EP73: Resell Hubspot (or any SaaS) Easily with AppBind Virtual Credit Cards

Jorge

The Internet marketing Hello. Welcome to the Software Como Servicio podcast. This episode will be in English because we have a special guest. It's Suneer Sac from Or a shot from AppBind. Welcome

to the show. Thanks for having me. I know I wish that my Spanish language had No chance of practice here in Canada where I live.

You didn't understand the the intro.

Sunir

A little bit. A little bit. I mean, we learned French. It's not that different because we're Canadian. The history of our content be what it is. But here I am. Thanks for having me. SaaS is the same in any language, so you can just

Jorge

Yes. Well, we we were talking behind the scenes, and I was talking to you about software Comoce de Lisio And that many people are interested in the topic in in Latin America, in Spanish, and it's Agrawi community. So that's why I, invite guests like you because you have an interesting story story to tell, and I loved your service at Vine. Tell tell us about your origin story or how you came up with the idea.

Sunir

Well, let's say what it is first, and my origin story is is a long story because it's a fun story, but it's a journey. But what what what we're doing so the issue with SaaS or subscription anything is that it broke the way that software goes to market completely. And you might go, oh, what are you talking about? All these companies are doing really well. Well, The licensed software, when software came in boxes, did a lot better, and I always find it entertaining seeing if you know Saster and Jason Lumpkin, it's like the race to 100,000,000 ARR, which is his thing, like $100,000,000 in 1 year, which by the way, who makes that money? Now, I guess more companies. It's taken a long time, But, you know, Lotus 123, the 1st real spreadsheet we're after VisiCalc. How long did it take them to get to $1100,000,000 of revenue in today's money? You know, it was 1 year. It took them 1 year to do that. And what's the difference? What's the difference? Is that when you could when you have a distribution channel that looks like everything else in the planet, where you put a bunch of stuff in boxes and ship them to shopping malls all across America, you know, back in the eighties.

And now, worldwide, You know? It should be easy to actually scale revenue very, I mean but there aren't that many SaaS companies that grow this way. And if you look at the numbers pre pandemic, 2020 2019. I don't have the pandemic numbers because it was a crazy time forever. But in 2019, there was 500 and, Say $60,000,000,000 of b to b software sold globally, 364,000,000,000 of which was sold through partners, but of SaaS, less than $23,000,000,000. Anyhow, SaaS was a $100,000,000,000 of that. And so, you know, while SaaS was, like, about 1 in 5, 1 in 6 of all software sales, that's in 14. I'm like, what's going on here? And that's just the software itself. Then you look at services revenue, which is, you know, in 2019, was $2,100,000,000,000, of which Microsoft was half.

Microsoft is an enormous company, by the way. I people don't really appreciate it. I don't know why, But Microsoft is 1 80th of the world's economy, them and their their aftermarket. 1,300,000,000,000. You know? They're larger than some countries, you know, them and their ecosystem. It's all because they sold 96% through partners. But what's why does the SaaS not work? K. That's a very nice macroeconomic story.

Looks good if I was, like, you know, and analysts. But what's the problem? So when I started the marketing team at FreshBooks in 2007, which is invoicing for agencies, consultants, whatever, my my thought going into that, because it's 2007, just think how long ago that was, is that we'd sell the software through partners, accountants, bookkeepers, consultants, whatever, but it didn't work because subscriptions can't be sold through partners. There are 2 problems when you try to go to market and actually get a partner to sell a subscription. Number 1, they can't create accounts. You can't even create a subscription account. It's very difficult, because you want to create account that you can manage, that the customer owns and control because the data has to be owned by the customer. And because of this fact that you're storing the data now on your servers instead of what we used to do is actually put a computer in the Customer's office and then install, you know, pick a CD and install in their office. You can't do that anymore.

So there has to be some kind of contractual relationship between the customer and the software vendor. So that's difficult. Oh, it's manageable. The second problem, which is almost impossible, is the billing. How do you pay for a subscription and and expense it to the client without getting stuck in the middle of this financial risk. It's an ongoing recurring charge and liability and all the bookkeeping, especially since most SaaS, it's variable cost. It it changes price all the time, so you gotta watch that expense carefully and the bookkeeping overhead overwhelms. And this was a very interesting problem.

I thought, honestly, in 2007 when I when I started the marketing, we would go through partners. 2008, I started a partnership team at Fresh Shbooks. And we did very well, but it wasn't through partner reselling. It was only through integrations at the time, which I'm happy to talk about, if if you're interested with integration strategy. But what like, I we kept trying because there's so much demand. Like, there's so much so many people who love the product who said, I could sell this to our Customers, how do I do it? They kept asking us for how. And, you know, I'm a computer scientist by training, and so I immediately thought about a solution technically to solve it. And we took, in today's money every year the number goes up because it but the, it's $500,000 in today's money we spent, and we and a third of the engineering team, basically.

