How Demio's Founders Overcame Their $100K SaaS Lesson
David Abrams is the co-founder of Demio, a webinar platform that helps businesses to engage, communicate and build relationships with their prospects and customers.
The company was founded in 2014, but it took them 2 years to develop the beta and launch. And so the product has been in market for about a year. The company is self-funded and based in Tampa, Florida.
This episode is a story about two guys who decided they were going to build their own webinar software. They spotted a gap in the market and believed their idea could succeed.
But neither of the founders were technical. So they hired a company to build the first version of their product. They spent almost $100,000 and ended up with a buggy and poor quality product which they had to throw away.
Having learned a very important lesson for $100,000, they decided to start again and this time did a much better job hiring the right developer and being more involved in the design and development of the product.
It took them a long time to get things right. Their product was in beta for 2 years. But in the end, the hard work and patience paid off. Currently, they're generating about $500,000 in annual revenue and are growing fast.
TranscriptClick to view transcript
00:11 Welcome to another episode of The SaaS Podcast. I'm your host Omer Khan
00:17 And this is the show where I interviewed proven founders and industry experts who share their strategies and insights to help you build launch and grow your SaaS business.
00:28 This week's interview is a story about two guys who decided that they were going to build their own webinar software. They spotted a gap in the market and believe that their idea could succeed. But neither of the founders were technical. So they hired a company to build the first version of their product. They spent almost a hundred thousand dollars and ended up with a buggy and poor quality product which they basically had to throw away. Having learned a very important lesson for a hundred thousand dollars they decided to start again and this time did a much better job hiring the right developer and being more involved in the design and development of the product. It took them a long time to get things right. Their product was in beta for two years. But in the end the hard work and patience paid off.
01:19 Currently they're generating about $500,000 in annual revenue and are growing fast. It's a great story and there are a number of valuable lessons in this interview so I hope you enjoy it. Before we get started if you want help to build, launch, or grow your software business then check out SaaS Club. It's a premium membership that I launched to help you get the insights, motivation and support you need to succeed. Registration for new members is closed right now but you can join the waitlist and I'll let you know when I start accepting new members again. Just go to SaaSClub.co to learn more and to join the waitlist. OK let's get on with the interview. Today's guest is the co-founder of Demio a webinar platform that helps businesses to engage, communicate and build relationships with their prospects and customers.
02:20 The company was founded in 2014 but it took the founders about two years to develop the beta and launch so the product has been in market for about a year. The company is self-funded and based in Tampa, Florida. So today I'd like to welcome David Abrams. David welcome to the show.
02:41 Hey thanks so much for having me. I'm excited to be here.
02:44 Now I want to start by getting inside your head a little bit. Just figure out what makes you tick. So what is it that gets you out of bed everyday to work on your business.
02:53 It's a great question there's a lot of stuff but I'm going to start with maybe maybe a quote is best. Sure. Well I have a quote from Chuck Palahniuk
that I absolutely love it says, “We all die. The goal isn't to live forever, the goal is to create something that will”.
03:08 And I think for me when I when I take a look at my life I really think about deep why and I really try to think about what it is that gets me out of bed. It's the idea of building something great.
03:18 Just being able to create something that will last longer than me and be able to impact the world. And I think that starts in Demio, I think Demio maybe a stepping stone in my life. That's kind of what gets me out of bed every day.
03:31 Nice. OK. So let's talk about Demio. I gave the audience a little bit of an overview of what the product is but in your own words tell us what you know who who are your target customers or target market and what's the problem you're trying to solve for them with Demio.
03:50 So I think for us we kind of have this weird split right now because when we started building Demio we had a target market but that target market has shifted and is going to shift again here very soon we're going to do a pricing change which will move us more up market.
04:05 And I think to kind of where our real Avatar is right now our avatar is mostly small to medium businesses and even a very small BSM biz, small businesses, solopreneurs a lot of those for the printers may be in the coaching or consulting or online marketing niche. And so that's kind of where we started. And the reason we started there was because of previous businesses that we had and ran into connections and network that we had grown with those businesses. So those businesses at kind of leveraged our relationship in the marketplace and once we're there we wanted to go and basically you know bring in customers since we went after those customers that demographic of customer base.
04:46 And then we ended up taking a look at where we are now and we said you know we really want to go a market and have a new avatar. But I think the problem that were solving remains the same. And that really is creating what we call a delightful webinar experience I think for most people running webinars there are technology that gives you video communication and stuff like that but at the end of the day what people want is a simple easy to use platform that's reliable that they can trust that their audience likes but it also helps them either convert leads into customers or retain customers reduce churn. Stuff like that.
