How ARTA CEO Adam Fields grew to $10.4M revenue and 10 customers in 2024.

hey folks my guest today is adam fields he's the founder and ceo of arta arda the shopping cart for collectibles before joining the company he was vp at artspace.com where he where he became hyper aware of the difficulties and high friction nature of transactions for collectibles and unique objects today arda is used by market leaders in the collectible space across auctions merchants and marketplaces worldwide he holds a ba from the university of wisconsin-madison and though he grew up in downtown chicago he has called new york city home for the past 10 years adam you're ready to take it to the top let's do it all right so what is what does it mean to be a shopping cart for collectibles yeah so the whole idea here is that the the collectible ecosystem in our mind is really one of the last segments of retail to be transformed by the internet and one of the core reasons for that is because the high friction nature around the transactions so what we're really trying to do is provide marketplaces auctions and merchants in the collectible and high item value space so art furniture antiques julia jewelry baseball cards etc the ability to build their businesses on our digital infrastructure and what that really means is it allows these sellers to transact easier so that you can combine uh an item with the cost of shipping uh to have a more contained transaction it allows customer or sellers rather to sell and reach their customers globally by automating and scaling their fulfillment function and then what that does too is opens up post-purchase visibility and order tracking for all stakeholders would you call yourself a marketplace then or no we started as a marketplace and pivoted pretty hard away from a marketplace more towards an integrated option as we saw people needing an end-to-end solution um so we really have an integrated api that allows an online platform um to go from click to inquire uh to click to buy so who's paying you then the sellers of the art or the buyers of the art uh well it's it's much more than than art obviously um but it's really a b2b2c uh type transaction so we're integrating with a merchant directly an auction house directly uh or a marketplace directly um they then can surface shipping costs uh automate their entire checkout and fulfillment process and stay in touch with their customers once orders have shipped and have been on on their way so we're being paid for our software by the merchant or the seller and then on the transaction we're taking some um some margin um services uh whether that's uh shipping uh or insurance yeah and these i mean you have a big brand using folks like celebs for example use your tool to manage their their you know both sellers buyers transactions the whole the whole back-end api yeah exactly um you know so we're having some pretty large customers and enterprises building their digital businesses on our infrastructure so it's it's an exciting time interesting okay so tell me a little bit i mean how should we think about what these customers pay you on average per month to use the tool and what do you price against is it is it number of unique skus processed or something else yeah so we charge based on api calls we have a free model uh for non-integrated customers which is mostly for smaller teams or folks without technical capabilities for larger teams that are trying to really build a custom solution to automate their entire flow um we do charge based on usage and that usage is both on api calls and then seats as they start to scale up how many api calls can someone use this for like for free so what a thousand a month is free or something different so we don't offer any any api api calls um for free um the less the less integrated you are the less you pay you can ship a million items a month um if you're doing it on your own if you're really trying to to to get a little bit more uh automated with your workflows uh trying to optimize your team and overhead um we then try to transfer some of that value onto our technology whether that's automating pre-sell estimates um automating emails and post-sell communications um we charge against a variety of calls on pricing uh tracking visibility uh et cetera okay and i want to go back adam and get more of your back story here sort of how you got into this we sort of jumped right into current state of of things but you learned a lot early on you moved away from marketplaces but before we go there i mean so what's sort of the sweet spot right like what's the what's the average customer going to pay you per month to use the technology the api technology api technology if you're a pre-launch customer and you're trying to get to market faster and don't really want to have to build out all this infrastructure hire all the internal teams et cetera it'll start at a couple hundred dollars a month um if you're a a large team that might have 25 to 50 people and are really trying to change uh what your overhead and some costs are um that'll run higher um the more the more you ship the more you transact the more you'll pay but the less on a unit level um and and so we're quite well aligned uh and and we we want to do well when our customers do well adam i just have no context that i don't know the space at all what is a team of 50 people how many api calls might they be making per month it depends on how a customer would utilize a utilized api i mean we're really sitting in a pre-sale transaction and post sale um so sometimes an auction or a marketplace might want to show their customers what it would cost to ship and fulfill um before they buy something to try to build trust uh and create a more seamless transaction sometimes people might want to just fold it right into the transaction um themselves to make for a more seamless checkout so it really depends on how customers want to orient their businesses but we do see a pretty clear ratio