How Ocurate Closed 4 Enterprise Customers at $6K to $10K a Month in Under Six Months (Interview with Richard Purcell)

Introduction and What Ocurate Does

Nathan Latka

00:00Hey folks, my guest today is Richard Purcell. He's building ocurate, that's ocurate.com, actionable LTV predictions. Richard, you ready to take us to the top?

Richard Purcell

00:08>> Let's do it.

Nathan Latka

00:09Alright, SaaS folks here, LTV. So is this a tool specifically built for SaaS founders?

Target Market and Core Problem

Richard Purcell

00:14>> So we're primarily working with B2C organizations, and the biggest problem that we're seeing is that leading brands want to be able to measure their business, their customers, and campaigns on LTV, because if they know exactly how much a customer is going to spend in the future, it'll inform their marketing investments, forecasting, and general health of the business. But the biggest problem is they don't have the data, and past purchase data alone does not predict the future,

How Ocurate Works and LTV Prediction Accuracy

Richard Purcell

00:42>> and third party data has always been unreliable, and it will soon cease to exist with all the changes in rules and regulations. And so what ocurate does is we bring in external privacy first data on every adult American's in-depth behaviors and attitudes, And when we match this database with a brand's customer data, the outcome is a 90% plus accurate LTV prediction at the individual level, which helps brands make the right investments and the right customers throughout

01:09>> all phases of the life cycle.

Nathan Latka

01:11And so if brands are paying you for this technology, what are they paying you on average per month to use it?

Pricing Model and Target Customer Size

Richard Purcell

01:16>> Yeah, so we're primarily working with mid sized direct to consumer brands between $10,000,000 to $500,000,000 in revenue, And the way that we price is based on the size of the database and that's between 6,000 to $10,000 a month.

Nathan Latka

01:30I see. Okay. Interesting. And size of the database measured by what?

Richard Purcell

01:34>> By like number of leads, existing customers, and lapsed customers.

Nathan Latka

01:38Okay, so is that your most powerful way to upsell, it's based off number of customers, the utility value?

Richard Purcell

01:44>> Yeah, it's either number of customers in the database and we hope to grow as the companies grow, but also, you know, we're working with a publicly traded company where with one of their divisions, we're predicting their LTV at the individual level, and now we're gonna expand to other divisions as well.

Company Backstory and Spinout from PredictWise

Nathan Latka

02:02I see. What's the backstory here? When did you launch the business?

Richard Purcell

02:05>> Yeah, so the backstory is, the company was spun out of a previous company called Predictwise, and so Predictwise was mapping every adult American over the course of five years in a very privacy first way, and it was primarily used for progressive political campaigns, and ocurate was spun out to only target commercial enterprises, and so what we've been able to do over the last year or so is only work with these reps.

Nathan Latka

02:34Spun it out just last year, 2020.

Richard Purcell

02:36>> No. Well, ocurate was incorporated earlier this year. And so we're probably about, you know, nine months old, nine to ten months old.

Nathan Latka

02:44Okay. Got it. So so okay. But when did the spinout happen?

Richard Purcell

02:48>> The spinout happened around June of this year.

Nathan Latka

02:52Okay. It was okay. Got it. So so sorry. What what were you referencing last year?

Richard Purcell

02:56>> I'm I'm referencing the fact that we were starting to think about building a company only to target commercial enterprises around sometime last year, but we didn't actually do that until this year.

Nathan Latka

03:08I see. I see. Okay. Got it. So you spun out. Now, does that mean the parent company is sitting on the cap table of ocurate right now?

Richard Purcell

03:15>> That is correct.

Nathan Latka

03:16Okay, so how do you structure that? Mean, why not just go out and start your own thing from scratch? Like what do you get from the parent company that it was worth giving up a bunch of equity for?

Richard Purcell

03:25>> I think primarily what was the biggest value add was being able to leverage the database that ocurate built over the last five years.

Nathan Latka

03:35Sorry, that ocurate built or the parent company built?

Richard Purcell

03:38>> I'm sorry, that Predictwise built. Yes.

Nathan Latka

03:40Got it. Sorry, it's called Predictwise.

Richard Purcell

03:42>> Yes. Mhmm.

Nathan Latka

03:43And and they were exclusively working with ecommerce brands as well?

Richard Purcell

03:46>> No. PredictWise is only working with political campaigns.

Nathan Latka

03:50Okay. Interesting. So what does that have to do with predicting LTV now for mid sized ecommerce brands?

