Mikael (02:30):

That's good. What's up, man? How are you guys doing pretty

Dylan (02:34):

Good, man. Pretty good at you're on here.

Mikael (02:40):

Looking forward to it. Heck yeah.

Dylan (02:42):

Yeah. Give everybody a little background of kind of who you are kind of what you're getting into these days. So everybody kind of has some context.

Mikael (02:47):

Sure. Yeah. Uh, Miquel DIA, uh, I'm in Toronto, Canada repping, uh, up here and I've built funnel Lytics about three or we're approaching on three years now. Um, and we built this tool to help marketers better understand what's happening. What's working, what's not working with their, with their marketing funnels, right. With everything that they put out in, in this universe and the, on the internet, like you do all of this work as marketers and you have no clue whether or not it actually really gives you money back. So I wanted to a visual way to kind of tell me precisely what was working and what wasn't. So we decided to build this tool called funnel Lytics. And, uh, here we are, uh, three years later, we've got over 150,000 people, uh, in our platform. Um, uh, we have a freemium model, so 150,000 on the free tool and, uh, a bunch of them 10,000 or so on paid and yeah, it's been, it's been pretty cool.

Zach (03:49):

That's awesome. Then one of the things I love about funneling is the visualization on the funnel maps, right? Like that was so unique to you guys. And, uh, I don't know, kind of, you guys operate in the same spaces, wicked reports or high roasts, or, you know, in that bucket, but there's just not too many solutions out there where you can visualize your funnel flow by the pages. Like most visualizations, like come in the form of like pie charts, spreadsheets, and they're just numbers. And, uh, and marketers, you know, w w w suck at math, we call it marketer math over here where they just round up to the nearest million or billion. And, um, yeah. And so that's one thing I've always appreciated about fanatics, but yeah. Congrats on all the free users, man. That is, that is no, no small feat. Uh, so congrats. Appreciate it. Yeah. I mean, at the end of the day, uh it's

Mikael (04:50):

It's like you said, right. Uh, the visual aspect is what, uh, you know, marketers sit there and they, they sit down on a, in front of a whiteboard come up with their strategies or whatever, a diagramming tool, they map it all out. Um, and then they're stuck looking at spreadsheets and charts and graphs to try and understand like, wait, how does the stuff that I put on my whiteboard translate to these numbers in these spreadsheets and like how to understand. So, uh, we just wanted to simplify that and bridge that gap a little bit more. So

Zach (05:20):

I want to talk about this year, guys is rich ed. What's working now for you guys. You, you have an amazing story in the sense that it's actually very similar to, um, a friend of mine here in Austin, uh, Dave Rogen, Moser at proof in the sense that you guys like crushed ads for the first year, both of you guys into a free trial or freemium style offer and scaled your spend up aggressively in year one to like 80,000, a hundred thousand a month, um, give or take would love to hear that story, but I've seen it ha you know, it's, it's awesome when it happens in the world of SAS. And I would love to kind of like focus this conversation really around, you know, for other marketers that are wanting to jump into SAS, like, what is the funnel and the ad strategy that they should be thinking of? Cause like most B2B SAS companies are lucky to be spending five, 10 K a month on ads. So I think you guys have always had an amazing, uh, funnel there. So yeah. Why don't you give everybody a good overview of what's working now and how you got there?

Mikael (06:34):

Yeah.

Mikael (06:35):

The biggest problem with SAS is, um, most SAS companies are happy to get a, you know, 12 month payback period on their customer acquisition. And it's like, well, how can you be happy with 12 months? So you gotta wait a whole year before you make your money back and then make some profit. Like that's, that's a long time to wait. Uh, I prefer like 24 hours or like seven days. If I can make my money back back quickly, I can scale as quickly as I, I want. So, uh, our number one ad that has been running for three plus years, we actually just swapped it out because, um, our, our platform no longer looks the way it looked in the ad. And when people started getting confused, we had a very, very simple demo. Like it was like a, a super sped up 32nd video of this mapping tool, right?

