[Raised $34 million] Ep.166 - How This Founder Grew a SaaS Business from 27 to 1,000 Customers Using Just $3k a Month on Facebook Ads

Chris Ronzio founded Trainual, a software platform that helps businesses document their processes, policies, and procedures in one place. It provides a centralized location for employees to access training materials and ensures that everyone is on the same page. Trainual also offers features such as onboarding checklists, quizzes, and analytics to track employee progress and improve training effectiveness. Trainual has raised to date more than $33.75 million from notable investors such as Altos Ventures, The Shark Group CEO Daymond John, Indeed Co-Founder and Chairman Rony Kahan, PandaDoc CEO Mikita Mikado, TSheets Co-Founder Matt Rissell, 8x8 CEO David Sipes, 4490 Ventures, MATH Venture Partners and PHX Ventures.

To date, the company powers the ops behind more than 10,000 businesses across countless industries in 177 countries.

Where to find Chris Ronzio:

• Website: Employee Onboarding, SOP & Training Software | Trainual
• LinkedIn (7) Chris Ronzio | LinkedIn

Where to find Hadi Radwan:

• Newsletter: Principles Friday | Hadi Radwan | Substack
• LinkedIn: Hadi Radwan | LinkedIn

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Transcript

I have a small favor to ask that takes you literally a few seconds. If you like the first 100 podcasts and the guests that we have invited so far, can you do me a small favor and give us a thumbs up on any podcast platform that you are listening on. It helps the podcast more than you think, because the higher we go on the ranking, the more interesting guests we can invite. Thank you again for your support. Let's do it. Broadcasting from around the world. You're listening to the first 100 a podcast on how founders acquired their first 100 paying customers. Here's your host, Hadi Rodwan. This episode is brought to you by Blocks, the no-code platform that's changing how founders, engineers and product managers build and ship software. Blocks is like a backend platform on steroids. With its built-in database and an impressive suite of features, Blocks lets you create workflows, actions, triggers, events, schedulers and more. You can even handle authentication and notification all without writing a single line of code. Whether you're building a complex enterprise application or just need to ship an API quickly, Blocks has you covered. It's the fastest way to go from idea to launch. Check out Blocks today on blocks.online. That's www.blocks.online and build your next project smarter, not harder. Chris, good to have you on the show. How are you doing today? I'm great. Thanks for having me. Amazing. We've been trying to get that. I think you're one of the earliest people I tried to reach out in season one, two years ago. And we made it now, which is great because I'm very interested in your story, the way you've built your platform. But just a quick introduction for our listeners. Chris Ronsio is the founder of Train Your World, which is a platform that helps businesses document their processes, policies. and procedures in one place. You have a centralized, I think, location for everything an employee needs, from training material to onboarding to checklists. And you've grown to more than 10,000 businesses over the past few years, and you're in more than 170 countries. You raise to date more than 33.7 million from notable investors like Altos Ventures, the Shark CEO, David Jones. and many, many more. Chris, take us back to your early days. Did you exhibit any signs of entrepreneurships when you were young? All of them. I don't know. I think I was starting a new business every week. From the time I was four years old, I was washing cars, waxing cars, cleaning, lawn furniture, landscaping, doing whatever I could to make an extra buck. And that just... You know, powered me through my childhood. I, I loved buying my own toys and clothes and see tapes and CDs. And, uh, carried me through to today. That's amazing. What is the early learnings you've had when you started these small businesses? What made you go in the entrepreneurship direction? Because there was a lot of people who just say, you know what, I'm going to go get my degree and start working for a safe job. The earliest thing I remember was that there was no cap. on what I could earn. You know, if you got a job, and when I was 14, I did, I worked at a supermarket, and I remember they were paying me, you know, $5.25 an hour, and that was the limit. And there were good things that I learned at that job, like the structure of a workplace and just how a business, a real business works. But I would do a project. you know, over the course of an hour in my neighborhood and make $100. And so I thought, okay, if I can make my own income, if I can make my own living, my earnings will be kind of uncapped. And so as all my friends were working through high school, I actually started a real business. I started a video production company that did sporting events. And on big weekends, big tournaments, we'd make $3,000, $5,000, $10,000 on a weekend. filming the tournament, selling the access to the videos. And so I realized at an early age that, you know, there's no limit when you're producing a product. There's a