And even I thought this was crazy, so I went to the CEO, Mike, and it's like, Mike, you gotta fire me. Like, this is Crazy. I mean, I didn't wanna get fired. But, like, this project was stupid. Like, it was painful to get to continue. Because you you can't divert a third of the company's resources, you know, to this go to market channel. And if it wasn't driving a third of the revenue, like, it doesn't make any sense, you know, and and we'd have to maintain it. And the issue is It wasn't the the the initial build, which was extraordinarily expensive to build it out.

Jorge

The issue was we'd have to touch that billing system and rip it apart, because SaaS billing is not simple. It's not like what we used to do, because I used to be in a I used to work in a micro like a in a Microsoft shop. 1st, we were consultants, and then we built a product. When we built a product, when partners called us to say, I love your product. How do I sell it to our customers? You know, which is the greatest it was very easy. It's like, what's your what's your address? We'll ship you a bunch of boxes by FedEx and salute you. Good luck. We sell it to you at 40% list.

That's it. It was very simple, You know? It's just a transaction. But it doesn't work with subscriptions. And so why? The billing system, because it because recurring Upgrades, downgrades, churn, cancellation, variable costs, all that stuff is very complicated, and your entire company Operationally, it's wrapped around that central billing and CRM, you know, system. And so everyone will fight the partner team, but you're just picking a fight with literally everybody internally. Not that you want dude. But it's just so much friction. It's terrible.

So all of support will fight you because, you know, they'll now every account that comes in, they have to know if it's partner attached or not, how How to deal with it or not. It's they they can't stand it. Finance will hate it because they have to track it. Product and engineering will hate it because they want to change the pricing model in the future, and they want to have the flexibility to do it. Sales will hate it because they gotta figure out a quote and price. It's very, very, very confusing. And so this blew my mind. I mean, we we couldn't we failed.

And I wasn't the like, I'm not the only company who's yet still, you know then I went to Olark, The live chat, I was CMO there, and the demand was there still. People wanted to bring our live chat products into all these ecommerce sites and whatever. We still couldn't figure out how to sell it, You know? We try to go using the referral model, which is what everyone does. Right? It's almost always referrals and referral links. And it's like, well, what's the problem with that? What's the problem with that? Here's the problem. And I actually wish I learned this because I was I'm a smart person. I'm not smart. I'm I I just failed a lot Mhmm.

A lot. I failed so many times. So I I was consulting after I left Olark, because I left oh, look. I have my 3rd kid coming. I live in Canada. They're the America. We so I wanted to pat leave. We have, like I hate telling this.

We have 12 now we have 18 months of, So I wanted to do some of that. So I left, but I didn't want what wanna do. I didn't wanna get a job because then I'd have I wouldn't have leave, so I was consulting again. I I you know, I consulted back and forth. So I was like, okay. But this is now I'm doing it in subscription land rather than license land. So now I'm like, okay. How do I deal with this? And I didn't buy the subscriptions for my client, and this he was a fashion retailer.

He He was making clothes. He was making a bricks and mortar store. He was making a line of clothes, and I was we're doing the ecommerce. I was working on the the analytics conversion rate optimization, and funnel to the advertising funnel to and I didn't buy anything. So 3 days from lunch, he noticed there's no phone number. Like, there's no tracking. Nothing is working, like, that I'm supposed do because they didn't buy anything. I every Monday, I I asked him, every Monday, can you sign up for these, you know, branch and talk to us? He's like, yeah.

Sure. But it was like he's a he's a he's a He's making clothes. He's, like, clothe the air, you know. I'm asking to buy computer science stuff. Like, he finally let me have it. He finally let me have it. He said, Sanir, My plumber okay. He's making a store.

My plumber is not making me buy my own pipes. I expect you take care of this for me. Working with you is 10 times harder than not working because, in fact, I just threw all the work back on their shoulder. And I was like, goddamn. So I went and bought the subscriptions, you know, and then canceled my credit card because they won't get charged again. Did an all nighter, delivered, and, of course, he fired me. And I asked him, you know, after a year month later, what because we had actually pretty good rapport. I had this idea for AppLines.

Like, what was your experience as a client? Yeah. You wasted my time, confused me, slowed down the project, did that for everyone else. You couldn't even control your own time. I don't know how anyone can run a business like that. Right? And I was like, yeah. I was like, and I asked him, when did you decide to fire me? And this is what kills me. He says, oh, yeah. On the 1st call.

It still hurts. The 1st call. It's like, you know, don't get me wrong, you said, Senira. I wasn't mad at you until the end. I was just stressed out. I'm sorry about that, but it was quite stressful. But, no, I when thinking back, I realized that, because because this is a this is a problem with referrals. I'd asked I burdened him with a bunch of 2 dos he didn't understand right from the jump, things he expected me to take care of.