Mikael (07:26):

So you can kind of diagram out your entire funnel. And, uh, we just basically advertise this free mapping tool using this little 32nd super fast demo, video that with like this cheesy background music, I literally whipped it up using like me just dragging on the canvas. And then I sped it up like five times, and then I downloaded this free, like, like typing and that's it. That was the ad. And then the copy was something like, you know, free, free mapping tool, map out your marketing funnels in a matter of seconds. And that's what we ran for a long, the longest time. And we push people to the free mapping tool. Um, and there's a couple of things that I did that I think most people fail to do so, or don't think about. So the first thing is when we push people to the free mapping tool, uh, right away, we offer them something to buy, right?

Mikael (08:23):

Like most people, uh, are happy to get people into their software and then they want to do the whole onboarding and, and you know, the free trial and all that stuff. Well, we gave you a free tool, but instead of just giving you a free trial and waiting 14 days, we give you something that you can buy right away. So for us, it was this template kit we gave you for $50. You could, instead of starting with a blank canvas, you could start with over 50 different types of templates from some of the world's best marketers. And I think the conversion rate on that from cold traffic from Facebook was about four, a half percent or something, uh, right from, from that. So then from there, we upsold people if they bought so that we could increase our cart value. But one of the most important things that I did was everybody who came into the free mapping tool.

Mikael (09:11):

We pushed them into a community. We put them into a Facebook group, a number one that allowed me to understand who these people were and communicate and build, build trust, and value with them. Uh, also it created a sense of well community. That's what the whole point of a Facebook group is. It created this sense of, um, that they were part of something slightly bigger. Um, but I've leveraged that group right now that group's sitting at about 28,000 people. Um, I've leveraged that group over time to, you know, keep doing promotions and, and, and make more money and even decide what to offer next. Right. I would actually go inside of the Facebook group, post a question and say, Hey, would you guys prefer if we built something like this or this, or would you guys prefer this type of course, or this type of course, and literally people would vote.

Mikael (09:57):

And then I just be like, all right, well, here it is. And then people will pay me money for it. So that group became a, a big piece of, of our growth, but ultimately that's what allowed us to scale so quickly free mapping tool in her upsell. We made our money back right there, uh, within the first, like on, on ad spend, it was about for every dollar we spent, we made about a dollar 20 cents on literally the front end acquisition. Uh, everybody moved into a Facebook group and everything else was that trip afterwards was a profit. And, and while on ad spend at least, and, uh, allowed us to scale. So I think that's the biggest difference. So one of the things I have is like, as a SAS company, it's very easy to like start just, you know, having, uh, coming up with a funnel.

Mikael (10:48):

Well, let me back up. It's not easy to come up with an amazing winning, converting funnel. Awesome job. I'm like bad. Cause it was awesome. But like after that B2B SAS comes, they're going to go through this evolution. Right. I was just like, you blitz Facebook ads, you get your MRR up like phenomenal numbers in 12 months. And then you realize, Oh, like there's some serious churn here from people that are just coming in. These are our quote unquote ideal clients. And then you waffle for like a year of like, just kind of running off promotions and like kind of figuring out where are the good customers that were where's the LTV. And then on the backside, you really start to like figure that out. And then it becomes a little bit more of a slower, like strategic, like we're getting like better deals, better customer, better LTV.

Mikael (11:43):

So what does the backside of that funnel, you know, now look like, because I feel like you guys are a lot more focused now. I AKA like less opportunistic of like we're afraid. Well, yeah, let's just, let's just leave it at that. Yeah. I think, I think this is the problem, right? Like when you're first getting started, you have no clue truly who your customer is. So your job is to build up, think of like a picture, a circle, right? Your job is to build up that pool of customers, people who are willing to take out their credit card and give you money. So do you want to get that pool big enough to the point where I can now start doing an analysis of that pool of people? If that pool is too small, then I have no clue. I can't start segmenting because when you grow that pool of customers, you can then take smaller circles within that bigger circle.

