EP 537: Raised $150k Then CTO Left, Now He's Cruising $30k MRR with LeadFuze CEO Justin McGill

Justin McGill. He's an entrepreneur and owned a startup in 2008 when he started a digital agency. After he scaled that out, he launched LeadFuze – a B2B lead generation platform. He's also the co-host of Zero to Scale Podcast which gives us a behind the scenes look at growing a startup with 200K per month in MRR.

Famous Five:

• Favorite Book? – The Ultimate Sales Machine
• What CEO do you follow? – Elon Musk
• Favorite online tool? — ZenPayroll which is now Gusto and bench.co
• Do you get 8 hours of sleep?— No
• If you could let your 20-year old self, know one thing, what would it be? – Justin would've told himself that entrepreneurship was a path in life he could take

Time Stamped Show Notes:

• 01:50 – Nathan introduces Justin to the show
• 02:15 – LeadFuze is a software platform
• • 02:21 – LeadFuze allows to you to search for contact information and automate the outreach to ideal and prospective customers—turning them into possible sales opportunities
• 02:35 – LeadFuze is a subscription-based company
• 02:55 – Average MRR is $175
• • 03:08 – Early stage companies are using LeadFuze
• 03:25 – Average number of customers
• 03:45 – LeadFuze started off completely bootstrapped and had a small raise of $150K
• • 03:56 – Two of three investors are Rob Walling of Drip and David Hauser of Grasshopper
• 04:26 – Justin shares why he decided to take capital
• 04:43 – Justin did a small equity round
• 06:10 – If you're trying to grow your sales, LeadFuze can help you
• 06:43 – LeadFuze is web-based
• 07:00 – LeadFuze wants to focus exclusively on lead generation
• 07:24 – LeadFuze is a software with a service
• 08:14 – Gross customer churn and revenue churn
• • 08:35 – "Customers stay for 6 months or so"
• 09:15 – Why not just charge $175 upfront?
• • 09:31 – LeadFuze is currently a product company without engineering help
  • 09:47 – Justin is trying to look for a CTO
• 10:58 – Justin shares why his CTO left
• 11:57 – Current team size on remote
• • 12:18 – About to open an office in Phoenix, AZ
• 12:30 – LeadFuze has 3 co-founders, one who was Justin's sales coach
• 13:55 – CAC
• • 14:05 – Around $300
• 14:28 – Justin invested in content and that is what driving the signups at the moment
• 14:50 – LeadFuze offers 20 leads for free
• • 15:02 – 8.5% of the signups convert from free trial to paid
  • 15:10 – Free trial doesn't require a credit card
• 15:40 – Total 2015 revenue
• • 15:50 - LeadFuze started totally free
  • 16:11 – Average total cash flow by the end of 2015 is around $250K
• 16:45 – Some of the sources where LeadFuze pulls data are from ClearBit, Full Contact, and Tower Data
• 17:23 – Hit Justin up on Twitter
• 18:55 – The Famous Five

3 Key Points:

• As a startup, the pay-as-you-go model may be more beneficial than subscription plans.
• Entrepreneurs need to be more open about their people leaving.
• Don't waste time and TAKE the leap as early as you can.

Resources Mentioned:

• Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
• Drip – Nathan uses Drip's email automation platform and visual campaign builder to build his sales funnel
• Toptal – Nathan found his development team using Toptal for his new business Send Later. He was able to keep 100% equity and didn't have to hire a co-founder due to the quality of Toptal
• Host Gator – The site Nathan uses to buy his domain names and hosting for the cheapest price possible.
• Audible – Nathan uses Audible when he's driving from Austin to San Antonio (1.5-hour drive) to listen to audio books.
• The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
• Jamf – Jamf helped Nathan keep his Macbook Air 11" secure even when he left it in the airplane's back seat pocket
• ClearBit, Full Contact, and Tower Data Where LeadFuze pulls its data
• @Jus10McGill – Justin's Twitter handle
• Show Notes provided by Mallard Creatives