In this episode I speak with Dave Woodward The CEO of ClickFunnels and host of the weekly Funnel Hacker Radio Podcast.
In just 6 years, the company went from 0 to 125K Customers, 350 employees and $150 Million in annual revenue, and what it meant for him.
Did we mention they did it with zero funding?
We also went through a variety of topics, including:
- how to instil a company’s culture from a small team to hundreds of employees
- how to build a community with people, not for them
- the work people should prioritise to become more effective leaders
Upraw media: https://uprawmedia.com/
Episode highlights: https://uprawmedia.com/blog/customers-clickfunnels
If you are keen to know more about Upraw Media or be a Masters of SaaS guest speaker, visit uprawmedia.com or DM us on LinkedIn. We are also on Youtube if you'd like to put a face to the names and voices of the best in SaaS. Thanks for tuning in!
In this episode I speak with Dave Woodward The CEO of ClickFunnels and host of the weekly Funnel Hacker Radio Podcast.
In just 6 years, the company went from 0 to 125K Customers, 350 employees and $150 Million in annual revenue, and what it meant for him.
Did we mention they did it with zero funding?
We also went through a variety of topics, including:
- how to instil a company’s culture from a small team to hundreds of employees
- how to build a community with people, not for them
- the work people should prioritise to become more effective leaders
Upraw media: https://uprawmedia.com/
Episode highlights: https://uprawmedia.com/blog/customers-clickfunnels
If you are keen to know more about Upraw Media or be a Masters of SaaS guest speaker, visit uprawmedia.com or DM us on LinkedIn. We are also on Youtube if you'd like to put a face to the names and voices of the best in SaaS. Thanks for tuning in!
Hey guys, welcome to the Masters of SaaS podcast brought to you by Upraw media, a growth marketing agency for SaaS specialising in paid media content and conversion rate optimisation. I'll be your host, Todd Chambers. I have the absolute pleasure of chatting with really smart people from the SaaS industry. The goal is to extract as much value as possible. What are their strategies, their tactics, their failures, funny stories, key learnings? All of this can then be used to help you grow and scale your own SaaS business. In this episode, I speak with Dave Woodward, the CEO of ClickFunnels, and host of the weekly funnel hacker Radio Podcast. ClickFunnels has 125,000 customers 350 employees and generates 150 million in annual revenue. They achieved this in just six years and with zero funding. We discuss how they use webinars to fuel the growth of the company. Interestingly, they devised a strategy to increase their customers upfront payment to around $1,000. This allowed them to spend considerably more on customer acquisition and bypass the traditional SaaS payback period. We also dive in today's responsibilities of a CEO, the importance of having a personal assistant, and the key metrics that Dave watches like a hawk. Alright, let's do it. Hey, Dave, welcome to the show! Thanks so much for being here.
Dave Woodward:I'm so excited. Thank you, this is going to be a lot of fun!
Todd Chambers:Good stuff. Well, let's start off with a basic introduction. Who's Dave Woodward? What's your background? And how did you end up at ClickFunnels?
Dave Woodward:My background is I've been an entrepreneur my entire life. I'm completely unemployable, no one would ever hire me. I've had the opportunity of working with ClickFunnels since we got started and have a part of ClickFunnels from the beginning. I've never out of all the companies I've ever built here's nothing more exciting, more fun, and nothing I've been more passionate about and really helping small to middle- sized businesses and entrepreneurs scale and grow and build their businesses using ClickFunnels. So it's been right in my life.
Todd Chambers:Am I right in saying that you had an agency before Click Funnels?
Dave Woodward:Very good. Yes! You did your homework! Um, yeah, I had it. This was pre-internet days. So it was direct response marketing, a lot of financial services. So I had real estate agencies and mortgage brokers and financial planners and insurance agents and really kind of cut my teeth in that industry and knew it really well. Had a couple of agencies that sold myself, and so I just took my marketing skills and building those other agencies we sold and used those to help further grow and scale other businesses.
Todd Chambers:Just on my own personal interest, obviously, we run an agency. How does your agency days compared to being the CEO ClickFunnels?
Dave Woodward:There are pros and cons to both I guess. Honestly, I think the one thing I have loved more than anything else about ClickFunnels is the SaaS revenue. There's just something about monthly recurring revenue that I think the hardest thing for me in having an agency was: you basically go out, you kill what you want and then you got to fulfil on that. And so it was this cycle of feast or famine for so many years until I was able to build it well enough to where I had enough of a team to do a lot of the selling side first. But I think that was the hardest part with an agency for sure.
Todd Chambers:Yeah, I think it's a common thread, isn't it? I hear, particularly, on SaaS podcasts. So many people that start SaaS companies came from an agency background, and I guess the scale of a SaaS company and the unit economics make a lot more sense than selling time. Right?
Dave Woodward:It totally does.
Todd Chambers:Yeah. Cool, for people that don't understand, can you explain maybe in the most simplistic terms, what is ClickFunnels? What does it actually do?
