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How we are growing at 60% YOY with our unique positioning in the highly competitive SEO space
Episode 1917th November 2022 • B2B SaaS Podcast • Upendra Varma
00:00:00 00:25:54

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Karsten Madsen, CEO of MorningScore, talks about how his unique "motivation" based positioning in the SEO space truly differentiates them from the huge competition. He also talks about the tactics he uses to grow using SEO as a primary top-of-funnel growth channel.

In this episode, we talk about,

  • What MorningScore is all about
  • How they are serving 850 paying customers with around $600k ARR, growing at around 60% YOY
  • How he used killer cold emails to get the first ten customers
  • How 40% of their new growth comes from SEO & rest from Google Ads, Facebook Ads & other channels
  • How they use "alternative to competitor" SEO strategy in a highly competitive space
  • How their unique positioning is helping them differentiate
  • Team & future vision
  • How they ended up building one of the most complicated software which needs to scrape the web regularly

If you are building a SaaS in a highly competitive B2B SaaS space, you should listen to Karsten's unique insights & growth tactics.


You can also watch this episode on youtube here.

Transcripts

Karsten Madsen:

And a lot of them tell us that, you know, they have a huge

Karsten Madsen:

increase in revenue because they found our tool and they started doing seo.

Karsten Madsen:

And you know, we motivated them to do it.

Karsten Madsen:

So that motivation becomes, Somehow a key differentiator for us.

Karsten Madsen:

And, but it's hard to tell people hey, we can motivate you.

Karsten Madsen:

You know, it sounds stupid.

Karsten Madsen:

So what we do instead, we say, just try our tool and we try to make it

Karsten Madsen:

very easy to sign up for our tool.

Karsten Madsen:

I think we make it way easier than most of our competitors,

Karsten Madsen:

yeah, well the real value is, you know, the motivation that it, you

Karsten Madsen:

know, makes you, like, some people go nuts when they use their tool.

Karsten Madsen:

They want green everywhere, you know, green check mark.

Karsten Madsen:

So that's the real value.

Karsten Madsen:

They understand the value of what they've done.

Karsten Madsen:

So that becomes a real value as well.

Karsten Madsen:

But those are the two only things.

Karsten Madsen:

The rest I would understand if people say, Yeah, so you have keywords, so you

Karsten Madsen:

have links, so you have a onsite section.

Karsten Madsen:

I've seen that 200 times before and yes, you've seen it 200 times before

Karsten Madsen:

because it has been there 200 times.

Karsten Madsen:

Yes.

Karsten Madsen:

That's, that's not where we differentiate.

Karsten Madsen:

We're, we're the same on this one.

Upendra Varma:

You're listening to the B2B SaaS podcast with your host Upendra Varma.

Upendra Varma:

Every week I talk to the world's best B2B SaaS founders and ask them

Upendra Varma:

everything about their business.

Upendra Varma:

There's a lot to learn from every founder, whether they're just starting out or

Upendra Varma:

already doing tens of millions in ar.

Upendra Varma:

It could be their zero to one journey, their top of an elite generation,

Upendra Varma:

their lead conversion strategy, their churn and account expansion

Upendra Varma:

process, their product journey, or even how they sold their company.

Upendra Varma:

Everyone has interesting story and insights they've gained over time.

Upendra Varma:

I'm here to decode them by asking the right questions, no superficial and

Upendra Varma:

lengthy conversations in just 15 to 20 minutes, I'll deep dive into one

Upendra Varma:

of the above themes backed by real metrics so that all of these insights

Upendra Varma:

are data backed and actionable.

Upendra Varma:

Let's listen to today's episode.

Upendra Varma:

hello everyone.

Upendra Varma:

Welcome to the SaaS podcast.

Upendra Varma:

Today we have Karsten Madsen with us Castin here runs a

Upendra Varma:

company called Morning Score.

Upendra Varma:

Hey, Castel, welcome to the show.

Upendra Varma:

Hey,

Karsten Madsen:

hey, Upendra.

Karsten Madsen:

Really awesome to be here.

Karsten Madsen:

All

Upendra Varma:

right, Castin, so let's, let's try to understand

Upendra Varma:

what Morning Score does, right?

Upendra Varma:

What does, what does the product do, and why do customers pay?

Karsten Madsen:

Yeah, why do they pay money?

Karsten Madsen:

And you know, we are in a very competitive industry, the SEO tools

Karsten Madsen:

industry, so basically ranking number one on Google and how to do that.

Karsten Madsen:

There are plenty of online tools for that.

Karsten Madsen:

And I don't know, I got this crazy idea to create another such tool.

Karsten Madsen:

Looking back, it probably wasn't so smart because, you know, there's so

Karsten Madsen:

many competitors and I've learned the hard way that if you go into

Karsten Madsen:

a competitive industry, you're gonna face a lot of challenges.

Karsten Madsen:

So why should they pay money for our tool?

Karsten Madsen:

That's probably the what I spend the most time thinking about.

Karsten Madsen:

And our main argument so far is we've gamified the whole

Karsten Madsen:

experience of, of growing your seo.

Karsten Madsen:

And it sounds silly, but actually it's what makes a difference.

Karsten Madsen:

So if you're a beginner, you will learn SEO through our game, gamification.

Karsten Madsen:

So we give you missions, we suggest things that you do.

