How Capterra Ads Helped PhoneWagon Grow to Over $1M ARR with Ryan Shank

Hey, superstars! Thanks for joining us today. I'm your host, Aaron Zakowski, and today I'm chatting with Ryan Shank. Ryan is the founder and CEO of PhoneWagon, a call tracking software that helps marketers and agencies to track which of their marketing campaigns are driving more phone calls and revenue. Ryan grew PhoneWagon from zero to over a million dollars in annual revenue in just 4 years and recently sold his company to CallRail. Hey, Ryan, how you doing today?

Hey, I'm doing great. Thanks for having me.

For sure. Uh, would love to hear a little bit more about your background, how you kind of started, uh, PhoneWagon, and how you grew that to be able to sell it so, so quickly in just 4 years?

Yeah, absolutely. So, um, starts out, uh, actually before PhoneWagon, I was a COO at a company called mHelpDesk that was in the category of field service software. Um, and when I was there, we were, we were basically selling software to small businesses to help them manage, you know, work orders and scheduling. And everything like that. And that company ended up getting acquired by HomeAdvisor, which is a huge marketplace for home services. And when I was there, you know, a lot of the businesses that were buying the field service software to sort of manage the jobs were also buying leads from HomeAdvisor and Angie's List. They're buying leads from a bunch of different places. And, you know, what we found is that a lot of those businesses, while they were getting, you know, people submitting forms and online lead requests, a lot of them also were getting phone calls as well. And they valued, especially in the home services industry, they valued phone calls incredibly highly because, uh, you know, these, these are businesses that are on the go, and a lot of times a phone call is, uh, is, you know, someone looking for something, it's a consultation. So I sort of saw that the need in the market was like, hey, they want to be able to get these phone calls as leads and saw that there was a, uh, a need to sort of, uh, sort of track the phone calls in addition to the web leads. So when I was, uh, when I was leaving that company, a couple things were happening that I thought was interesting. Um, it was summer of 2016, so Twilio was IPOing that summer. So there was a lot of sort of eyeballs on telephony and, and that space and different applications that people were building, uh, on top of Twilio. So that was interesting. There was a couple other companies that were sort of launching in the phone telephony space, more for the enterprise, like Dialpad. There was a company called TalkDesk back then that I kind of had an eye on, which funny enough, recently this company TalkDesk just raised at like a $10 billion valuation just now. Back then, they obviously weren't that high, but they were still kind of on my radar. So, and, uh, and as I was leaving, um, and help desk, and I was trying to decide what I wanted to do next, you know, a couple things. One, I wanted to stay in my lane. I think there's a big value, uh, especially if this is a B2B marketing podcast. I think there's value in sort of like doing what you know, staying in your lane. You know, I didn't want to go and start, you know, a Shopify store and go direct to consumer or e-commerce. Um, I didn't really want to go enterprise because I didn't know that space, right? I sort of wanted to stay SMB, B2B. Um, so I was, you know, like kind of taking a look and I was like, oh, I think this could be interesting. You know, if you could build something on Twilio, there's a lot of hype in the phone space, right? People moving from like desk phones to cloud. Hey, can you start something here? So that's how I was like, all right, you know, I want to take a stab at, uh, at going after, after the telephony space. And that's what I did in, uh, really summer of '16 is when I kind of started like building it. And that's how I sort of stumbled and landed on PhotoWagon.

Yeah. And I saw there's an article, I guess you wrote on Neil Patel's blog, talking about how you actually built the platform and the whole website and business for about $40 grand, which is quite incredible.