Dave Woodward:So Click Funnels is for any small to middle-sized business who's either trying to generate a lead online or to sell any product, physical or digital online. So if you've got a product or service you're trying to sell online, you're trying to generate a lead, Click Funnels is for you. We've got a drag and drop editor that allows you to build out your entire online sales funnels. You can do webinars, auto webinars, you can have membership sites, all the follow-up funnels and the email automation sequences is really one of the biggest things that most people use ClickFunnels for. For every dollar comes in the front end, there's typically anywhere from 15 to 17 in the follow-up sequences, and the great thing about ClickFunnels is you can actually see where people fall out throughout that follow- up the funnel. One of the biggest things we find for a lot of e-commerce business cart abandonment is always the biggest issue. And so by having the funnel that controls the cart, and also being able to split test, the actual way this shopping cart is set up, linked with all the automation sequences is really one of the main things that people love about ClickFunnels
Todd Chambers:you probably get this question all the time, so apologies I'm gonna ask it anyway. I can see it's on your website, and I read quite a lengthy article about the difference between what I guess what you do define as a sales funnel and a typical marketing funnel. This seems to be the key differentiation between ClickFunnels and perhaps some other landing page building type software. What, in your mind is a sales funnel? And how does that apply to ClickFunnels?
Dave Woodward:Sure, I think a lot of it also ties into just the difference between a website and a sales funnel, we see that comparison as well. Typically, what you'll find for most websites or a lot of others funnels is it's really this massive billboard. It's a huge shopping place where a person comes in, and they just get distracted. I think the hardest part these days is most people's patients online is just a click away. And if they can't find their answer super, super fast, they're gone. Now one of the great things about ClickFunnels and having a sales funnel is you have one one product, or you have one problem you're trying to solve. And by having one problem you're trying to solve, you can dedicate all of your focus to that person who's landing there, whether coming from something you've done organically or through paid traffic, they literally land there, and they know exactly what they're looking for, they get the answer. The idea behind the sales funnel is you then sell them one product at a time. Unlike typical shopping carts, where they have massive sticker shock at the end, and they have huge cart abandonment issues. What will happen is, you'll go through, and you sell them one product, and then it gets added to the next and then it gets added to the next, and so there's no sticker shock. They are literally just buying one product at a time. We just recently did Russell's(Brunson) most recent book Traffic Secrets. Again, $7, free plus shipping, but our average cart value at the end is around$60. Did "Perfect webinar secrets" just over Black Friday, Cyber Monday; again it's a $7 front end digital product in our average cart value, that's $42. So the whole idea behind it is allowing them to buy one product at a time. So they get that itch scratched, and they solved that problem. And then it's on to the next.
Todd Chambers:Yeah, understand. And you're there are two co-founders, and I believe you're a partner. How did that kind of manifest?
Dave Woodward:Sure. So Russell Brunson and Todd Dickerson are our two co-founders. Russell is the marketing genius, and Todd is the development tech wiz, and without the two of them, ClickFunnels would not exist. I was brought in right at the very beginning as well, and so we have our two co-founders, and there are four other partners.
Todd Chambers:So when you first came into the company, was it literally just you three? Or was there already a small team at that point?
Dave Woodward:So Russell had John Parkes working for him for quite a few years in his prior business. And so they came in as partners, myself brought in from the outside. And then we brought in our Chief Technology Officer Ryan Montgomery.
Todd Chambers:Maybe anyone doesn't understand the size of ClickFunnels. It's quite an achievement! I think you guys are around six years old, maybe you can give some context into the revenue the headcount, anything you're comfortable sharing.
Dave Woodward:I'm pretty open. So whatever you'd like to know. Yeah, six years, September 14 2014, when we launched, so we're six years old and during that period of time, we've had over 125,000 customers. This year, we'll do close about 150 million in annual revenue. Majority of that is annual recurring revenue, which is nice as a SaaS company. In addition to that, we got about 350 employees, the majority of those are in our customer support, servicing in our clients and trying to make sure they have the greatest success using our platform.
Todd Chambers:With regards to the headcount, how is the tea structure? That's quite a lot of people, and we can talk ab ut your role in a second as CE and how that's changed. But ye h, what is it what is the ma ority of the makeup of those
Dave Woodward:So we're 100% remote. I'm here in our Boise employees? office, our Boise office is primarily an executive office. That's me, Russell, Brent, and John are here primarily. in add tion to that, Todd has an off ce in Atlanta, but everyone els is remote. Our customer sup ort is remotes, our dev lopers, remote, again, it's a r mote company. I think that's all wed us the opportunity of rea ly recruiting the very best tal nt. We didn't need to rec uit them in Boise, we didn't nee to recruit them in Atlanta. So herever the best talent was any here in the world, we had the opportunity of using that as a w y of bringing them onboard. I think the other thing, especially for a lot of our developers, they have the opportunity of actually working on something that they can see the end user actually having success with. Unlike a person who's working for Facebook or Twitter, where they're, they're dealing with little tiny pixels and things that really doesn't have that much impact. Any of our developers that are on the team people we work with on our team, they actually have massive impact in the lives of our customers.
