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Founder Interview

How Avify Reached $42K Revenue and 100 Customers in 2022 After Shutting Down a $30K/mo Agency (Interview with CEO Pedro Gutiérrez)

Interview Date
May 25, 2022
Interviewee
Pedro GutiérrezCEO
Watch
Watch the full interview

Company Metrics at Interview Time

Revenue (2022)

$42K

Customers (2022)

100

Gross Churn (2022)

1.5%

Team Size (2022)

12

Historical Snapshot

These numbers were reported by Pedro Gutiérrez during his interview with Nathan Latka recorded in May 2022 and are a historical snapshot, not current figures. See Avify’s current numbers.

Key Takeaways

  • 01Avify launched in February 2021 as a pilot and officially in July 2021
  • 02The founding team shut down a $30K per month agency in December 2021 to focus fully on Avify
  • 03Avify had 100 customers as of May 2022 at a base price of $49 per month
  • 04Total funding raised to date was $90,000 across a friends and family round of $30K and a 500 Startups investment
  • 05A $600K pre-seed round was open in May 2022 at a $5M post-money valuation, with $140K closed at time of interview
  • 06Monthly gross churn was 1.5% as of May 2022
  • 07The team had 12 full-time members including 4 co-founders and 6 engineers
  • 08Free workshops on topics like funnels, paid media, and content creation generated 300 to 1,000 leads per event, closing at 3 to 4%
  • 09Avify was the first startup from Costa Rica accepted into 500 Startups
  • 10Pedro Gutiérrez and CTO Alexis Valenciano hold the largest equity stakes among the four co-founders

Company Metrics at Time of Interview

MetricValueSource
Revenue (2022)$42KFounder interview, May 2022
Customers (2022)100Founder interview, May 2022
Pricing (Basic Plan) (2022)$49Founder interview, May 2022
Pricing (Entry Plan) (2022)$499Founder interview, May 2022
Early Beta Tester Price (2022)$29Founder interview, May 2022
Gross Churn (2022)1.5%Founder interview, May 2022
Team Size (2022)12Founder interview, May 2022
Engineers (2022)6Founder interview, May 2022
Co-Founders4Founder interview, May 2022
Total Funding Raised$90,000Founder interview, May 2022
Friends and Family Round$30KFounder interview, May 2022
Pre-Seed Closed So Far (2022)$140KFounder interview, May 2022
Year Founded2021Founder interview, May 2022
Workshop Leads per Event (2022)300 to 1,000Founder interview, May 2022
Workshop Close Rate (2022)3 to 4%Founder interview, May 2022

Growth Breakdown

Revenue

Avify reported $42K in revenue as of May 2022. Early beta testers were grandfathered at $29 per month, while new customers starting in May 2022 paid $49 per month on the basic plan. A higher-tier entry plan at $499 per month was also introduced for sellers testing a product with fewer than 10 orders.

Customers

Avify had surpassed 100 customers by May 2022. Pedro Gutiérrez noted the team deliberately forced churn from non-ideal customers who were paying but not actively using the platform, keeping monthly gross churn at 1.5%.

Team

The team grew to 12 full-time members, all of whom transitioned from the agency when it was shut down in December 2021. The team includes 4 co-founders and 6 engineers, with 2 additional sales and marketing hires joining the week of the interview.

Funding

Avify raised a total of $90,000 prior to May 2022, comprising a $30K friends and family round and an investment from 500 Startups. At the time of the interview, a $600K pre-seed round was open at a $5M post-money valuation, with $140K already closed.

Growth Strategy

Cold Outreach and Founder-Led Sales

Pedro personally sent cold messages to potential customers offering a free interview, then converted those calls into sales. This door-to-door and direct outreach approach brought in Avify's first paying customers in 2021.

Free Workshops and Webinars

Avify ran free workshops covering funnels, finances, paid media, and content creation, targeting merchants moving from offline to online selling. Each workshop generated between 300 and 1,000 new leads, with a close rate of 3 to 4%.