Karsten Madsen:

You complete those missions and you earn XP and then you level up in the tool and

Karsten Madsen:

it's all cool and you get motivated, you get these screen check marks and so on.

Karsten Madsen:

And if you're an expert, we have a pretty, our data is pretty deep and,

Karsten Madsen:

and the tool and the functionality of the tool is also quite deep, which means

Karsten Madsen:

that most experts will be plenty fine with all the tools we've got, and that

Karsten Madsen:

extra motivation of leveling up as they grow their customers or their own SEO is

Karsten Madsen:

actually what a lot of experts tell us.

Karsten Madsen:

Makes them choose our tool instead of let's say a Res or Sam Rush or whatever

Karsten Madsen:

out there, at least as a daily driver.

Karsten Madsen:

And then they use those tools when they need something specific from those.

Karsten Madsen:

So yeah, that's, that's, that's why people pay us money so far.

Karsten Madsen:

. Yeah, that's a

Upendra Varma:

pretty interesting.

Upendra Varma:

You know, positioning, right?

Upendra Varma:

So gamification in AEO industry, we, we'll come back to that.

Upendra Varma:

So I just wanna understand your customer base so that we can come back and talk

Upendra Varma:

about how it's working for you, Your unique positioning that I've seen it.

Upendra Varma:

So, so help me understand, like how, how much revenue were you

Upendra Varma:

doing last month approximately?

Karsten Madsen:

Yeah, so our MR is roughly 50 K in dollars.

Karsten Madsen:

You know, the dollar keeps going up, so I have to keep adjusting,

Karsten Madsen:

but that's around that number.

Karsten Madsen:

Customers eight.

Karsten Madsen:

Actively paying customers like almost eight 50.

Karsten Madsen:

Mm-hmm.

Karsten Madsen:

. And, you know, how would the revenue, the revenue on a get, we make almost

Karsten Madsen:

the MR on a monthly basis, to be honest.

Karsten Madsen:

So that's pretty closely.

Upendra Varma:

And then where you say at 12 months

Karsten Madsen:

before, so Yeah.

Karsten Madsen:

12 months before we were at roughly 30,000.

Karsten Madsen:

Mr.

Upendra Varma:

Got it.

Upendra Varma:

All right.

Upendra Varma:

So, so, so you let, let, let me just Understand how big these customers are.

Upendra Varma:

Right.

Upendra Varma:

So, so, so what sort of customers do you have?

Upendra Varma:

Who are these customers?

Upendra Varma:

Are the agencies, or do you have any specific segment that you're targeting?

Upendra Varma:

Or like, explain how these customers look like, because I know it's, it's

Upendra Varma:

a big product wise product, like anybody in the world can use your tool.

Upendra Varma:

Are you focusing on someone?

Upendra Varma:

Like how does the customer base look like today?

Karsten Madsen:

Yeah, so web shops, so that's e-commerce and agencies.

Karsten Madsen:

I'm, When I say agencies, I mean all kinds of agencies can be digital agencies, can

Karsten Madsen:

be SEO consultants, can be all kinds of agencies that work with digitalization.

Karsten Madsen:

Are you using That's the two primary groups and those are the ones we focus on

Karsten Madsen:

and you know, How do we get those cust?

Karsten Madsen:

I mean, how do we reach those goals?

Karsten Madsen:

That's my next

Upendra Varma:

question.

Upendra Varma:

So, so ah, okay.

Upendra Varma:

. So, so let, so let, let's, let's do it systematically because there's a lot

Upendra Varma:

of, you know, journey involved in here.

Upendra Varma:

And so I want you to sort of look at your last, last year's sort of growth, right?

Upendra Varma:

And help me understand where you got all of those new customers from.

Upendra Varma:

First, first of all, what channels have been working for you?

Karsten Madsen:

I think the biggest growth factors, especially if we talk

Karsten Madsen:

about the beginning, I think that's actually the most interesting for you.

Karsten Madsen:

Mm-hmm.

Karsten Madsen:

is a few things.

Karsten Madsen:

So email marketing I think especially because it's not really legal in

Karsten Madsen:

Denmark where we, we started out.

Karsten Madsen:

And I didn't know at the time.

Karsten Madsen:

So I found, I scraped some very good email lists of web shop owners, so

Karsten Madsen:

eCommerce owners, and I got like 3000 of them, and I think we got

Karsten Madsen:

like 10 customers out of that.

Karsten Madsen:

So like some of our ten first customers, just by emailing them all and saying,

Karsten Madsen:

Hey, there's this new cool day.

Karsten Madsen:

Any tool, you know, like patriotism, it always works.

Karsten Madsen:

And the same with agency.

Karsten Madsen:

So just direct email.

Karsten Madsen:

But these

Upendra Varma:

are cold emails, right?

Upendra Varma:

So they absolutely

Karsten Madsen:

know nothing to email cold.

Karsten Madsen:

We didn't know anything about them and we didn't even try to

Karsten Madsen:

make it smart or we didn't do any follow ups, anything like that.

Karsten Madsen:

But I sent them through my personal inbox.

Karsten Madsen:

I didn't do any, I didn't use any tool.

Karsten Madsen:

I used actually some very old school mail merch tools from

Karsten Madsen:

Microsoft the Office Suite.

Karsten Madsen:

That's actually an amazing tool.