Todd Chambers:When I see a ClickFunnels page, they have a kind of a certain look and feel which we'll get onto in a second. Does Click Funnels kind of cater to a specific you mentioned small to medium-sized companies, but does it lend itself particularly well to a certain type of product or service for example?
Dave Woodward:We started primarily with the information marketers, coaches, consultants, things of that area. Since then we've grown rapidly into a lot of the e-commerce play, so
people who are:Amazon shops, Etsy, Shopify, anything at all like that. Recently with COVID, we've seen a lot of professional
services coming onboard:doctors, dentists, accounts, attorneys, real estate agents, more physical people who are trying to bring people in. A lot of them also realising they can start doing things, telemedicine has become huge. And so we're seeing the opportunity of expanding much more than your geographic limitations and so those been probably some of the three largest areas. Agencies continue to use our platform for their clients as well.
Todd Chambers:So the big question is, how the hell did you grow from zero to 150 million ARR in six years? And I know that's a really big question. I'm sure it's tonnes of hard work and cumulative gains over the years, but kind of looking back now, are there perhaps one or two or two or three things that stick out in your mind? Actually looking backwards, those are the fundamental things that we got right, and that's how we've been able to scale so big.
Dave Woodward:I think the first thing you kind of have to understand is we're totally bootstrapped, we have no debt. And we don't have any partner, financial partners. So because of that, we learned very early on that we had to get very, very good at what we did to bring people in. And I think Russell literally had decade's worth of experience marketing online, really, one of the main things we saw was, for us, if we were to look at a trial, a typical trial is going to run anywhere from $130 to $150 per trial, and realising that it's a 14 day free trial with a credit card. After 15 days, we're gonna have a 40% to 45% conversion. So to have someone pay $97, it's going to cost us almost $400, to have that happen. So then we're really four months out before we actually get a return on that. So our CAC versus return and verything else is not a four- onth out if we were to go that irection. So what we end up oing instead was do what we new worked, and that was reating funnels to generate lients for free. So our whole thing is trying to find two metrics we pay a lot of We tried doing a whole bunch of other things in the beginning,
attention to, and that is:what' our cost acquire a customer? nd what's our average cart val e? So for us, we knew that one of the main things that when we re selling other types of information was providin a product or service that as bundled with information. And so for us, the very first th ng that really took ClickFunnels to our first 10,000 (we've b en even using it these days ri ht now) was webina trying to bring people on thinking that "if you build it, they will come" type of approach did not work. What we found was, actually was Russell was speaking at one of his, one of his friends, live events. And during that live event, we had the table rush take effect. And we're offering ClickFunnels bundled with information on how actually to use the product. At the time as $1,000 product for a year's worth of ClickFunnels but what they received with that was, it was called our funnel hacks webinar. They received a tonne of information on how to actually use the software, how to actually create products online. There were probably four or five different additional education training components. Actually in addition to that what they received was a year's worth of Click Funnels. Since that we've now dropped it down to six months of ClickFunnels and then what happened was, we took that live event onto a webinar. And we started doing webinars through a lot of affiliates, and then through paid traffic. And that really has been the main thing that's helped build ClickFunnels.
Todd Chambers:You touch on a really interesting point about the unit economics. You're saying it's costing you 400 to acquire a customer, but you're only gaining that money back at approximately 100 per month. So you have this kind of payback period of four months. And if you really want to scale something big, then you end up in this kind of negative cash flow trope. And it sounds like you kind of eat your own dog food. And that's kind of what the product is, it's to help you build these funnels. And that's how you built it. Selling the information and the course content first I guess most companies sell the product first. And then as an afterthought, there's like an onboarding, this is how you use it. You guys have it the other way around.
Dave Woodward:Yes, for us, the great thing is it brought in$1,000 upfront. The nice thing is brought $1,000 upfront, but the great part of the webinar is on the thank you page is where we had a free trial. And so even though a typical webinar, we're going to close you know, 20%, 25-30% of the attendees. What we found on all the registrants we would pick up probably three to four times that amount of people actually starting the free trial just because they went through the funnel to sign up for the webinar. And so we picked up a tonne of free trials. Typically we would look at we'd get as many free trials as we actually had customers.
Todd Chambers:Just in terms of your role. I believe you were previously the CRO, the Chie Revenue Officer, and now you re the CEO. What was your rol as CRO, and how did the tr nsition happen to CEO and ki d of what is the difference of your role at the moment?