limit when you're selling your time. 100%. Take us back to the founding of how moment of training and how did it come into fruition? So it was kind of a founding over a few years. The actual moment was I had sold my first business, which I ran for 12 years. I had started my second company, which was a consulting firm to help other businesses with their operations. And one of my clients had this need where every season, every quarter, they were hiring about 60 or 70 new people, and they needed to retrain those people on how they did what they did. And he had this, you know, 80 page PDF. And that was the way that he trained people is he sent him this PDF. And he said, Hey, read this and then show up and I'll show you what to do on day one. And so I thought every company I'm working with is trying to package up who they are and how they operate. And there's no streamlined way to do this. Everybody's doing it with documents and Dropbox folders and Word docs and Google docs and PDFs. And so I thought if I could build some tool, this is something that I could take from consulting client to consulting client and have some IP for my consulting business. And so over the course of a few months, we built this. MVP, I put $10,000 into it. That's all it costs for the MVP. And it was this little product for my consulting clients that originally launched in 2015. So practically you validated product market fit with your existing solution. And I believe how did you manage to hone the ideal customer profile? Cause as a consulting company, you'd come across many profiles, but how did you manage to say, okay, this is the niche or this is the segment I'm going to go after. So I started where I was comfortable. You know, the businesses that I was surrounded by in these entrepreneur peer groups that I was in were five to 100 employees. And so when I was consulting, that's who I was working with was companies with five to 100 employees. They were small enough that they still had a sense of culture and community and the founder had influence, but they were big enough that they needed some structure and they needed to be efficient and productive and use the right tech tools. And so it was the... perfect size for me as a consultant. And so these were just the businesses I was working with. I had a couple dozen clients over a few years. And as I would work with them, I would put all their materials into Trainual, and I wouldn't charge them for the software while we were working together. But as soon as my consulting was over, then their monthly subscription to Trainual would start for $49 or $99 a month. And so it was over the course of three years that I was building up my first. you know, a few dozen clients and like you said, really, you know, proof of concept, really being able to see that there was some product market fit. Amazing. And one of the key metrics you look at when you're in the software business is time to value. So you pick up few North Star metric and you say, you know, if you go with my competitor or your traditional approach, this is how much time it takes you to realize value. In your case, what was the immediate value they could realize? Because You know, everyone has their old habits. They have a PDF, it doesn't cost them anything. It's zero dollars, they give it out. They cannot measure effectiveness immediately, but how would a platform like yours early on deliver this aha moment for them? Well, it was because I did it all for them. You know, it wasn't sold as a software product. It was really just for my consulting clients. And so in my services, I did all the work, and then I started hiring employees for the software, the consulting business. and we would put all of the materials into Trainual. And then they had a valuable instance of the product that they could use with their team. And so it was really, you know, the amount that they were paying me, that $49 or $99, hailed in comparison to what they paid consulting-wise. So they saw it as this tiny little subscription that they could pay to kind of keep me involved in their business. Take us back to the early days, to early 100, because we've heard now you're founder led sales, the product market fit where you're going after clients, maybe your network. How did you scale from 10 to 100 or 10 to a thousand? Because I've read that in your first year when you were alive, you managed to get around a thousand businesses to use Train. Yeah, yeah. So through that period, that two or three year period where it was only available to my consulting clients, I think we got up to 27 companies that were on the product. Late 2017, me and my small team decided maybe we have something here. Maybe we can give this a run and make it a real SaaS product. And so we rebuilt the tool. We made 100% new version of the tool. It still looked the same, but it was all new code. It was clean. There were some new features. And I put up a, I got rid of the website where you could sign up for it. And I made it just a countdown with a landing page to put your email. And I started advertising it, driving some traffic to the page. And it was really just through my audience. It was, you know, we did some, some Google AdWords, but we, I told everybody, I posted about it on LinkedIn. I emailed my whole network. I