Yeah, yeah. It was cool. I'm actually really glad I wrote that article. I think it was— I wanted to document my kind of process and sort of what I did to initially start it. I think especially Especially now it's starting to get really popular to sort of like build in public and to like kind of share openly. I think back then, you know, there was a few companies that were doing it. Like Buffer was sort of like the pioneer in sort of this like open startup. And then a lot of times like on like IndieHackers, people are, you know, hooking up their metrics and sort of like building openly. And it's a lot more common. You know, I think kind of before it was like this thing of like, hey, do we kind of like stay closed? Do we not disclose anything? And I wanted to sort of like be open and sort of share the process. And I think that article actually like was, it was pretty cool. You know, it ranks really highly even now for if you search any terms like launch B2B SaaS company, Build, it's number 1 organic result. And you know, people are finding it every day. And it's really cool the messages I get. People are like, hey, I saw this article and I'm really inspired. Like even every single week now, still 4 years later, which is the crazy power of just like organic search. You know, I get messages, people, you know, telling me that they found it and this is what they're building and that sort of thing. So yeah, so it was really cool. And again, I just wanted to sort of document the journey and sort of do this like open, hey, here's what I did. And, you know, see if you can apply it in another B2B SaaS software.

Nice. So I'm curious, you mentioned the fact, you know, that the idea of keeping, you know, revenues public and things like that and disclosing all of that online. I've seen discussions and debates about that, you know, in certain online communities that I'm a part of. You know, what's your rationale? What's your thinking about why you would think that, you know, your earnings and your growth should be public and why you want to share that?

Look, I think, you know, I do get, you know, if you're too small, right, then people might not take you seriously. So I definitely understand the, like, hey, we want to maybe, like, appear bigger than we are. But I think now, right, it's pretty common to just sort of, like, just be open and sort of humanize yourself. And I think a lot of people can relate when you're building a company like, hey, this is where we're at, here's our revenues. Like, people almost want to get sort of behind the story and sort of like be a part of that journey. And I think a lot of times too, you know, there's a certain type of customer that like feels connected when they feel like they know the founder, they can see the metrics, they sort of like are following the journey. You know, that said, you know, if it's larger companies, they might not want to get behind a super early small small startups, you might lose some deals because they're like, well, look, you're like, you know, doing, you know, $100K annual revenue and we don't feel comfortable putting our billion-dollar company sort of like on your platform. You know, there might be like platform risk, whatever it is. But, um, but yeah, I think like the openness and just, again, if you're trying to differentiate maybe like in the crowd and create like a brand, I think there is value in humanizing, humanizing it instead of just being, you know, a software product.

Yeah, and I think a bunch of brands— I mean, yours is definitely a great example. I think about, you know, Dave Rogenmoser over at Proof and his team, how they've just been— had the personalities running the company and their advertising and a lot of their branding. You know, you look at Trainual, you look a lot of small B2B-focused companies, and I think, you know, people want to do business with people. So having the founders front and center, I think, is really interesting.

Definitely.

Yeah. So tell me, so the beginning, you launched this product, you know, you got it going. How did you get that initial traction and and customers going? I mean, what advertising, what marketing were you doing there?

Yeah, I think like especially, you know, with B2B, B2B software, um, there's a few things that are pretty, pretty common, right? People can do ad buys, right? You can kind of do a Facebook ad campaign. You can, you know, set up a landing page. You can, you know, buy some Google ads. Again, those things are expensive and you got to be able to, you know, track them to make sure that that you're getting the return on ad spend and that it's worth it. You know, one thing that we did, and, you know, we did it, I've seen it in a lot of different areas, is, you know, there's a lot of like, there's a lot of like review sites that you're able to sort of use that you can sort of pay, they're pay-to-play, right? So there's Capterra, There's G2. There's a bunch of these software review sites. And one thing that I thought was interesting, and I knew this from the previous company I was at, was Capterra, where basically like they show up number 1 in organic search for pretty much any software category, right? Like if you search for CRM software, Capterra is going to be number 1 organic result, probably even number 1 paid result. And the listing that they dump you into is sort of like a— they actually deep default to sort of like a directory, but it's also a review site of all the different software products in that category. So if I search CRM software, I'm going to hit Capterra and I'm going to find, you know, probably Salesforce and probably like Pipedrive and whatever it is. So, you know, we were able to just, you know, create a listing. Anyone can create a listing on those sites. You can build out your profile, put your screenshots, put a nice description, get some reviews from like, even if you have 5 customers, just ask the customers to create reviews on that, right? And then if you're paying to sort of be at the top of there, you can sort of like get that pass-through organic traffic, right? If someone's just searching against CRM software, if someone's searching for, you know, screen sharing software tool, call tracking, so whatever the software tool is, they're going to hit there. And then if you're paying to sort of be at the top, you're gonna get that traffic as well.