05:19 Alright. So let's go back to 2014 or I guess even earlier before you launched the business where did the idea come from. How did you guys come up with the idea for D
05:31 Yes the idea really did come in the end of 2014 that's kind of where we started. And my co-founder himself you know he took the idea and came out with it and I came onto it consulting with it and it ended up coming into the business so I came on a month or two after we kind of got started there.
05:48 But with the though process that kind of went through our head is when we started there weren't a lot of the competing platforms are out now. Really, there are a couple of major players and what we saw in the marketplace was the same pain that we are experiencing so we have like I said our own side businesses and stuff like that and we were using webinars to sell and market our own products. But we were continually having issues where platforms like go to webinars whether freeze or crash on us. I think Google Hangouts had just come out and they were super delayed and really slow. And that platform WebinarJam had even come out yet when we started on this stuff. And so we wanted to build a platform that had all the marketing and sales automation that we needed with the webinar. Now we have three or four different platforms we're putting together. Lining them up doing all these actually automation or paying for all these different things.
06:38 We really just wanted to have a very nice seamless experience. So we came up with this idea we want to go through with it now it took us quite a while to get it and a lot of that time while we were putting this out other people came into the marketplace so I think a lot of stuff had actually change and we came up with this idea like a lot of what our initial idea was which was building a very robust platform with all of these different options where you have live, an automated hybrid and you know all these different like demo rooms all these crazy things we had so many features when we first started on our initial idea but that idea has kind of released them down into being a simple and easy to use platform but it really did come from our own pain.
07:18 And then when we looked on Facebook and Twitter and stuff like that we just saw a marketplace literally speaking on Facebook and Twitter about the pain that they had. Oh they wanted a new platform. All they were looking for a great platform. So we could visually see that there was a pain point in the marketplace and so was our talking to people and you're like yeah I would love a platform like that so we did some very very basic initial kind of research but again I think 90 percent of where our idea came from was based on our own pain.
07:43 Give me an example of of one of those pains you mentioned integrating with different tools if maybe that's a good example but just kind of kind of walk us through like what you're having to do and why it was so difficult.
07:58 Sure. I mean I think you know first and foremost we wanted to integrate our webinar platform with our CRM. So we had hoped those up and this is before. I mean I think maybe Zapier was more Zapier to basically zap attendees from GotoWebinar into our CRM we had a landing page provider connect those two. So then we have three applications there. And then if we wanted to segment our audience out of GotoWebinar I know who came who didn't come who did that we had to use another third party provider to send that information back to Infusionsoft and then make the campaign. So it was just everything was all over the place. It was really jagging. I took a lot of time at this time in my other side business I was doing some consulting and stuff like that and some funnel building so I was actually doing this for other people’s businesses.
08:42 I could see that everybody struggled to set these up but you need these tools to actually have a powerful webinar campaign like you wanted to know people that didn't show up. You want to market them a different way and the people that showed up and complete it. So you know it's a really big part of the webinar campaign but it just took so much to put together. So we were like why can't we just have a seamless easy way to do this. Why doesn't this exist yet.
09:04 Yeah. OK. So so the logic so far sounds pretty good you guys have seen you're experiencing the pain yourself you're seeing this with with clients. You've done some let's call it a light weight validation of the problem with the idea and you're hearing from the market that you know people sort of resonates with people and they're looking for a better way to run webinars. What did you guys do next. Was it kind of taking some some baby steps to go on and further test the idea and getting an MVP or did you sort of decide to go all in pretty quickly.
09:45 You know I think we were both coming out of you know like the side businesses like I said and this was although we had done software like smaller softwares and stuff like that. This was for sure our biggest software today and it was the most robust one we've ever worked on so we were kind of naives to be honest with you. Probably the best way to describe it. We like less we're all in on this idea. We didn't even really doubt it any more than what we had seen in kind of our own pain. We know we can do this we can do something awesome Some find some really good marketing angles do a great job.
10:15 So we jumped in really kind of where we started was doing some technical due diligence seen you know what it would take to kind of get around any MVP or any MVPs like any issues as far as technical issues but even this was kind of basically done we hired a consultant to kind of go through what it would look like kind of map out our initial spec and a spec was not like string of every piece was not an MVP this was like big spec of probably like enterprise level software. And then we went out when like let's just built it and we just we just sort of put the money in to build it.
10:52 So I think if there's one mistake that I can say that we've made it was that we didn't know about MVP we didn't prioritize an MVP and we didn't chunk our idea down to be validated quickly and easily. And when you spoke earlier about our journey taking almost two years to get to market I would say that's probably our biggest reason why is that not only did we fall into technical hurdles and technical pitfalls along the way because of a very robust platform. We also had to reshift and change some of what our software did or what we wanted to do because we didn't start with MVP built on top of it we went to a robust and then had a cleanup from there.
