620,000 monthly recurring revenue in US dollars, so that works out to about an average revenue per customer of about 80$. We are growing that rate, you know, revenue is growing at about a 7%-8%; 7% a month, 6% – 7% a month, so depending on the quarter, we are getting close to the US Thanksgiving holiday season, so I think just start to slow down a bit. But we'll double this year; we doubled…we did better than double last year. Yeah, great! Margins were profitable! We are 76 employees today, across 2 offices; main office here in Vancouver, we are …about 68 of us here and then we have a Montreal office, where we have half our marketing team and so I think it was in…our East-Coast success team, so I think there is 8 in the Montreal office.
Omer: What is the one thing in your business that you are most excited about right now? What does the future of Unbounce look like in the next year or so?
Rick: You know what excites me right now, is the culture that we had created! It was one of the fears that we had and it's one of the…you know, when I talked to other entrepreneurs who are in businesses that are few heads or years ahead of us and I said, “You look back on that growth stage and what advice you have for me?” and one of the things that they almost unanimously said, “Just be careful of the culture. Just keep an eye on that; be careful how you grow; don't just throw bumps and seeds. Go the extra mile to make sure you had really special people and they will take care of the business.” And I think we've done that really well, in this last 18 months of…you know, 18 months ago, I think we were less than 20 employees, so we've grown really fast and we've had very very little churn in terms of employees and they are actually…they are shaping what Unbounce is going to be 18, 24 or 25, – you know, 3, 4 years from now. And that is what I actually…I am super-excited about that! It is what I love coming in to work and just watching the team work and grow the business.
Omer: It's time for our lightening round. I am going to ask you a series of questions and I would like you to answer them as quickly as you can. Are you ready?
Omer: Okay, what's the best piece of business advice that you ever received?
Rick: Treat company money like it's coming under your own pocket. So be frugal.
Omer: What book would you recommend to our audience and why?
Rick: Eric's “The Lean Startup”
Omer: What is one attribute or characteristic in your mind of a successful entrepreneur?
Rick: Create something that is really important to a lot of people; hopefully they can make money at it.
Omer: What is your favorite personal productivity tool or habit?
Rick: Sticky notes – if I can't get my idea down on one sticky, it's too complicated, so simplify it.
Omer: I love that one! If you had to start over tomorrow, how would you go about finding that next business opportunity?
Rick: Talk to your target market; you know, talk to future customers.
Omer: What's an interesting or fun fact about you that most people don't know?
Rick: Interesting or fun fact about me that most people don't know, I am a huge Start-Trek fan!
Omer: [Laughter] And finally, what is one of your most important passions, outside of your work and I think you may have already told me this.
Rick: Yeah. Gardening.
Omer: [Laughter] Awesome! Alright, great answers. Rick, I want to thank you for joining me today and sharing your experiences and insights. Thank you for letting us get to know you a little better personally as well! Now, if folks want to find out more about Unbounce, they can go to Unbounce.com. And if they want to get in touch with you, what is the best way for them to do that?
Rick: You can follow me on Twitter @rickperreault or you can send me an email: [rick AT Unbounce.com] ; so happy to chat.
Omer: Awesome! Rick, thanks again and I wish you continued success!
Rick: Alright, thanks Omer.
Omer: I hope you enjoyed that interview with Rick Perreault of Unbounce. You can get through the show notes for this episode by going to ConversionAid.com/25, where you'll find all the links and resources that we discussed today. If you'd like to get in touch with me, you can find me on Twitter @omerkhan or you can email me at: [omer AT conversionaid.com] and if you enjoyed the episode, then I really appreciate you taking a couple of minutes to submit a review on iTunes and subscribing to this show, if you haven't already done so; just go to ConversionAid.com/iTunes. Thanks for listening. Until next time, take care. ConversionAid.com/iTunes. Thanks for listening. Until next time, take care.
Transcription sponsored by Karooya – Negative Keywords Tool
- “Unrelenting laser focus.”
- “The Lean Startup” by Eric Ries