between you know calls uh two transactions that we try to articulate to our customers as we go through the purchase and evaluation process interesting so so what is uh before we again we'll go to the box for here in a second but like i guess in november how many total api calls did you process are we talking like hundreds of millions or like a million or like ten thousand no no no we're talking more in the in in the ten thousand range we we launched our our new product um in q2 um and we launched with a pretty um you know focused set of customers you mentioned a few of them and are really starting to grow with them month over month we launched in in april uh and it pretty much doubled um you know a quarter of a quarter uh since then in terms of number of api calls in terms of overall revenue uh oh revenue rate yeah um that's great so so and just be i mean one of the things i like to do before going into causes just look at founders pricing pages and go do these guys have a shot just based off pricing alone the highest ndr companies today they like they almost always have this number of api calls right that's the utility based metric and the number of seats and if you can align value directly to your product value directly to like the subbies of the world i got to imagine your net dollar retention is just going to be through the freaking roof if you're doing a good job for your customers i think that's right and i think that's also i like to say the problem is the opportunity and the opportunity is the problem that this kind of collectibles market is so antiquated and really the struggle here is trying to find customers that have recognized they need to digitize their businesses um so trying to have people understand what an api is how they can integrate it um into their business and see the benefits not just for themselves but for their customers too is really kind of why the the the timing um is starting to align uh in the market interesting okay take me to the backstory here you mentioned you just launched this in april but when did you write the first line of code for the platform the back story here is that i previously as you mentioned was part of the founding team of a marketplace called artspace.com which was trying to make collectibles uh more accessible to a broader audience and really there saw how high prediction and difficult these transactions were but also how difficult it was to build these types of businesses online so we saw that there was a huge fragmentation across the vendor base that can allow sellers to connect with the vendor to ship these items again we're dealing with collectible and high value items this isn't just that i need a shipping label here you go this is more specialized packing insurance and services um uh to get from point a to point b um so there's not really a consolidated solution so what we really saw is that if you can build a consolidated solution to to to connect uh merchants uh or sellers with those um specialized service providers all of a sudden you're taking a ton of the legwork uh out of the entire process so as a marketplace we really were aligning towards that over time we kind of saw well people people want to connect with providers but they also want a full integrated automated and scalable end-to-end solution that can really open up these digital anytime so i'm just jumping timelines all right so you left art space back in 2014 right and jumped right into ardo so 2014 is sort of like first line of code i guess first experimentation started back then 20 mid 2015 was first line of code in the uh for the marketplace model um and then we transitioned right before kovid we said you know what this is this is working but it's really not the big um you know high size outcome that we want here so we're going to go more towards this uh integrated uh b2b platform style wait that's a bold move adam i want to dive more into that because it takes a lot of courage to move away from the whole business model right so like let me let me dig here for a second so it's working it sounds like it was good but it wasn't great what was good i mean how can you share like what was revenue pre-covered revenue pre-code we were doing a couple hundred thousand dollars a month you know again working with some of the largest um you know more offline merchants in the space um but we saw that that it was really trending towards digital towards e-commerce um we wanted to open up these digital channels and a marketplace model made it a little bit difficult to do that you're dealing with people that are a little bit antiquated in how they act um so if you can find a way to more deeply embed yourself into these operations all of a sudden you're becoming a more scalable and sticky solution so just to be clear when you saved like pre-code but in 2019 you're doing a couple hundred thousand per month was that gmv going through the marketplace or was that your cut that was gmb going through them okay so you were making what five very small five ten percent of two or three hundred grand a month something like that no we were making like ten to twenty percent oh that's a healthy take rate yeah no it was a good takeaway for a marketplace and again it wasn't that we thought that model was super successful but we saw the largest opportunity was really trying to align with these larger customers and then we built a product that all of a sudden uh allowed us to integrate with the artsys of the world the largest digital collectibles marketplaces the sotheby's of the world the largest auctioneers in the world so really we were struggling to find that product market fit with some of these largest the largest customers so really reoriented uh our our product and solution uh around that mm-hmm that's really really interesting i would say though that is a that is a healthy i mean i see a lot of marketplace models it's very rare you see someone be able to get away the 10 take rate so the value is