RevBoss
Eric Boggs spent years in the trenches of B2B software. He was employee number one at Bronto, where he was a one-man sales team for two and a half years, and later founded and ran Argyle Social. Argyle's outbound sales process, in his words, was "a complete mess." After Argyle wound down, he spent a year as a consultant helping SaaS companies such as Azure, User Voice, and Device Magic improve their sales processes. That work gave him a bead on the idea that became RevBoss.
RevBoss did not start as software. It launched as a services company, and Boggs later admitted that building a services business was easy while growing one was very hard. The plan from the beginning was to turn the agency's repeated client problems into a SaaS product with a built-in customer base. The product launched in September 2016. The company raised $1.1 million in seed funding about a year earlier, and almost all of it went into software development. Boggs said that "everything takes twice as long and costs twice as much."
The transition was painful on paper. One financial services client paying $3,000 a month was expected to move to a $1,000 a month SaaS plan, creating a short-term cash gap. Boggs described the trade-off as cannibalizing the business in the short term while building more valuable recurring revenue over the long term.
The existing services clients became the first SaaS customers. Many of the roughly 50 to 60 services-plus-product customers had been with RevBoss for a long time. The sales pitch also helped: prospects new to sales prospecting could let RevBoss run the program for three months as a service, then move into the SaaS product already running.
Acquisition costs were low, at about $2,000 per customer, and mostly came from inbound and referrals. Boggs joked that a company helping others build pipeline had "sucked it out" at its own sales. The team of 12 had only one salesperson. Projected gross monthly churn was about 8%, which Boggs called a worst-case budget. He budgeted a 12-month lifetime value of about $18,000 and hoped for longer retention.
As of December 2016, RevBoss had about 50 customers, an average revenue per customer of roughly $1,800 per month, and MRR just below $90K. The team of 12 was split between a sales and services team in Durham, North Carolina and remote engineers in several states and Ecuador.
- •Because the first SaaS customers were already paying services clients, the company skipped the cold-start problem that kills most new software products.
- •Accepting a short-term revenue drop to convert services clients into recurring subscriptions shows a founder optimizing for compounding value rather than near-term cash.
- •Low customer acquisition cost from inbound and referrals signals that the product solves a problem customers already talk about, which makes word of mouth work without a large sales team.
- •Drawing on prior experience at Bronto and Argyle gave Boggs a clear view of the sales-process pain, so the product was built around a problem he had lived through himself.
- 1.Start by running your agency or services work as a sales-enablement engagement, and note which problems clients repeat across accounts.
- 2.Package the repeated work into software, and offer existing clients a managed pilot period that converts into a self-serve subscription.
- 3.Accept a short-term revenue drop in exchange for recurring revenue, and track the cash gap explicitly so it doesn't surprise the business.
- 4.Ask satisfied clients for referrals and track their inbound and referral sources so you know which channel is actually driving growth.
- 5.Set conservative churn and LTV assumptions for budgeting, then update them as real retention data comes in.
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