12min SaaS podcast, Founder Interview (Joran Hofman) by Upendra Varma (Host)

Intro to Podcast

Upendra Varma  00:00

All right. Welcome, everyone. Welcome to the Turn That SaaS podcast. I'm your host Upendra Varma. And today we have Joran Hoffman with us, Joran, runs a company called Reditus. So Hey, Joran, welcome to the show. 

Joran Hofman  00:14

Thank you for having me, Upendra. 

Upendra Varma  00:16

Yeah. So Joran. So let's talk about your product first. So what does Reditus do? And why do customers pay you money?

SPEAKERS

Upendra Varma, Joran Hofman

SUMMARY KEYWORDS

affiliates, monthly recurring revenue, linkedin, saas, marketplace, Appsumo, bootstrapped founder,

Related content: Apple Podcast link & blog on Upendra's site; Linkedin B2B Case Study

Intro to Reditus

Joran Hofman  00:24

Reditus is an affiliate management tool, purely focused on b2b SaaS companies. So we help them to grow by basically leveraging somebody else's network. So, why do they pay us? So they either pay us to get listed in the marketplace, which helps them to find new affiliates or affiliates find them, or they pay us when they hit that threshold in the free plan, which basically meant that they hit 5k monthly recurring revenue, via our own recruited affiliates in the free plan.

Upendra Varma  00:54

Okay, alright. So let's talk a bit more here. So you're not just selling an affiliate marketing software? Is it? So you also may have this marketplace where you have these potential affiliates that people could sort of come and sort of talk to? Is that how it is?

Joran Hofman  01:09

Yeah, yeah. So they, we do leave it on the affiliate side. So basically, the affiliates house your marketplace with all kinds of b2b SaaS programs offered on that side, they can filter it on commission percentage, commission length, and they can join that program, or they request to join that program. So we, we indeed, go one step further. Because I did get started reading this out of pure frustration. This is Amazon's affiliate product ad TAS tools, I have to log into all these tools separately, which is a complete hassle. So that's why we are taking a different approach by listing all these programs into one marketplace, and then an affiliate can manage all their programs by Reditus. Easily.

Upendra Varma  01:52

Good. So let's talk about this marketplace first. So how many affiliates do you have on your platform as of today?

Joran Hofman  01:58

So today, we have I would say 1500? Maybe like there are some test pages in there. So let's say 1200, like active users?

Upendra Varma  02:07

And do you also charge them or, or they're just in just log in, and they just look for opportunities out there?

Joran Hofman  02:14

Correct. So we basically only charge one side, and the side we charge is, are the SaaS companies. And we do not charge the affiliates and we won't be charging them in the future either. So that side of the marketplace wall will always be free.

Reditus Metrics

Upendra Varma  02:30

Makes sense? So let's talk about these SaaS Customers. So how many customers do you have on your platform as of today?

Joran Hofman  02:36

Yeah, so many of your podcasts. Previous podcasters did an AppSumo launch? Like we did it as well. I'm gonna take those numbers out. So at the moment, we have 16 paying clients on a monthly recurring revenue basis.

Upendra Varma  02:52

Got it? And what's the approximate amount MRR that you did last month?

Joran Hofman  02:56

$1900 MRR

Appsumo Experience & Numbers

Upendra Varma  02:59

And also give us some numbers about how your lifetime deal went.

Joran Hofman  03:04

Yeah, so lifetime deal, we cut it short. So normally you have to do 120 days, we did 90 days, we sold around like $10k in code, which relates to like 170 or 178 codes or something like that. And most of them, or only one of them actually purchased like 10 codes, which gave them like unlimited, free of everything other than that we limited to a monthly recurring revenue what they could earn by recruiting and produced by us.

Upendra Varma  03:36

But then why did you cut short your program?

Also read this blog: Our AppSumo Experience.

Joran Hofman  03:40

Firstly, I didn't like it. I mean, it's nice, I think it's always a two phase situation during a lifetime deal. Like it's really nice to get your first users, really nice to get some revenue in. But the lifetime deal community has some different expectations, like they want the world where you are. So you can't offer that yet. So the expectations they have might be different than you can offer. And it's somewhat validating the product, but then it somewhat isn't because you're basically selling to a community who's not willing to pay the full price. So for us at one point, like we were ready to go monthly recurring revenue, so I did not want to bother that much anymore. But just selling a lifetime deal. Really having to bargain everything in it. I rather just bargain I guess for the monthly recurring revenue. So that's why we really try to keep it short and sweet. 

Upendra Varma  04:35

So the interesting thing is you basically cut it short, right? So what what happened what what was the trigger there? Right? So why so you must have known all of these things before you started that lifetime deal. But what made you sort of stop it in between? Was there any big event or something that you'll realize that you didn't knew in the beginning?