11:27 Okay. So yeah I mean I was going to say well you guys didn't really do much with an MVP but as with sort of talk later that isn't particularly hindered the progress and you guys are doing pretty well for a product that's really been sort of launched. I guess a year ago but at the same time I guess what I'm hearing is that if you had gone down the path of building an MVP you'd probably still be where you are today but you would have gone here faster and maybe had less detours along the way. Is that a fair summary?
12:07 Yeah absolutely it is a very fair summary. I mean we're totally bootstrapped that's to me really important to say so I think you know losing time was losing money but obviously losing time was was very good. Time is the most valuable asset you have. So we lost a lot of time I think by not doing it that way where we learned the lessons it took us. We we went to hard approach basically to say we got you know smacked up and down learning everything that you had to learn we could just gone MVP right then and right. But obviously it took us you know the path that we went down to learn that. So we spent a lot of money going this route. We nearly depleted most of our bootstrap funding to do it. We got here we're here we're doing good. But you know I think those early days there's a lot of lessons to be learned.
12:49 And we you know we always kind to document during that time like our journey and try to showcase what was happening in why we were doing the things we do and we look back now on this journey. Like we see you know just so many mistakes and stuff that we can easily learn from.
13:04 Do either of you I either get technical to code did you have to hire a team to start building the product.
13:12 Yeah that's exactly where most of our bootstrapped funds went to was building a team because we're not technical co-founders were actually both for more the business marketing operation side. So we are more like this that area. So we had kind of like an office and we're going to fill it with developers but we ended up hiring some people overseas and just wanted to get great people so that we ended up having this office with no developers in it.
13:37 But really for us it was we got to get great people that we knew we knew that we needed to get great people into building products but that also became kind of something that we can talk about you know a little bit which is you know just how we had to learn to hire and the mistakes that we made on hiring the wrong people how much money did you guys put into getting this business off the ground.
13:58 So to get up to beta which we did a free beta version for three months we did free beta.
14:03 We spent roughly around $450,000 in development about two years
14:10 And that was all from consulting revenue that you guys had had sort of accrued.
14:18 So our other businesses were actually more like internet marketing, lifestyle marketing businesses. My partner had a SEO company and he had launched the software as I had lunch some other software with other software products. And then I was also doing consulting and other work as well.
14:33 Yeah I mean I want to get into kind of the the building the team and sort of the the lessons and the mistakes that you kind of went through because I think those two years there really is an really interesting time in terms of how you guys evolve the business.
14:50 One question I had was when you started out in 2014 maybe the webinar market wasn't as crowded as it is today. And over those two years you probably saw a number of new competitors coming into the market. How did you react to that in terms of did you guys try to just put that to the side and stay focused on what you had decided to build or was that kind of a process of you continuously looking at what was happening in the market with these new players and then using some of that research and insights to go back and refine what your product design was like.
15:41 It's a great question and so I think it's kind of multifaceted someone to first say I think initially there were a lot of competitors were coming into this. I think the reason being was that streaming was kind of expensive to do. It was really like the way that the webinar seem work like Cisco WebEx and all these companies that use a very unique type of streaming that takes a lot of dedicated infrastructure to build something that's so streaming was not the easiest thing to do. So I think jumping into a streaming engine again I think naïve was a good word. Earlier I said that we could just build this great big streaming engine with all these features and do exactly want with low time like low you know no delays really fast connections all that kind of stuff that was kind of naive of us to even think that was possible because we're not developers.
16:26 We had this kind of unique mindset when we started getting into it and learning more about the streaming in the technologies we saw a technology that was emerging which was WebRTC. And this is a peer to peer network connection that allows you to have basically real time connections with people very easily.
16:44 So with the rise of this technology started coming a rise of all these kind of new players into the marketplace so about a year to where we were. That's what a lot of these players are to come out and really start to bring these products to market was because of this new technology. Now we had already built in a full year a product on an old streaming technology that wasn't as fast and we literally already had paid beta members during this time that we had to basically cancel and refund everyone go back to ground zero and rebuild our technology to be WebRTC based so that we could catch up with the competitors. Now initially, like when I came into this I was always a very competitive person myself and I would look at competitors and you know maybe get a little downtrodden or just like feel like you know look at what they're doing who were there do we need to do this we to do that.
17:34 And I think for a little bit kind of took away from our energy because we were looking what other people are doing. But then we realized that if we could focus on what we knew we wanted to be like our vision of our product and kind of put blinders on we could really focus on what makes us unique and we kind of had this hypothesis right like so you're MVP is your hypothesis anyways but our hypothesis was that you know people would just rather have a simple easy to use platform very minimalistic user interface. There's not a lot of technical things it's really fast to use its real time connections. Are we kind of had this approach we like what things what people you know never want never want less.
