Clipfolio
Alan White and his co-founder Peter launched Clipfolio in 2001 as a consumer dashboard for monitoring real-time data. It was popular, but it did not make money, and the founders spent many years slogging through it. Their persistence paid off when they relaunched the idea as a cloud product aimed at small and mid-sized businesses in 2012.
The 2012 cloud version gave business owners one screen that pulls marketing, sales, and support data together so they can see the health of their business in real time. The product is subscription-based and entirely in the cloud, with mobile support that runs on TVs. Alan says the company was bootstrapped at the start, and the founders held off on raising outside money until they had metrics showing a good return on investment.
The company grew quickly after the cloud launch. Alan says it had about 350 customers by the end of 2012 and about 1,100 by the end of 2013, with month-over-month growth of roughly 15 to 20 percent. That growth led to a $1.7 million seed round in early 2014 and a $6.2 million Series A in early 2015. Clipfolio sells entirely through inbound, self-serve sign-ups and has no outbound sales team, because Alan believes small business owners don't want to be sold to.
Clipfolio's average customer pays about $70 to $80 per month, with plans starting at $24 or $25 and some large customers paying $1,000 to $2,000 per month. Monthly logo churn is about 3 to 3.75 percent, with a payback period of about 8 to 10 months and an LTV-to-CAC ratio of about 4. Alan points to custom metric calculation as a key differentiator against widget-style dashboards.
As of the November 2016 interview, Clipfolio had about 7,000 customers and roughly $500,000 in monthly recurring revenue. The company had about 70 employees, including a support team of four in India, and had raised about $7.9 million in total. Alan said the team was planning another doubling of revenue for 2016.
- •Relaunching an existing product as a self-serve cloud tool for SMBs turned a decade of stagnant consumer revenue into rapid growth, which suggests the market fit mattered more than the original idea.
- •Keeping sales entirely inbound at a $70 monthly price point removed the cost of field sales, which is why the unit economics (roughly 8 to 10 month payback and a 4x LTV-to-CAC ratio) work at this scale.
- •Growth of 15 to 20 percent month over month before the seed round gave the founders concrete evidence that outside capital would accelerate an existing engine rather than fund a bet.
- •Differentiating on customizable metrics rather than templated widgets helped the company stand apart from competitors that offer only standard dashboards.
- 1.Start with a credit-card, self-serve pricing tier low enough (around $25 to $80 per month) that small business owners can buy without procurement or an IT review.
- 2.Build the product so customers can customize their own metrics, since off-the-shelf templates lose users who eventually want to modify them.
- 3.Support adoption with free education such as webinars and a regular blog that teaches users which metrics matter and what to do when they move.
- 4.Track payback period and LTV-to-CAC before raising capital, and only raise a round once the data shows that additional spend will produce predictable returns.
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