How we are growing at 60% YOY with our unique positioning in the highly competitive SEO space

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

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

And you know, we motivated them to do it.

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

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

You know, it sounds stupid.

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

very easy to sign up for our tool.

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

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

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

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

So that's the real value.

They understand the value of what they've done.

So that becomes a real value as well.

But those are the two only things.

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

have links, so you have a onsite section.

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

because it has been there 200 times.

Yes.

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

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

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

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

everything about their business.

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

already doing tens of millions in ar.

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

their lead conversion strategy, their churn and account expansion

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

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

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

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

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

are data backed and actionable.

Let's listen to today's episode.

hello everyone.

Welcome to the SaaS podcast.

Today we have Karsten Madsen with us Castin here runs a

company called Morning Score.

Hey, Castel, welcome to the show.

Hey,

hey, Upendra.

Really awesome to be here.

All

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

what Morning Score does, right?

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

Yeah, why do they pay money?

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

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

There are plenty of online tools for that.

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

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

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

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

So why should they pay money for our tool?

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

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

experience of, of growing your seo.

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

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

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

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

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

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

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

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

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

actually what a lot of experts tell us.

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

out there, at least as a daily driver.

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

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

. Yeah, that's a

pretty interesting.

You know, positioning, right?

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

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

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

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

doing last month approximately?

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

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

but that's around that number.

Customers eight.

Actively paying customers like almost eight 50.

Mm-hmm.

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

the MR on a monthly basis, to be honest.

So that's pretty closely.

And then where you say at 12 months

before, so Yeah.

12 months before we were at roughly 30,000.

Mr.

Got it.

All right.

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

Right.

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

Who are these customers?

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

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

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

Are you focusing on someone?

Like how does the customer base look like today?

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

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

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

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

and you know, How do we get those cust?

I mean, how do we reach those goals?

That's my next

question.

So, so ah, okay.

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

of, you know, journey involved in here.

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

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

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

I think the biggest growth factors, especially if we talk

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

Mm-hmm.

is a few things.

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

Denmark where we, we started out.

And I didn't know at the time.

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

like 10 customers out of that.

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

Hey, there's this new cool day.

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

And the same with agency.

So just direct email.

But these

are cold emails, right?

So they absolutely

know nothing to email cold.

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

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

But I sent them through my personal inbox.

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

I used actually some very old school mail merch tools from

Microsoft the Office Suite.

That's actually an amazing tool.

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

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

Then

I stopped.

Just help me close that story, right?

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

of customers just by doing that.

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

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

So what really worked according to you there?

Was it that patriotism that you were mentioning, or was

it something else?

Patriotism helps.

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

. Upendra Varma: Okay.

So you, you are being too modest,

I kill it.

No, no.

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

from, from, you know network and so on.

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

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

That always

works.

Okay.

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

So

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

low prices or what was that initiative?

Yeah.

Well, half price.

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

way lower than we would give today.

Right.

So that, that helped.

Yeah.

So

let's move forward.

So you've got those 10 customers.

What happened?

When was this?

By the, Okay.

Which year was

this?

2018.

20 20 18.

2018.

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

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

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

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

We do our own seo.

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

New customers.

Mm-hmm.

. So new revenue coming in is from SEO today.

And actually we wanna go double.

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

cheapest channel for us works really well.

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

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

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

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

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

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

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

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

Everything dries up so quickly on Facebook.

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

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

work so hard to get them to do it.

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

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

Mean content machine to be strong on Facebook ads.

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

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

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

content person is quite expensive.

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

Yes.

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

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

costs, what it costs to get a customer.

For Facebook ads, you include the forecast.

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

All right.

So, so yeah, you mentioned something, right?

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

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

So we did experiment a lot with Facebook

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

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

Yeah.

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

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

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

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

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

remaining 20%, some kind of branding.

Yeah.

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

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

be an expert in that, right?

But still, Yeah, just imagining, right?

So your, the.

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

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

So what has really worked for you?

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

that you found out or what was your

process like?

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

product, but just a marketing of it.

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

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

can also use that to my advantage.

So there's many people search for SCM Rush.

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

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

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

You know, when people Google that.

And that traffic would be at least looking for an alternative

and then we would be there.

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

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

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

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

So that was enough to gain some traction.

So that was like the biggest trick we had.

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

That helps us a lot as well.

All right, So,

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

wouldn't it be competitive as well?

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

So Yeah.

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

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

Cuz we're a small company.

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

that, that drives most traffic to you?

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

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

We ranked quite

high on it.

And what's that number?

Is it in top 10, 20 50.

Also, it depends country by country.

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

Okay.

Now I think it's number two or three.

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

So yeah, it's not bad.

I

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

Alright.

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

at your, you know, funnel, right?

So how does your bottom of funnel look like?

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

potential leads to your website.

So what happens after that?

How do you close

them?

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

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

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

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

But just by email.

Mm-hmm.

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

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

about us and ask them some questions.

And actually we got a quite high interaction rate.

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

reply and obviously I do as well.

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

and my colleague the same.

So, So, yeah, that works.

Post trial signup.

So, so yeah.

