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🧠 This 3-person startup makes $1M a year
How this SaaS platform makes crazy money with just a dozen customers
Charlie from IdeaHub
April 18, 2024
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Case Study
This 3-person startup makes $1M a year
This week I spoke to Paul Xue and heard firsthand how he teamed up with founder-couple Trevor and Samantha to build Cloutdesk into one of the top all-in-one management platforms for marketers.
They just signed their biggest client to date, a 6-figure deal, and are on track to cross $1M ARR this year.
Here’s how they did it…
How Cloutdesk got started
Samantha is a full-time creator. And it’s a lot of work.
Like any entrepreneur, she’s constantly spinning plates and needed a central place where she could track everything like sourcing deals and negotiating with brands.
So together with her partner Trevor, they started Cloutdesk as a solution to this personal problem.
“So the idea was to build a platform to help creators to essentially do all of the back office work.
So at the top, it's helping you keep track of the deals that you sourced, the negotiation process, the contracts that you've sent, chasing people down for payments, and finally getting payments into a bank account.
So Cloutdesk was essentially built to manage that entire cycle.”
How Paul got involved
The couple built and ran a simple product with a couple of hundred creators for about a year before realising they needed a CTO to help take it to the next level.
That’s where Paul comes in. He’s founded multiple ventures as well as run a successful dev agency.
“When I joined, Cloutdesk was a thin slice of a web application built on top of Airtable.
They had a real need for a CTO to join at a pivotal moment when they needed to hit startup scale.
And at the same time, I was winding down my previous startup. So it was good timing.
Pivoting and hitting scale
The team knew to achieve scale they would need to pivot from selling to creators to selling to marketers.
“We realized that selling Cloutdesk B2C, it's just hard.
It's it's a lot of education, a lot of creators actually don't want to use platforms because they're kind of not that technically savvy.
Our core audience was women between the ages of let’s say 20 and 35 years and they are relatively unfamiliar with using management software.
We had to spend a lot of effort educating our customers. So we pivoted towards a B2B strategy and we focused on selling to marketers.
So yeah, that was kind of like the major pivot.”
Building Cloutdesk for marketers
With Samantha already working with a lot of brands, the team had a good network of marketers to act as beta testers for the new tools.
Paul quickly developed a local no-code MVP and gave it to a marketer to try out.
“We spent a few months just with this MVP in Retool which we built in literally just a couple weeks.
We really just needed to understand their flow and sequence of events before we actually built a custom platform.
Once we felt like we understood the requirements we then took that and built a custom platform which is today’s CloutDesk and is much more scalable.
But because we built that MVP so quickly it gave us a lot of validation early on. Super important.”
A lot of the time founders take this crucial stage for granted. They think they know what their customers need without actually engaging them.
No matter how confident you are, you have to hear it from the horse’s mouth, otherwise, you're just speculating.
Shifting to B2B sales
Right now the team has about a dozen B2B customers and is approaching $1M ARR.
That might sound crazy to some, but B2B is all about high effort sales and high rewards.
“So we sell Cloutdesk to small- and mid-sized marketing agencies as well as enterprises.
Enterprises take a lot of effort to get to the point of signing contracts but once you’re there they’ll easily sign another and expand because there’s 90% buy-in from most of the organisation.
But for even the mid-level marketing agencies even after the contract is signed, your internal champion is still trying to prove the use case. So every single month or week, you're still trying to prove the use case even if they’re actively using it.
So a lot of our CEO Trevor’s time is just locked up into nudging customers chasing them down for meetings and keeping the relationship warm.”
A lot of the time enterprises will take longer to sign, but be much more valuable customers once they do.
Especially with products like Cloutdesk where often you’re trying to be the platform an enterprise will use internally for a good majority of their work.
So they know that if they choose a provider it will take a lot of work to rip it out again.
This ‘stickiness’ is something founders should try to build into their products as much as possible.
We did a whole deep dive into making sticky products right here if you want to know more.
If you loved this case study - be sure to reply and let us know!
See you next week! 👋
Charlie
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