Dave Woodward:I think the role is pretty much the same. So my s ill set is in growing and s aling businesses, that's what I do the best. And because of t at, revenue is what you need t grow and scale a business. A d so chief revenue officers r ally kind of what I spent the ast four yearsfive years on, eally making sure we were growin. We looked at the typical, you know, SaaS thing where we're trying to get two years of tripling and three years of doubling. That's really how we looked at it. And so I set the goal of what was it gonna take to triple our revenue and our customers in the first three years? Triple in the first two and then double for the next three. And that's really what kind of the roadmap that I set out to do, working with Russell and, and with John Brent and with the other people on the marketing and sales team. Trying to make sure that we hit those types of numbers was critical to our growth. Obviously, the other thing that really plays into revenue is going to be churn. So working with these quite a few different companies these days to actually help reduce churn and voluntary churn versus voluntary churn, trying to get that down as low as we possibly can. But then, as far as CEO, I've been in that role, I guess, for the last two years. And we officially made it this last year. Primarily, Russell and Todd are brilliant at what they do. But managing people isn't one of the things that bring them a lot of joy and satisfaction. And so I've taken on that opportunity to really manage the team and try to grow and scale and build the business that Russell and Todd are still heavily involved in taught still quite a bit daily basis inside of the tech Russell does the same on the marketing. And my skill set really is helping scale and build a business.
Todd Chambers:So when you log in, and you sit down to work on a Monday morning, what a traditional day look like for you? Is it a lot of looking after your managers? Is it hiring? What does the kind of day to day look like?
Dave Woodward:So our Mondays are: what we try to do in the first two hours is knock out all of our meetings. And so we have an executive, we call it a go-meeting, it's based on their goals and objectives. So the first 30 minutes is me with our executive team. The next 30 minutes is the executive team with the managers and the last 30 minutes is the managers with people they work with. And then we have a company-wide pulse meeting. Do you think that's a huge part when you have such a big team, So within two hours, everyone throughout the company knows what the goals and the plans are, what objectives we need, what obstacles we need to overcome. So our goals and obstacles, trying to make sure we knock those things out. Everyone knows what everyone's working on for the week. And we and you have hundreds of people below you? Do you think having target that and make sure that happens. I'm really not a meeting type of person. My go-to tools are Voxer, Slack and that personal assistant, a person who's got your back, was email. And I rarely ever checked my email. I've got the most at a critical turning point for you? I can tell you for me no matter how big your company is, amazing assistant in the world, Courtney Nicoll works with me, a d she manages all my email a d everything else and so tho e things are priority she lets e know about, but I really try to spend time just on strategy nd working with the te I think the very first hire you have to hire is an assistant. I think that they will take off so much of the stuff that you were you're struggling to deal with on a regular basis that just occupies your time that you don't need, and they're worth their weight in gold. I've been blessed to have great assistance through my entire career. And to me, it's just a necessity.
Todd Chambers:Now I'm really intrigued. So if you're hiring assistant, it sounds like Courtney's doing a great job. So well done to Courtney! What do you look for in a personal assistant? I guess they have quite a broad range of different skills. When you're hiring, what do you look for?
Dave Woodward:So for me, the main thing I'm looking, and everyone's different on that, but I look at what are the things that I don't want to do, that's going to take away time? I'm trying to buy back time. First thing I hire an assistant is I'm just buying time. Email is one of the things that just occupies a tonne of my time. I don't want to mess with email, I don't want to mess with scheduling calendar stuff. I don't want to mess with anything that I mean, she literally takes care of everything as far as transferring domains, buying products, buying services, travel. Literally, anything that I don't need to personally be involved in, she does all of that. She's just the most amazing woman to work with. I've been blessed to have her for quite some time now. And she just steps up, and we have a daily meeting at eight o'clock. We go through and if I can't make that call, I just Voxer the things I need, and she's on top of it. She typically will say"hey, you know what, these are the priorities, these are things you need to reach out to these people today". She's more than just a gatekeeper. She's kind of my second brain. She thinks for me in a lot of areas which I have been blessed to have.
Todd Chambers:So I'm not familiar with Vox. Is that project management software? Or is it something else?
Dave Woodward:Voxer. And it's like a walkie talkie on your phone. The thing I like most about it is I can go at four times the speed, so I can listen to content and consume content really quick. The thing that's always hard for me is people typically won't get to the point fast enough. And so for me, I
can speed that up real quick:team members can ask me questions, I can respond. Again, it goes back to the idea as far as being reactive or proactive in your communication. I don't want to be sitting there where I'm having to react to everybody all the time. I prefer to be much more proactive. Everyone knows that if you need something right away, Voxer is the best way of getting to me. If it's something by the eod type of deal, Slack is where I go to next. And then if it's something that I just need information on, that's what emails for.
Todd Chambers:Gotcha. You speaking about Monday morning, you just like to knock the meetings, I get them done. And everybody knows what the blockers are. Everybody knows what the objectives are for the week. How do you communicate that? You know, kind of top down is that done through project management, through slack? Is it done through the managers? How does that filter down?
Dave Woodward:It's done through the managers, but we use Slack quite a bit. Clickup is what we use for all of our project management. We've done Trello we've done Asana, we've done Monday.com, ClickUp seems to be the most recent one we're on. It works really well for us.