clearly there what what did you communicate to the team i mean how did you get everyone on board with saying you know what we're killing this 30 000 a month business in terms of gross revenue i mean it it at the one on the one hand it was very easy on the other hand there was a lot of kind of um transitionary period where we needed to to really hunker down and build something without a lot of the reward um the the good news was that during covid there wasn't a lot going on anyways at the very early stages so it was a very you know opportune time to go heads down and build um but i think people saw that it was the right solution and now we're starting to really see the fruits the fruits of our labor and that decision take me back to how you chose to fund this i don't think you've bootstrapped you chose to raise early on what was the first round the first round was we did a million dollar precedent round uh i think that was like a 15 16 uh area and and was that sort of you know a million on five cap notes or pretty standard at the time you know the venture landscape has changed so much i think at the time that was like one on a four or five post um which which i think was a pretty large uh pre-seat check at the time yeah now you know that's um that that's a one person haven't even thought about a product that i just haven't found or an idea pre-revenue yeah no track right all right keep the story going here so you raise a million you're experimenting the marketplace model what was the next round after that then we we started to see some pretty solid growth on the marketplace side raised a three million dollar seed um off of that um and that uh was in about uh 17 18 um range continued to grow pretty well but again like saw a little bit of friction in trying to really land these larger enterprise type customers and really start to scale um these these e-commerce operations take and then keep going forward you raised additional capital i think recently yeah so you know around end of 2019 and uh beginning of 2020 we said this is what we're gonna do we're gonna go for it we're gonna we we conceptualize this product we started to build it we started to pre-sell it um raised a four million dollar seed seed plus whatever you want to call it really around this new direction um which was which was which was quite successful that allowed us to continue to accelerate the build of the product pre-sign a bunch of these customers get that product to market and now since it's been in market we're seeing some pretty uh rapid growth um since we launched it in q2 uh and see see kind of that product market fit point um really starting to come at us pretty hard which is both exciting and terrifying at the same time so about 8.5 million total raised to date then yes okay very cool now um talk to me today about customers right so obviously you had a bunch of relationships with customers via the marketplace but how many customers do you have on your new sort of api product your seat based product today yeah so we really started to focus towards people that we called our api ready um people that had the technical capabilities to not just know what an api is but they integrated into their product so that was really digital first um type sellers and marketplaces so artsy is a good example um they're a marketplace that i think has like 7 500 merchants on their platform uh they needed a way to really scale and automate um their business globally and their fulfillment and post-purchase visibility side um so we we they were one of our first customers i really focused on finding like five to ten uh large enterprise api ready type type customers um that we went to market with and now that we have those uh our whole idea is to try to make the product more accessible to a broader audience so we initially had just a custom api product then we rolled out hosted versions of that um to make it easier for people with less technical abilities and now we're opening up our platform to people without the ability to integrate uh all together so adam today though maybe about 10 to 15 sort of onboarded artie's of the world actively using you paying you yes that's fair okay great and then again api calls it sounds like that's a key driver for you in addition to new seats on the platform what are you charging like per api call on average um it depends on the type of call it can range for from a couple cents you know for for a tracking call um the highest value call that we have are the pricing calls um we didn't totally get into it but the the simple ability to to show a price across multiple items price points commodities geographies is one of the huge pain points that we're solving so the highest value calls that we have are the pricing and booking calls for for those types of transactions interesting when does the sas business get as big as the marketplace was so i mean maybe you already passed it but when you get past 30 000 a month just on this new sas this sas tool we we passed that in our second quarter of existence um so it took us it took it took us very substantially less time um to get there um with this new model and part of the reason being is because we can tap into these um you know existing customers that that are that are quite large and really start to ride uh that wave 83 grand a month is the magic million dollar run rate number you've got 14 days 15 days left in the year do you guys think you break a million dollar run rate by the end of december we're we're we're gonna try um we're gonna get pretty close i think i think if not uh this month then january um certainly um we're we're liking the way our growth and trajectory um is going but exciting times i mean the pricing and the usage is set up so nicely i can't wait to see where you guys end up a year from today talk to me though a little bit you know going through a pivot can sometimes mean a lot of dilution right you've got to convince investors to stick along sometimes