Mikael (12:33):

And you can identify that actually some of these people, like, for example, with us, let's say the, the big pool is called let's call them funnel marketers, right? Anybody and everyone who considers themselves a funnel marketer, or who does funnel marketing to some degree. Well, what we found is, as we built up this bigger pool of funnel marketers, we were able to realize that actually the funnel service providers, more importantly, the people who are an actual agency looking to sell funnels and shift their offering towards that have our highest lifetime value, have a higher retention, lower churn, bigger, they're willing to spend way more on education and on services on the backend. So within this bigger pool of funnel marketers, we found that funnel providers, funnel agencies are actually a much better fit for us as a whole, right? But that doesn't work. If you don't blitz at the beginning, if you don't build a big enough pool of customers, because you, you can't make an analysis on 30 people, right?

Mikael (13:40):

So that's the first step is like when you blitz, you start to build up that big pool of customers. And if you don't segment your customers and you'll never know or speak to them, I should say, you won't be able to see trends or analysis of within this bigger pool of customers. Who's actually our true customer. So you're right. Like now we've gotten to this point where it makes no more sense for us to keep blitz blitzing the entire funnel marketing space, because we're just getting a bunch of customers that we don't care about at the end of the day, right? That we don't really want as customers that end up churning, they end up wasting our support resources and asking so many questions and it can't even install a script on, on, on WordPress and all of these things. But then there's this pool of customers that we know that we can serve.

Mikael (14:28):

We can bring that higher lifetime value. We can actually help them get to that next level. So now the job is to refine our funnel and say, all right, we don't want to speak to any to everybody. We, we don't want to talk about this free mapping tool. We want to talk about the free mapping tool for these funnel providers or use this tool to sell and pitch clients, right. For example. And now that pool is smaller. So I can't blitz the market the same way because the pool of customers is actually smaller, but because we're coming in with the right intent, we can now up sell them. And we can, we can kind of grow that pool of customers. One of the best things I heard, um, was from Eric Carlson, who runs, um, uh, 10 X, what is it? 10 X factory. And, um, he says the, he is the four, uh, concept of use.

Mikael (15:22):

Okay. So, you know, funnel has this analytics tool and like your first concept of use of your tech or your product was get better insights into your funnel, right? The second concept of use, that's working better for you and, and concept, it's just a better way of like, what's your hook into the product. That's going to yield a better LTV and funnel dash made the same, same pivot to that hook from here's a better analytics insight tool to here as a audit dashboard for, as a sales enablement tool. And we also made the same pivot into agencies as well in our early days of like agencies appreciate the dashboards. But the reason why agencies like we'll pay more is not because of like the pain of getting access to the numbers. It's the opportunity of like getting an actual client to like, you know, pay them.

Mikael (16:24):

Right. And so they're gonna start to incorporate it like it, like in a typical agency, they might have like 10, 20, 30 clients, but they might be pitching, let's just say hundreds of people a year. So the user engagement on that concept of use is going to really like bump up. Um, whereas if an agency kind of is like, has like a small amount of clients they're going to, they're not using it all that much, if that makes sense. Is that like some of the, is that like a fair assessment or like a recap of, of like what Eric was saying in terms of this concept of use of just sometimes, um, you know, the pro I think like a non-internet marketing, like B2B SAS example would be like Febreeze.

Speaker 5 (17:06):

Like, it was just like

Mikael (17:08):

This, they didn't really like, know what to do with that. Um, until they kind of turned it into this like refresher spray, uh, you know,

Speaker 5 (17:17):

Yeah. It's funny. Every time I say this, I have like the worst habit, the most confused look on here. Uh,

Mikael (17:36):

No, so I, I, I agree with you, right? Like, um, we started off with there's layers to it. So even though the, if you think about going back to the circle concept, right? So funnel marketers is this bigger circle. And within that circle are all service providers, right? Funnel agents, people it's called them, or people sell funnels as a service. Um, the, even though the usage of the tool is the same, the, the tool itself is doing the exact same thing. The, uh, job to be done is very different. So what I'm doing when I'm using it as a service provider is I'm using it to close clients and I'm using it to retain clients, but the outcome is a client pays me money, right. Versus an in-house team is looking in order for the service provider to retain clients. They've got to look at the data, they got to put together a report and they've got to communicate that to the client.