So when you're a new company starting off, you know, you get on Capterra, you get on G2 and like you're the new kid on the block, you know, Twilio's already up there and CallRail's already up there and all the other companies. Are you able to compete just by coming in and saying, you know, let me just bid and you're gonna get traffic and steal away from those big guys?

Yeah, I mean, it's completely pay to play, right? Like again, the default listing result is shown as sponsored. So you can pay to sort of like be at the top. And so you'll be number one on there if you're paying, you know, the top bid to get those clicks. So you can literally pay to be at the top and then you can link off from there to a landing page. So any B2B SaaS company could create the profile, pay to bid to be at the top. You don't have to be number 1, right? Because that's probably the highest, but there's still traffic at 2, 3 spots on those listings. And then you could link to a landing page that you're going to be able to get conversions from. So it's an interesting place because, you know, it might be more expensive. You'd have to kind of run the numbers, more expensive than sort of if you're just doing ad buys on Google Ads and then Facebook. Like if you haven't, you don't have enough data to sort of get the targeting right, like you can sort of use those platforms or Capterra specifically sort of get that really relevant traffic.

Interesting. I mean, it's interesting because, you know, I know so many people obviously advertising on these comparison platforms and very few people that I've seen actually really talking about how it works. How do the reviews actually play into the rankings over there? You know, if someone's got, you know, 500 reviews and you've got 5 reviews and you're coming in, if you're paying to play, you know, are you still— is that going to affect you in terms of your results, the fact you've got so few results, so few reviews? And if someone's not paying to play, are those reviews really going to make any impact whatsoever on those platforms?

So again, I haven't looked at it like very recently, but historically it was, again, the default kind of ranking was by sponsored. So it's whoever's paying. So as long as, you know, if you haven't paid, you're actually like going to be in the regular listing sort of like at the bottom, and then like the paid listings are going to be at the top, and then whoever's sort of like paying more is going to be at the very top. So even the person with more reviews might be 2 or 3 if you're outbidding them for that number 1 spot. And I think people, when they click through, are sort of just going to— they're not changing the sort. They might be, but it at least used to default though to the sponsored instead of number of reviews.

Gotcha. So do you think if, if all the sponsored posts are at the top, is there still value? Would you recommend that a small B2B SaaS company who's kind of getting started, should they still be focusing on getting reviews over there? Or, you know, is there one platform that you would recommend over others in terms of where you're most likely to see success?

I think B2B software companies should absolutely focus on reviews, right? I think like You know, people these days are looking for reviews. They're looking for social proof. They want to kind of get something that's sort of de-risked a little bit from a review element. So I absolutely think that the reviews— again, this is more qualitative, saying like, hey, I think the reviews will help with conversion. So drive the reviews. That also kind of helps bulk up your profile and sort of gives you more legitimacy. And yeah, I mean, there's a bunch of sites that I think are interesting and valuable for the reviews. I think G2 is, you know, they've raised a ton of money and they seem like they're killing it as well. Capterra, obviously I'm a big fan of. I think like reviews on kind of all those sites are incredibly valuable.

Nice. All right. So you used these review sites, you kind of got your initial traction, you got some initial customers. Started growing. Um, I know from conversations with lots of people, you know, that the traffic you're going to get from Capterra G2 is, is really strong, but it's also limited just based on how many searches are coming through, just like, you know, Google search might be. How do you continue that growth to kind of hit the numbers and revenue numbers that you did?