Richard Purcell

03:56>> Yeah, so if you think about the problem that political campaigns face and how that relates to e commerce is, you know, if you think about a political campaign, there are a lot of swing voters and you're not quite sure which swing voters actually target for different causes that they care about. And so by understanding someone's foundational personalities, behaviors, and attitudes, this would help figure out, okay, well, let's target this voter in a different way because of

04:23>> what they care about the most. And so it's very similar to e commerce brands where you have a bunch of customers, but it's not clear which ones to focus on and why. And these e commerce brands are primarily using purchase data, but we know purchase data alone is not enough to predict future performance. So because we could bring in this external database to really understand who that customer is from a more holistic standpoint, that helps really

04:45>> complete that view of who that customer is to inform when and how to intervene based on a combination of their LTV and their changes in behaviors.

Nathan Latka

04:54Interesting. Okay. So got it. So you keep going about six, seven, eight, nine months ago, going up on your full year in business here. How many customers are you now working with today?

Customer Count and Early Traction

Richard Purcell

05:02>> Yeah, so since we launched ocurate officially, we're able to close four enterprise customers in less than six months. And so today we have a handful of customers, but we plan to grow substantially next year.

Nathan Latka

05:17And where those four come from? Was it did they come from PredictWise?

Customer Acquisition Channels

Richard Purcell

05:21>> So all of our first customers aside from two of them came from our existing network, and we've been having a lot of success with outbound emailing campaigns to generate new customers.

Nathan Latka

05:32Interesting. Okay. And so four customers times that, I think you said $6,000 a month is sort of a fair average. I mean, you guys are doing, like, $20,000 to $30,000 bucks a month right now in revenue?

Richard Purcell

05:41>> Yeah. That sounds about right.

Nathan Latka

05:43And bootstrapping or have you raised?

Richard Purcell

05:45>> So to date, we've been revenue back, but we're in the process of raising our first venture round.

Nathan Latka

05:50Okay. Got it. Oh oh, and when you say revenue back, has PredictWise put a bunch of money?

Richard Purcell

05:54>> Yeah. That's like bootstrapped. So we were using revenue that we're getting from our customers to maintain the business.

Nathan Latka

06:00Okay, so PredictWise, when you did the spin out, they didn't write you a big check to help fund early stage operations? No. So how did you fund yourself? How'd you pay your salary, like the first month or two?

Founding Team, Equity and Who Runs Ocurate

Richard Purcell

06:10>> Yeah, so that first came from a first customer that we were able to close. More details are probably best to ask our co founder and CEO, but I know that What we were are you? I'm on the founding team. So I'm leading all of our go to market. I was one of the three first co founders.

Nathan Latka

06:31Okay. So how did you guys assemble that team? Did you just sort of say, Hey, we're all equal, at least do 30% or what?

Richard Purcell

06:38>> Yeah, so that's probably detail that our CEO is best to share that with, but, you know, we started with these three that all started by working with PredictWise and decided to spin off into ocurate.

Nathan Latka

06:49But you shy away from answering like bigger questions, which tells me like, would they view you as a third co founder? Do you have enough equity where they'd say, yeah, Richard's a third co founder?

Richard Purcell

06:59>> I have enough equity in the company where it makes me feel like I have ownership as one of the first people to join.

Nathan Latka

07:05Yeah. So they might call you like head of head of marketing or something who's incentivized with equity versus like being a true sort of ground level stage one co founder?

Richard Purcell

07:15>> Yeah. I mean, I think usually the co founder title is when someone has over 10% equity. I have less than that.

Where Future Growth Comes From: Mobile Gaming and Subscription Brands

Nathan Latka

07:23Okay. Fair enough. Fair enough. Got it. Okay, cool. Talk to me about where you see future growth coming from. What's sort of go to market for the next twelve months?

Richard Purcell

07:29>> Yeah, so I'm confident that our total addressable market is every single B2C organization in The United States. But when we think about our service obtainable market, like where we can land our first customers, we're seeing the strongest traction in mobile gaming and companies that sell a good or a service as a subscription. Specifically with subscription brands, you know, when people are purchasing at a similar purchase value, it's really hard to figure out who to focus on

07:57>> and why. And these subscription brands are usually the ones that are optimizing their business on LTV today, and so we're seeing a lot of traction there as well.

Fundraising Plans

Nathan Latka

08:06Interesting. You mentioned you're thinking about raising now. How much are you targeting?

Richard Purcell

08:10>> So we're gonna be raising, over 7 figures in revenue. The exact number on that and the valuation Sorry.

Nathan Latka

08:17What do you what do mean 7 figures in revenue?