Todd Chambers:We also transitioned to ClickUp around six months ago. And I think it's a steep learning curve. I was a little bit resistant in the first couple of months, now we've embraced it. And I've really got my head around. It's really adaptable. So yes, shout out to those guys. You mentioned webinars being kind of your core traction channel back in the day. And these days, of course, you are a much bigger company, have much more resources, many, many more people in the marketing team. In 2020, what are kind of the core channels that work particularly well for you, because you're still growing quite considerably year over year? So how are you guys doing that?
Dave Woodward:We're still using webinars. We're huge proponents of webinars. In addition to that, Russell's written three
different books:Dotcom secrets, Expert secrets, Traffic Secrets, just released this year. Russel is now in New York Times bestselling author because of that book, and it sold almost close to 100,000 copies now. We use a lot of front ends, we have 20 different front ends that John Parkes, our Chief Marketing Officer, runs to drive our traffic to. The books have been a huge opportunity because it provides a lot of content. Obviously, within the books, it sells and pitches ClickFunnels. The other really big thing this year, we've been doing now for the last two years. And that is our One Funnel Away Challenge. That has probably been the best thing to help us not only for client acquisition but more importantly, for retention and decreasing churn. The idea behind One Funnel Away Channel it cost me 100 bucks, we give that $100 away to any affiliate who promotes the challenge. But the idea behind it, it's: it literally takes someone in and within 30 days and get their funnel up and built and running and tested and having sales. I think the most important thing, whatever you're selling is you have to have the buyer consume the product. And the more consumption that occurs, the greater chance they're going to either rebuy it or refer it or whatever else you might be trying to do with that product. The way it works is every single day, there's a basically it's a 10,000-foot level, it's given by Russell, and then it's broken down kind of 1000 foot level. And then we have our coaches who get in daily on Facebook, communicating with people just trying to make sure there's any hurdles they're running against, or any offices they have that those things are getting answered. The whole idea here is giving them bite-sized pieces that they can tackle within a day. And every single day, they're just doing a little bit more. By the end of the month, they built everything, they'd rent traffic to it, they've tested things that got results. And that way they're like "I actually can see something taking place". That for us has been probably the biggest game-changer for especially from a retention standpoint, we see by you know, month six and eight and twelve at that point where we're seeing you a 50% increase over clients who didn't go through the One Funnel Away Challenge.
Todd Chambers:It seems like you've also built a really great community. I know you have a Facebook community, you also have a live conference. How much of the community aspect do you think kind of plays into the culture and the growth of the company?
Dave Woodward:I can tell you for from our perspective, culture is the most important part these days. Again, I joke around as far iPhones, I got the new iPhone 12. It's literally the same thing as iPhone 10, a better camera but it the same thing. I bought it just because I have been with Apple for so many years, it's just the next thing that I do. I may skip a version or whatever. It's because I believe in the Apple culture. I must have probably 15 or 20 different if Apple products as far as my family members and things. We look at ClickFunnels following that same type of initiative. And it's really is that it's that culture, it's that getting you to go way back to you know, Steve Jobs original 1984 commercial of introducing the Mac for the first time. I think the idea behind it is you get people who are that passionate about your products, that they literally just, again, we've got t-shirts, we give out all the time, you go through our signup flow, you get a funnel hacker shirt, so you can then identify I am a funnel hacker, I'm part of the community. I think the biggest problem most people struggle with as far as an entrepreneur or small business owner, it is so lonely and so scary. And you just you don't have anybody to talk to who knows what you're going through. I remember when I was running my agency, people just had no idea. I mean, a lot of my
friends and their spouses:they had businesses and jobs that were nine to five, and they're like, I just don't understand what you're doing how it just made no sense. And because that I, you know, go out to dinner, I just didn't have anything to talk to me back. So I'm like, we'll talk about family and kids, but professionally, our lives were so different. And I think the main thing that ClickFunnels provides is it provides a community for those people who want to be a part of want to grow at scale and build their own business. And that for us is probably one of the most fun things for me. We were fortunate to have our funnel hacking live event in January, right before the whole COVID thing you know.
Todd Chambers:You were lucky with this!
Dave Woodward:We were. We're looking out to 2021 trying to find the right date because people love to get together as entrepreneurs. They love to be a part of it, they want us, and they love seeing the success we award. We have our two comma club awards, and our two comma club x and two comma club c awards, just trying to recognise the success of other businesses and entrepreneurs.
Todd Chambers:Yeah, you hit the nail on the head for me. I'm familiar with ClickFunnels anyway, but looking into this, there's definitely that entrepreneurial spirit within the community, it's people that kind of want to make it and having that content and having those people around that can answer those questions and guide you I think is...yeah what creates that culture within the community. Essentially, I think in 2020, if you look at, you know, software, realistically, you're probably not going to win the race if you're building based on features because, you know, these days we can build anything. Development is almost a commodity. I think the brand and the community is the thing that's going to differentiate you and yeah, and keep people retained with within the product. Super smart bit. Yeah. How about COVID? And you mentioned you had your event in January, which I guess was just before the sh*t hit the fan. How has COVID affected you? You mentioned your you remote team, I assume?
