HipLead
Connor Lee's path to HipLead started with a failed company. Telfi, a telephony startup built on Twilio that aimed to offer Google Voice-style service for businesses and compete with Grasshopper, went through Y Combinator's Winter 2011 batch. It reached a couple of thousand dollars in monthly revenue, with unexpected traction among Canadians because Google Voice did not work in Canada. When the math showed no large win on the horizon, Connor stepped away and his co-founder kept it running until it faded.
Before Telfi, Connor had run marketing at a friend's B2B food company, Buyers Best Friend. He said the company scaled to a large amount of revenue without spending money on marketing, relying mainly on outbound sales. That experience became the foundation for what came next.
HipLead began as a consultancy rather than a software product. Connor's founder friends asked him to repeat what he had done at Buyers Best Friend, and each paid him a couple thousand dollars. The company launched in 2013, though he started working on it in 2012. Its first year brought in roughly $200,000 in revenue, and it had employees from day one.
The service model was built around outbound sales. HipLead generates leads, handles some sales operations, and runs outbound email campaigns for clients, typically working with their demand generation or sales operations teams. Clients pay between $2,000 and $4,000 a month on average, and the biggest client pays around $20,000 a month.
The first customers came from Connor's network of founder friends. Rather than running a formal acquisition engine, HipLead grew through the reputation of its results and the referrals those results generated. By 2015 revenue was just under $1 million, and by December 2016 the company had 30 customers.
HipLead stayed profitable from day one and kept customer economics tight. Connor said customer acquisition cost was close to $500, while lifetime value was about $16,000, based on a cohort analysis of historical revenue data. Annual churn was under 15%, and contracts ran for a minimum of three months, with six-month and one-year deals common.
The company avoided venture capital. It took a little over $200,000 in revenue-based financing from Lighter Capital to make a few key hires, without giving up equity. Connor noted that this kind of financing generally suits companies with real, scalable revenue, often above $1 million in ARR, so it would not work for a very early company.
As of December 2016, HipLead was doing about $120,000 in MRR, serving 30 customers, and employing 16 people across San Francisco and remote locations in South America, Asia, and Europe. Connor said he was open to raising capital in the future but was not actively pursuing it.
- •Selling outbound sales as a done-for-you service let HipLead charge recurring fees from the start, which gave it steady MRR without needing a product build.
- •Connor's prior results at Buyers Best Friend gave him proof he could show prospective clients, which turned network trust into paying customers.
- •Keeping CAC around $500 against roughly $16,000 lifetime value gave the business a wide margin for spending on growth.
- •Profitability from day one and revenue-based financing instead of equity let the company grow without giving up ownership.
- •Multi-month contracts and under 15% annual churn indicated clients saw results, which supported referrals and renewals.
- 1.Start by doing the service manually for a few friends or contacts who already trust you, and charge them a recurring fee.
- 2.Document a concrete result from a past project, such as revenue growth driven by outbound sales, and use it as sales proof.
- 3.Track CAC and lifetime value using cohort analysis on your actual client revenue data before committing to growth spending.
- 4.Sell minimum three-month contracts with the option of longer terms to reduce churn and improve forecast predictability.
- 5.Once revenue is steady and above roughly $1 million ARR, consider revenue-based financing as a non-dilutive way to fund hiring.
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