Karsten Madsen:

Like, I was like, Whoa, this is way better than some of these advanced, modern tools.

Karsten Madsen:

Anyway, can show you later, but so that's one of the first things I, I did.

Karsten Madsen:

Then

Upendra Varma:

I stopped.

Upendra Varma:

Just help me close that story, right?

Upendra Varma:

So, Like it's, it's really hard to imagine that you would get a bunch

Upendra Varma:

of customers just by doing that.

Upendra Varma:

What, like if I were to send it from my personal email saying

Upendra Varma:

that I've got some new fancy tool, why would they even care about?

Upendra Varma:

So what really worked according to you there?

Upendra Varma:

Was it that patriotism that you were mentioning, or was

Karsten Madsen:

it something else?

Karsten Madsen:

Patriotism helps.

Karsten Madsen:

I think I've made a really good email, to be honest.

Karsten Madsen:

. Upendra Varma: Okay.

Karsten Madsen:

So you, you are being too modest,

Karsten Madsen:

I kill it.

Karsten Madsen:

No, no.

Karsten Madsen:

There was some patriotism and some people knew me, my, me personally from other

Karsten Madsen:

from, from, you know network and so on.

Karsten Madsen:

And I think the fact that we gave them a very good deal, you know, giving

Karsten Madsen:

a very good, I told him the first 50 customers get a very good deal.

Karsten Madsen:

That always

Upendra Varma:

works.

Upendra Varma:

Okay.

Upendra Varma:

So were you playing along the line of, you know, pricing.

Karsten Madsen:

So

Upendra Varma:

what's, so, so, so like, were you offering them like this for crazy

Upendra Varma:

low prices or what was that initiative?

Karsten Madsen:

Yeah.

Karsten Madsen:

Well, half price.

Karsten Madsen:

I wouldn't call it crazy low, but that was like a pioneer discount that was

Karsten Madsen:

way lower than we would give today.

Karsten Madsen:

Right.

Karsten Madsen:

So that, that helped.

Karsten Madsen:

Yeah.

Karsten Madsen:

So

Upendra Varma:

let's move forward.

Upendra Varma:

So you've got those 10 customers.

Upendra Varma:

What happened?

Upendra Varma:

When was this?

Upendra Varma:

By the, Okay.

Upendra Varma:

Which year was

Karsten Madsen:

this?

Karsten Madsen:

2018.

Karsten Madsen:

20 20 18.

Karsten Madsen:

2018.

Karsten Madsen:

End of 2018.

Karsten Madsen:

So how we grew from there is more of a classic story.

Karsten Madsen:

We started doing a lot of Somi just posting, I started doing

Karsten Madsen:

videos on LinkedIn that started really catching some, some traffic.

Karsten Madsen:

Seo, you know, we're an SEO tool.

Karsten Madsen:

We do our own seo.

Karsten Madsen:

And that has all, that's probably like 40% of our revenue.

Karsten Madsen:

New customers.

Karsten Madsen:

Mm-hmm.

Karsten Madsen:

. So new revenue coming in is from SEO today.

Karsten Madsen:

And actually we wanna go double.

Karsten Madsen:

We wanna, we wanna double down on that because we see that it's just the

Karsten Madsen:

cheapest channel for us works really well.

Karsten Madsen:

We've tried you know, Google ads that was pretty effective too, but quite

Karsten Madsen:

expensive because, you know, the competition is high in my industry.

Karsten Madsen:

We've done Facebook ads, we've done a lot of things quo ads.

Karsten Madsen:

We've done a lot of things, but none of them.

Karsten Madsen:

So I don't have anything bad to say about Facebook ads, but I wanna remind

Karsten Madsen:

people who do that, that it almost takes a full-time position, like a

Karsten Madsen:

full-time job to keep creating new, they call it creatives, to keep creating

Karsten Madsen:

new content that you can push on Facebook and, and why you might ask.

Karsten Madsen:

Everything dries up so quickly on Facebook.

Karsten Madsen:

Your audience get tired of the same ad very quickly, and Facebook is

Karsten Madsen:

not very good at showing your ad to new audiences, and you have to

Karsten Madsen:

work so hard to get them to do it.

Karsten Madsen:

So my experience, and I've worked with some of the smartest Facebook

Karsten Madsen:

people consultants in the world, and they all tell me you need a.

Karsten Madsen:

Mean content machine to be strong on Facebook ads.

Karsten Madsen:

So, and then I told him, Okay, so you're telling me I need a

Karsten Madsen:

full-time content person to even be relevant for Facebook ads?

Karsten Madsen:

So then if you think about it, you need to, at least in Denmark, a full-time

Karsten Madsen:

content person is quite expensive.

Karsten Madsen:

Someone who's very good at graphics or content, there's quite not cheap.

Karsten Madsen:

Yes.

Karsten Madsen:

So you have to add that on top of your Facebook ad expenses.

Karsten Madsen:

And then when you calculate, you know, the cock, you know, the customer acquisition

Karsten Madsen:

costs, what it costs to get a customer.

Karsten Madsen:

For Facebook ads, you include the forecast.

Karsten Madsen:

It's a very bad investment in my opinion, So we stopped doing that.

Karsten Madsen:

All right.

Upendra Varma:

So, so yeah, you mentioned something, right?