Dave Woodward:Yeah.
Todd Chambers:Okay, so you were quite well placed for COVID. But how is it been on the company, anything you've kind of comfortable sharing?
Dave Woodward:The biggest mistake I made was not buying zoom stock four years ago when I started using it, but aside from that, from a company's perspective, it's been a huge blessing. Um, it's hard for me to talk to other businesses I know who. I got a lot of friends who've lost their businesses because of COVID, and I'm sensitive to that pain and that frustration. Having gone through that in 2008-2009, I know how painful that is. For us, at ClickFunnels It was actually a huge boom. We had a large spike in customers who were trying to figure out how to go online. I think the main thing COVID did was it accelerated and pushed people three to four years into the future, as far as just online usage. Again, take a look at anyone. I mean, Amazon. Everyone's shopping on Amazon right now. I mean, look at what we just went through in Black Friday. They actually started Black Friday on November 1 just trying to get the retailer's money because, again, Cyber Monday's actually sells more than Black Friday. That's these days just because of, of COVID and because of what's happened now. I think that you're seeing a lot of your professional services a lot of people who even our gyms one of my trainers here. He's had a huge successful gym here for years, but now he's going online just because of the whole COVID situation. I think what it primarily did was it started making, forcing people to feel much more comfortable doing things online, buying online, shopping, just consuming content online. And I think because of that, we happen to be one of the beneficiaries. I know a lot of other companies are in that same situation. But I think as you look forward, the benefit of COVID is, I think you're gonna see a lot of companies actually accelerate their growth online, where they otherwise would have waited three to five years to do it.
Todd Chambers:Yeah, indeed. Well, you're so right. There are so many unfortunate losers in this in this situation. And you mentioned that you had a similar feeling in 2008, or 2009. Do you mind sharing what happened to you there?
Dave Woodward:I was heavily involved in the mortgage real estate. Most of my clients were in that area. And I started paying in advance for clients marketing, knowing we get it on the back end, and they just didn't pay. And so it was a, it took me to my knees, I guess, a lot of times.
Todd Chambers:Were there any particular lessons from that period looking back?
Dave Woodward:I could do a whole podcast just on the lessons learned! I think one of the main ones: I got overleveraged, for sure, I trusted too much of my clients. I'm a much more astute business owner, and I run our business much more by numbers. You can't run just by numbers, you got to have a gut check out there as well, but I think I trusted too much for sure in my clients and thought we were working together. And again I understand, when it's your business and your family, they come first. And so because of that, I didn't get paid on things that should have been paid on. But again, I think the main thing was just building reserves. And just being cautious. I'm not a person who runs my life by fear at all, I'm very optimistic about everything that's happening. But I think at the same time, the primary thing I learned was you make sure you have reserves. Cash flow is king, and especially when you go into hard times, everything goes on sale. And it would have been a nice time to actually buy things instead of selling things.
Todd Chambers:Are there maybe 2,3,4 metrics from a numbers perspective of ClickFunnels that you kind of have on the pulse? Would it be new users activated users churn? Like what are those few metrics that you watch like a hawk?
Dave Woodward:So ClickFunnels is a 14 day free trial with a credit card. And so when they first come in, they sign up, step one is sign up. Step two is to enter the credit card. I look at those numbers every single day: how many people are coming in and enter their email address and signing up? How many people are actually entering their credit card, and then obviously, day four day 15, when they pay or the so those are the first things. For us, the really big number I always look at is day 105. That's 14 days plus three months. That's really where I see churn, I think 14 days free trial, again, we're in the tiny business to small business, middle-sized businesses. So there's going to be a lot of people; it's more of a paid trial for three months. We really look at after three months, those are customers who are really going to stick and move forward with it. So I look at that. Obviously, MRR is a huge issue. I look at churn on an on a very frequent basis. If not daily, I always look at least weekly. And then the other thing, obviously, is I take a huge look at EBITDA, and saturation, SaaS quick ratios.
Todd Chambers:Just to take another random question that came into my mind. And again, I was thinking about the size of the company, and you're the CEO, but you also have the two co-founders I'm sure to have quite a strong opinion about the strategic direction of Click Funnels. How do you kind of come to those big strategic decisions in the direction of the company? Is it is that designated to one person and he takes point or is it more of a collaborative effort there?
Dave Woodward:I've known Russell now for, gosh, 12 years, I've known Todd for the last nine years now. We're pretty much always on the same page.
Todd Chambers:Okay.