Mikael (18:40):

And, you know, they got to kind of go through the same motion, but the outcome is the client sticking around and paying me for months and months, right. Versus an in-house team or an in-house marketer, even though they're looking at the data, they're doing an analysis and they're, um, you know, putting together a report, the outcome is not getting a client to stick around. The outcome is optimizing my funnel. It's a, it's, it's figuring out what can I do next in order to improve the process. So it's, it's extremely important to understand what does your customer truly do this thing for, like, or use this thing for. Right. And, and understanding the market is extremely important too. Um, I had a, uh, a really, there's a book called obviously awesome. And this changed a ton of my perception, uh, around what I should be doing with, with funnel Lytics.

Mikael (19:35):

And you know, and this is beyond just funnel existed for anybody. The book is called obviously awesome by April Dunford. And it's all about positioning. And she does a very, very interesting analogy that has stuck out with me and completely changed the way I, I look at things and she says this, she says, imagine you, um, create or invent a new baked. Good. Right. It's made of flour. There's chocolate in it, in it. It's moist. It's super delicious. And it's kind of like this hybrid between a cake and a muffin. Right? So now you've got a very fundamental decision to make within your business. Are you going to categorize it as a cake or are you going to categorize it as a muffin? Because whatever you choose will define your entire business. Here's what I mean, Dylan, where do you buy a muffin? A Starbucks are fast. Some are easy. Typically. When do you eat it? Probably the morning. I'm a morning guy. Yeah. What's the competition like? What's the alternative

Speaker 6 (20:43):

Bagels, bagels, big avail guy much. Does it cost?

Mikael (20:49):

I think the bagels are a little bit more expensive. Usually costs. Give me two 50, $3 maybe. Right. Okay. So by you saying it's a muffin, you've already given this entire perception as to what category fits in. Okay. Let's do the same exercise with cake, right? So where do you buy cake? Great. American cookie cookie cakes. How much do they cost? Shoot? Probably 10, 15 bucks. If not more. When, when do, when do you eat a cake? When I'm celebrating on occasion, maybe for dessert right after dinner. I can see that. Okay. What is the competition to a cake? A lot. I feel like it's a lot more competition with cakes and you're eating arts pies. A lot of sweets. Yeah. Yeah. And so you see how fundamentally it's the same product, right? Whether it's a muffin or a cake, it's still this baked to good, but by me, categorizing it as a cake, I've already given the market and the people who are about to buy it this perception as to, well, it has to be in this price range.

Mikael (21:49):

This is what I'm thinking about it. Versus if I'm putting it as a muffin, it's gotta be, it's a morning thing. It's certainly not going to be a an afternoon thing. And I think a lot of people fail to realize this within their own business. Like for me, it made me realize a lot about even the funnel marketing space and whether or not we're truly a funnel marketing tool or we're actually a customer journey tool. And that might sell to be very similar. But when somebody thinks about customer journeys, it's typically a bigger type of business. They've got customers to analyze. Cause that's the whole point of customer journeys, right? They've got more traffic, they've got more data versus funnel marketing. You're thinking more about the, the newbie who's getting into the info marketing space. Who's trying to figure out what upsells and down sells and what they should put on their sales page and, and all that stuff. Fundamentally, our tool does the same thing for both, right? But by us, figuring out which category we fit in, it completely changes the perception, right. It completely changes how people approach it and what they think it should be worth, how much they're willing to pay for it and all of that stuff. So I don't know if that even answers your question. I just kind of went on a rant there, but I liked it. That was our perception. Heck yeah, man,

Speaker 7 (23:11):

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Mikael (24:15):

Well, we dove into the rich ad, give us something terrible, man. Let's hear this kind of poor ad. Something that you thought would probably kill it. Didn't work out too hot. At least the beach.

Speaker 8 (24:28):

Yeah.

