1Mby1M Deal Radar 2014: Happy Grasshopper, Safety Harbor, Florida

Happy Grasshopper is an email marketing company that focuses on providing fun, engaging content to help salespeople and small businesses build and nurture their relationships with leads and past customers. Founded in October 2010 by serial and parallel entrepreneur Dan Stewart, Happy Grasshopper is growing rapidly as it maintains its distinction as a company that sends emails to communicate, not broadcast.

Prior to founding the company, Inc. 500/5000 honoree Dan was the president of a CRM company. This is where he noticed that simply enabling salespeople to send messaging was not a complete solution. Salespeople struggled with knowing what to send, when to send it, and the frequency of message delivery. Happy Grasshopper was founded in response to this clear need for effective email marketing campaigns.

Their blog post in a real estate Facebook group called ‘What Should I Spend My Money On?’ gave them visibility in the real estate press and was the early rocket fuel that they needed. A real estate trainer mentioned them on stage at a large event, and this gave them their initial few dozen customers. These initial customers spread their positive results from using Happy Grasshopper and helped the company quickly grow to several hundred customers. They now have more than 10,000 customers from across 50 verticals including real estate, insurance, automobile, and financial sales.

The team of professional writers at Happy Grasshopper create timely, interesting messages designed to prompt a response, making it easier to stay in touch with a network. The secret to their success lies in understanding the reason or need for reaching out to customers. They tailor content for three distinct groups of people: people who know them, people who don’t, and people they’d like to recruit. They address these needs with three services:

• HG Keep in Touch – Fun, friendly conversation starting messages are provided for approval to users. These messages are intended for delivery to past customers, sphere of influence, and other contacts that know the sender.
• Position-Me™ – Custom written, fully automated email follow-up campaigns. These campaigns automatically and intelligently respond to leads from any source.
• HG-Recruits™ – Custom written email-recruiting campaigns that match the company culture with the right recruits. These campaigns are created after in-depth interviews with the client.

The email marketing landscape is crowded and Dan says they benefit directly from this. Their market already understands there is value in email, and they are looking to optimize it. Happy Grasshopper is regarded as a less painful, more effective solution than do-it-yourself email service providers such as Constant Contact, Mailchimp, and iContact.

HG Keep-in-Touch is priced competitively with do it yourself solutions and their premium services, HG-Recruits™ and Position-Me™, cost less than hiring an independent copywriter and subscribing to an email service provider. HG Keep-In-Touch is $19, $29 and $39 per month for up to 500, 2,000 and 5,000 contacts with no setup fee. Position-Me and HG-Recruits have a $1,495 setup fee and are $59 per month. Both include HG Keep-In-Touch.

According to Dan, there are 571,800 sales people employed in the real estate sector, their key focus sector. At $2203 per user per year, the TAM in real estate translates to $1.25 billion. The total number of sales people employed in their target sectors is 14,500,000, which translates to a TAM of $31 billion.

In 2013, Happy Grasshopper began offering their platform as a white label solution and is seeing traction among marketing companies wishing to provide email marketing services, and political action committees wanting to make use of the unique “one through many” messaging their platform enables.

Since October of 2013, the company has grown 400%. In 2014, much of their growth has come from channel and white label partnerships with organizations like Fidelity National Financial and Curaytor. The 1,900 member sales force of Fidelity National Financial is currently being trained on presenting Happy Grasshopper to real estate and mortgage professionals nationwide. In their first month, with only a small percentage of sales executives trained, this yielded over 900 referrals for free trials.

They expect to generate revenue around $2 million in 2014 at a $3 million annual run rate. They are still operating as a lean startup and reinvest their profits into growth. Their customer acquisition strategy consists of PR, public speaking, inbound marketing via content generation, channel partnerships, and inside sales.
After nearly four years, Happy Grasshopper has conclusively proven that their conversational approach yields dramatically higher open rates, and creates much stronger engagement with prospects, past customers, and potential recruits.

Dan is a veteran bootstrapper and Happy Grasshopper is his seventh company. Since inception, they have been able to rely on cash infusions from his other companies. They continue to invest about 110% of Happy Grosshopper’s revenues back into the company. He has not yet sought any capital.

Regarding their exit strategy, Dan says, “Like any bootstrapping entrepreneurs, we have our moments of exhaustion, but to date we have turned away all acquisition inquiries. I’m doing exactly what I want to do, with exactly whom I want to do it with. Why would I ever want to give that up?”

This segment is a part in the series : 1Mby1M Deal Radar 2014