Upendra Varma:

So like you've experimented with a lot of those things, and so you mentioned 40% of

Upendra Varma:

a new growth last year came from seo, and where was that rest of 60% coming from.

Karsten Madsen:

So we did experiment a lot with Facebook

Karsten Madsen:

ads, so we'll say 20% Facebook ads.

Karsten Madsen:

Somi is very hard to measure, as you know, so I have like a catch all.

Karsten Madsen:

Yeah.

Karsten Madsen:

So like you could put like, you know, the remaining 40% in Somi Google Ads.

Karsten Madsen:

There's a bit, there's like 10, 20% there.

Karsten Madsen:

And, you know, like we also did some events.

Karsten Madsen:

We are, I, I was lucky enough to present at some conferences and

Karsten Madsen:

so on, so I would call the rest just branding, you know, like the

Karsten Madsen:

remaining 20%, some kind of branding.

Karsten Madsen:

Yeah.

Upendra Varma:

All right, so let's, let's get back to your SEO part of it, right?

Upendra Varma:

So, so look, I mean, you run an SEO company, so you must

Upendra Varma:

be an expert in that, right?

Upendra Varma:

But still, Yeah, just imagining, right?

Upendra Varma:

So your, the.

Upendra Varma:

In which you are and it's pretty competitive and to, to sort of make

Upendra Varma:

a tent where SEO is gonna take a lot of effort or something very creative.

Upendra Varma:

So what has really worked for you?

Upendra Varma:

Is there any, anything that you've done, you know, any key insights

Upendra Varma:

that you found out or what was your

Karsten Madsen:

process like?

Karsten Madsen:

Yeah, so in terms of getting customers from our own seo if we're not talking

Karsten Madsen:

product, but just a marketing of it.

Karsten Madsen:

I have to say the, the good old tactic of running alternative two pages.

Karsten Madsen:

So because there are so many searches in my industry for competitors, I

Karsten Madsen:

can also use that to my advantage.

Karsten Madsen:

So there's many people search for SCM Rush.

Karsten Madsen:

I think some people call it Sim Rush SE ranking, hfs, all these tools.

Karsten Madsen:

So I could create like, Alternative to a HFS on our, on our website.

Karsten Madsen:

That page would then rank high on some searches for Aifs alternative.

Karsten Madsen:

You know, when people Google that.

Karsten Madsen:

And that traffic would be at least looking for an alternative

Karsten Madsen:

and then we would be there.

Karsten Madsen:

And we've gotten at least a pretty decent amount of customers from that.

Karsten Madsen:

And it's very cheap to do because you set up those landing pages and

Karsten Madsen:

you know, I we're lucky enough to have a lot of links to our websites.

Karsten Madsen:

We have a strong website, we have easy time ranking.

Karsten Madsen:

So that was enough to gain some traction.

Karsten Madsen:

So that was like the biggest trick we had.

Karsten Madsen:

And then we've created some great blog posts that just keep creating traffic.

Karsten Madsen:

That helps us a lot as well.

Karsten Madsen:

All right, So,

Upendra Varma:

so, but wouldn't that alternative part also, like,

Upendra Varma:

wouldn't it be competitive as well?

Upendra Varma:

You've got like lots of products out there, right?

Upendra Varma:

So Yeah.

Karsten Madsen:

Yeah, it is very, But we are not, we don't have

Karsten Madsen:

all the first place, We don't have the best spots on that.

Karsten Madsen:

Cuz we're a small company.

Karsten Madsen:

We don't have a huge SEO team that we can just What's, what's the key word

Upendra Varma:

that, that drives most traffic to you?

Karsten Madsen:

So yeah, that's a very good question because but I

Karsten Madsen:

think actually at some point HFS alternative was pretty good for us.

Karsten Madsen:

We ranked quite

Upendra Varma:

high on it.

Upendra Varma:

And what's that number?

Upendra Varma:

Is it in top 10, 20 50.

Karsten Madsen:

Also, it depends country by country.

Karsten Madsen:

We measure in Germany, and Germany was number one at 1.0.

Karsten Madsen:

Okay.

Karsten Madsen:

Now I think it's number two or three.

Karsten Madsen:

In, in United States we're number five or six.

Karsten Madsen:

So yeah, it's not bad.

Karsten Madsen:

I

Upendra Varma:

think that's, that's, that, that, that makes sense.

Upendra Varma:

Alright.

Upendra Varma:

Alright, so, so now let's go back, you know, and sort of look

Upendra Varma:

at your, you know, funnel, right?

Upendra Varma:

So how does your bottom of funnel look like?

Upendra Varma:

So once, once you sort of you know, bring all of this, you know,

Upendra Varma:

potential leads to your website.

Upendra Varma:

So what happens after that?

Upendra Varma:

How do you close

Karsten Madsen:

them?

Karsten Madsen:

Yeah, so it's mostly self-service because, you know, the price point

Karsten Madsen:

starts around $60, so we can't afford to hire a sales team to close them.

Karsten Madsen:

But I do have a few sales people who whenever there's a very good lead coming

Karsten Madsen:

in, a big company or something that look promising, they will detect them.

Karsten Madsen:

But just by email.

Karsten Madsen:

Mm-hmm.