Richard Purcell

08:19>> I'm sorry. 7 figures in in capital.

Nathan Latka

08:22Got it. So you're raising more than a million dollars?

Richard Purcell

08:24>> Yes.

Nathan Latka

08:24Got it. And and so why is that the right amount?

Richard Purcell

08:28>> It's right amount when we think about how much runway we need to get from our seed to our a and to close enough customers and grow the team in meantime.

Nathan Latka

08:37How many customers you can close if you have another million bucks?

Growth Goals for Next Year

Richard Purcell

08:41>> So our goal for next year is to close a total of 20 new customers.

Nathan Latka

08:46Mhmm. So 24 total, which would, you know, obviously take you up past a million dollar run rate?

Richard Purcell

08:52>> Yeah. That sounds about right.

Team Size and Structure

Nathan Latka

08:54Mhmm. What's the team size today? How many folks?

Richard Purcell

08:57>> So we have about five full time employees. I'm the only non engineer on the team, and we are currently hiring more people for our first full time salespeople, engineers, and then we're also supported by a team of contractors that help us with sales, marketing, and engineering.

Nathan Latka

09:16Just to be clear, so the five includes you and the two other co founders?

Richard Purcell

09:20>> Yes.

Nathan Latka

09:21You talked about contractors helping with sales. Are you working with a firm like AliOOP to outsource your SDR team or what does that mean?

Outsourced SDR and Agency Partners

Richard Purcell

09:28>> Yeah, so we're working with an outsourced SDR team as an agency. We're working with another agency to help with content marketing, working with another part time designer. And so we find that working with these people part time helps us reduce costs as well as reduce risk.

Nathan Latka

09:46Which firm did you choose to do the outsourced SDR work?

Richard Purcell

09:49>> They're called leadgenerator.io.

Nathan Latka

09:52Leadgenerator.io?

Richard Purcell

09:53>> Yeah.

Nathan Latka

09:54They've done well so far?

Richard Purcell

09:56>> Really well. Yes.

Nathan Latka

09:57Do they do they actually spin up a human like an SDR? Can you hire that human or no?

Richard Purcell

10:02>> Yeah. So we have full time two full time SDRs and one full time researcher.

Famous Five Rapid Fire Questions

Nathan Latka

10:07Very interesting. Okay. Cool. So so if you wanna check you out, again, you can go to ocurate.com. That's ocurate.com. Richard, anything else folks should know about before we wrap up with the famous five?

Richard Purcell

10:19>> No. I think we covered a lot.

Nathan Latka

10:21Alright, man. Here we go. Number one, favorite business book?

Richard Purcell

10:24>> Favorite business book is zero to one.

Nathan Latka

10:26Number two, is there a CEO you're following or studying?

Richard Purcell

10:29>> I really like Manny Medina from Outreach. I really admire his compassion and the way he thinks about growing business.

Nathan Latka

10:35Number three, what's your favorite online tool for building ocurate?

Richard Purcell

10:39>> I would say it was a combination of LinkedIn Sales Navigator and Slack.

Nathan Latka

10:43Okay. And number four, how many hours of sleep do get every night?

Richard Purcell

10:45>> Seven or eight.

Nathan Latka

10:46That's pretty good. Situation, married, single, kids?

Richard Purcell

10:49>> I'm single, but I'm a proud uncle of an eight year old niece and a four year old nephew.

Closing Thoughts and Wrap Up

Nathan Latka

10:54Very cool. Okay. So no kids. How old are you? 35. 35. Take us home here. Last question. Something you wish you knew when you were 20.

Richard Purcell

11:04>> I think one would just be that everything is gonna be okay. And then the second would be spending more time understanding data.

Nathan Latka

11:11Mhmm. Guys, there you have it. Ocurate.com spun out of a company called PredictWise. That company still sits on the cap table today, but they are bootstrapped looking to raise now north of 1,000,000 to continue fueling growth. They've closed four enterprise customers at $6,000 a pop per month over the past, call it six, twelve months. So nice growth. They're a team of five right now looking to continue to hire again, help midsize e commerce brands understand

11:29potential lifetime value of new customers so they can back into what they could spend on CAC. Hot space, we'll see what happens. Richard, thanks for taking us to the top.

Richard Purcell

11:36>> Thank you.

11:39>> One more thing before you go.

Nathan Latka

11:40We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday 1PM Central. Additionally, remember these recorded founder

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12:51the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode. If you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter those people. We got to push them away. Click

13:09the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments.

Richard Purcell

13:14>> See you.