was driving them to this page to sign up and I got a few hundred email signups to be notified when we launched. So then January of 2018, we booked a room at a, or a patio at this local hotel. And I threw a big launch party. I had this huge touch screen there where we were going to show off the application. I invited a reporter from the newspaper, I had a photographer there, I invited all my friends and I tried to make this event where we had maybe 60 or 70 people at this event. We took pictures, I posted about it on social media and I was trying to build some hype. At the event, I sold six month subscriptions for the price of one month subscriptions basically to try to get some more customers in the door and we sold another 10 or 15 accounts. And so that was the initial push, but now we had this product and we had to figure out how to sell it to strangers. So first thing I did in the second month of our relaunch, so February 2018, is we launched on Product Hunt. So you've probably heard of Product Hunt. I changed our model and required no credit card, nothing like that to just get into a free trial because I wanted to see what people thought. We didn't convert any of those, but I got such good feedback. during those free trials, month two was really about just refining the product a little bit. Month three, we finally went out and started trying to do Facebook ads. So the way that this worked was we hired a contractor out in Tel Aviv who a friend of mine had worked with. He was really good at Facebook ads, but we couldn't really afford him. And so we worked out this deal where he said if we paid him $1,500, he would teach us how to do the Facebook ads ourselves. But we had to be willing to commit $3,000 a month in Facebook spend because he told us if we can't put $100 a day into one ad for 30 days, we're not gonna get any meaningful results. So we had to pay him 1,500, we had to pay 3,000 for the Facebook ads. And I did some math, some light funnel math here to say, You know, if people are paying us a hundred bucks a month, how long do I think they'll stick? Well, they should be around for six months. So if my lifetime value is $600 on these customers and I'm spending 3000, I need to get at least five customers to kind of break even over the next six months. And so that was how I thought about getting customers. And so in that first month in March, we got six customers. So slightly better than what I was doing previously. And so I was optimistic. I thought, all right, let's scale this up. So April comes around and we decided to spend $4,000. But a crazy thing happened. Instead of getting the same number of customers, we actually got more because there were people that saw our ad in March that didn't convert until April. And so we got like, you know, a dozen customers in that second month. And so then we were off to the races and we had something that was working. Amazing. So. After you developed the Facebook strategy, you had some people there. How did you think about the retention? Cause you mentioned something very important. You said six months. Everyone wants it to be two years, five years, 10 years. Right. So what was the strategy to keep people staying on the platform with the subscriptions? Cause I'm thinking about, okay, I've built my standard procedures. It's working. Uh, should I continue on the platform or should I go back to my old habits? So. My thought here was six months was a conservative estimate. I knew that I had used the product for the last three years or so with a handful of consulting clients. So I knew it provided some long-term value. I knew the product worked. It was very simple. But honestly, in that first big year, we weren't focused on retention at all. We didn't have the team to focus on retention. We didn't have anyone in customer success until we had 3,000 companies on the tool. And so it was all about acquisition. I wanted to prove that there was demand for this product. And the customers that stayed were the ones that were operationally oriented. They got the product, they understood it, they were the do-it-yourselfers. And what we were doing is we were optimizing our Facebook ads to target lookalike audiences of our most successful customers. And so we set up these little triggers, these little... you know, things in the app where once they paid us three times or something like that, it would fire a setting back to Facebook. So it was giving Facebook these little indications of like, okay, these are your best customers, go find more of them. That was all we relied on in terms of retention. It wasn't until year two of the business that we really started building out customer success. Why Facebook, not Google Ads, for example, was there any specific reason? Why not? Instagram ads or TikTok? Maybe TikTok was not back then. It was Facebook and Instagram because that's where we could display videos. It was all video ads. And so Facebook and Instagram feeds would pop up a video. Videos in 2018 and the ads were not as common as static ads or as they are now. And my past company was a video production company. And so we understood video. We knew how to story tell. And so it really started with, actually this is funny, I have this book here, so the E-Myth I'm holding up, I don't know if we're on