He couldn't rely on me anymore to do like to be he that I I he could see that I knew what to do, but I he couldn't rely on me to do it, because I wouldn't do it. I refused to do it. And so he knew that he had to hire someone internally to take care of this, which is effectively what he did. Right? And we he did that, basically, but he couldn't handle it up until So he was just dealing with me until he had free time to hire someone internally. He hired someone internally, and that was the end of me. So I had fired myself by burdening my client. Right? And this is the problem with referrals. Like, your plumber would never send you to a hardware store to buy your own pipes, pumps, valves, you know, if your basement is flooded.

Right? You my basement is flooding. Like, can you deal with this? Like, I don't wanna talk to 3 of some pump manufacturers to see which one best suits my organizational needs. Get the water out of my basement. But if your marketing funnel is leaking, you know, this is exactly what a lot of, you know, market agencies are doing. They're like making you, like, let's talk to Salesforce. Let's talk to HubSpot. Let's talk to I don't care. Just get this thing working.

Like, do you wanna use Reply. Io or or Hunter or Snovio or Salesloft? Like, I don't Outreach, I don't know. I don't if I knew if I knew, I would done have done it. And this is actually the I think what a lot of SaaS companies, You know, it's invisible to them because we can't see our customers anymore, but this is what's happening. Like, they if you think from the customer's point of view, at least a third and probably a half of potential customer. Whether it's a small business or an enterprise, they do not have the wherewithal internally to purchase directly. They have to hire externally because they just don't have the staff experience or time or whatever it is. And therefore, Or if you do not provide an opportunity to them, if you bring in additional trusted experts on a contract basis to get them going, they're not going to be able to get by your software.

For it. And you know who they're gonna buy? Your competitors because it's the only like like, as far as the customer is concerned, they don't actually care about which software they're using most of the time. They care about their problem. And if the partner, in between you and the customer, finds it easier to work with another company, they're just gonna work with that company. For them, They their their only focus on is on getting that client, you know, back in control as quickly as possible, so whoever supports them best. And this is, you know, a long story to tell you where AppLion came from. We're a portal that basically allowed you to drop in, doesn't touch your billing system, allows you to support your solution partners, Bring let them basically purchase your software without being in the middle of the subs we we we invoice the the client and build the client automatically, and we don't ever need to integrate with your bill which sounds like magic. And there's a magic trick, but it it it we can do it.

We know how to do it. We have a little little magic trick. I could explain what that is.

Sunir

Yeah. I'm showing your your website Take here in in the video version of the podcast, and you use, like, a virtual card. Right?

Jorge

Yeah. So the the the clever idea that I had after FreshBooks is, like, what is the real solution? So this is the version of the site says subscription manager for agencies. I realized the agencies need something for them. They need a vendor management portal, but what but what's a subscription? Right? A subscription is how you sign up and how you pay for it. And what they needed is some way that they could do that on behalf of a client. So we make a virtual shared email address so they can sign up, Forwards emails to them, they manage the accounts. Forwards emails to the clients, so that they could own the accounts, which is very important. And a virtual shared credit card, so that the agencies can pay for the subscriptions or buy the subscriptions, sorry, but we automatically track all the charges, so there's no bookkeeping.

We do all the bookkeeping and bill the client automatically so that the agencies know the financial risks. The clients own everything in the beginning. And we handle all the transfers at the end of the project, so the clients always own their And it's it's been transformative for the agencies on our site who are on our products who use it because they can start building this is the key. They get off doing labor just doing Labor, they start building systems again. Right? And systems is where the margins is for them. That's how they build a business. It allows them, as it turns out, to bring in more and more and more different kinds of software to for the clients. It's easier for them to say yes to you as a software vendor.

I can bring you to my clients because I know how I can implement it and then build the client without having to Get the client involved. And for the SaaS vendors, because it's a credit card, we don't need an integration. We don't need anything. We can just go in literally in a day, Turn it on. Get you set up and set up and allow your partners to onboard and start purchasing your software. We handle all the commissions because we can track the money across the credit card. We'll we'll rebate them automatically. What you can show we'll show you all their, all the partners, all the customers, all the relationship.

It's amazing what you can do with your with a virtual credit card. That's incredible.

Sunir

Yeah. I I have been thinking about this business model. Like, You can be a consultant on Hubs HubSpot Yes. The marketing CRM all in one, And maybe teach them about how to use it, how to load their leads, and all that, and charge, like, 20% or I don't know what percent, but You can earn from that and a setup fee of all the configuration and all with app buying, Right. Very easily.