Karsten Madsen:

. And then we also have like this classic email flow that, you know,

Karsten Madsen:

we send a few email during the trial to, you know, Talk a little bit

Karsten Madsen:

about us and ask them some questions.

Karsten Madsen:

And actually we got a quite high interaction rate.

Karsten Madsen:

I also send some emails from me personally and I tell them that I'll

Karsten Madsen:

reply and obviously I do as well.

Karsten Madsen:

And so a few times a week I reply to people who ask questions

Karsten Madsen:

and my colleague the same.

Karsten Madsen:

So, So, yeah, that works.

Karsten Madsen:

Post trial signup.

Upendra Varma:

So, so yeah.

Upendra Varma:

Any plans to sort of go upmarket to increase your acv?

Upendra Varma:

Is that something that you're working on?

Upendra Varma:

Are you still gonna sort of play around?

Upendra Varma:

Yeah, so,

Karsten Madsen:

so I wouldn't call it upmarket necessarily because

Karsten Madsen:

we have some of the biggest clients in the world right now.

Karsten Madsen:

You, you , what's the biggest activity that you have?

Karsten Madsen:

So you're talking about in terms of money or just brand recognition?

Karsten Madsen:

Well, I,

Upendra Varma:

money in terms of

Karsten Madsen:

money, Yeah.

Karsten Madsen:

So, so that would be 10,000 ar you know, like annual yeah, yeah, yeah.

Karsten Madsen:

Acv 10,000 acv.

Karsten Madsen:

Yeah, Yeah.

Karsten Madsen:

Yeah.

Karsten Madsen:

It's not huge, but you know, we're in a, we're in a,

Upendra Varma:

so, so I smaller, I'm assuming you did not close this using

Upendra Varma:

yourselfer model, so you must have done something there to sort of close such.

Karsten Madsen:

Oh, it was my network mainly, you know?

Karsten Madsen:

Okay.

Karsten Madsen:

It helps.

Karsten Madsen:

And that's, you know, the tip of the iceberg where people don't see that

Karsten Madsen:

I've been an entrepreneur for 12 years.

Karsten Madsen:

You know, obviously I have some network that I can push.

Upendra Varma:

Such deal.

Upendra Varma:

So, so no, my question is, I mean, I know you've got these amazing, you

Upendra Varma:

know, lead generation channels that are giving you leads consistently and.

Upendra Varma:

You also have, you know, your network and there are other possibilities that

Upendra Varma:

you could sort of explore with, right?

Upendra Varma:

To increase your ACVs and maybe go up market or increase that, you

Upendra Varma:

know, that ticket sizes, right?

Upendra Varma:

So what's the future gonna talk about?

Upendra Varma:

But, you know, my question is like, what's the future gonna look like?

Upendra Varma:

For example, how are you gonna go from 50 KR to, let's say 500 K?

Upendra Varma:

So how, how does that journey look like?

Karsten Madsen:

Well, it looks very simple.

Karsten Madsen:

We have tried a lot of things in the last two years and

Karsten Madsen:

we've made a lot of mistakes.

Karsten Madsen:

So our main challenge was we thought we were gonna be only a tool for beginners

Karsten Madsen:

because we thought there's so much money in that everyone wants a tool to learn.

Karsten Madsen:

Seo.

Karsten Madsen:

Turns out it's a horrible idea.

Karsten Madsen:

Beginners don't want to pay any money and they churn very fast.

Karsten Madsen:

So, It just was a bad, bad business case.

Karsten Madsen:

So what we've done now, we've said, Okay, let's go back to what we used to do.

Karsten Madsen:

We build an SEO tool for everyone.

Karsten Madsen:

You know, we're like the Volkswagen of of seo.

Karsten Madsen:

We don't care if you're an expert or if you're a beginner, you belonged

Karsten Madsen:

with us because we are for the people.

Karsten Madsen:

That's how we see it.

Karsten Madsen:

So that means we're not gonna be the most advanced tool, but we're definitely

Karsten Madsen:

not gonna be the simplest tool.

Karsten Madsen:

So how we're gonna grow big is to go head on head with the big tools

Karsten Madsen:

like scm, Rush, hfs Mask, so on.

Karsten Madsen:

By just outperforming them on intuitive features.

Karsten Madsen:

Not necessarily more features, but just better and more awesome

Karsten Madsen:

features and just gamification.

Karsten Madsen:

That just makes it so fun to be part of our journey instead of theirs.

Karsten Madsen:

So that's a product talk.

Karsten Madsen:

If you talk marketing Well, SEO is actually where we're gonna

Karsten Madsen:

bet a lot of our energy now.

Karsten Madsen:

And then affiliate I've, I saw one of your earlier podcasts and they,

Karsten Madsen:

he also talked about affiliate.

Karsten Madsen:

Affiliate, I think is here to stay, at least in the SaaS world.

Karsten Madsen:

And I'm actually, this week I've spent a lot of energy pushing

Karsten Madsen:

different different affiliate.

Karsten Madsen:

You know, I, I reach out to blocks and say, Hey, you should mention our tool too.

Karsten Madsen:

And I think at least short term, at least, that could take us to.

Karsten Madsen:

To at least 200 kmr.

Karsten Madsen:

I didn't make a plan for 500 K to be honest.

Karsten Madsen:

Sure, sure, sure.

Karsten Madsen:

But, but to 200 K, that should, that should be the affiliate and the seo.