video, but was one of my favorite, favorite books. I don't know if you've read it. And in the book, it talks about having this franchise prototype for your business. Whether you want a franchise or not, you need to have this prototype that you could franchise, and in order to do that, you need to build an operations manual. And so the first Facebook ad we ever put out, was me holding up this book and saying, hey, if you've read this, you've probably learned this, and you probably need this tool that I built, this software, in order to do it, to make it happen. And so what we were doing is we were borrowing the authority of Michael E. Gerber and the Emyth brand that people know, a lot of people know, because they've sold millions of copies, and it catches people's interest as they're scrolling through your feed, and then they watch the video, they click through to our website, they check out the trial. and ideally become a customer. And so those are the first couple ads and it was all about telling stories. So then as we developed our ads, we kept it super simple. Again, it's one camera, one shot, even a lot of them shot just on a smartphone, on an iPhone, walking down the street and saying, could someone else run your business? What if you didn't show up one day? Who would do all the things that need to be done? Well, that's what our product does. You know, and so you're like putting this little you know, nugget in someone's head to think, okay, I'm interested, I'm intrigued, I wanna check out their product. I looked at some of your videos while researching. They're very creative, they're very simple, and they're very effective, I think, for the strategy that you mentioned with Facebook, how you build the lookalikes. Moving on to the next phase where you're scaling from maybe 100 to 1,000, did you? double down only on Facebook ads or were there any strategies or tactics that are much more maybe efficient on the long run? Because Facebook as you're putting money in, you're getting money out, right? Is there anything that you put less money but you get more output? So Facebook was honestly like the lion's share of our budget, Facebook and Instagram, for the first two years. So we built the business to, you know, three, four million of annual recurring revenue with just Facebook ads really. The only other thing we introduced early on was an affiliate program. So I knew that as a consultant, I was out recommending tools, I was helping customers, I was inside their business, I had my hands on everything. And so I thought if I can find more of those people, they'll be great channels to sell train you all through and I'm providing a product on their shelf, an extra revenue stream for them, something that they can offer as a service. And so we started our certified partner program in December of that first year, and it started building up slowly in that second year. Today it's very strong, consultants around the world, a huge directory on our website, and so that is a great channel for us, and it's much stickier customers. It's people that are helping get the customers set up and fully flushing out their content, just like I used to. It makes a lot of sense, right? You go to the doctor, they prescribe to you a medicine, you buy it, because you're trusting them. with the consultation, which is exactly why community of consultants, if they recommend something, you wouldn't go and research it and say, Oh, let me look at the pros and the cons. You've already paid that consultant to do that job. So it's more powerful. The only caveat would be building it up takes a bit of time, right? And not all affiliate programs work. You have to have the right setup and structure in place. Is there anything that you could advise our listeners when it comes to affiliate marketing that's hard to do? but you need to do it in advance to make it successful. So when we first launched it, we had eight affiliates or eight consultants and we flew them all in to Phoenix to do an in-person workshop together. And we worked together to build out accounts. And so at this point, we didn't really have a standard operating procedure or any process for how to do the consulting work. And that's what we were trying to create. And so we brought people in person, we did this day-long workshop. We built out sample accounts with them. We answered the questions that came up, and we figured out where their objections were, where their problems were, what resources they really wanted from us. Did they wanna close the sales, or did they wanna send them to us to be closed? Did they wanna do the support, or did they wanna kick the support to us? What kind of revenue share did they need? Was it a percentage ongoing? Was it a bigger hit up front? And so we got... really close to those first few consultants to figure out the program. And I think that's a smart way to do it. It's honestly the same way I built the company was getting really close to those first couple dozen customers. And so we did the same thing with our consultants. Knowing what you know today and in hindsight, Facebook worked. If you go back in time, is there something you would have tried for sure? I would have spent 10 times more on Facebook because you don't understand the timing. when you have it. And the