How Groundhogg Built a $25,000 Monthly Recurring Revenue CRM Business
By Bruce Harpham
Thursday, 28 January 2021
Growing a software company isn’t easy, even when you have significant funding from venture capital investors. Groundhogg, a customer relationship management (CRM) and marketing automation startup company based in Toronto, has grown to $25,000 per month in revenue with only a single loan from the founder’s family. “In the company’s first full fiscal year (i.e., 2019), we earned about $100,000 in revenue and had $130,000 in expenses,” Adrian Tobey, Groundhogg founder and lead developer, told Startup Savant.
Building a Minimum Viable Product in Three Months
The first version of Groundhogg was developed over a few busy months in 2018. “I built the minimum viable product (MVP) of Groundhogg myself between August and November 2018. It included everything you’d expect from a CRM and marketing automation tool. It had a CRM, an email builder, a user journey map, and reports,” said Tobey.
The company has minimal ongoing technology expenses. “The product itself is a self-hosted WordPress plugin, so we don’t have any data storage or high-volume processing needs,” Tobey shared in an interview.
How Groundhogg Acquired Its First 10 Customers
Groundhogg attracted its first customers through the founder’s personal network. “Our first ten customers came from my parent’s agency. My dad, a massive Groundhogg supporter, bought all of his clients a Groundhogg license and moved them off Infusionsoft within a matter of weeks,” Tobey commented.
Growing With Digital Agency Partners
The next wave of customers came from several channels. The startup company has over thirty certified partners, mainly digital marketing agencies, who implement Groundhogg for their clients. The company's certified partners include Bluewerx Technologies, eSmiths, WP-Tonic, and Sleek Web Designs. The certified partner program offers training and "up to 30% recurring commission" to partners.
The 30% commission rate gives Groundhogg an edge over some of its competitors. For example, HubSpot (stock ticker: NYSE: HUBS) pays a 20% commission to its partners. In 2019, HubSpot earned $674 million in total revenue. In contrast, Keap (best known for its Infusionsoft product) offers a 20% to 30% commission for its certified partners.
Long-Term Growth Through Podcasts and Content Marketing
In addition, the founder appeared on WordPress podcasts like WP Builds podcast and the WP-Tonic Show to promote the company. These podcasts offer a direct way to appeal to the WordPress industry. According to VentureBeat, 30% of all websites in the world run on WordPress.
“Appearing on podcasts started a wave of interest. I started to see traffic spike, and I got invitations to other podcasts as a result. Over time my product's reputation grew stronger, and customers started coming in after seeing me present on a podcast,” Tobey commented.
“The podcast, interviews, and blog posts are now out there forever, unlike a Facebook ad which disappears as soon as you run out of money.”
About the Author
Bruce Harpham is an author and marketing consultant based in Canada. His first book "Project Managers At Work" shared real-world success lessons from NASA, Google, and other organizations. His articles have been published in CIO.com, InfoWorld, Canadian Business, and other organizations. Visit BruceHarpham.com for articles, interviews with tech leaders, and updates on future books.