Dave Woodward:I think one of the things I learned from the whole 2008-2009 is very careful who you partner with. And I was hesitant to have another partnership later. But for me, when you find the right partners. I spend as much time with Russell and Todd as I do with my wife. It's almost like another marriage. We're very similar, we're very focused on the same direction we're trying to go. I guess if it came right down to as far as to push or shove I mean, really, Todd and Russell the two that would have the final win, they have the most equity.
Todd Chambers:yeah. So what is the future of ClickFunnels? What is the strategic direction you guys are looking to? Is it more of the same? Or is there a different angle?
Dave Woodward:Oh my gosh, I'm so excited about this! It's actually a different angle. Part of it I can say and part of it, you'll have to wait till later this year, as we look at some other things. I think the main thing you're going to see, primarily with ClickFunnels and with other companies in our
space:I think you'll probably see over the course the next two to three years, a large roll-up of companies, especially as we start hitting a recession or anything like that would be a huge trigger for a roll-up in this industry. Payments are going to be a really large opportunity for us. We have a deal right now with Stripe we have anywhere from two to $3 billion that gets processed on the platform that we can track on an annual basis. So payments is a huge, huge opportunity. Another machine for ClickFunnels is international growth. We've organically grown to where the majority of our customers are actually outside of the United States. And so we haven't ever done any massive marketing pushes to actually grow and scale internationally, it definitely is one of the things we take a look at in growing and scaling. And that's a huge opportunity for us. A lot of the other countries around the world are becoming much more inclined to do things online as well.
Todd Chambers:I'm just thinking the best professional question I can ask you before I maybe tie up on personal questions. For me, I think one of the hardest things about growing a business has been hiring. And I'm sure for you hiring is a huge part of what you do. Are there any specific things around hiring that maybe if you're giving advice to someone that we're looking to grow a SaaS company? What do you think are the fundamental principles of hiring?
Dave Woodward:We've been really blessed and really fortunate for the most part. I was actually talking to a friend of mine is that a C level executive in a publicly-traded company for the last 20 years, I mean, just that's where he's cut his teeth. But, interestingly, the advice he gave me was basically, from zero to 500 employees should all come from referrals. He said, especially these days, with culture being so important, and with people being so remote, they can work anywhere, culture fit is going to be the most important part. You can teach, and you can train a skill set. Culture is something you really can't teach or train. You can try to find the right ones. Still, realistically from zero to 500 employees... honestly, if you can get to that level without having an HR department and just focusing on hiring from friends and referrals, that's going to be your best growth opportunity. And I can tell you our first, probably 200 employees was that way and then we started going outside and, and looking at HR and going that direction. Not saying we have bad hires, but it was a different hire. I think the hardest part when you're growing and scaling a business is to maintain the entrepreneurial founders' vision and the culture that exists in a startup that as other people come in later, they don't appreciate or don't feel all the blessings and the greatness of what got you to where you're at. I'm a huge believer in what got you here won't get you there and who got you here typically won't be the same people who get you there unless they're willing to grow and change and grow with that. So I would highly recommend when you're looking at growing and scaling from an employee standpoint, if you can get referrals from your existing customers, that's by far the best way of doing it.
Todd Chambers:I feel like hiring on culture is yeah, that's a really solid piece of advice. But how practically, do you do that? I think it sounds maybe easier than it actually is. Let's say you are even getting referrals from the customers, how do you ensure that you do get someone that is culturally the right fit?
Dave Woodward:For us, I can tell you, our support teams, all came from customers. Some people using the power platform, they were passionate about what we did. And so it was a very easy culture fit because they had no desire to come work with us unless they wanted to, to take that culture and to grow and build and scale that and help in that area. So from a support standpoint, that's one of the things we did. When looking at developers, we didn't have a large friend network in the development space, and we reached out to a couple of headhunters. Still, the one thing I found what was when you're looking at a culture that...we're in the process of Russell creating an on onboarding for new employees that will be all culture-based. A lot of video content, things that success of our customers, what our customers really like. I think part of that culture is helping them identify who the avatar is. And I think it's important that it's hard to fall in love with the culture if you don't love the avatar you're serving. And for us, trying to help our customers and our employees really understand who that avatar is, what pains they're going through, so that it's important as an employee, whether you're on the dev side, or on the customer support side, or on the sales side, you need to know what the other person on the other side is experiencing and feeling. We're looking at having each of our developers and all of our customers actually spend time in support. Tony Shea recently just passed away, Zappos co-founder, huge, huge fan of everything he did at Zappos, and really taking a look at making sure that every single employee spent time with that customer. I think the best way of instilling culture is to make sure they know your customers, they love the customers, they're excited about the customers, they want to have those customers have success. That's where culture comes into play.
Todd Chambers:Well, that's kind of wraps up on the professional side, if you don't mind. Just the last couple of questions on a personal note, how is your personal relationship with money changed? I think there's there's common advice that once you get to a certain salary, that your happiness doesn't increase after a certain point, right? Is that something that you've experienced yourself?