Jorge

That's exactly right. And in fact, actually, HubSpot is a very good example. So that is, you You know, that company, you know, Peter Caputo set up that program. I'm having a little Twitter debate with him actually right now. But he's very, very, very, very good at selling agents, channels. And what he what he done, he's he he the HubSpot taught his HubSpot agencies how to be HubSpot agencies, how to be inbound marketing agent, but the problem is, commercially, They still don't have they don't they're not building systems out. They're just to implement. So they're really focused on the 1st 3 months of the HubSpot install, and then they end up they don't have a long term stickiness.

I was talking okay. I have my own podcast. I was interviewing. It's all about, you know, how to get the digital under control so your digital agency comes under control. So interviewing is HubSpot Agency owner. Unfortunately, of course, it's always in the app, you know, when you're not recording, because in the after interview, it's like, it's just a pandemic. And he was saying to me, Sunir, you know, we're just chatting about, like, the pandemic and how and he's like, Sunir, he's just like, what do I own? What do you mean? What do I own as like an agency? I still don't know the question. It's like, you have your your your agency, you have your staff, you have your clients, your brand, your blog.

What do you mean? What do you own? It's like, no. No. No. Every single month, I have to start the business from from like, what does that even mean? Like, that can't be true. It's like, no. Every single month. Because he was he was on this treadmill. Think how privileged we are in SaaS.

We have a product that's high leverage. It's sticky. Like, you don't have to work on it. You can sit there, but the agencies don't. They used to. When they're systems integrators, they would build a system and maintain it. An industrial plumber would build out the plumbing in a factory and then maintain it for 10 years, but these agencies don't. Right? They're just selling human labor.

And so what he's saying, every single month with every single client, I have to beg every single client, like, what more can I do for you, please, just to prove their value? So they're constantly selling human labor. That's all they have. Right? And what he told me because what I sell you said, you know, I'm I'm what I do is I sell the sprinkles, but not the doughnut. It's like, what does that mean? I mean, I'm Canadian. But, like, here's what he meant was, here's a little candy on the doughnut. Right? They convince someone to buy the doughnut in the 1st place, and then the customer got addicted to the doughnut store. Who's a doughnut store? HubSpot. Right? They're the ones selling the substantive part of the deal.

Right? They make $24,000 a year. Right? But his agency gets kicked kicked out of, you know, after they convince them to buy the doughnut in the 1st place. They only get pennies. And and he was like, oh, okay. You know? And I was like, that's for me, it was very weird because My background coming from the system integrator space and the license software, this is not when I began my career when I was 18. It was formative. It showed me, you know like my president that, you know, that SI, she told me, you know, never we don't sell you, Senira. We sell systems.

You are the hello, but the labors that are you're handing the keyboard is just a hello for the but we don't sell that system. There's no ongoing engagement. There's no point. That's the product. And that's not just because we want the contract, the 3 year maintenance contracts, because the 3 year maintenance contract means to find other things to work with them on, sell them more systems. That was very lucrative. Right? But from the customer's point of view, you know, they they don't they can't think about this problem. They want they you are the system, not the software.

You know, an industrial plumber, factory, they they lay all the pipe like a bread making factory. They usually you know, they might have their internal plumbers but if they outsourced it, they're gonna have an industrial plumber. Industrial HVAC is the same thing, commercial HVAC. You'll have a company company install the heating and cooling. No. Like, no one's gonna maintain their own heating Cooling, they just have 10 year contracts. That's typical. And so, you know, what do you do as a SaaS company to go to market? You know? And this is, I think, the gap of information that we have because we can't see anyone in.

We it's very simple. Like, whoever's closer to the customer, you know, is the lead partner, and you're the supporting partner. So if you can support these companies, you know, they they their job is They're agencies. They take action. That's what agency mean. I think the word's the same in Spanish. Right? Agency. Right? So it's their job is to take action, right, to a customer.

It means custom. They have to do a custom build. What they do is they adapt technology to the customers. Right? And just like a plumber doesn't make their own pipes, Right? They're building a plumbing system out of parts. They're building a system out of parts. And so that system is their product, and that becomes productized services, which is leverage. That's that's margins. That's something they can hang around and, like, build a business out.

Like, one and one of the weirdest things, you you know, that people don't understand because if you live in SaaS, you're so used to the product being the profitable center. Agencies don't have that, you know, anymore because SaaS companies have taken so much. But when you when you're an agency, there's a trap where you cannot scale revenue as a service company. You cannot because the more you You scale your revenue and you have to you have to scale payroll to meet it meet the meet the sales. And the more payroll you have, it means next month you have a liability you have to meet. So so they go on this treadmill where you have to run faster and faster down this hill, and you just can't keep up. You'll break your legs, you know, doing this. They need something where they have a Sustainable product of some kind, which is usually the system of products and that's their value to you.

They can bring your product in plus your technical integration partners together into a solution and deliver the whole thing. That's their role in the ecosystem. And if you think about it that way, it's actually a lot easier to figure out how do you go market with them. How do we support you putting a system together for the client that you get to meet? It's very simple.