Karsten Madsen:

That's like where we're gonna push hard.

Upendra Varma:

Makes sense.

Upendra Varma:

Makes sense.

Upendra Varma:

So now I'm gonna go back and, you know, talk about that positioning aspect, right?

Upendra Varma:

That unique factor that you have.

Upendra Varma:

So I'm gonna be blunt and I'm gonna ask you.

Upendra Varma:

Is it really making an impact or is it something that you are really using it to

Upendra Varma:

differentiate yourself from a competitor?

Upendra Varma:

Because I, if I look at your website, it's pretty obvious that you're an AEO

Upendra Varma:

tool, but you're very unique because you're trying to do something new.

Upendra Varma:

And I've never seen such a positioning in AEO game.

Upendra Varma:

Right.

Upendra Varma:

I've seen tons of products.

Upendra Varma:

Right.

Upendra Varma:

So how exactly is this working for you in terms of, you know,

Upendra Varma:

value that this positioning is generating for your customers?

Karsten Madsen:

Yeah.

Karsten Madsen:

Okay.

Karsten Madsen:

So, Well, maybe a boring answer is we have some customer stories and like what

Karsten Madsen:

is really exciting for us is that we have a lot of customers who told us they

Karsten Madsen:

never knew how to do seo or they were too bored to do it, believe it or not.

Karsten Madsen:

You know, people are too rich these days, especially in my part of the world.

Karsten Madsen:

They're like, ah, I'm too bored to grow my company.

Karsten Madsen:

Then they discover our tool and they, and we have a lot of

Karsten Madsen:

customer stories on our website.

Karsten Madsen:

So in depth and in detail, we show graphs of how they grew their, their traffic.

Karsten Madsen:

And a lot of them tell us that, you know, they have a huge increase

Karsten Madsen:

in revenue because they found our tool and they started doing seo.

Karsten Madsen:

And you know, we motivated them to do it.

Karsten Madsen:

So that motivation becomes, Somehow a key differentiator for us.

Karsten Madsen:

And, but it's hard to tell people hey, we can motivate you.

Karsten Madsen:

You know, it sounds stupid.

Karsten Madsen:

So what we do instead, we say, just try our tool and we try to make it

Karsten Madsen:

very easy to sign up for our tool.

Karsten Madsen:

I think we make it way easier than most of our competitors, but just, you know,

Karsten Madsen:

type in your website on the front page.

Karsten Madsen:

Yeah.

Karsten Madsen:

And just get going with your SEO within two minutes.

Karsten Madsen:

No credit card, no nothing.

Karsten Madsen:

Right.

Karsten Madsen:

So, so that's, that's what I believe in.

Karsten Madsen:

And we actually have a really cool feature where you just click on one button,

Karsten Madsen:

one click, and you see our tool live.

Karsten Madsen:

It's like a live demo.

Karsten Madsen:

You don't need to do anything else.

Karsten Madsen:

Mm-hmm.

Karsten Madsen:

. So I think those kind of things is helping us push.

Karsten Madsen:

What enable us to show what we can do as a tool instead of talking about it.

Karsten Madsen:

Because it's really hard when there are so many competitors.

Karsten Madsen:

Everyone's like, Yeah, yeah, yeah, yeah, yeah, exactly.

Karsten Madsen:

You know, And once they try it, they're like, Oh, this is cool.

Karsten Madsen:

And that, you know, that's,

Upendra Varma:

that's, that's what I was trying to understand, right?

Upendra Varma:

Is this that cool feature that you've got, Right.

Upendra Varma:

That is really sort of helping you sort of, you know, maybe.

Upendra Varma:

Get more ice on your product or get people to try out your product or, or do you

Upendra Varma:

believe there's real value in it that that people are able to extract out?

Karsten Madsen:

Yeah, well the real value is, you know, the motivation that

Karsten Madsen:

it, you know, makes you, like, some people go nuts when they use their tool.

Karsten Madsen:

They want green everywhere, you know, green check mark.

Karsten Madsen:

So that's the real value.

Karsten Madsen:

Yeah.

Karsten Madsen:

And on top of that, we, we, we, we spend a lot of time on making the tool intuitive

Karsten Madsen:

and, and, and it's really easy to use.

Karsten Madsen:

So for a beginner, there's like instant value for the expert.

Karsten Madsen:

The value is mostly agencies.

Karsten Madsen:

So if you have clients, you want to show them what you've done and what

Karsten Madsen:

the agencies are telling us that when they use morning score, the clients.

Karsten Madsen:

They understand the value of what they've done.

Karsten Madsen:

So that becomes a real value as well.

Karsten Madsen:

But those are the two only things.

Karsten Madsen:

The rest I would understand if people say, Yeah, so you have keywords, so you

Karsten Madsen:

have links, so you have a onsite section.

Karsten Madsen:

I've seen that 200 times before and yes, you've seen it 200 times before

Karsten Madsen:

because it has been there 200 times.

Karsten Madsen:

Yes.

Karsten Madsen:

That's, that's not where we differentiate.

Karsten Madsen:

We're, we're the same on this one.

Karsten Madsen:

And I completely

Upendra Varma:

agree with that.

Upendra Varma:

Yeah.

Upendra Varma:

Yeah.

Upendra Varma:

That, that's very interesting actually.

