Hey - Marc here.

Happy Saturday morning, motivated B2B SaaS Founders!

Here's at least one tip to keep in mind as you grow your B2B SaaS company:

Today's issue takes about 5 minutes to read.

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In today's issue, I share some key takeaways from a recent interview between Nathan Latka, the host of Daily Interviews with SaaS Founders, and David Freund, the CEO and founder of LeaseLeads. They discussed his first year building leasing APIs for the real estate industry on the back of a $1.75m agency.

David Freund boasts a virtual leasing agent that helps increase tours and leads for multi-family properties to more than 300%. He lives in Denver, Colorado, and is also a competitive Enduro mountain biker, musician, and coffee snob.

About LeaseLeads

They were running an agency building custom websites for agents in 2015, converted it slowly, and then transitioned this past year aggressively into a SaaS-type product. There's still a heavy service-based component with the website development, but they've standardized a lot through templates.

David has permission to sell to the customers of the agency. They brought the agency's model and web development to LeaseLeads and turned it into a recurring product.

Their revenue in their first year was about $300k. When they started, they were a big player in the freelance world. Now, they've got about nine full-time employees and have a freelance team of almost 50 people. In 2020, they did about $1.75m in revenue.

P.S. Their virtual leasing agent is the flagship product that's taking off at $350 per month, and now, they have 70 customers on that with $80k total monthly revenue.

Challenges

Rent and its availability are constantly changing.

Real estate agents don't display this kind of data on their websites—it's either static or buried in PDFs that take forever to load and aren't easy to navigate. So early on, they got into the API space and came up with a solution that helps make all of this dynamic information more accessible and relevant.

Advice to Other Founders

Some of the most successful SaaS start off as an agency.

He learned a lot about business structure, selling assets, and defining value through their negotiation of transitioning to a SaaS. It was hard at the moment, but it was one of the best learning lessons he's ever had.

Vet intensely in the spaces you know best.

Everyone wants the superpower of finding cheap talent that's really talented. It's all about testing different relationships. Ask initial questions using a type form to standardize each role. Asking questions and specific test examples before getting on a call will help you evaluate the next steps.

When you have a solid team, it doesn't take much cap.

David inherited a lot of the agency services they were doing previously for web builds, did a lot of custom builds outside of the templates, and did custom API integrations that don't necessarily fall in the recurring bucket like their productized offerings. Only less than 1% of their customers have churned.

You can't throw everything in a template.

Many of the services already occurring, including the web development services, were brought over. They tried to productize as much of them as they could. You can't always fit enterprise-level industry in a template. A lot of these companies have custom solutions for multiple feeds.

Bonus

David thinks "The Obstacle Is The Way" is a beautiful business book by Ryan Holiday.
He follows Brian Halligan and considers Dharmesh Shah from HubSpot philosophical and insightful.
He thinks Figma was a weird online tool for building LeaseLeads, but it's the coolest one for him.
He wished he knew in his 20s that things take time. Patience and persistence is a virtue over everything else.

TL;DR

Launched an agency helping those in real estate launch their own websites back in 2015 to $300k in sales, then grew that agency to about $1.7m in revenue. The other agency co-founder kept a little equity. Now, David split off and built LeaseLeads which effectively templatized websites for these folks and, more importantly, provides APIs and integrations that allow them to update their sites automatically. On average, they've got 70 customers paying $80k a month, all in revenue; $25k of that is pure SaaS. The rest is productized service, but churn's almost non-existent because they spend so much setting up, integrating, and onboarding those 70 customers.

P.S. Here is a link to the full interview if you are interested in listening to the full episode: His first year building leasing APIs for real estate industry on the back of a $1.75m agency.

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See you again next week.

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