Mikael (24:30):

We've, we've tested a lot of different things. Uh, I mean 99% of all of our ads don't work. So, you know, that's, there's that, uh, number one, you've got to test a lot. There's, there's a lot of different things that you've got to test and you've got to keep cranking out ads like people who think if you're, if you're lucky enough to get one ad up and it works like consider yourself lucky, right? Like this, it doesn't happen. It very rarely happens. So, um, for example, w you know, when we realized that we wanted to go after funnel agencies, we started testing a lot of different funnels to bring in these types of agencies, not through the platform per se, but directly through a coaching program that we offer these agencies. We've had a lot of success getting these agencies coming in through the platform, using the tool for themselves to sell and pitch clients.

Mikael (25:22):

And then when they get valued, then we get them to, um, apply for, uh, for this, this program that we have. So that has worked really well for us, but we wanted to scale that and we want it to go out to the market and see if we can just get these agencies straight into the program, without this a long roundabout weight to getting there. So we tested webinars, we tested for like front end $47 offers to try and self-liquidating funnels. We tested all sorts of stuff speaking directly to the market. Um, and it's, it's been challenging way more challenging than we expected from the standpoint of trying to make that work. It's not as easy as people think, like to just do a ad to a webinar and then like, get on the phone and close people. It's not that simple. So I can't think of like a very specific ad that completely bombed, but I can think of a bunch of campaigns that we spent thousands of dollars where it's like, Oh, this didn't even break. Even this, this didn't even make us any money. And we waited far too long before shutting it off and like, all right, well just $5,000 down the drain. Yeah. Let's just give it to Mark Zuckerberg and let him have fun with it. Cause we're clearly not happy with this $5,000. So yeah, I mean, I can't think of a specific one off the top of my head, but, um, it's happened a lot.

Dylan (26:46):

It makes sense. Especially in the webinar side of things, there are so hit or miss. So, I mean, especially when you have to have the back end with the one call closes, you have to have the sales team for having, you know, updated with the knowledge and stuff. So that's sufficient that works

Mikael (27:00):

The education process, right? I think a lot of people miss that little piece of it, like it's the cycle to get somebody to commit and the, the difference between a free mapping tool to them then using that free mapping tool to close a client and then being in part of our Facebook group and getting a ton of value through that Facebook group and then applying for this program and then getting on call and closing well, that entire time that they've been indoctrinated in Goodwill and all of the stuff that we've given them is very different than an ad to a landing page, to a 60 minute webinar to try and close them right on, on the call. Right. It's a way different process.

Dylan (27:47):

Oh, a hundred percent. Well snap, quite the poor out there. That's super legit there. I love hearing the mixed cases with webinar funnels that cracks me up sometimes. But with the final piece of the pie, the final segment, of course, we'd love to kind of dive into some financial tips or principles. So based off your expertise and experience, what kind of financial tips or principles could you give to the audience?

Mikael (28:10):

Lots. Um, we're talking about, we're talking about business here as a whole, uh,

Dylan (28:14):

The business with all the customers, you know, the freebies, you know, how are you kind of monetizing these in the long road? You know, maybe how you're gaging LTV on different timing windows. I mean, with your business. It's pretty interesting. Cause I felt like cashflow is huge.

Mikael (28:27):

Yeah. Cashflow is always huge. Um, I think the first tip I would give anybody is if you're going to start advertising, you've got to find the easiest, fastest way to recoup that money. W how can you recoup your advertising dollars and liquidate your advertising dollars, uh, as fast as possible, literally, unless you're going to go and raise millions of dollars from a VC and you have that money to burn and wait 12 months or eight, 10 months, however long it is. Um, you've gotta be smart with it. So step number one is if you want to scale, you've got to liquidate your advertising costs. Step number two is you can't liquidate your advertising costs and hope to be like profitable and make a ton of money. So number two is, well, what's the sequence and what's the funnel that you're going to push people through.