Sunir

Yes. I was thinking about, like, a productized service. Can be, I don't know, newsletters for small businesses, and I, choose ActiveCampaign or Mailchimp or whatever, and you now can earn money By managing all all the things, right, like writing the newsletter, managing the software, but without buying, it's An easy way to do that. Right?

Jorge

That's exactly right. Most of our our best market are local marketing agents because if you're dealing with, Let's say a restaurant or a plumbing company or handyman service or whatever. I mean, they're not dummies. They're technically capable, but in their domain. Right? Like so they're they're gonna contract out Internet marketing, which is another technical to to an agent a contractor. And, really, Customers don't really care how Internet marketing systems are built or funnels or any of this stuff. They can't keep up with it. What they want? What do they want? They want one thing, more customers.

That's it. So if you deliver them a pipeline of growth of customers, they're happy. Right? But then you as an agency, if you what we're finding on AppBind, it gives them permission to get past Facebook ads and Google ads and HubSpot. Right? This is the 3 the this is the 3 products. Now they can Yes. You know, bring in more leverage, more tools. So, you know, we're using StreamYard, very popular now. Right? Because podcasting is very, very popular.

Imagine bringing out and organizing a podcast campaign for SMB without having ability to build out, you know, StreamYard and look for them. Very difficult. Right?

Sunir

All the graphics of Streamyard, the branding, everything.

Jorge

That's right. And then what about Upwork and all these other services you wanna like, you also want a subcontract, You know? Like, these are kinds of things that you wanna be able to flexibly bring in, you know, or generate the result. And every Internet marketing campaign is different. You know? Yes. So you want some flexibility to bring in what what you need. And AppBind creates the trusted relationship between the client because

Sunir

Yes. Yeah. Let me tell you an insight about the Latin American market. They want a service. They don't want self serve. So

Jorge

Yeah. Right?

Sunir

That's a a big insight about the the the market. We we don't want or we don't know how to use it. Well, maybe Me or my types that, like, maybe use other American SaaS and World SaaS, they We know how to use it. We know how to put a credit card there and start using it, but the old timers Or so the baby boomers of Latin America that are in big corporations, they don't, know how to, Or new customers even. They don't know how to self serve or use a self-service, and they want a service. It's more More in the in the in the culture, I think.

Jorge

I think that's human nature. Like, I always I I have this joke that that's true. Like, since the age of the pyramids, humans have been contracting to each other, right, when it goes beyond their, like, their skill or capability. I mean, it's normal. That's how we work together as humans. Right? And then subscriptions, SaaS, What it's done is it because it forces the customer to buy direct and forces the SaaS companies, therefore, to provide full service, right, has really killed you at this market. And, Frankly, it's just not feasible to grow successfully without supporting half of the market that wants to hire their own. And that that is the truth.

And you'll see every scaling SaaS company has some kind of solution partner community around it, whether they they they, they're allowed to do it with permission and then in the light with certified programs or secretly on the side. You know, that's gonna happen anyway because customers demand it. I mean, I was talking to you know Evernote? Just for an example.

Sunir

Yeah.

Jorge

So Evernote, they had a huge number of implementation partners. Weirdly, it's a note taking app, but, you know, there's a lot of people who just, like, want help with everything. Right? But they would never they would never acknowledge partners. It was a very confusing experience. So they were allowed to they were allowed to they were allowed to They help tell people about Evernote, but they weren't allowed to log in to the customer's accounts by Evernote even though technically and legally, the customer can appoint anybody to act as their agent on their like, that's their choice, but Evernote would block it. And I was like, well, this is the problem with with the SaaS mindset that you control on everything. You can't control everything. Customer controls it.

You have to let the customer be the center of attention.

Sunir

Yeah. And even I was thinking of a service, Like, for, I don't know, not technical people, even by have a consultant. I don't know who will make this idea. Have an a consultant on Spotify, YouTube Premium, Netflix, and, like, put it with Appvine and Do our revenue from that? I I think it's, interesting. A small idea, but interesting.

Jorge

What? Just to buy these services for for consumers, you mean? Is that what you mean?

Sunir

Yes. Yeah. That's interesting.

Jorge

Is there a problem with that? I, like, I don't know the Latin market. It could be a payments problem. Like, they can't Is our credit card's not

Sunir

Yeah. The popular in there? We don't have, like, the, the the confidence in, like, Paying with credit card because maybe it's a fraud or a scam or something. We we rely in cash

Jorge

Okay. Mainly. Yeah. And this is actually an opportunity so this is a very common problem outside of the US and Europe, That internal payments, do not mesh well with the US financial system. And I think we're all learning this this this week Just how powerful the US financial system truly is.

Sunir

Yes.