Joran Hofman  04:52

Yeah, I mean, I even wrote a blog about it like the lifetime deal community was really new for me, so I thought it I thought it was going to be a huge success, we're just going to launch an app platform we did on AppSumo. And it's going to be instant success. That wasn't the case. Because apparently, there's two tracks you can take, you can have the select route, or you can have the old marketplace. I did not know that. So we listed ourselves, which basically meant is on day one, I was ready, like I was behind chat, ready to answer any questions, nothing really happened. Because apparently, you have to push everything yourself to 10 reviews, and then they're going to do a Facebook post about you. But that Facebook group doesn't really have that much members in there. So I was expecting a bit more from them, where we had to push everything ourselves. So at one point I kind of talked to them is like, what are you guys doing for us, because you are taking quite a bit of cut like we are, like demolishing, like our revenue model. So they couldn't really do much for us more. So we just decided we're going to cut it short and like the one thing we probably have different than most companies, we have really niche, right, we focus purely on b2b SaaS companies, where if you email marketing tool probably the entire app, some of us are going to be interesting where for us, we purely focused on other SaaS tools.

Upendra Varma  06:17

Got it? So essentially, what you're saying is, that you are not in absolute select, and you just have to do everything for yourself. So it will not really give adding any value as such to you, is it?

Joran Hofman  06:29

Correct, correct. And in the end, like, you are not earning that much money, and you are investing a lot of time because they will come with a lot of requests. And again, the expectations they have might be different than a normal user. So that's why we really wanted to keep it short.

Upendra Varma  06:46

Got it. So just to close this app, some more topic, right? So how much money did you raise out of all of it out of the deal that you've just cut short?

Joran Hofman  06:53

Yeah, so 10k dollars.

Upendra Varma  06:57

$10k, makes sense. All right. All right. So let's come back to your SaaS customers you had, like you have like 16 paying recurring customers. Right. So talk to me, where did you get all of these customers from?

Attracting first paying clients for SaaS

Joran Hofman  07:08

Yeah, I mean, personally, I have a big network on LinkedIn. So I have around 10,000 followers, which is a good place to start. But in the end, the biggest, where we got it from is LinkedIn outreach, just by reaching out to other founders, who are the same size as us are a bit smaller. So we can add a strategy where we focus on smaller companies first and allow the decision makers easy approval process, etc. Talking founder to founder, and then from there reaching out to them.

Upendra Varma  07:39

Got it. So you mentioned LinkedIn outreach. Right? So were you using any automated tool? Or was it just you pinging people out manually?

Linkedin outreach

Joran Hofman  07:47

It was kind of semi automated, like we did not use a tool like Expandi or DuxSoup or, or anything like that. I actually had a VA, they call it a VA on my LinkedIn, okay. The my LinkedIn profile details and login, and they basically started reaching out to I think, what was it like 200 founders per week, and then they just would send a connection request. And as soon as they would accept it, they would start messaging them, but in a manual way, in a personalized way. So that automated for me, but not for the person who's doing it

Upendra Varma  08:25

That makes sense. So help me complete this funnel, right? So, you reach out to 200 founders per day. So what does like what is your acceptance rate for connections? And what happens after that? How do you basically show the value of the business directly sell your product? Or what else do you do? What's the strategy, complete the funnel for me? 

Joran Hofman  08:44

Yeah. So like, we did not send a message with the connection request. So the connection request was empty. That allowed us to produce pocket interest from them to accepting it to find out, okay, what does Joran want, then, we did not go in sell mode right away. So we just basically, the guy had a credit messages saying like, we're working on an intricate SaaS project at the moment, would you like to learn more about it? Starting with a question, not selling. And then if they would update, talk to me about it, then I would give a small pitch as to what we will do. Are you interested in learning more? If yes, let's book a demo. And that was the end goal, booking at demo, and then they would come to me. So that company, basically we would do everything before booking a demo, and the demo would end up with me. And that person ending up in the call would actually think they already talked to me before jumping on a call.

Upendra Varma  09:41

Alright, So your goal is to book demos, and like for every 200 people that you reach out every week, so approximately how many demos Do you book?

Joran Hofman  09:50

Yeah, that's a really good question. And I do not have the answer for that because that's the I guess, the challenge with not doing it in a tool like this. It's really hard to keep track of those numbers.

Upendra Varma  10:00

Yeah, but approximately 5, 10, 1500? What does that look like? Or maybe you can aggregate it over a month or any quarter? And you can just give me some numbers?

Joran Hofman  10:11

It's a good question. Let me I guess I would say, at the best month, we had around 30 to 40 demos per month. And, like, the thing is, also, it's really hard to track this, that people wouldn't even book a demo, they would just directly sign up. And then they wouldn't even want to talk to me. They just signed up and already got started themselves.