click-throughs and the cost of our ads back then was a magnitude or two smaller than it is now. The market's been more saturated, it's much more competitive. Obviously today we have tons of different acquisition channels, very diversified. But in those early days when something's working and it pencils out, I would have put the pedal to the metal even more. Makes a lot of sense, because that's why it's in hindsight. You wouldn't say, okay. I should put more money because I know it's going to survive. Sometimes you're afraid that things go the other way around. And when you're a startup, you have limited funding. So you have to be very careful how to spend it. Speaking about funding, if we go to your pricing page, it has changed over the years. How does an entrepreneur starts to think about pricing if they're in the SaaS space? So we have a platform. You want to say, I want to set my prices day one. What are things you would look at? techniques you could consider just to feel the price is in the right place. It doesn't have to be accurate 100%. It has to be somewhere in the right place. I think the easiest thing is just to look at comparable tools and to look at other software tools that would be in their stack. And so for us, when we started selling a subscription product, a software or productivity kind of product, we looked at project management tools. We looked at, you know, things in the very small biz HR. stack of recruiting tools or things that people were willing to pay for, prospecting tools. And I thought if people are paying $50 here, $150 here, $100 there, $200 there, that was kind of the sweet spot where I thought that we could launch out of the gates. But you charge what people are willing to pay. And so over time, as your product gets better, as it has more functionality, as it's more competitive, as you're offering more support, you can afford to charge more. It's something that we've changed over and over. Every quarter, we're basically changing our packaging and pricing, and you have to iterate, because what's working last year is not what's gonna work this year. 100%. What is the proudest moment that you currently have on Trenuel? Proudest moment? I think the proudest moments are probably when I see people in the wild or when people come up to me because I'm wearing a trainual shirt or a hat and they say, Oh, are you the guy from trainual or my company uses this? You know, that started happening a lot more in the last couple years where, you know, check into a hotel and the hotel said, Oh, actually, like I've just finished my training in your tool. Or, you know, you go to a restaurant or a coffee shop and they're like, do you work for trainual? Yeah, we use that. Or I'll get you know, be in line to board a plane and someone will come up to me and say like, hey, I saw your Instagram video, things like that, because we know we're making an impact. We know it's getting out into the world. Amazing. What is a principle that you live by that has served you well on your journey? Principle. You know, I want to just be proud of how I behaved in every situation and, you know, just live a good life, have a balanced life, you know, not sacrifice time with my family and my kids and be a... best leader I can for the company. So I'm just trying to keep it all in balance and be true to myself. Amazing. Chris, thank you for joining this session. What's next for Trainwool? More of the same. We're just, we are only scratching the surface. You know, every business honestly needs a playbook if it wants to operate at its peak performance. And, you know, with 10,000 or so companies today, there are millions to go. So we're just getting started. Thank you for stopping by. This was an amazing and insightful episode. Is there anything you would like to share with our audience? Is there anything that we could give back to you? Yeah, if you'd like, you can check out my book, The Business Playbook. It'll teach you everything you need to structure your own playbook for your company, whether you wanna do it yourself or use a software tool like ours. So check it out, theb We'll put that in the show notes. Thank you for stopping by. We wish you the best of luck. Thank you, you too. This episode is brought to you by Blocks. the no-code platform that's changing how founders, engineers, and product managers build and ship software. Blocks is like a backend platform on steroids. With its built-in database and an impressive suite of features, Blocks lets you create workflows, actions, triggers, events, schedulers, and more. You can even handle authentication and notification all without writing a single line of code. Whether you're building a complex enterprise application, or just need to ship an API quickly, Blocks has you covered. It's the fastest way to go from idea to launch. Check out Blocks today on blocks.online. That's www.blocks.online and build your next project smarter, not harder. Thank you so much for listening to the first 100. We hope it inspired you in your journey. If you're enjoying the podcast, please subscribe to our podcast on Apple iTunes, Stitcher, Google Play or Spotify and share it with a friend starting their entrepreneurship journey. Leave us a five-star review. Your support will help spread our podcast to more viewers.