Um, it's kind of like all, uh, you know, I think in B2B it's, it's more of like a long tail of a bunch of different channels, right? I think you have to do the review sites, you have to do the paid spends, um, you have to do communities, you have to do maybe outbound, which we were never able to, to kind of figure out. But obviously more in like— and again, it depends. I know it's a B2B podcast, so some people will have, you know, uh, the average cost per sale and the average revenue per sale to sort of justify sort of that SDR/AE model and go outbound. So I think it's a combination of paid ad spend, social, paid ad spend, search, Google Ads, review sites, outbound, community building, which is huge right now. You know, you're seeing like a lot of projects start up their own communities, whether it's on a Discord channel or whether it's on a platform like Circle, which I know is like kind of like more private community, whatever it is, right? I think especially for B2B, It's a long tail of all these different things that you're sort of like kind of picking up sales from each of these different channels. You're looking at it, hey, which channel is ROI positive and kind of seeing if you can increase ad spend on those channels and sort of killing the channels that it might not be profitable. And I think in the very early days too, you know, you really have to say like, look, is it profitable in the short term? What's our payback period? Um, it might not be, but honestly, if you take a longer-term approach of saying, hey, you know, this channel is not really profitable right now, but we're driving top line, we're, you know, and these eventually are going to lead to referrals and that sort of thing, you have to almost take a longer-term, uh, view of things instead of like, hey, is my, you know, payback period, am I CAC to LTV, you know, ROI positive right now? Maybe not. So I think it's, uh, it's definitely looking at it from like a long-term perspective and kind of all these different channels added up.

Nice. So thinking about long-term perspective and communities and such, you once mentioned to me that, you know, in the early stages, you kind of were building relationships actually in a lot of these communities, and that was a big lever to help you guys grow. Can you share a little bit about that?

Yeah, I think like, and it's interesting now, even with stuff that I'm doing now, I'm like really paying attention to communities and how people are building communities, they're inside of communities, Communities are helping launch projects, uh, they're helping, um, with that. But yeah, I think it's, I think it's important to sort of like be on the ground. And it's funny, I see like Gary Vee right now, he's huge in, uh, in NFTs. And you know, he's, um, one, building his own community with like his NFT project, which is called VeeFriends. And he's like super deep in the Discords, right? He's chatting with people. I think it's like very important to not just sort of like have a community, know that it's there, but to really be a part of it, to be doing meetups and to be doing, you know, having real relationships and really being like immersed with your customers and your potential customers and being one of them. And I think that sort of will lead downstream to people trusting you, to knowing you, to, you know, them then recommending your product to other people in the community. Like, oh, you know, he or she He is one of us and, you know, they're in here and here's the product that, you know, there's just so much more awareness and, uh, and this like real level of relationship.

Yeah. Nice. Um, so basically, you know, you sounds like, you know, growing, uh, PhoneWagon, you had a lot of different channels, you know, Capterra, communities, paid ads, et cetera. Can you share a little bit of kind of how you got to the point where, um, acquisition came along? Is there any part of the story with that you should share? I know these things tend to be, you know, somewhat private in the early stage since the acquisition, but, uh, any part of that story you can share how that came about?

Yeah, I mean, I think anytime you're sort of like in a market and you're gaining traction, you know, you're going to be noticed from, you know, other players in the space or other products that, you know, you could be complementary towards. Um, so I, you know, I think we, you know, we were chatting, you know, just at a high level with a few people kind of in the space. As, as, you know, customers are starting to talk about us, they're starting to use us, they're starting to like, you know, you just sort of like get on the radar of, uh, of other companies, competitors, complementary products, right? Like if you're, um, I'm trying to think of a good example, but you know, like, you know, I'm curious how the Slack Salesforce acquisition came about, but, but Regardless, you know, I think like, you know, we, you know, we were just kind of getting a little bit of— not a little bit, we were getting traction and we were kind of making a name for ourselves in the space. And I think that sort of just gets you on the radar of these other people. And so when it kind of makes sense to sort of join forces, I think it makes sense. And in our case with Corel, like, totally made sense, right? Like, they're the best product in the space. And, you know, it just was such a win-win for the customers and team and product and everything like that, that it's like, hey, when it makes sense to join forces, like, absolutely, like, let's do that. Let's, you know, let's make this a massive win for our customers. And, you know, at the end of the day, that's what we're all trying to do. We're trying to make the best product, the best experience for the customers to have, like, the best outcome. And when that opportunity came, I was like, absolutely, you know, that just totally makes sense. And, uh, you know, the customers are going to win here. So, so that's sort of like how it came about. And, uh, and it's like, why, you know, why build two, two different product roadmaps that are relative, you know, potentially similar or overlapping when we can combine forces, have more resources and, uh, and have this huge, um, huge win for, for the customers.