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

Is that something that you're working on?

Are you still gonna sort of play around?

Yeah, so,

so I wouldn't call it upmarket necessarily because

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

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

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

Well, I,

money in terms of

money, Yeah.

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

Acv 10,000 acv.

Yeah, Yeah.

Yeah.

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

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

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

Oh, it was my network mainly, you know?

Okay.

It helps.

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

I've been an entrepreneur for 12 years.

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

Such deal.

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

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

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

you could sort of explore with, right?

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

know, that ticket sizes, right?

So what's the future gonna talk about?

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

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

So how, how does that journey look like?

Well, it looks very simple.

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

we've made a lot of mistakes.

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

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

Seo.

Turns out it's a horrible idea.

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

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

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

We build an SEO tool for everyone.

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

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

with us because we are for the people.

That's how we see it.

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

not gonna be the simplest tool.

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

like scm, Rush, hfs Mask, so on.

By just outperforming them on intuitive features.

Not necessarily more features, but just better and more awesome

features and just gamification.

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

So that's a product talk.

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

bet a lot of our energy now.

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

he also talked about affiliate.

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

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

different different affiliate.

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

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

To at least 200 kmr.

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

Sure, sure, sure.

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

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

Makes sense.

Makes sense.

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

That unique factor that you have.

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

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

differentiate yourself from a competitor?

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

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

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

Right.

I've seen tons of products.

Right.

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

value that this positioning is generating for your customers?

Yeah.

Okay.

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

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

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

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

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

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

customer stories on our website.

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

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

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

And you know, we motivated them to do it.

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

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

You know, it sounds stupid.

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

very easy to sign up for our tool.

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

type in your website on the front page.

Yeah.

And just get going with your SEO within two minutes.

No credit card, no nothing.

Right.

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

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

one click, and you see our tool live.

It's like a live demo.

You don't need to do anything else.

Mm-hmm.

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

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

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

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

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

And that, you know, that's,

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

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

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

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

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

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

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

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

So that's the real value.

Yeah.

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

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

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

The value is mostly agencies.

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

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

They understand the value of what they've done.

So that becomes a real value as well.

But those are the two only things.

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

have links, so you have a onsite section.

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

because it has been there 200 times.

Yes.

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

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

And I completely

agree with that.

Yeah.

Yeah.

That, that's very interesting actually.

Yeah.

Alright.

Alright.

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

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

How many folks in your team?

Nine people?

Nine.

Nine.

Like how many in the G team go to market?

So two indigo to market team is quite small.

And how many engineers?

Three.

Three engineers.

Got it.

And like how many founders are you?

Just a solar founder.

Two founders.

Two founders, me and the cto.

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

SEO tools ass because we know we have the technical foundation

So,

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

you manage to build a product like this.

Just three engineers.

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

building a product like this.

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

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

So it's, it's really amazing.

So our

shortcut, our shortcut is, Providers.

Oh, so hfs.

Yeah.

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

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

scrape the entire internet.

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

say here on this podcast, but Sure.

It's not all, you know, Okay.

Mm-hmm.

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

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

There are, yeah.

Yeah.

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

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

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

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

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

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

Okay.

We take some from them.

This partner over here has some data.

Okay.

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

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

Quality out there?

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

interesting question here, right?

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

And let's try to quantify that.

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

up giving these data providers?

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

I would say.

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

Two, that's just data costs.

Just data costs.

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

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

server costs.

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

of goods, is that what you're saying?

Yeah, yeah, yeah, yeah.

But that's still really amazing.

you are just selling a software.

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

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

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

I think that is really amazing.

. Karsten Madsen: Yeah.

Well, it depends.

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

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

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

Then we only make 30% on you.

But that's normal, you know?

That's, that's interesting.

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

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

Yeah.

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

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

like, How wonder did you build this?

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

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

still need to build a software.

The data part is really critical, right?

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

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

that's just really amazing.

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

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

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

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

can look and they're very good providers.

I think they do a great job.

Awesome.

Awesome.

That's great.

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

Yeah, we raised a total of $1 million.

Yeah.

And who did you raise this money from?

Is it venture

capital?

Mostly angels.

Mostly angels.

And so what are the, what are their expectations

from you going forward?

I mean, it's not

your Oh, way too, way too high.

, they expect us to grow grow big.

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

expect us to run a, a good business.

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

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

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

We grow like a hundred percent a year.

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

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

So we spend a lot of money preparing for that.

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

now is become cashflow positive.

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

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

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

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

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

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

money.

Yeah.

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

Predicting.

Right?

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

You know, what's the vision here?

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

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

sell it out?

I'm never gonna sell.

That's not my ambition.

I hate, I hate that.

I don't like it.

I wanna build a very, Cool company.

I wanna build the coolest SEO tool out there.

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

That's one of our goals.

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

We are just gonna keep pushing and.

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

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

So I care a lot about my employees.

I care a lot about our customers.

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

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

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

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

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

you certainly got a cool product.

I can see that.

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

Go to much greater heights.

Thank you.

Thanks for taking the time to talk.

Yeah, thanks a lot.

Yeah.

Thank you all.