18:16 So like they would never want or never want. I guess more of. So they would want more delay. They wouldn't want more steps to take. They wouldn't want you know more technology to deal with so we try to take that approach to it. So as we kind of grew and evolved through through these years we really started putting blinders on and there are still like we don't even look at our computers anymore.
18:36 I mean on some level we do just you know it's just a mind of small stuff in the marketplace but we definitely don't do it anymore to kind of see what is you know what is out there what do we need to do stuff like that.
18:50 Let's talk about the building out the team. So you've you've got the idea you've decided you want to make the investment. You mentioned hiring somebody to come and help with kind of scoping out the sort of the design of the product.
19:06 How did you go about getting your first developer on board.
19:12 It's a great question.
19:13 So we started with our consultant and he actually reprimanded his brother in law who was living in Turkey and on this really amazing development agency. And so we flew him out from Turkey we sat with him for a week and we went through like again like a gigantic idea of what our software was going to be. You expect it all out like this. This is the kicker we're like all right let's get done in two months. And I mean this was gigantic and he looks at it looks as like our eye. So he like pay him all this money. We do a like kind of bulk payments at this agency. So families that happen I had to leave and come back in when I kind of got back into here started and go through what was coming out the other end that we weren't really didn't have our fingers on the pulse of kind of like what the developers were doing we just let them develop with this guy kind of in charge of everything kind of being like “CTO-most”.
20:00 And when we came back it was just terrible. Nothing basically worked. We put in all this money and just got burned.
20:07 I mean burned that and basically we had to scrap after almost putting in six figures from all this you know funding into this agency had to start from scratch. It was really hard. And so we said we're not going to do the same mistake we're not going to get burned again. We're really going to keep our fingers on the pulse we're gonna hire ourself.
20:24 So luckily you know in my consulting agency before one of the things that I would do was help find and hire developers I've actually had a pretty strong system of hiring that I've been hired into other companies to help them do. So I kind of had a good systematic idea of how to hire and what to look for. But from the level of developers in what we're looking for now this was kind of a new venture for me. So initially I was on platforms like I think it's Upwork at this time and Odesk/Upwork and stuff like that looking for developers. Now what I really wanted to do was just find great talent we had this idea that if we could just find great talent we didn't want to limit it to a certain location size. So we're looking everywhere but we had a development process which included you know how many people fill out not just responding to a post with a specific keyword but following up with questions.
21:18 Then we did a three part interview series where related unique questions on each interview. And then we had like a development test. If the development test we hired a consultant to write these tests for us so that we could actually judge who they were. So we initially hired our first developer who's still with us and he's absolutely amazing like without him we probably would not be here at all. It's just fantastic. And so we luckily got him on board and with his help we're able to hire some more people and he helped do some of those development tasks and judge some of these scores. And one of the interview styles was the development interview.
21:53 We ended up bringing on about seven people ourselves just seven developers and here's another big mistake that we made is that we felt that we had been burned we'd lost time or lost six months of time. It was $100,000. This agency had kind of burned us. And we're like man we're so far behind. We need to rush through this thing. We need to get this thing up we're six months behind we to read and premarketing. So we hired fast we didn't hire great. These were in like I say like everyone that said I was the first hire was amazing and the rest were kind of like let's just get them in positions quickly the people that just felt like they were OK they were good but they were like the best people that could possibly get. And we hired fast and we didn't really have still a clean small MVP or clean spec so we just kind of threw people in and we just pound the payment for about six months and really just did everything we could with these people to just try to get us back to where we were we needed to be to get to market and this is where we kind of hang out with our first beta version and this is the one where the streaming tech was still outdated we still a little bit used the initial CTO's architecture because of that it set us back again.
23:03 But I think the lesson that I can say here is that first hire we did great. The rest the hires we hired really fast. I just think that those early hires are so critical to your success. I think if we had just hired two people instead of seven people and we had done that second hire just as good as we did that first hire and we literally sat down and spent a month stacking it again looking at all of our options and looking at our scaling architecture.
23:28 We probably could've avoided that six months night huge overhead of six months that we used to just kind of rush in like power through the I guess our initial release again.
23:38 How many of those seven hires are still with you.
24:27 So we really try to go slow and make sure it's the right person. Cold like a cultural fit a business fit an understanding of the product and understand the development technology has a good mindset. Like you know think through challenges. All that kind of stuff.