Dave Woodward:Money is just an amplifier. It amplifies whatever type of person you are. So if you're a good person, having more money's gonna make you a better person. If you're a bad person, having more money makes you a worse person. I can tell you that I think all of us have a, there's a baseline dollar amount. And it's different for every person on how much they need to make to feel safe to make them feel secure. It might be 50,000 100,000 200,000, whatever that number is. And, again, I find it's typically set by how you grew up, or your experiences with money when you were younger. For me, I know, six figures, man. If I could just get through past that six-figure mark, that's when I feel safe and secure and able to provide for my family. I think once you hit that the real key is learning how to make sure that money doesn't run your life. And I'm a huge believer in, in tiding in. And I think that no matter how much money you make, I remember when I was a financial advisor years when I first started my career, even though I'm a huge believer from religious purposes on why tithing is so important, I think, just spiritually amongst in no matter if you have any spiritual belief at all, just the idea of giving away 10%, you pick whatever charity you want. What it does, psychologically, is it tells you you can live on less. And by doing that, if you can start living on 90, so I look at tithing as an attempt. If you can live on 90%, whatever you're making, that in and of itself helps you overcome a lot of the fears and the money mongering type of thing that happens for so many business owners and entrepreneurs as well as other people. So I'm a huge believer, as far as tithing, I think the other thing is that, that the more money you make, you know, all it does is so you can I heard it said years ago, you don't have a problem if you can solve with money. So money is just a way of keeping score for me. Obviously, the bigger the businesses, the bigger the problems. It's just newer devils you deal with. And I think the key is making sure that you're fiscally responsible as a business owner, especially we've had such boom time for so long, that it's really easy. People think "Oh, it's always going to be this way!" I felt that way in 2008 and nine and got my teeth kicked in 2010 through 12. and realise that's not always the case. What goes up doesn't always have to continue going up. So it typically comes down. And because of that, I think the most important thing when it comes to money is to make sure you have a minimum of two months reserves if not three to six months reserves to be able to make sure that you can weather the storm. There's nothing worse as a business owner than being forced into making a bad decision because you don't have resources.
Todd Chambers:Yeah, I was reading a survey, actually about marketing agencies, funnily enough. And they were saying that I think the vast majority of marketing agencies only have around one and a month to two months of cash flow. So if the sh*t hits the fan...
Dave Woodward:Oh, yeah!
Todd Chambers:And then as you just said, you're forced to make those bad decisions, which is not a good place to be.
Dave Woodward:Well, especially you're paying attention to ROAS, and your return on ad spend. If your return on ad spend is out in two to three months, then you better have six months worth because it's going to take you some time to capture that's why I was looking at trying to get this as quick as possible.
Todd Chambers:My last question there. Thank you so much for your time. Correct me if I'm wrong, I think I I saw that you meditate. And I also saw you sleep geek like me. Which of that two meditation or sleep(tough question) do you think has provided the kind of the biggest gains for you as a human being?
Dave Woodward:For me, I think it's meditation. Okay, I can tell you from a sleep standpoint, my sleep is never consistent. My aura ring tells me that every day.
Todd Chambers:Your readiness was terrible on several of your Instagram..
Dave Woodward:Yeah, I know, at least for me, sleep-wise, I'm a six to seven-hour a night. If I get six to seven hours a night, I'm good. When it starts dipping less than six, a couple nights in a row, it catches up to me. For me as far as meditation, I have an infrared sauna I love spending time in and especially during the winter months. And for me, that's a time of meditation. And I think when I look at meditation, it's I'm meditating a lot of different ways. Some of it's through just prayer. Others are just trying to just kill the noise around me just so I can think through things. I'm a huge believer in asking better questions, the better questions you ask, the better answers you're going to get. And the only way you can ask good questions is you have to have time to think through. And so that's really my meditation is a lot more thinking through a lot of the questions and things and just trying to get things quiet. I've got the benefit of having a beautiful wife and four boys, and we have an active lifestyle. And so because of that, finding stillness is a tough thing at times. So for me that meditation in the morning, I'm a morning person and again 15 minutes is about all it takes, and I just need to be able to calm things down.
Todd Chambers:It's really interesting is that when you if you don't meditate for whatever reason, even if it's just for say, three days, four days, when you wake, and you're at work you really do feel the difference. Meditation, the over the years, it really does just calm you kind of balances you gives you that equanimity you need to be the eye of the storm.
Dave Woodward:That's the best way of looking out for sure!
Todd Chambers:Listen, Dave, I know you need to go you've been incredibly quick with your time. So thank you so much. Where can people reach you if they want to find you?
Dave Woodward:ClickFunnels is obviously where I'm at! As far as my personal stuff, Instagram and Facebook, the two channels I use the most.
Todd Chambers:Awesome, thank you so much for your time and have a good day!
Dave Woodward:Thanks, Todd.
Todd Chambers:Thanks for listening to the podcast, guys. If you want to get links to any of the resources we discussed in the interview, head over to Uprawmedia.com/podcast. Until next time, take it easy!