Jorge

Like, oh, it does control the world. Okay. Great. Okay. So the way AppLines works It's it's funny. We all just wanted the pandemic to end and go back to having fun, and then, no. Alright. No

Sunir

Yeah. Another another geopolitical problem.

Jorge

Yeah. So here's how AppBind works. So everything inside you, AppBind Is it is internally in US dollars? And we issue US US based US credit card. Doesn't mean that we allow you to anonymously use them. We check who you are, but it doesn't matter. We'll issue them. So if you are are acting as, I'm gonna call it a reseller in this case. That term is really strange because most companies don't present Tells to customers as resellers.

But if you are basically arbitraging the or that's a weird word. If you're if you're actually standing in as the way to purchase American products or European. For people who don't have US to pay with, let's just call that reselling. You can take the money however you want, convert it locally in however you want in your country. And then you can fund the Outline account and purchase accounts on their people's behalf, using that. And that allows you the ability to serve serve these customer without, you know Yeah. In US dollars.

Sunir

Another another example about agencies is that Facebook ads buying or meta ads buying. It's it's difficult. Right? When you onboard a new customer, you you need To go in a in a Zoom call and then tell them, insert the your credit card here in the business manager, and it's very confusing.

Jorge

This is where I got fired. That's exactly what happened to me with this fashion retailer. I was trying to get them do all like, I think Facebook was the one that, like, terminated. Or because Facebook I don't I don't even understand Facebook business manager. You know? I just so many buttons to click, and I'm like, where is this? And you and they move it around every quarter. Like, I don't I'll tell you one thing that really blows my mind about Facebook. 2, I've had my credit card, because I have virtual card. Credit card stolen from from from Facebook more than once.

I don't even understand how it's possible. Like, this is a $1,000,000,000,000 corporation. How are my cards being stolen from like, I don't get that is a terrifying I mean,

Sunir

I don't Yeah.

Jorge

And then do true, but it does appear to be

Sunir

very true. So you don't Then you have, like, a $50,000 bill in your credit card.

Jorge

Yeah. I I was like, well incredibly. Yeah. So then, like, what if you have a client's if you got a client to put a payment source, something that they're already afraid of and you're afraid they don't trust credit cards. You need some kind of we need to use a virtual card that you can control that limits the damage. Right? So and then the customers This happens a lot too, by the way. If customers give you a credit card, it doesn't need to sign up. This is what a lot of people say.

Well, why there's 2 things that SaaS companies will say. Well, why can't the customer sign up Well, they would if they could, but they're already overwhelmed, like they're already behind schedule. They're already confused. They already feel incompetent, like they don't understand the thing They hired someone else to handle it. Let the person they hired to help them help them. That's why referrals don't make any sense in that case. And then the second thing is, Why can't the agency pay for it? Well, then they're gonna be in the middle of financial risk. They don't wanna pay they're not a bank.

They can't pay for the client stuff. So the 3rd solution is Why can't the client just give the credit card to the agency? Well, what happens if that credit card gets compromised either by the agency or someone else? Then you have a problem. First, the agency may be blamed, which very likely to happen. I've seen it many times at FreshBooks because we you know, clients would call us all the time to complain about our customers' agencies. And And we're like, we're just an invoicing tool. We can't help you. But I heard a lot of stories when I was there, like, once a month. And then when I was, And the second thing is, if the client's credit card goes down, you're still responsible to keep that funnel going, because the customer is not paying you to manage Facebook.

What they're paying you for? Customers. They want more customers. So if your Facebook ads go down, you're you're in trouble. And so you have to spend a day updating all the billing systems of all the things the client's credit card is in. And you don't have a credit card, so what are you gonna use? You end up using your own credit card to keep the thing going, and then now you're extending a loan to your customer. And why did that card go down? Maybe they don't have any money, and so you don't know, and then you could end up look sending them a loan you never clicked on. It's chaos. Right? And so Yes.

So this is why the vertical card made made sense to me.

Sunir

Also in in in Mexico, in Facebook ads Mexico, now there's tax regulation that the cost the customer needs to put their card, not You as an agency. You get in trouble if you put your card as an agency.

Jorge

Oh, that's interesting. So, because of the because of there's, some kind of stamp task, Tax, refer to import export, is that what they're doing?

Sunir

I'm not sure, but maybe, like, taxes, like, you need to, the customer needs to put their funding source directly, or without buying it could be it could be a solution?

Jorge

Yeah. Well, we, you know, we everything with us is transparent. So we are you're in the US, so we are just a stand in. So if you pay us I mean, what what happens with AppBind is the the customers put the money into an expense account that it's control it still owns belongs to the, but then that's basically extending a deposit to the agency to go spend out of, which is very similar to a plumber. So if if I before you're doing a rental in a house, you give the your your the contractor a deposit so they can go buy the materials. Right? And then they can start working. Yes. Right? That's a very common thing.