24:40 One kind of observation I want to make here is that I think what you went through there isn't that uncommon. I think part of it is driven by it's kind of a balance between like time, time, money and quality. And when you're when you kind of feel like you're behind the eight ball a bit you kind of really focus on saying you know we were kind of burning money we're wasting time. We really need to get people on board quickly and build this product. And the downside of that is that you don't necessarily anticipate the the challenges that are going to come along the way when you actually start building it in terms of technical challenges talent challenges. It's kind of a difficult decision to make when you're when you're kind of going through it for the first time I think but as you've kind of gone through that experience now I think what you what I'm hearing from you is that you know look we've kind of learned our lesson and now we would be much more comfortable even though if we feel like we're behind schedule and we're having to spend a bit more money it's much more with the time taking the time to hire slowly hire the right people because it'll pay off down the line when you're actually in the weeds of building the product.
26:00 You're absolutely right there and I think you know I kind of have this process that no matter how many times you read things I we read everything on SaaS we read all the blog posts and core post and everything about growing a business and SaaS and stuff like that. But until you're actually in the experience and doing it there are lessons that you only learn by like putting your hand on the stove you know no everyone can tell where the stove is hot but the moment you put your hand on the stove. Trust me you believe it you learn that lesson fast. And I think for us you know. We learn the lessons and I don't, I don't regret a single second of it because it taught us so much and it helped us grow and I think a lot of times it's easy to fall in love with the idea of a startup or the idea of a software or idea of a SaaS.
26:44 The hard part is the discipline needed to understand you know how to do it correctly because there is like you know you hear all these cool stories it's not like they're not saying that we were like reading these stories or falling in love with them. But I think you don't you don't think about in the weeds how tough it can be until you learn those lessons.
27:01 So OK so we talked a little bit about hiring and hiring the right people. One of the mistakes you also mentioned was not having an MVP and how that pushed you in in several different directions over the course of those two years as you were trying to to sort of launch the product.
27:24 Can you talk a little bit about some of those changes in direction or parts of the product design or plan that you had to kind of scale back refocus do differently because of the lack of an MVP early on.
27:42 Yeah absolutely. The lack of an MVP taught us I mean I think there's a lot of the is tied into some of the hard things because our MVP like “MVP” our initial idea in our initial spec was so big we needed so many developers and there were so many different languages and probably redundancies and million fell over points across the board because it was so big. So the biggest thing was because we made it so big we made our path to actually get to market. So difficult. So we realized that to get to market in an actual quick pace to start making money and our idea we had to simplify and it was that simple. Like when we made that kind of mindset shift like oh OK. So we started to do was really just cut out and take away everything that we didn't actually need.
28:27 So kind of the reverse of what you do with MVP right? So we started cutting out a lot of the features that didn't matter. And we realized what really mattered for us was, crazy enough right? The video streaming we needed to have a good video sharing platform. We need ot have a reliable service that could scale and some of the small business and marketing things as well so we wanted to have, handouts and call-to-actions, we wanted to have integrations with that segmented based on what happened on the webinar. And that was it. Those were the things that we started with. That's our MVP and even that is still pretty big because the streaming and stuff has just so much that goes into it. But we said okay this is what we need because at the base level this is what we are.
29:09 We're just shooting platform that has some marketing and segmentation. You know pieces to it. So it really took us some time. It was kind of hard to do this but cut out a lot of what we had already envisioned shifted away and started small. And what we did to actually implement this quickly into the company was we said we're going to go for the beta and with free beta we said we're going to make this transition pretty quickly. So we had to basically say, listen to make the entire company simplified, we're going to let go of all of these different features and we're going to let people in for free. So because you're coming in for free we're not going make any money. We will have money for support so we need to minimize support tickets.
29:50 We minimize the difficulty to use the software so it costs us to actually for ourselves into this MVP. We shipped out everything will have to bare bones brought in almost a thousand people offer free beta like organically came in for free beta which is amazing. And me and everything else from there is kind of history they really helped us to then understand which features we needed. What's add back on and everything like that.
30:15 How did you get the word out get to get those thousand people. So we actually did a couple of things. So
30:20 like I said we were doing this kind of this YouTube video series called Inside Demio we're kind of filming everything that was happening as we were trying to build this company and it was it was about 20, 20 episodes of doing lots of mistakes and us just trying to figure out what we were doing the entire time but that actually got a lot of traction we would put them on YouTube we would put them on Facebook and we would put some video ads behind like $5 a day video ads. When we run them we got a pretty good sized audience and all that went back to the Demio.com website which was a landing page. Had people that could sign up for the waiting list. And then when we got close to a free beta we had it on a free beta list you could sign up to be on Beta.
