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Kellogg: SMB software point solutions are falling behind all-in-one platforms
“Point solutions are sort of a dying game now. And all those point solutions are You know, they're falling behind because there's more and more platforms that do everything.”
Kellogg: Small businesses prefer buying services over pure software
“What we're selling to the SMB feels like services because an SMB wants to buy services. But on the back end, we're using technology to increase scale and profitability.”
Kellogg: SMB software requires a 'do-it-for-me' managed service layer
“Even if we had the greatest, you know, small business platform in the whole world for small business, there wouldn't be a lot of utilization without the service piece. We literally need to do the work for them. So we put together kind of the do it for me model…”
Kellogg: Madwire cohorts hit negative churn after 18 months
“It actually after 18 months turns to a negative churn, which means essentially people are upgrading at a higher rate than we are seeing in loss. So the book is actually growing month over month.”
Kellogg: Sales reps maximize closing ratios at exactly 60 inbound leads
“We try to give our sales team about 60 leads per person. They have the highest closing ratio if you supply that many. If you give them less, they have too much time on their hands. If you give them too much, they close not as many because they don't have enoug…”
Kellogg: Madwire is targeting an IPO within two to three years
“We have talked about dividends in the future and that sort of a thing, but for us, honestly, I think our vision is all that we're on a good roadway here, and if it's IPO that's kind of where we're targeting over the next two to three years, and we figure that …”
Kellogg: 50% to 60% of Madwire Customers Churn in Year One
“So a good percentage do churn in the first year. It's not nine out of 10, but it is about, you know, probably close to 60%, 50, 60%. We'll churn, but we capture, recapture our marketing costs.”
Kellogg: Madwire payments GMV growth will settle around 20% monthly
“It's been growing a lot, but we think it'll flatten out probably be like 20% monthly growth here over the next couple of years.”
Kellogg: Madwire Would Be at $120M-$130M ARR Without COVID-19
“If last year didn't happen, we'd probably be in the one 20, the 30 range right now.”
Madwire provides in-house marketing services rather than using third-party partners
“And then one thing that makes us different than really any company in the SaaS industry is we also have the talent component. So if you want to build essentially an outsourced marketing team through the platform with us, you can actually do that too. We don't …”
Kellogg: Madwire's 50 accounts per employee beats HubSpot and Sprout Social
“Our account per person ratio now is about 50 accounts per person, which is better than HubSpot and Sprout Social.”
Kellogg: Madwire expects core churn to improve to 1.5% within 24 months
“And we expect that to improve to about 1.5% over the next 24 months with payments and some other business management tools that we've built into the platform.”
Kellogg: Madwire's service gross margins range between 60% and 80%
“With our service based businesses or services the margins right in that. 60 to 80% range.”
Kellogg: Madwire is pacing at a $105M annual revenue run rate
“Right, right on pace for that about right now in terms of the run rate.”
Kellogg: Madwire raised $7.5M in 2014 and has never spent it
“In 2014, we did bring on some partners two small partners at that point, and we raised about 7.5 million at that juncture. We really haven't used any of that capital. We really just felt like we needed it. It's still there. It's literally still there.”
Kellogg: Madwire sees roughly 50% customer churn in their first year
“The churn in the new account bucket is usually about 50%. So of the accounts that we open, about half of them will move into the core customer. SPEAKER_01: That's annually. Nathan Latka: That's over the first year. JB Kellogg: That's over the first year.”
Kellogg: Madwire reaches CAC payback in month three with six-month agreements
“Now our CAC's around 3000. It's a little bit more than that. And so when you look at our average account size coming in the door, which is right around 1500, usually in month three is when we start to become profitable on that account. We have a six month agre…”
Kellogg: Madwire reserves 10% option pool for leadership
“There is a small pool that we've set aside for leaders. And so we give them stock options when you move into leadership. And so that it's about 10% is what the pool is.”
Kellogg: Madwire distributes monthly revenue sharing to every single employee
“Yeah, we do do a revenue share every month and that's to the entire company, even without stock options.”
Kellogg: Tolerate weak employee performance only if attitude and effort remain high
“The way that we rate employees now, which is attitude, effort, performance. If the attitude and effort are good, we'll be very long suffering on performance. If either one of those is very short leash, so it's kind of a short leash, long leash look at it.”
Madwire raised $7.5M in its initial outside funding round
“Seven million. Yeah. Seven and a half. Yeah.”