But the the difference is that the money in AppLines is controlled based on subscriptions. Right? So you can only u use the cards associated. Like, there's a purchase order, like, that the agency will give you. So I'm buying Facebook ads and HubSpot and StreamYard and whatever. These are the things I'm buying, Buy it degrees and then we only issue cards for those products, because we have all their merchandise. So then we lost cards for that and then it can only be drawn for that. So in that sense, the money is transferred to AppBind. We hold it securely, and then that money then you can issue a card to Facebook from from there.

Sunir

Another Another thing that I saw about your platform is that you were mentioning about, affiliate partners or Link, affiliate links, and all that. You also can take advantage of that on top of your markup of managing the software. Right?

Jorge

Yes. This is a very I don't raise it as a first point, but it is a very actually a long term point. So, a lot of first This is it's not free money because you're joining a partner program, but it's actually lost if you're working with a vendor, You're losing money because every minute you're spending time with the vendor, you're not billing for it, and so you're losing money. So it's very important to, yes, take the money to pay back for your time invested in the vendor. But the second reason you should do it is that the vendors the software vendors, they look at these referral programs for, agencies that have a lot of clients. So when they have a customer who needs an agency, they go to these agencies. It's a good way to build a relationship. And if you're a SaaS vendor because I think listening to this and thinking about AppMy might be a good solution for your reseller portal.

Like, conversely, we show you all the partners on the system using ours, and who all their customers are. So similarly, you could see, who's, you know, who's the best paid partners or not. But for those of you who have referral programs Or for those who are working with referral programs, this allows the agency to sign up themselves because you never would put a referral link in front of a client. Right? It makes literally it's absolutely backwards. 1st, you just threw the project back on the customer's plate, which is exactly how, you know, you're gonna get fired. You just re you just burden them with something they wanted you to do. And 2nd, when you did that, you asked them to pay you for that privilege. It's like, I'm a little bit short this Can you go down to the harp this is like a plumber, right, saying, can you go to the hardware store to pick up the pipes for this project? But I'm a little bit short this month.

Can you take my ID? I get a little kickback from the hardware store, so I just wanna wanna take my wife out for dinner on Friday.

Sunir

So It's

Jorge

like they're gonna get really mad. Right? It's really mad. But now but now because the agencies are signing up their own hands, they can use These referral program links, if that's all you have, to sign up and and track the track the deal. And then they take the money and then they can take, build a relationship with the vendor. And then the 3rd reason for doing that is if these commissions are are recurring, ongoing revenue sources. If you ever plan to sell your agents, this is the highest leverage revenue because it's the late the the the labor like, the revenue around the client base, like the client treadmill, It's only one time you only get one time revenue on that because it's only the current value of the contracts that's worth. Because the problem with the client revenue, like anything that's labor based, is it doesn't matter. Like I said, you have nothing.

You you you own nothing. This is what the vendor said. You own nothing for labor you're selling to clients. Hence, you just made payroll. That's all you've achieved. And then even then, there's still risk that the clients will not pay you. You're still financing. And it's very, very risky to have a labor only business.

Sunir

I I am thinking even you can, start a new business model, right, as an agency. Maybe don't charge a setup fee, but just, like, charge a like, I will do everything for free. I just want the recurring revenue for managing Facebook ads, Let's see. And I

Jorge

That's pretty common. Yeah. Ad spend. That's pretty common. So ad agencies, a very common model, is 25 points of the of the budget. So in in AppBind, we we calculate. You put a markup on on ad spend 25%, and we'll do all the calculation automatically and build the client it's coming through. So you don't have to do the bookkeeping.

We'll handle that as well. I wouldn't I wouldn't suggest only doing a performance based, or like a but like a spend managed based because it's kind of misaligned. Yeah. Like so you can do a performance based one, which is like how many leads and demos are booked. That's quite risky. It's fine to start up if you're just starting as an agency. The best model to get into is, yes, you need to have KPIs, you need a key performance indicators. You need to have goals that you have to hit for the clients.

Yes. But but you should wrap you should build a system out So that there's something operationally that you're doing every month with them. Wrap a retainer around that because now on AppLines as of we're just launching our our retainer merge products, so you can add retainers to the stack. So, you build the system out and add like $1,000 a month or whatever you're, you know, to the retainer for your time And you you you are there maintaining the stack and building it out. But you're actually the stack is really the how. The the what is the work you're doing, and the why is the business results. It's like, I'm gonna get you more customers. I'm going to solve your financial reporting if you're talking to the accountants.

Whatever it is. That is the best model because it's stable for the clients and high margin for you, and it still results.