31:01 Then we did you know when we beta rolled around we did some email marketing doubtless that had grown and we announced that there was free beta and we also started opening this affiliate program for people letting them know there were going to be a grand opening launch coming up and they could actually bring in people into free beta now. And anyway that ended up converting in beta. They would get a percentage of that sale right so some affiliate percentage or a percentage from that grand opening. So this got us pretty much all organic beta sign ups we posted on social media and stuff like that. So on our own social media we did some small Facebook ads but most of this was actually word of mouth referral. And still to this day most of our customers still come from word of mouth referral or the viral loop.
31:42 That's the other big thing. So when people got into beta and they started running webinars we started getting these small viral loops so we run a webinar to 100 people, that's the 100 people that saw the system or they saw the emails that went out or they saw the thank you pages and all of those things have links to sign up for free beta.
31:57 So it just kind of made it organic for us.
32:01 OK. I like that. It's really. You know simple you didn't overcomplicate what you were doing. Well I mean your background is in marketing right.
32:10 So you know you don't expect that but I really like that it's and I guess this is is this the core of the pre-marketing that you mentioned earlier.
32:20 Exactly. This was the core of the pre-marketing and we were doing even before the show that we made inside Demio. We were still doing like teaser videos and video advertisements and stuff like that. And honestly some of it became like looking back now was on some level market validation because we're putting out these ads which some of them were screenshots of like our platform and stuff like that. And you know having text that was saying like you know imagine a platform that had these features and we put the screenshots of our features in there we would run them with like$5 a day. We look at the comments and stuff like that what some people were tagging people about the company. So we were kind of building up our name in a buzz almost a year and a half before even beta came out.
32:59 OK. So you went through the two years of running the beta and at some point you decided OK we're ready to launch and we're going to start charging.
33:12 So number one, how did you decide what you were going to charge for the product and secondly how did you manage the people that had been, had gone used to using the product for free for over a year.
33:31 So the free beta was actually only at this point going on for three months and we probably would have extended that farther but we were running out of runway. We had an a very fast approaching CCD zero cash date from our bootstrapped funds and we knew that we had to get out there and launch the product.
33:46 We had to make sales. And the other option was looking at funding but without any sales being in free beta and have so much time and effort put in. We knew that we probably wouldn't get good terms on funding and it was can be a hard road and we didn't get to make it so we said let's do it on our own. We'll launch this product. We'll bring in cash and that will be our cash and move forward. So we decided that we wanted to open the doors and we had a cut data short. We honestly would have probably kept it open longer had we had the ability to. So we looked at what we wanted to do and wanted we knew we wanted to do something that made a splash in the marketplace. So we decided to do a launch using affiliate and referral partners as our primary traffic source to open the accounts.
34:26 So initially when people were coming in free beta we had a blog post and stuff like that like journey blog posts and we talked about this everywheres that beta would be free until our grand opening. So we initially kind of opened looped it they knew that there was going to be a grand opening at some time. We didn't have a specific date when we first opened for beta. We didn't know when that date was going to be but we did have you know the expectations set. So we first said you know this is why we're doing beta. We want to get you guys in. We want to learn about the product we want to make a better product for you and we want to make it simple so people are coming and they love that stuff.
34:58 We didn't for a lot of people that came in and we still saw a little bit of a lower this just me for I took my head a little bit of a lower usage level on some of the free people that were coming in but the people that actually did use the platform gave us great feedback. And so they were there a lot of those people signed up to be affiliate in for our partners in St.. So we had those. We also reach out to our network. And so for the grand opening pricing we said okay what can we do. We make a splash we didn't want to do. Lifetime sales are like that but we still need to get cash flow in. So we looked at doing annual sales we said okay we went to annual sales.
35:31 At least that way we can bring in you know offered cash we can give a good percentage to these referral partners that are coming in. So you decide on a 40% referral commission structure so people can make a good amount of money. When we looked at we are very excited about our package cost we're going to be but we wanted to do something special for a seven day period of our grand opening and we discounted prices by almost. I want to say almost 50 percent was the discounted pricing in some cases even more. I think. Like our packages were 237, 367 and 497 and the 490 step in package now is ,$2300. So it was a pretty huge discounted deal and everyone got these grandfathered discounts for life but we were still able to give great commissions to their referral partners because we were still you know multiday $100 sales. So we were able to launch with that and we were able to get six months of runway that we wanted.
36:26 So we were able to hit our goals it was amazing during this launch. And basically everyone that bought it has an amazing discount because we're raising our prices again so now they're going to have this amazing discount for life. But that was kind of the incentive that we wanted to do. So we didn't get any really backlash from people that went from free beta to paid. I think we did it about almost 10% in conversion I think was the number from 3 beta to paid accounts and then we had customers that came in off that free traffic. And for months after that we still got people begging for that discount but we discontinued that after seven days.