there's a very big dilute around in the middle of there you were sold founder at the beginning right so you own 100 at the start yep which is always nice uh obviously you do the million seed round of maybe some fun mvp development you didn't do the three million sort of seed round most people selling 10 to 20 in the seed round were you sort of in that same range or did you do something super unique no we we we've we've been kind of you know pretty standard when it comes to dilution and venture fundraising being a solo founder has some benefits you know some downside to what you mentioned the the one of the benefits but i i think it's really just belief in in the business belief in in the ecosystem and really just like holding through the course we we've been able to take a lot of the learnings we had previously and applied to kind of this new model um but you know we we've come too far in an industry that is just has so much inertia that we we couldn't have turned back okay so is it fair to say that c round was something like maybe a three on 20 you sold 15 of the business something like that yeah exactly and then how did you negotiate the seed too new investors coming in notation did notation participate in the second and second seed so when we first started notation was exclusively first check um they started to grow a bit over time participated as much as they could but we really went on to an entirely new investor base not because of lack of interest just because of kind of fund construction and fund dynamics so we've been at we've added some pretty nice new investors um between you know coors and capital uh in chicago and a couple of other funds that have really seen this new direction that we're going uh and wanted to help accelerate our growth um into the go to market out of the product you've got a great group we both share uh investors and angels is an investor in our country oh nice and founder path so we share we share investors i'm trying to give you some love here you know let you let you put us up a little bit the angels is great they're incredible yeah so so that 4 million in c2 fair to say that was sort of 10 to 20 dilution there or something different yeah exactly pretty much 20 dilution all along the way here yeah yeah so you've sold again 10 20 effectively three times now did you set up an esop pool and if so what would you recommend to other solo founders trying to incentivize their employees how much should they dedicate to that pool i i think 10 i mean i know you've asked this to other people before and i think 10 is usually a good way to start um i think i think what people don't realize is that for the people that that do stick around and grow you want to continue to layer on incentivize them for the people that that don't and move on a lot of that goes back into the pool too um so just because you you grant it doesn't mean that it's you know always gone uh forever no that's right very cool all right well healthy growth rates scaling nicely flush out the team here before we wrap up with the famous five how many folks today full time we're we're 20 folks um about half of which is devoted to product engineering um the other side to you know logistics account management customer support customer success marketing finance etc there you guys have it adam let's wrap up with the famous five number one favorite book i would say high output uh management by uh andy grove yeah number two is there a ceo you're following or studying i like to follow the startup ceos generally i think there's a lot to learn from different ceos with different focuses of products i i don't i tend not to focus on one in particular number three what's your favorite online tool for billing art building arta we we kind of have a crush on stripe um across the product the marketing the docs just the design everything about it stripe stripe for us is kind of the gold standard number four how many hours of sleep are you getting every night i try to get eight uh it doesn't always work that way i don't have a problem falling asleep but stay to sleep uh is this difficult when you get your mind churning all the time fair fair enough and what's your situation adam married single kiddos i am recently married i got married this past summer during during kind of the height of code so it nice to have someone who can support me throughout this journey any kiddos or none yet not yet i hope that changes soon i got i arda i got art as a kiddo but not not any human kiddos we'll call it a half baby or maybe a 1.5 yeah exactly last question here adam how old are you i am 37 and what do you wish you knew back when you were 20 i wish i knew everything back when i was 20. i think that you learned so much and kind of how to prioritize time um how to be confident in in yourself what's important um and i think in terms of running a company um you you kind of double an age every year so i feel a lot a lot older than 37 with what i've learned the last couple years guys arda dot io they started off back in 2016 as a marketplace grew to about 300 uh 300 000 a month in gmd going to the platform with a 10 take rate so a healthy model but they raised about four million up to that point and adam said you know what this isn't growing how we want it to grow let's pivot they moved to a different model now not a marketplace actually selling sort of an api tool into the artsys of the world celebrities of the world to manage showing pricing bidding shipping auctions all of that for luxurious items artwork and things of that nature they grew from 30 000 bucks a month again pre-coping on marketplace model to about call it seventy five eighty thousand dollars a month today as they continue to scale uh again adam's sole founder trying to preserve equity but also incentivize employees by the esop pool adam thanks for taking the stop thank you one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank 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