Sunir

Yeah. For example, we interview interviewing a company called many requests.com. It's like a portal for agencies, and They have, like, a checkout, and it's for for agencies that want to prove ties and to charge for For their services with credit cards with with a credit card, like, you know, on a monthly basis, but you are doing that, Built in and not bind or something like that.

Jorge

So, we're adding this now is the Literally, the next thing is service billing. Now I'm not gonna say that we're gonna compete with products like Many Requests or FreshBooks directly, because those are really about the complexity of service billing, but we are a payment portal. We have the, payment methods on file. Right? So that you can add your your you know, you can calculate how much is owed and then post the through fresh through through through AppBinds, and then collect money. They already have it in their credit cards and

Sunir

Something like an Uber platform, b two e. Well, you you know what I mean, but

Jorge

Well, I think, actually, if you wanna go that way, just one last analogy to give people, because this is really a SaaS audience. DoorDash, if you know I mean, I don't do you have DoorDash in Mexico? Do you know what that is?

Sunir

It's Trucking.

Jorge

It's Yeah. Delivery like, it's it's a delivery platform for food. Right? And so Yes. This is a good analogy. I I don't like saying we're x for y. I don't say, like, Appline is a DoorDash for SaaS, but we're the DoorDash for SaaS Mhmm. Or okay. Or whatever you mentioned.

But what what are these models? So a restaurateur yeah. A lot of restaurateurs believe, like SaaS companies, that customers come in for the white glove service. Like, they won't come like, the table service, the wait area, all like, the ambiance, all this stuff. They want the full service. SaaS companies think the customers need the full life cycle treatment. You know, you have sales and success and account managers and all the okay. Some customers want that. Turns out well, it's been known for a long time in in the restaurant industries for professionals that 30% of customers don't care about any of that.

They just want Right? Since the the pandemic, of course, increased that to 50%. So what these DoorDash, Uber Eats, or whatever, they all found is they would show up to these restaurants with delivery people wearing their uniforms with virtual cards and bay buy the food, like because you don't the thing with virtual cards, you don't need integration. You can just show up and buy, use a credit card, and purchase. Right? That's why AppBind works with any SaaS company. We have 300 apps. Right? So these companies just show up and the restauranteur is like, who the hell are you? Like, why are you showing up? What's DoorDash? And then DoorDash is like, well, we have all these patrons, these customers who want food delivered, You don't have any delivery because they haven't staffed up a delivery service. And but you could sign up and then market to them. And so they put the DoorDash decals on the windows.

Right? And then the customers would sign up when they want a delivery and around the wheel it went. And then the same thing, SaaS companies don't have a delivery service because that's the agencies or Right? Accounting, like, service companies. That's the delivery service clients need. And, you know, if you you can't stand up your own service channel, you know, you have to support the service. And that's where AppLines allows you go to market, and it's 30% of the IT industry is minimum.

Sunir

Yeah. And to finalize, like, what is your fee or your business model?

Jorge

So, we charge, 1% of the money moving through us for us. That's really a bookkeeping charge because we have managing money costs money. And then, Whatever the payment fees to load in, so Stripe fees, that's just an expense. And then for SaaS that that's the only charge we do for the agency. And for SaaS vendors, it's 2.99 a month, US to have the registered partner program. So that should be less than your cost of bookkeeping and allow you to go to market to this channel.

Sunir

That's great. I liked this this conversation. Thank you for being here. I think it it will, a lot of Mexican users, Latin American users will go with you to app mynd.com And check check you out.

Jorge

It's amazing. Yeah. We absolutely love it. Happy to be

Sunir

fixed by it. And what are other place can they Find you.

Jorge

If you're a SaaS company

Sunir

find.

Jorge

If you're a SaaS company, I run the trade association of all the SaaS partnership people, cloudsoftwareassociation.com. And really, honestly, we're having our conference because we'll be in person again after 2 years, 3 years. April end of April in San Francisco. It's actually all partnership people. It's an instant network. It's called SaaS Connect, sasconnect.org. Come there if you wanna wanna, like, Connect immediately to the partnership network. Tech partnerships and channel partnerships, sasconnect.org.

And then me, I'm Sunir, s u, n as in November, [email protected]. So [email protected]. Email me there or LinkedIn, Sanir Shah, s h a h. LinkedIn, I'm happy to meet anyone. Happy to help anyone, honestly. Like, I don't know if people could see, but I have this guy on my wall, Gandhiji here. So kind of my vibe. I'm here to help people.

This is like a really difficult problem. I like it because there's a lot of small businesses, big big businesses all struggling. But, you know, if you can get people the right technology, then you can get them to the right solutions, and you can make a big impact on them. That's actually what I care about.

Sunir

Yes. That's a a great mission, and thank you for sharing your story, and, see you on the next, See see see you on the next episode with a with another guest, and thank you for being here.

Jorge

Thank you so much for having me.

Sunir

Bye.

Jorge

Bye,