37:00OK. So let's talk about revenue.
37:05 How much are you guys doing at the moment.
37:07 So right now we're north of I believe 42K MRR.
37:13 Awesome. So about half a million annual run rate is exactly you guys are currently. Okay cool.
37:21 So you mention that. OK so you did that discount you did the launch you got people on board and then you said that you're raising prices again or have raised prices again.
37:34 Tell me a little bit about why you're doing that and what sort of the strategic thinking behind that is and I think the reason I'm kind of I want to kind of pick your brain here is because in in a market like this where there are a lot of competitors it can be it can be quite tempting to focus on price as the differentiator right in terms of yeah we have the cheapest webinar platform that you can use and that's not necessarily the smartest thing to do. And so it will be good to understand in terms of how you have managed to sort of continue to differentiate and which is I guess allowed you to continue to raise your prices.
38:29 No, I think that's what I mean it's a wonderful thing to think about. So when we first started this kind of the launch pricing is kind of into this as well. We did want to go under under the market and what we consider our biggest competitor which would be like GotoWebinar, we want it to go under their pricing and we want to do it strategically to slip into the market and initially get traction that way because we knew honestly we out of the gate we probably wouldn't be able to compete or be as good as a platform that's been around for 15 years. So we knew that pricing was going to be our kind of advantageous point to get customers in and learn and grow from there. So we wanted to start low knowing that we could raise prices and we didn't want pricing to be our major differentiator but we wanted to allow us some ease into the marketplace. So.
39:17 Again we did a great opening launch that was the lowest prices ever honestly came much like $19 a month or so something like that on one of the plants are super low. But I think price that the big thing with price is that it's the attractor to the customer Avatar and at the beginning when we were talking about who is our customer now which I said is almost a very small business owner like a solopreneur or where we want to go is more upmarket into some of the best companies and customers that we have that use us all the time in different fashions are more SaaS companies.
39:48 Bigger consultancies you know medium sized businesses larger businesses that have possibly marketing teams stuff like that right there use it using webinars in a multitude of ways because one that helps us be utilized by these companies and stuff like that so and our and our thought process now is twofold. So this pricing change its about to happen is one to help us go up market a little bit. So pull us out of the underprice appeal which to us for that we know that already all of the testimonials and all the feedback that we get is just based around that were easily used that were simple that is just pushing plan and really enjoyed the experience that it was just it was just a nice experience like that is our kind of our USP just a delightful simple webinar experience but also has the marketing power.
40:33 So with this new pricing change one is moving us up market. We also have a big internal streaming architectural change happening and with that a bunch of things are growing in the platform and so we know this is a good time to justify a pricing change because we're getting bigger. We're getting better there and get more stuff. Now our current customers are going to keep their pricing. They're not going to have to change pricing but all new customers that come in will be paying the new pricing. So one this kind of gives us a nice promotional scarcity period leading up to this pricing change once the pricing changes there there will not be any you know going back to pass prices. Now the other thing that we're doing is we're doing a pro and normal plan. So with the Pro Plan you can get more marketing and sales features unlocked on your account and where this is going to do the plan for this actually to help us to attract the right customers in those pro plans to reduce churn and to also just solidify and get to the right people that may not need a bigger attendee room size but just want more marketing and sales tools in their webinars itself.
41:39 How are you changing your your marketing to go and reach these new types of customers?
41:45 Yeah. So we're actually doing. We're really trying to again focus being a key thing that we all try to do. Focus on one marketing aspect at times so first going to be leading up to this. This this launch right, this relaunch of the pricing in the products like that. We're now also doing a very big push a heavy push on content marketing. So the big push here is we're creating basically a journey blog of really in-depth journey blog along with our podcast as well as you know really highly optimized SEO optimized content so our goal now is to create great content that talks and speaks now to it to the right customer demographic where before we were really using word of mouth or referral marketing to attract people in the space that we already knew. Now we're going after more long term organic approach. And then after we have that kind of solidified we're going to be doing and going back to advertising approach and marketing that.
42:42 OK cool. So kind of summarizing you guys you sort of look back to sort of the mistakes that I heard you talk about and I think they're kind of all interrelated to some degree one was the challenges around hiring the right team and what you learned from that. Secondly he was not having a minimum viable product and you know how you had to make a number of shifts in direction and maybe learn take take longer to learn than you would have we would have liked. And thirdly I think it’s just sort of that the lack of the clear vision which I think resulted from maybe maybe the sort of the MVP. Aside from those three things if you are sort of going back to 2014-2015 what advice would you be giving yourself what would you be on those three things what else would you be doing differently.