Upendra Varma:

Yeah.

Upendra Varma:

Alright.

Upendra Varma:

Alright.

Upendra Varma:

So yeah, so let's, I think, let's wrap this up, right.

Upendra Varma:

So, so when just wanted to understand how your team looked like today as a video.

Upendra Varma:

How many folks in your team?

Upendra Varma:

Nine people?

Upendra Varma:

Nine.

Upendra Varma:

Nine.

Upendra Varma:

Like how many in the G team go to market?

Karsten Madsen:

So two indigo to market team is quite small.

Karsten Madsen:

And how many engineers?

Upendra Varma:

Three.

Upendra Varma:

Three engineers.

Upendra Varma:

Got it.

Upendra Varma:

And like how many founders are you?

Upendra Varma:

Just a solar founder.

Karsten Madsen:

Two founders.

Karsten Madsen:

Two founders, me and the cto.

Karsten Madsen:

I, I am very happy to have a strong CTO and we're gonna kick the other

Karsten Madsen:

SEO tools ass because we know we have the technical foundation

Karsten Madsen:

So,

Upendra Varma:

So I'm, to be honest, right, I'm struggling to understand how

Upendra Varma:

you manage to build a product like this.

Upendra Varma:

Just three engineers.

Upendra Varma:

I mean, because I could imagine what it goes, what goes into

Upendra Varma:

building a product like this.

Upendra Varma:

So you've got to go and script everything in the internet, literally everything.

Upendra Varma:

Cause that's what your product basically does, right?

Upendra Varma:

So it's, it's really amazing.

Upendra Varma:

So our

Karsten Madsen:

shortcut, our shortcut is, Providers.

Karsten Madsen:

Oh, so hfs.

Karsten Madsen:

Yeah.

Karsten Madsen:

I'll, I'll tell you exactly how we do it.

Karsten Madsen:

So, HFS and Samage, they build their own databases and they

Karsten Madsen:

scrape the entire internet.

Karsten Madsen:

I'm not gonna, And, and they do some things, which I'm not gonna

Karsten Madsen:

say here on this podcast, but Sure.

Karsten Madsen:

It's not all, you know, Okay.

Karsten Madsen:

Mm-hmm.

Karsten Madsen:

. So if you wanna play that game, it's really hard.

Karsten Madsen:

In terms of scraping, you know, there are legalities.

Karsten Madsen:

There are, yeah.

Karsten Madsen:

Yeah.

Karsten Madsen:

So anyway so what we do, we just work with partners, so we.

Karsten Madsen:

And instead of building this huge database, we, whenever you type in a

Karsten Madsen:

website, in our tool, immediately we, we draw from seven different data partners.

Karsten Madsen:

So that's our approach and what we see, at least in many cases, we can get

Karsten Madsen:

more data than some of the other Azure tools because we are data agnostic.

Karsten Madsen:

We are like, Okay, this partner over here has some data.

Karsten Madsen:

Okay.

Karsten Madsen:

We take some from them.

Karsten Madsen:

This partner over here has some data.

Karsten Madsen:

Okay.

Karsten Madsen:

And then we compare the data and try to, you know, repair it and, and then,

Karsten Madsen:

and, and in that way, by having several data partners there, we can get.

Karsten Madsen:

Quality out there?

Karsten Madsen:

Not always, but we are pretty good on data model, so, so not an

Upendra Varma:

interesting question here, right?

Upendra Varma:

So, so for ex, like, how much cut do these sort of partners actually take from you?

Upendra Varma:

And let's try to quantify that.

Upendra Varma:

For example, for every dollar you make, how much do you end

Upendra Varma:

up giving these data providers?

Karsten Madsen:

That's very easy for every, for every dollar.

Karsten Madsen:

I would say.

Karsten Madsen:

For every $10 we make, we have to give away two.

Karsten Madsen:

Two, that's just data costs.

Karsten Madsen:

Just data costs.

Karsten Madsen:

On top of that you'll have server costs and so on.

Karsten Madsen:

So it's more like three actually, if you include our

Upendra Varma:

server costs.

Upendra Varma:

So it's, So sevens your, is what you sort of, So 30 is your sort of, you know, cost

Upendra Varma:

of goods, is that what you're saying?

Upendra Varma:

Yeah, yeah, yeah, yeah.

Upendra Varma:

But that's still really amazing.

Upendra Varma:

I mean, because in SAS world it's typically 2025, even if

Upendra Varma:

you are just selling a software.

Upendra Varma:

The servers itself will take up, you know, 20% of your overall sort of cost.

Karsten Madsen:

Yeah, I guess it's, it's not too

Upendra Varma:

bad then that's, that's pretty cheaper I guess then that's that.

Upendra Varma:

I think that is really amazing.

Upendra Varma:

. Karsten Madsen: Yeah.

Upendra Varma:

Well, it depends.

Upendra Varma:

If you buy our most expensive client, we actually make the least amount

Upendra Varma:

of money because then we give you a lot of credits for, you know, a lot

Upendra Varma:

of keywords and so on for a little, and then we make, maybe then it's.

Upendra Varma:

Then we only make 30% on you.

Upendra Varma:

But that's normal, you know?

Upendra Varma:

That's, that's interesting.

Upendra Varma:

I think that's one secret that you've revealed here today.

Karsten Madsen:

And one, you know, I don't care.