Mikael (29:17):

And what's that backend offer that is actually going to have, uh, a higher value, um, to actually make that profit right, to go down that path in terms of, you know, SAS and LTV and churn and all that stuff. Like you have to understand your cohorts. You have to understand your, the different of people that come into the door. Like I said before, if you take that big circle of customers, um, and you break it down into these various small groups, you can see that they will all have different values and different. So if you want to scale, you've got to understand what you're scaling, right? You can't, you can't, you can't get the whole market. You've got to focus on, on that smaller piece that is actually valuable to you. So, um, understand what you're scaling and then, you know, the rest is all operating expenses and, and all of that stuff.

Mikael (30:15):

I mean, teams, et cetera, like there's different philosophies at the end of the day, there's two ways to grow a business. You can either focus on profit or you can focus on growth, right? And I think it's extremely important to decide what you want as a, as a, as a CEO, as a founder, do you want profit? In which case you've got to be lean, you've got to try to get the most dollar per, uh, revenue per employee as possible. You've got to be as efficient as possible, or if you want to go for growth and market share, well, you've got to realize that you're going to burn money, right? You're going to go down that path of scale, which means you don't make profit and you're going to have to hire teams and all that stuff. So, and have you, you kind of like balanced those, right?

Mikael (31:05):

Like, uh, at different seasons of your business, you know, I feel like you've gone through different phases of growth and fundraise. And so how do you look at those now currently? Like, what are you, what is important to you at this stage? Uh, for me at this stage, it's pure future investments. Like I'm, I'm building, I'm building for my like five, 10 year vision, which, you know, we were talking before at the, uh, before this show about like Uber and Uber's autonomous vehicles and how they're that division of the company is burning something like $500 million a year, which is ludicrous, right. It's, it's crazy to think about, but they're building for this new future, right. This new vision for what the future can, can actually be like. Um, so there's, there's a balance, right? You've got to keep growing the customer segment that, you know, is profitable and scale, then keep extracting value and money from that.

Mikael (32:11):

But at the same time, I'm also investing in where are we going next? And how are we, how are we moving towards that? How does the product need to shift? And what do the engineers need to build in order for us to move towards that direction? So it's this balance between growing the existing pool versus building stuff for the future. And then it's, what's your tolerance level. Like for us, we've got internal tolerance level of, uh, you know, we're happy to burn anywhere between 20 to $50,000 a month. Right. We know that if we're like, that gives us plenty of runway. Um, and it gives us plenty of time to, to get to that profitability and, and hit that tipping point. But in the short term, we're happy to burn that kind of capital. So you've got to make those kinds of decisions for where do you want to go in your business? This is fire a boom,

Dylan (33:12):

Man, give everybody an idea, you know, what's next, any kind of cool projects coming up, how can people kind of get in touch with you

Mikael (33:17):

And how can we best support you? Yeah. I mean, go check out funnel, lytics.io, um, and sign up to follow Lytics. Uh, but no, man, I mean, all we're doing is continuing to build funnel Lytics. Like we've got a massive, massive plans and vision for what this tool can do. And, um, just look out for in the next, you know, three, three to five years, every marketing team in the world is going to be using for analytics regardless of their size. So that's, that's the vision we're gonna be. We'll find you LinkedIn Facebook find me on LinkedIn. Miquel DIA. Um, I post some content there and, uh, Facebook, I try to stay away from the warm hole of doom. So yeah, it is, it is, uh, I only advertise there. I just want to try to explain, um, so yeah, that's it LinkedIn, check me out on LinkedIn. Heck yeah.

Dylan (34:09):

Shoutout man. Thanks for jumping on. Had an absolute blast. Thanks guys.

Speaker 7 (34:17):

Thanks so much for listening to another episode of the rich ed, more ed podcasts. If you're like me and listen to podcasts on the go, go ahead and subscribe on Apple podcasts, Spotify, YouTube, and rich ed [inaudible] dot com slash podcast. And if you absolutely love the show, go ahead and leave a review and a comment share with a friend. If you do take a copy screenshot of it, email me zach@funneldash.com. Show me you left a review. I'll give you a free copy of the rich add or add book to learn more about the book. Go to rich ed for a.com to leave a review that a rich ed or at.com/review. Thanks again.