Nice. So now that you've had this big success, this big exit, I'm pretty sure you've kind of moved on and you're no longer working on the project anymore. What's next for Ryan Shank? Where are you seeing opportunities within the market, within the investing landscape? What are you up to now?

Oh my God. So this space is crazy. Even since I left PhoneWagon 3, 4 months ago, you're starting to see You know, one, you're starting to see company— companies are really good right now. Like, they're launching and the products are incredible. The communities they're building are incredible. The space is moving so fast, not just in like, um, SaaS and tech, but like in crypto and, uh, in that whole world. You're starting to see, you know, founders have their own rolling funds. You know, I think even early stage VCs without great brand names are having a tough time competing with, uh, with these founders who have, uh, who have like either syndicates in their funding companies. So, so, you know, I'm looking at a lot of this like smart contracts, a bunch of stuff that's happening on blockchain. I think it's crazy interesting. There's going to be a lot of use cases that are going to be applicable in other more traditional areas, like creating, you know, smart contracts in, uh, you know, fractionalization is super interesting to me, something that I'm really looking at right now. So, um, so I'm kind of looking at that space a lot right now, uh, and seeing what we what you can do on the blockchain to, uh, to kind of apply to more traditional stuff outside of just art and collectibles.

And so you're thinking, is your mind more, hey, I'm ready to start my next business soon, or are you now Ryan Shank, the investor?

No, no, no. Uh, so I have, I've been doing some, some like angel investing, some NFT stuff, but you know, I'm looking at how we can apply that to create a new company Um, and, and that's, you know, I love, I love the idea of creating something. I think like, especially in the early days, uh, and really everything I've done so far, I get super energized from the creative process and like building something from scratch, you know, building a product that, you know, you have this thesis on. And then once you're able to like talk to customers and build it and seeing them use it, like that is so fulfilling. When they start like using your product and literally organically telling their friends to use your product and then seeing them use it every single day. Like, that is so incredibly awesome that I want to like jump back into that and start, start just like building again and creating content and kind of going back to those like early, early days where, you know, the, the process is, is really about like creating.

Nice. That totally makes sense. Inspiring me to even think about like the fun that would be to build a company like that.

Yeah. Yeah. It's super fun. I think also, you know, that's where I'm good at. I want to get better at being like a manager and like managing, but I think like, I personally like the kind of early, early stuff of creating versus like managing and like process and, you know, that sort of thing.

Awesome. Uh, super. This was, this was really great. We learned a ton here. Um, let's jump into a quick lightning round, a couple quick questions, quite fast answers, and we'll go from there. So first question, um, is there a book that you would recommend to our listeners to read? To be fiction, business, what are you reading?

Um, I like Atomic Habits, uh, from James Clear. It's, uh, you know, it's kind of about like sort of about the compound effect, about how like, you know, you can get 1% better and it kind of compounds over time, but how to sort of like build in these habits into your, your everyday life and stack the habits so that you can just do those things. But I think it's really helpful if you want to sort of like be your best self.

Nice. What's your favorite marketing or productivity tool right now?

I love Intercom. I think live chat is amazing. I think, you know, the product that they built with the app, being able to tag people. I just love, I just love Intercom.

Okay. Fantastic. Who's a marketer or business leader that you're learning from right now?

Uh, two people. Scooter Braun, I think he's a genius with a lot— the way he's combining sort of like tech with influence with private equity. And I also like Michael Rubin, CEO of Fanatics. I think he's making crazy, crazy huge moves and And again, both of those guys I feel like are playing this like really long-term chess game instead of this short-term, uh, kind of quick grab.

Nice. Um, and last question is, where can our listeners go to learn more about you?

Uh, Twitter, Ryan A. Shank, um, or I— my new company Cameo Ventures is what I'm using as like a product studio to sort of launch, um, launch different products.

Okay, awesome. Ryan, appreciate your time. This has been fantastic. I know you showed a ton of value that our listeners are really going to learn a lot from. So thank you so much for joining us today.

Awesome. Yeah, thanks for having me.