Upendra Varma:

Yeah.

Upendra Varma:

That, that, like, that's really amazing to be honest, because I, I,

Upendra Varma:

I never really knew, Like, I, I just looked at your product and I was

Upendra Varma:

like, How wonder did you build this?

Upendra Varma:

I mean, it's, it's really, really hard.

Upendra Varma:

And in terms of data, obviously the product still had, Yeah, you

Upendra Varma:

still need to build a software.

Upendra Varma:

The data part is really critical, right?

Upendra Varma:

You need tons of engineers sitting out and, you know, scraping.

Upendra Varma:

But if you can just get it for like 20% of the cost, I mean,

Upendra Varma:

that's just really amazing.

Karsten Madsen:

We are, we are not even afraid to disclose where we get it

Karsten Madsen:

from because we are all about honesty and, and, and, you know, open openness

Karsten Madsen:

because we think that's, that's how you can, you know, look at our data.

Karsten Madsen:

So, so I have a list of seven providers and we have it on our website so everyone

Karsten Madsen:

can look and they're very good providers.

Karsten Madsen:

I think they do a great job.

Upendra Varma:

Awesome.

Upendra Varma:

Awesome.

Upendra Varma:

That's great.

Upendra Varma:

And did you raise any money as of today to build your.

Karsten Madsen:

Yeah, we raised a total of $1 million.

Karsten Madsen:

Yeah.

Upendra Varma:

And who did you raise this money from?

Upendra Varma:

Is it venture

Karsten Madsen:

capital?

Karsten Madsen:

Mostly angels.

Karsten Madsen:

Mostly angels.

Upendra Varma:

And so what are the, what are their expectations

Upendra Varma:

from you going forward?

Upendra Varma:

I mean, it's not

Karsten Madsen:

your Oh, way too, way too high.

Karsten Madsen:

, they expect us to grow grow big.

Karsten Madsen:

But I think given the current situation and the world, they also just

Karsten Madsen:

expect us to run a, a good business.

Karsten Madsen:

We don't have time to talk about it, but this year has been crazy for us

Karsten Madsen:

because, We thought we were gonna go vc, but it turns out we're not really

Karsten Madsen:

ready for VC or maybe we're not relevant for vc cuz we don't grow fast enough.

Karsten Madsen:

We grow like a hundred percent a year.

Karsten Madsen:

But that's just a minimum You need to grow in vc At our stage, we, we think

Karsten Madsen:

it's fine, but they, they, they want more.

Karsten Madsen:

So we spend a lot of money preparing for that.

Karsten Madsen:

But now we realize that in the current market, all we wanna do

Karsten Madsen:

now is become cashflow positive.

Karsten Madsen:

So we spend less money than we get, and we're currently on a journey to do that.

Karsten Madsen:

We, we currently burn money but in within 12 months, we should be cashflow positive.

Karsten Madsen:

So that's my current goal and I'm really looking forward to that day where I can

Karsten Madsen:

finally say, Yes, we're real business now.

Karsten Madsen:

We make more money than of course, we're a real business and, and we're doing well.

Karsten Madsen:

But, you know, it's, it's, it's a nice feeling to make more

Upendra Varma:

money.

Upendra Varma:

Yeah.

Upendra Varma:

I'm sure you're gonna, you're gonna reach, tell me much sooner than what you.

Upendra Varma:

Predicting.

Upendra Varma:

Right?

Upendra Varma:

So what's, what's the future look like?

Upendra Varma:

You know, what's the vision here?

Upendra Varma:

Like five years down the line, are you still gonna take that VC route,

Upendra Varma:

are you, or are you gonna build a sustainable company and maybe

Karsten Madsen:

sell it out?

Karsten Madsen:

I'm never gonna sell.

Karsten Madsen:

That's not my ambition.

Karsten Madsen:

I hate, I hate that.

Karsten Madsen:

I don't like it.

Karsten Madsen:

I wanna build a very, Cool company.

Karsten Madsen:

I wanna build the coolest SEO tool out there.

Karsten Madsen:

We want to be a top three SEO tool in the world.

Karsten Madsen:

That's one of our goals.

Karsten Madsen:

Not in five years, but in 10 years, we're realistic.

Karsten Madsen:

We are just gonna keep pushing and.

Karsten Madsen:

Yeah, for me, I've, this is my second company for me when I

Karsten Madsen:

build a company, it's all about creating the coolest workplace.

Karsten Madsen:

So I care a lot about my employees.

Karsten Madsen:

I care a lot about our customers.

Karsten Madsen:

I just want to build a great place where people love to go to work.

Karsten Madsen:

And so that's actually the most important thing for me.

Karsten Madsen:

Of course, we want to grow and so on, but.

Karsten Madsen:

Building a cool product and having a cool workplace, you know?

Karsten Madsen:

Then I don't really care about how big you, if

Upendra Varma:

you certainly got a cool product.

Upendra Varma:

I can see that.

Upendra Varma:

All right, cast . I hope you, hope you scale mornings.

Upendra Varma:

Go to much greater heights.

Upendra Varma:

Thank you.

Upendra Varma:

Thanks for taking the time to talk.

Karsten Madsen:

Yeah, thanks a lot.

Karsten Madsen:

Yeah.

Karsten Madsen:

Thank you all.

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