Bootstrapping to Inflection: Dan Stewart, CEO of Happy Grasshopper (Part 7)

Sramana Mitra: What was the inflection point? I remember there was a channel-based inflection point that you were able to hit upon as well, right?

Dan Stewart: It was the introduction of the custom-writing services that caused the spike in our revenues. Instead of providing a single message that they can send once per month, by providing this custom content, we became attractive to a much broader audience.

Sramana Mitra: When was that?

Dan Stewart: That was 2013.

Sramana Mitra: That is the inflection point?

Dan Stewart: Inflection is a bit tough there. It led to the inflection point. It wasn’t like it instantly caught fire. We had to figure it out. When we first launched that new component of our service, we held a webinar for our existing users. We had $40,000 in upgrades from that webinar. That was outstanding. Of course, we didn’t have the systems and processes figured out.

Sramana Mitra: This is a people-intensive process too.

Dan Stewart: Yes. We had to scale our staff a little bit. We went from three people to seven people. It just grew from there. There are about 30 of us today. We need to hire probably 25 more over the next year.

Sramana Mitra: How people-intensive is the operation based on the custom-writing service? What is the ratio? How many customers can one copywriter handle?

Dan Stewart: Each copywriter can handle six custom campaigns per week. Currently, we have three copywriters plus an editor. The editor can jump in and handle some overflow. The introduction of the services solved our cash flow problem and allowed our MRR to grow to a point where we’ve been self-sustaining. With the introduction of HG Touch for Keller Williams, it’s the reverse of the model.

All those agents were signing up but that’s not what HG Touch for Keller Williams is. We have six audiences that our writers are creating content for. From a technical perspective, we’re doing it in a way that no single recipient gets the same message twice. It’s like a return to our roots almost.

Sramana Mitra: What are the other major highlights till 2016? What are other major strategic insights or moves that are worth discussing? That’s the period that I know less about what you’ve been up to.

Dan Stewart: Day one as a company, we knew nothing. We had an idea of what this might become but we had no understanding of how to get there. The thought was to take what we’ve learned from Sramana, validate within a vertical, figure out how to build our revenues to a significant point, build profits to a significant point, and then leverage what we’ve learned into multiple other verticals.

We’re thinking we want to get to a minimum of $10 million of annually recurring revenue before doing that. There are tiers on this path. First we sold to single agents one at a time. Then we sold to teams. Instead of selling to one agent, we sold to a handful at a time. Then it was to large teams. Then to brokerages. Then the large brokerages. Just this week, we’ve acquired hundreds of new clients. One sale alone had over 220 new users. Another one today is between 300 and 500. We’ve been selling up the ladder towards the mouth of the stream.

Sramana Mitra: The business has changed in that you have a lot of enterprise deals coming in.

Dan Stewart: Yes. What we’ve been able to do is leverage what we’ve learned from serving individuals to serving larger and larger constituencies of clients. We intend to leverage the credibility we’ve gained in real estate to start at the top in other verticals.

Sramana Mitra: Where are you going to end 2016 revenue-wise?

Dan Stewart: We should finish under $3 million. I think I told you in an email that we’re anticipating $12 million in 2017.

Sramana Mitra: What is the driver for the growth from $3 million to $12 million. That’s a very big jump. Something must have happened that gives you that kind of forecast. What is that?

Dan Stewart: There’s a large partnership that we have in place where there is a channel deal we have worked out. We’re also working out other deals.

Sramana Mitra: Good navigation. It seems like things are starting to come together. Large deals take time to mature. These kinds of high-impact moves are not overnight. They take time. I’m always interested to hear how things are moving for you. My very best wishes. Good luck.

This segment is part 7 in the series : Bootstrapping to Inflection: Dan Stewart, CEO of Happy Grasshopper
1 2 3 4 5 6 7