How Addu CEO Rees Vinsen grew Addu to $1.8M revenue and 600 customers in 2019.

hello everyone my guest today is reese vincent he's a ceo and founder of a company called aduco a customer data platform and co-founder ceo of sports cafe a sports media network he also consults to select brands across new zealand and the usa reese you ready to take us to the top let's get it all right man so the lifeblood to me any media network are our impressions so sports cafe where are you guys at uh the sports cafe is uh we raised a million dollars in seed last year we're raising a cb at the moment at the moment my focus is more so on aduco so do co is a customer data platform that gives brands and small enterprise the intelligence tools that they need to organize and personalize uh their digital experiences ads content uh and and so on to increase sales and absolutely smash digital objectives is a duco in the sports cafe the media network are they under this on the same cap table uh completely different so adoka was actually uh spun out of an agency that i started when i was 15. we've been developing the product that we've uh recently shipped two weeks ago for the last two and a half years okay so it's pre-revenue though right now ah no we've packed on 160k in the last two weeks okay so and is this all recurring revenue uh yeah okay so kind of break that down for me what's an average customer paying you per month to use the platform yeah so while we were building we were testing with uh you know we had a host of beta customers that i managed to pull out from relationships with our agency they were primarily enterprising agencies other agencies larger networks um and we were spending average you know 5k a month we as i mentioned we shipped our brand platform our brand plan uh two weeks ago uh we packed on i mean looking at the dashboard this morning uh 1395 customers about 1400 customers um and they're paying an average of 100 and a hundred dollars a month okay it's very difficult obviously to just turn on and basically generate that much revenue so let's talk about kind of the tactics here how did you build kind of this this wait list which turned out to convert you know it looks like pretty aggressively over the past couple weeks yeah no it's been great uh we haven't slept much so again coming off the back of an agency and spilling this product out of an agency we managed to generate a lot of hype as i mentioned we've been developing this product for two and a half years we switched off our agency about six months ago you shut it down yeah it was a good agency we were 12 people um two officers we worked with how much revenue did the agency do um um 60 70 a month okay so it's like a million dollar agency you shut down pretty much yeah i mean the prospect of of you know what we've built here um yeah that's you know multiple multiple times there before you turn on the revenue on on this adu company how much over the past two years did you sink into developing it what was the total cost to get the mvp built yeah entirely bootstrap so i've put in um just shy of 300k about 280 odd to date okay and that was all used to build the mvp yeah okay very good and then um again you know you launched the paid plan it sounds like two two weeks ago how did you get thousands of people to see that pricing page and how did you get 1400 of them actually to convert to paid yeah so we've been talking a lot of a lot of snack over the last two years um and having having a large group of really trusting early beta customers helped a lot i've been working with them super closely shipping the things that you know the common links between what they are wanting common requests it seems to be keeping them happy and we enjoy um dictating our roadmap like that to a certain extent so of course that gets them talking in tandem with that we have also lined up a few different distribution deals um so we're leveraging off uh agency relationships that we used to have you know reselling to other agencies we launched with appsumo you know pushing product hunt then we also have some strategic partners so working with companies like lean club um gets us going so it's been a really really fast pace last two weeks we're expecting to continue um like this let me break down some of these channels real quick let's do appsumo first so appsumo usually only does lifetime deals what was the lifetime price that they launched with for you uh 79. yeah so um and then how many how many customers signed up via that uh around about a thousand of those okay a thousand and you included those thousand and the fourteen hundred dollar uh customer account you just gave me yes yeah okay so just to be clear those aren't true those aren't true recurring revenue customers they paid once now have you converted them all to a monthly plan uh we're converting a few of them yeah yeah so it's going really really well um and tie in line with their um you know their lifetime deal because we offer the capability to add on what's essentially expansion packs um so that they can they can um you know add multiple accounts under each integration so of the thousand paid customers you got from appsumo that paid one time 79 how many of them have you converted to a monthly plan at a hundred dollars a month oh it's just it's just wrecking up that moment to 300. yeah okay about 300 okay and then so i guess what i should ask you is uh the 1400 customer account number you gave me how many of them are actually they're paying the monthly fee only ignore the one-time appsumo stuff oh five six hundred okay about 600 of them so you've essentially have 600 customers paying about a hundred bucks a month which obviously puts you at about what is that you know six thousand or sorry six sixty thousand dollars a month in revenue right now and it's just growing like i said this is all this has all happened in the last two weeks so um it's going really really well yeah i guess what i'm trying to split out the reason i'm being careful here is the sas economics are tied to the economics long term on a customer right the lifetime value one-time sales in my opinion do not deserve the credit that you signing up a 100 a month account takes because it's way harder and it's way more valuable customer so what i'm trying to understand when you say 150 000 the past two weeks that's not all that's 150 000 a month in recurring revenue you basically got a 79 000 in sales from appsumo they keep 70 you keep 30 of that so call it 25 000 in cash flow to you and then you're converting some portion of that into paid plans at 100 a month is that right uh not not entirely correct i think we're going way off here um as i said you know we have uh we have a break of customers that are better paying enterprise level licenses there's a lot of customers that are paying uh and including add-ons and the monthly subscriptions that they've moved out to um so these customers pay you know multiple hundreds of dollars a month so it's it's that's that's just where we're at at the moment again the reason what i'm trying to split out here is the absolute stuff i totally understand the enterprise place so i want to i want to focus more on that if you look at the the the actual monthly recurring revenue right that you currently have across your monthly paying customers which it sounds like you said you have 600 of is that right now about 150 000 a month or is it 60 thousand dollars a month uh it's quite it's closing towards 1.50 we're hoping yeah well i mean okay i get that that's what you're hoping for but what are you actually at well yeah that's that's where it's at night okay it's at 100 000 okay so then you've got you know those people are paying more like you know on average maybe 250 a month across 600 customers because they're doing the add-on packages correct yes you average it out yeah yeah i mean yeah a lot more yeah that's what i'm doing i'm taking 150 000 a month divided by 600 means they're paying 250 bucks a month or 3000 bucks the first year in terms of acv sure why did you like why did you do the lifetime value deal with appsumo it sounds like you had no problem signing up customers yourself another channel um of course bootstrapped small team we want to move as fast as we can we want to find as much color on customers where the hotspots on the market are so it really presented a great opportunity for us to find that out quickly and a little experience how many folks on the team today uh four and a half okay four and a half and with this wait what do you mean four and a half contractor yeah how many full-time employees cool yeah okay um when you look at i imagine with this number of customers signing up there's maybe been one or two or maybe more that have actually started paying and potentially already churned or stopped paying what's your churn rate look like so far eight point five percent okay and that if you think that's a monthly number uh yeah it's actually average of that yeah since we started selling our plans yeah yeah so at 8.5 percent churn obviously annualized that means you're churning over 100 of your base each year um how do you manage and get turned lower [Music] um well i mean that that is largely attributed to you know appsumo nature of what app server was hold on what reason we were just talking about this appsumo customers they can't churn they pay one time and they're done so they're they're you don't even always...