Kellogg recalls Madwire's 2014-2015 valuation around $40M
“I think it was in like the forty million range, right in that area.”
Kellogg estimates Madwire had $15M-$20M ARR during 2014-2015 raise
“Revenue at that time was, I feel like our recurring was like fifteen million a year or something like that, maybe 20, right in that range.”
Kellogg: Madwire's New SMB Accounts Average $1,800 Monthly ARPU
“So in addition to our platform, which is 395 dollars a month, You can add on additional subscriptions for the marketing component. And so that pushes, you know, our new accounts coming in the door today are averaging about 1800 dollars a month, right in that a…”
Kellogg: Madwire's Post-12-Month Core Customer Churn Is ~1.5% Monthly
“Our core customers is a customer that's been with us over 12 months and our core customer churns really good. It's like one and a half percent per month.”
Kellogg: Madwire onboards 75% of new accounts to payments
“We're currently onboarding about 75% of our new accounts to payments.”
Kellogg: Madwire processes $1M in monthly payments GMV
“Well, we're about a million a month right now is about what our average is.”
Kellogg: 80% of New Madwire Customers Sign Up for Marketing Programs
“80% of our new customers do sign up for a marketing program.”
Kellogg: Madwire Has About 20,000 Total Paying Customers
“Total customers paying. Yeah, that's about 20,000.”
Kellogg: Madwire seeks an investment partner to fund software M&A rollups
“We are looking for, you know a possible new partner that sees in that vision and buys into that that would be excited about that for additional gunpowder, but we have no shortage of opportunities. We have a huge list of opportunities. We're actively talking wi…”
Madwire Reaches Approximately $8 Million in Monthly Recurring Revenue
“MRR today is right around eight million, right in that range.”
Kellogg: Madwire seeks $100M+ on balance sheet for M&A strategy
“It'd be nice to have a hundred million or more on the balance sheet that we could work with.”
Kellogg: About 35% of Madwire's customer accounts are in e-commerce
“About 35% of our accounts are e-commerce.”
Kellogg: Madwire has 20,000 customers averaging $500 monthly ARPU
“Well, we have 20,000 customers, and so when you look at it globally, it's about 500 dollars per month per customer, about 6000 per year.”
Kellogg: Madwire targets $150M revenue run rate by September 2021
“We have targets about this time next year to be in that hundred and fifty million range or so we feel pretty good about so that's what we're kind of marching towards”
Kellogg: Madwire aims for 15-20% EBITDA margins and 25%+ growth
“We're trying to get that into that 15 to 20% range here over the next year, which we think is very doable which would put us, you know, we're trying to align to that rule of 40, kind of, where our growth is going to be that 25% plus area and our EBITDA is righ…”
Kellogg breaks down Madwire's 500-person headcount across sales and tech
“Right now our 500 people is like 60 in, in tech. We have about 200 in sales. And then we have- All have quota. Yeah. Yeah. 200 in sales. We have a hundred, which is acquisition sales and a hundred, which is retention sales. So they're upselling, cross selling.…”
Madwire processes close to $1B annually through legacy SilverEdge accounts
“We have his legacy payments accounts, which are more of like an ISO model, because we acquired a company called SilverEdge two years ago. So with them, it's close to a billion, but if you exclude them and just- Annually? Yeah. Annually.”
Kellogg: 65% of new Marketing 360 customers activate embedded payments
“And so what we're seeing so far is 65% adoption rate. So users buying marketing three 60 right now, but 65% are activating payments.”
Kellogg: Madwire core customer logo churn is roughly 2.8% monthly
“Today, we're our logo churn on core customers, which a core customer is a customer that's been with us 12 months or more is about 2.8% per month.”
Kellogg: Only 50% of new Madwire customers reach the 12-month mark
“It's more like 50%. We'll make it to that twelve-month mark.”
Kellogg: Madwire pays $3,000 to $4,000 to acquire a new customer
“Yeah it's right. It's between three and 4000, depending on the month.”
Kellogg: Madwire generates approximately $175,000 in annual revenue per employee
“It's changing a little bit with our onboarding, but we're right in the 175,000 range.”
Kellogg: Madwire has about 10,000 active customers
“Total customers right now, when you, we just acquired a payments company, so that, you know, added to that total, but it's about 10,000 active customers right now.”
Kellogg: Madwire new incoming accounts average $1,500 per month MRR
“So the incoming accounts now, the average account size is around 1500 a month MRR.”