Upendra Varma  10:33

Yeah, I understand that. So 10% to 20% is a pretty good conversion rate. So just help me understand is it what it looks like you have 916 paying customers, and you're at around 1900? Mr. Right? That's, that's around 150? Is your approximate, you know, monthly revenue that you're getting from one customer? That's around 1500, ACV, or something like that, right? So can you afford to do demos at such a, at this point of, you know, based on your ACV range?

Joran Hofman  11:00

I mean, I can't afford anything at the moment, like, I know, I mean, we're bootstrapped. So,

Upendra Varma  11:09

But, is that the way to go? Wouldn't a self serve, you know, no touch sort of, you know, process would indeed be more scalable.

Do things which do not scale

Joran Hofman  11:17

100%. But in my opinion, to get there, you need to do the things first which don't scale. So I even do live chat myself. So if somebody needs support, they will come to me, and I would do it like right away. But for me, doing all those demos, probably doing all those sales meetings, for me doing the CES. Things also with the clients allows me to actually shape that product, that growth, shape that self service model, which we are doing right now. So we kind of use this phase to really understand what are the challenges our clients are having, they need to install practice scripts, they need to do a couple of other things, they need to start inviting their own affiliates, otherwise, they don't get success quickly. So we're now shaping that into a sequence making sure we send the right message at the right time. And then we're going to make the next step. So it's definitely not scalable. Definitely not worth it to do it money wise, but definitely learning wise it is.

Upendra Varma  12:15

Makes sense. So you mentioned something like you send when you send a connection request on LinkedIn, that you don't have any texts. So is that a conscious decision? Do you have any data to back that up? So typically, I would, I would expect that the more personalized your initial message looks like, there's more chances for people to sort of accept your request.

Personalise Linkedin Outreach

Joran Hofman  12:30

Yeah, and like, I mean, we did that. And we learned as if you would do it, like you need to do it really personalize, right? And you need to make sure you're not going to say, Hey, I noticed we're in the same group, hey, I noticed we have some same connections, like it has to be personalized, which is really hard to do when you do it on scale. So, we learned that, like, if you don't send anything, at least you don't give them another reason to deny your request. 

Upendra Varma  12:59

It's not really worth it. 

Joran Hofman  13:00

Exactly. When I look at it, because when I, when I look at all my requests, like they're all something like that, hey, I noticed we're all both attending this event. Hey, I noticed we both know, similar connections. Hey, I noticed we, that's not personalized, in my opinion, I guess automated and it's for me a reason to say well, you did not do your work. Let's just skip this.  Got it. Alright, so one question for you. Right. So why LinkedIn outreach? Why not some other channels? Why not cold email outreach? Or why not do something else? What's the thought process there? Yeah, I mean, I didn't want to have it personalized. So at the moment, we are like ramping up our email campaign, we already started SEO from day one, but like, we are doing longer term strategies as well, besides just LinkedIn, but it's not driving us any money. But LinkedIn, for me has been like a fruitful channel, as in, I post there every day. And we can that we can grow my network, and we can connect with others. So for me, it's like a multifactor. Because if I if they request my or accept my request, I can message them, but they will also see my content. And as I'm posting daily on a consistent basis, they will see my face all the time. And they think like okay, maybe now it is time to start an affiliate program.

SaaS Client Acquisition channels

Upendra Varma  14:14

Alright, so I want to pick your thought on something, right? So you are doing two to three thousand MRR and you're just starting out, you have like n number of acquisition channels in front of you, you need to sort of pick one or you really don't have the time and resources to do everything right. They have to pick one. Right? So how do you make this decision? Right, so what goes into this? I mean, I really want your personal opinion on this because this is one of the toughest things, right? It's not a science, right. So how are you going about it? Walk me through this.

Joran Hofman  14:43

Yeah, I mean, in the end, you look at results, right? Like what is driving results? So I definitely tried out a lot of things. I did hire a growth hacker already, who is going to do, for example, like cold email outreach, and because we have two sides, we need to take care of.  But in the end, I don't think you have to choose one specific growth channel. Like if you have the tools to automate it, or you are able to outsource it, you can run multiple at the same time. So how I always look at it is I kind of want to have some short wins. And I want to have long wins, because in the end, I'm not building a product just for today, but also for next year. 

Upendra Varma  15:22

Can you complete the picture for me, for example, for the next six to 12 months, right? So how, how is this going to work out? So now you will be primarily LinkedIn outbound, right, so when will SEO start kicking in? So what are the like, can you just explain that story? Or at least your own plans on that?

