Low Cost Advisor

LiveRecover Founder Sells Company, Buys OrderBump

Dennis Hegstad first appeared on “Ecommerce Conversations” in October 2020. He had co-founded LiveRecover, an SMS-based cart recovery app, to great success. Less than a year later, he sold the company to Voyage SMS, a text-message platform.

He told me, “After we sold LiveRecover, I took the summer to focus on cross-country running. Then I became bored. I needed to get back into something.”

That “something” is OrderBump, a Shopify app for driving upsells during the checkout process. Hegstad purchased the business in November 2021.

He and I recently discussed the sale of LiveRecover and the acquisition of OrderBump, including his plans for growth.

Our entire audio conversation is embedded below. The transcript is edited for clarity and length.

Eric Bandholz: You sold LiveRecover.

Dennis Hegstad: Yes. After a couple of failures and a smaller exit last year, 2021, we went through the process of trying to sell LiveRecover. It wasn’t listed on a marketplace or with a broker. We had a lot of unsolicited interest because we were one of the few SMS apps with scale that had not raised outside money. From about Q3 2020 until the summer of 2021, we spoke with a few potential acquirers. We ended up selling to some great people.

Bandholz: LiveRecover is a cool solution — leveraging SMS to drive orders.

Hegstad: Right. We focused on real-time conversations with customers. We weren’t the only app doing it. There was Tone Messaging, which was acquired by Attentive, and one or two others.

Bandholz: But you’re still in ecommerce.

Hegstad: I got into ecommerce during the MySpace heyday, roughly 2008. I understood selling things online. There are so many aspects — building the sales funnel, the creative, knowledge of every advertising platform and sales channel, and conversion optimization tools.

After running my own ecommerce stores from 2009 to 2017, LiveRecover was a natural evolution. I wanted to create something one time and then sell it forever. Plus, it’s fun to help other brands make money.

I’m not a developer, but my co-founder is. He’s super technical, a wizard. I had spent lots of money on engineers who told me, “Just another week. Another $2,000.” That ended up being $30,000, and I didn’t know what was accomplished.

So I took coding classes, online tutorials, building clones of Twitter, Airbnb, Reddit. Now I can go through GitHub or read a deploy. I know how many lines have changed, what the nodes are, and how to do those things myself.

I’m not an engineer, but I know enough to evaluate someone’s work and billable time.

Bandholz: You’ve bought another company. Tell us about OrderBump.

Hegstad: After we sold LiveRecover, I took the summer to focus on cross-country running. Then I became bored. I needed to get back into something.

Rather than start a company from scratch, I decided to buy a smaller software business and focus on growing it.

I had known the OrderBump owners through social media. They have a web development agency called The Vaan Group. They built OrderBump as a one-click upsell app, primarily for Shopify Plus merchants. I started poking around with it and asked if they were interested in selling.

They were focused on building websites, not running a SaaS business. After six months of negotiations, we landed a deal that was fair for both of us. It was an asset sale — the software and customer records.

The website is OrderBump.io. It’s an app for upsells. For example, someone buying a pair of sneakers may need shoelaces. We target impulse purchases of related items.

Bandholz: Did you bring your partner into it?

Hegstad: No. He and I are working on something outside of Shopify. OrderBump is just me as the owner and another engineer who came on board. We also have a customer service rep. Three of us, all told.

Bandholz: How does OrderBump know what to recommend?

Hegstad: A merchant with, say, 1,000 SKUs might not know what dress matches a particular style of shoes. But Shopify knows that. So OrderBump leans into Shopify’s Product Recommendations API. Shopify knows anonymously who you and I are, as consumers, and all the Shopify sites we’ve shopped on.

Shopify can suggest another SKU based on our anonymous history. It’s not a native feature on the Shopify platform, however.

Bandholz: Say a customer places three products in the cart. Then what?

Hegstad: OrderBump can have multiple product recommendations. It depends on the stage. There’s a pre-purchase upsell when you’re entering your card, name, and contact info. After submitting the order, you’re redirected to the post-purchase upsell page, where your credit card info is held for about 5 minutes. During that time, you can add items to your order. After that comes the thank you page.

All three stages are opportunities for upsells. But a merchant could also offer down-sells, which follow upsells. Say an upsell offer is a pair of socks for $2 off. If the customer declines, a down-sell offer could be, “Would you like a pair of laces for 50% off instead?”

The value proposition for OrderBump is in-checkout upsells. It’s a feature specific to Shopify Plus merchants. If you don’t have Shopify Plus, you can’t control the JavaScript at checkout. If you’re on Shopify Plus, we can inject upsells into your checkout, which is probably the best place to do it.

Other apps have solved post-purchase recommendations. We added it not because we were the best but because our pricing and customer support are equal or better.

To clarify, for in-checkout upsells, merchants have two placements on desktop. One is above the payment methods — PayPal, Shop Pay, Apple Pay, and similar. Then there’s a sidebar placement, which is the order details.

On mobile, it’s all condensed into one. And mobile is 90% of the traffic for most sellers.

Bandholz: What is your vision for OrderBump?

Hegstad: We closed on the acquisition in November 2021 — a couple of months ago, as you and I are speaking. We’re not going to build the next Klaviyo or something worth hundreds of millions of dollars. And I don’t have investors to please. So if I want to wake up and do nothing, that’s what I’m going to do.

But I’m excited. It’s fun building a quality product. If it grows to $1 million in recurring annual revenue, mission accomplished. I don’t want to work on it for years. I would love to hire someone eager to run a SaaS business, give them some equity, and then step back.

Bandholz: How can listeners reach out and stay in touch?

Hegstad: Our website is OrderBump.io. I’m on Twitter and LinkedIn.

Post a comment

Your email address will not be published. Required fields are marked *

Subscribe for latest Updates
Signup for our newsletter and get notified when we publish new articles for free!

    No Thanks