43:44 You know I would definitely say slow down. I think almost like you talked about before like there is you kind of feel this rush and this pressure with time and I think slowing down and thinking strategically would be a very very important thing to do. So that would really be you know focus on that MVP, I think that was the biggest thing was understanding what is our core MVP. What do we want to do. How do we get the right people in place to do it and without rushing through it. I think you know moving too fast can be done just as dangerous as you know when to start so you want to find the right pace and you just want to be strategic with your approach. I definitely think those are like some of the key things but I also think. Failing fast you know just just learn stay off as we want. The next thing don't get too down on it.
44:34 One interesting question I have here and I don't know if it's kind of is going to be a guesstimate on your part. Early on you talked about this pretty complex and big product that you guys had designed and wanted to build in and then eventually you realized that you know it was too big and you had to scale down. When you look at the product today compared to this grand design that you had early on have you have you built that product yet or in terms of percentage how much of that product is built now, 50?
45:15 I'd like to say, it's like 40% honestly it's and we're OK with that. Like we look at it and we say like the product that we have now is so much better that like what it would have been because it would have been all over the place it would have been gigantic. The product that we have now I think is great. And I'm OK with thinking. You know what. Maybe in another year we'll be able to add another big piece of it and maybe another year after that we're before our minds it was.
45:39 Two months to build all of this right. Like like my mind set was so short term for we have everything now whereas we can we can learn and adapt and maybe in a year what I think the product would need we may not need it anymore. We're now learning from customer feedback based on what the customers need versus based on like what our grand vision is of just some gigantic product.
46:01 And I think it's because when you're when you're sort of thinking about that product there's a tendency to want to add a lot of features and when you start to think bigger you start to think about you know how to make it scale and maybe support different languages and all of these kinds of things.
46:20 And and your experience shows that probably whatever product that you're thinking about building, the MVP is going to be a tiny fraction of that feature set and you can get to you know as you sort of said 40% of where you want to get to and still build a business that's doing you know half a million dollars a year.
46:47 And with the pricing changes that you're talking about now. I'm guessing a year from now if we're talking you're going to be pretty close to a 7 figure business if not be on that.
47:00 Yeah our goal on the next 12 months be 100K MRR.
47:00 Awesome. That's awesome. Yeah. Awesome I love these lessons. You know I think there are a lot of other things that we could talk about but we're out of time so I'm going to move on to the lightning round and ask you several questions. I just try to answer them as quickly as you can. Let's go. All right. What's the best piece of business advice you've ever received?
47:29 Said it before, fail fast.
47:31 What book would you recommend to our audience and why?
47:35 Seven Habits of Highly Effective People by Covey, great book.
47:39 What's one attribute or characteristic in your mind of a successful entrepreneur?
47:45 What's your favorite personal productivity tool or habit?
47:50 Reading in the morning before I get on the computer.
47:54 What's new a crazy business idea you'd love to pursue if you had the extra time?
47:58 Augmented reality.
48:01 What's an interesting fun fact about you that most people don't know?
48:06 I was adopted and I'm Salvadorean but I grew up in the United States.
48:10 Cool. And finally what is one of your most important passions outside of your work?
48:15 I'll give you two. Wine and basketball not together.
48:20 What a combination! Awesome!
48:22 So David it's been a pleasure. Thanks for joining me today and for being so transparent. And you know sharing the story of your journey and the lessons and the mistakes that you guys made along the way. I think there's just so many nuggets of sort of wisdom that you shared here that I think will be useful to so many people. And you know I kind of wish you guys the best and would love to get you back some time. And you know when you when you had a 100, 100,000 MRR would have a great time to do that. Now if people want to go and check out Demio they can go to Demioi that's D-E-M-I-O.com and if they want to get in touch with you what's the best way for them to do that.
49:12 Grab a live chat. Always in a live chat without talking with our customers on the website or you can email us at email@example.com and we're always available. We love chatting with people just talking about the product and you know reach out if you have any questions. Thank you for having us on the call.
49:26 It was great. Awesome. I loved it. Thanks man.
49:29 Alright. Have a great day.
49:33 All right. I hope you enjoyed this interview with David Abrahams of Demio. You can get to the show notes for this episode by going to thesaaspodcast.com if you need help building launching and growing your SaaS business. Go check out SaaS Club at saasclub.co, registration for new members isn't opened right now but you can join the waitlist and we'll let you know when registration opens up again. And if you want to show your support for the show then go to review on iTunes. I love to read those reviews and it really does make a difference both in terms of the show getting discovered by more people and inspiring me to keep creating this free content for you. If you're not already in iTunes just go to conversionaid.com/itunes and that will get you to the right place to leave a review. Until next time, take care!
- “7 Habits of Highly Effective People” by Stephen R. Covey