Joran Hofman  15:38

Yeah, yeah. So at the moment, like, we definitely need, as a fairly new startup, we need the quick wins, right? So we need LinkedIn outreach, we need email, we need basically anything which is going to drive success. And we don't want to spend too much money. So we're not actually doing any ads or things like that. So if you are, if you have funding, then you can do that as well, pretty quickly. But then, like for me, and that's a early next year at VO should be like a really good driver for us to gain figures and to gain customers, which means I already have to start already know writing content, I do not want to rely on just purely doing outreach, either via email or LinkedIn, because that is going to dry up at one point. So we need to make sure we're going to be prepared for a more scalable solution.  yeah, let's talk about the other side of your marketplace. Right. So talking about these affiliates. So where do you find them? I mean, we do some recruitment for for some of our clients. And, the first thing we ask, of course, is, can you start leveraging your own network? So, if we were going to recruit affiliates for a certain tool, you're going to start with the people already know the tool, who already loved the tool, and  are happy to talk about it, which are their current users? So that's step number one. Step number two is basically look at the competitors. So are the competitors already running an affiliate program? Who are their affiliates? Can we actually recruit them for for them? Step number three would be what are the keywords you want to be ranked for? What are the blogs, which are ranking really good in Google? How can we get you in that blog? Can we recruit them as an affiliate? And I guess the fourth step could also be as in we could look at like referral traffic from the competitors, which aren't affiliates. How can we start having those traffic sources also refer to your site, basically. 

Upendra Varma  17:39

you have around 1500 affiliates as of today, right? So where did a big chunk of these people come from?

Joran Hofman  17:48

That's a good question. I would say, at the moment, the biggest chunk comes from our clients who basically leveraged their own network, because when you look at our market today, the clients who are in the marketplace, the SaaS clients who are listed with their affiliate program.

Upendra Varma  18:06

So, essentially the SaaS, customers, right? So, you onboard a SaaS Customer, and now you bring their affiliate partners as well to the marketplace. Yeah. So essentially, these 16 paying customers ended up bringing a lot of these, you know, a lot of these people out of this 1500 sort of affiliates, is that it?

Joran Hofman  18:27

Yeah, kinda because we also have the AppSumo clients, which I did not mention, but at the moment, we have around like 46, or 50, active affiliate programs in the marketplace. So it does mean like we already have, we do have quite a few actual clients live in the marketplace. And they helped us also to bring in affiliates, because when they start inviting around affiliates, the marketplace will grow

Why should someone use Reditus?

Upendra Varma  18:52

Got it, so if I'm a SaaS Customer, right, and I've got a bunch of affiliates, why would I come to your platform? And why would I bring all of my affiliates to your platform? What exactly are you going to add? Like, how are you going to add value to this?

Joran Hofman  19:04

Yeah. If you would compare it to our competitors, then you could do basically that, right? You could work in your own silo, you keep your own affiliates, if you're not going to bring them to my platform. But in the end, you're gonna hit a wall because you are working in a silo, because you have to invite all your affiliates yourself. And at one point you want to grow outside of your own network. So that's why we have the marketplace where yes, you do bring your own affiliates and other deals, those affiliates can join other programs, but they can do it anyway. If they want to join other programs, they will do it anyway. And if you actually have them within Reditas, you're more likely to have active affiliates, because those affiliates will have multiple programs, they will log in more to figure out how am I doing with program one, two, and three, and they will see your brand more and more so you will have more active affiliates. You will have affiliates requesting to join your program as well, which they might have joined because of a different one. And they will have live chat support, which, I think we're the only one who actually offers that in the market, right now.

Wrapping up

Upendra Varma  20:10

All right. Make sense? All right. All right. So yeah, let's wrap this up. So like, are you planning to raise any funding? Or how are you planning to build this company going forward?

Joran Hofman  20:21

Yeah, I change my mind every day. Like, we're still going good with being bootstrapped. But, I think that's a common challenge of a founder, right? Like today, you think of, okay, I need to raise money the next day, you won't think you don't think you need it. But we are going to do something at the end of the year. So either being revenue based financing, or we're gonna go and talk to VCs, but it just takes a lot of time, which takes time away from doing sales, talking to customers, etc. So I'm not 100% sure yet where we where we're gonna end up.

Upendra Varma  20:56

No issues. Alright, so Joran, when did you start with Reditus and how many folks in the company now?

Joran Hofman  21:01

Yeah, I started as a side hustle. So I started as being the product manager, two co founders. They're both technical. So we basically, we went, not the typical route is building an MVP. We actually built the entire product already, let's say in a year, so we started last year, February, something like that. I quit my job this February. So, we did the actual launch end of last year to get like early feedback, and then we developed the product even more. And then we started building monthly recurring revenue February this year.

Upendra Varma  21:35

Okay, got it. Makes sense. All right, Joran, thanks for taking the time to talk to me. Hope you still did. It is much greater scale. Thank you.

Joran Hofman  21:44

Thank you for having me Upendra. And, have a good one.

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