How Amber Book grew Amber Book to $4.3M revenue and 2.8K customers in 2022.

hey folks my guest today is michael erman he's an architect and author of the book architectural acoustics illustrated and winner of 13 awards for teaching research and design the design for his own house edition made from bubble wrap earned an international arc archetizer a plus design award uh last year he's now building amber hyphen book.com it's test prep for architects michael you ready to take us to the top i am ready nathan and we were just geeking out before the call you're at virginia tech i would have had you and i guess third or fourth year uh i would have been your professor that would have been crazy if you're stuck in an architecture if i stuck around i know man you know honest truth i was in chile martin's studio that first year and you guys you know how burst it's all open so you sit next to 50 years and over here 50 years going man i'm only making like 60 grand here i'm like tech's like one of the top architecture schools in the country uh like what's going on and it was because of the weight the financial markets were sure i like money too much i have to drop out it worked out for you i think yeah i'm having fun all right tell me more about this i did not know did i did i ever see your bubble wrap house by the way was it was it no you didn't it was not actually it's three doors down from the house that you looked at um uh yeah so um i put a actually i'm in the room now um so you can see the bubble wrap yeah yeah yeah oh wow um but i put an addition an addition made a bubble wrap because bubble wrap um usually if you have thermal insulation it's opaque and if you have daylight it's transparent but not very thermally insulative and uh so i i wanted to see if i could make something that was both um that light in that daylight in but also uh also um get me warm this time of year that's amazing so tell me like how did you get the idea for amber brook and when did you launch it yeah so the um there there are six exams if you had stayed in architecture uh you'd be in the middle right now taking six exams um to be an architect so you can't call yourself an architect you can't get your license until you've passed six exams and the average pass rate for each exam is 58 so uh it's a it's a pretty painful experience for some people um on average it takes two and a half years between when you for just for those who finish it takes two and a half years between when they pass their first when they take their first test when they pass their last one and that doesn't include the six months a year of studying that happens beforehand so um so uh uh so first i was teaching uh courses all around the country uh continuing to prep people for the exams and people kept asking me uh would you do a video for this but you you know would you do an online course and frankly i'm not a big online course person i'm kind of more of an in-person person and so i always said no but um the demand got high enough and i i uh one of my students was an animator and uh i said hey could we do some animations and you know and make a really good course and you know i'll figure out a recording studio to go to and we'll do it high quality and see what happens so we started making animated uh uh animated um content for prep for the class our prep for the test rather and then we spun that out and it became uh it became the course itself so we have about 50 hours of animation plus you know maybe a thousand flashcards and maybe a thousand practice questions well it's beautiful you know i'm used to a world of internet marketers coming on the show and they show me their courses and they look like i look at yours i go oh my gosh this is beautiful i mean this is what i mean if disney put out a core an info product this is what it would look like yeah it's not pixar it's simple animation but what we've what we've been what we've been able to do is i mean imagine pixar for 50 hours but yeah the cost but we've been able to make some low cost and most importantly uh instructive like no one ever had a bad class with a good teacher and so we've we've tried to make it uh instructive and helpful and and and we become the um we become kind of i don't know what the i don't know people feel about us i guess the way people feel about trader joe's or the way they used to feel about apple or something like that we've become the big player in the space um and uh um and we've been able to help a lot of people pass the exams and do it more efficiently and it's kind of fun and you know it's not it's not like fun like what you'd want to be doing if you had your choice but it's much more fun than the other modes of studying oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 interviews i've done manually saves you a lot of time well we've done this we've built it into the beautiful interface inside of founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're going to see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're going to get a different valuation a vc is going to pay a different valuation private equity firm is different if you're going to do a minority sale that's different and if you sell the whole business that's a different valuation you can see all those when i hover over here right so the teal is what a vc would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on youtube all these datas are built from real-time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raised they sold 22 to their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of sas valuations than what you can get now inside of founder path and we're thrilled to bring it to you all right we're gonna go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your valuation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform i hope to see you there all right let's jump back into the interview so what do people pay do they pay monthly is it one time how do they pay it's monthly so it's a subscription uh actually there's two different versions right so the um it's a subscription and it runs about uh um well our average is about 250 dollars a month and it's not really a pure place sas because there's an expectation that you'll pass and you'll finish and you'll pass so if we do our job paying right right unlike most of the people you interview we're actually thrilled when people leave us we think that's a really cool thing um but but uh but we also started offering firm licenses as well uh and the firm licenses are uh more more up your alley their b2b sas or evergreen um the average there for a firm uh is about maybe we don't track those numbers but i'm gonna say it's about twenty four hundred dollars a year uh um for the for everyone in the firm it's like all you can eat that's interesting and there you probably it's probably way more sticky right uh we would hope so it's fairly new but we our churn is less than one percent uh monthly and so it seems to be sticky and it's been around for a couple years just it was covered in the middle of it so just as things were picking up that uh um the world kind of got weird when people they closed the testing centers and people weren't taking the test for a while so so that was what 2019 you launched the firm offer uh probably yeah that sounds about right and what via five 10 20 firms on that or more i have 149 firms 150 weeks going today 150 firms that's a ton i mean so can i multiply 150 times 2400 that's 360 000 bucks a year uh i think it's more than that um so it's 150 firms times uh in that case it's 100 times 2400 so it's probably closer to 700 000 a year and that but that's only about 15 of our...