PureChat

Josh had already built several multi-million dollar SaaS products under the Axosoft umbrella, but wanted to focus on one that showed real promise. PureChat started as a live chat tool within Axosoft in 2012, but the real story began when he separated it into its own independent company in 2014. The live chat space was already crowded with competitors like Drift, HubSpot, Intercom, and Facebook Messenger integrations—but Josh saw an opening: most websites wanted something simple and easy to use, not feature-bloated enterprise solutions.

When PureChat spun out in 2014, revenues were zero. Josh and his small Arizona team of 9 raised $1.5M in an angel round locally to fund the effort. Initially, they charged for both live chat and analytics on a per-operator pricing model, but this created friction. The paid version was set at $99/month, targeting customers who wanted real-time visibility into their website visitors—something even Google Analytics couldn't easily provide.

For the first couple of years, PureChat grew steadily but remained constrained by its freemium positioning around analytics. Customers existed, but adoption was limited. By December 2016, Josh estimates they were running around $65-70k in MRR. The CAC was approximately $600 per paid customer, with a payback period of about six months—healthy unit economics, but not explosive growth.

The breakthrough came about three months before this interview when Josh made a bold decision: make the live chat itself 100% free and monetize purely on the analytics layer. "If we make it free, we have a shot at becoming the standard live chat tool for the web," he reasoned. Support costs and infrastructure would be trivial compared to payroll. This gamble paid off immediately—signups doubled and churn actually *improved*. The 3.8% monthly churn (equivalent to 26-month customer lifetime value of ~$2,000) proved the stickiness of the product. Josh was willing to spend up to $600-700 to acquire each paying customer, betting that the analytics upsell would convert free users into paid ones over time.

At the time of this interview, PureChat was doing $1.3M ARR across 4,000+ paying customers. The founder attributed growth primarily to strategic paid channels (Google AdWords and Facebook Ads), though the company wasn't aggressively pushing for acquisition—instead focusing on unit economics and retention. When asked if he'd sell for 2-3x ARR (roughly $3M), Josh declined, noting they'd already raised at a higher valuation on a convertible note and had completed a price round at a $5.5M valuation. His vision was to build a sustainable, self-sustaining business that might eventually attract acquirers like HubSpot, but only from a position of strength.