Retention-First Philosophy from YC Startup School

Pedro credited the YC Startup School curriculum for instilling a retention-first mindset early on. The team actively interviewed customers and removed non-ideal users to keep churn low and improve product fit.

Agency-to-SaaS Transition

Avify's founding team leveraged their existing reputation as an opinion leader in e-commerce development in Central America to attract early customers. Shutting down the agency allowed the full team to focus exclusively on the SaaS product starting in January 2022.

500 Startups Acceptance as a Credibility Signal

Being accepted into 500 Startups gave the team the conviction to fully commit to Avify and provided both capital and credibility to accelerate customer acquisition and fundraising.

Best Quotes

“Avify is a centralized back office for e commerce automation. So during the pandemic and the last few years, we noticed that there is a lot of people getting new orders from social commerce, but they still use e commerce channels like Shopify, Etsy, and other different channels. So they need a platform that can centralize everything. And we created a social commerce tool that helps them to have everything in one place and synchronize channels.”
“We shut down the agency in December, and we started acquiring new customers and totally dedicated team from January to to date, and we have doubled the amount of customers we have.”
“We started Avify in February 2021 as a pilot. And after five months working and pivoting and checking new things we needed to to create, we launched officially in July last year with a name.”
“Not yet because we started with a better price for the first early beta testers of $29. It's an evergreen price for them, and we started acquiring $49 per month this month in May. So I see. We are in 3,000, 3,500 exactly.”
“90,000. And right now, we have a pre seed round opened. We are raising $600,000, and we have closed a 140,000 so far. And what valuation are you hoping to get? 5,000,000 post money.”
“So far, our our churn is 1.5%. During all this process, we have forced some churn because we found not ideal customers at the beginning, and they were, like, paying every month, but they were not using the platform.”
“Really, what we really like to do is to create free workshops with five with four specific topics. Funnels, creation of funnels, finances, paid media, and content creation. Because there's a lot of different customers, ideal customers, that they are moving from the physical and offline stores into the digital stores, and they need help to have more traffic and understand how they can start selling in automatic pilot.”
“Every time we run one of the of these workshops, we are getting between 300 and a thousand new leads. We are closing between three or 4%.”

What Happened Next

This interview captured Avify at an early stage in May 2022, when the company had just crossed 100 customers and was mid-way through a $600K pre-seed raise at a $5M post-money valuation. The figures here reflect what Pedro Gutiérrez reported at that point in time and are not current. Visit the Avify company profile on GetLatka for the latest available data.

View Avify’s current profile and metrics

Full Transcript

Chapters

Introduction and Background

Nathan Latka

00:00Hey, folks. My guest today is Pedro Gutierrez. He was born in San Jose, Costa Rica. He's a computer engineer and has developed multiple businesses the past five years specializing in marketing, ecommerce development, and MVPs. Right now, he's running Avify that became the first startup to be accepted into 500 startups. Alright. Pedro, you ready to take us to the top?

Pedro Gutiérrez

00:17>> Yeah.

Nathan Latka

00:18Alright. Let's do it. So so what is Avify?

What Is Avify

Pedro Gutiérrez

00:21>> Well, Avify is a centralized back office for e commerce automation. So during the pandemic and the last few years, we noticed that there is a lot of people getting new orders from social commerce, but they still use e commerce channels like Shopify, Etsy, and other different channels. So they need a platform that can centralize everything. And we created a social commerce tool that helps them to have everything in one place and synchronize channels.

Pricing and Plans

Nathan Latka

00:52And so how much do they pay you per month on average to use this tech this tool you've built?

Pedro Gutiérrez

00:56>> They pay $49 a month for the basic plan. We just opened a super basic plan for $499. Just if you are testing a product, see if you can you can start selling it for less than 10 orders. But the basic plan is $49.

Nathan Latka

01:14Amazing. And put this on a timeline for me. When did you launch the business? What year?

Company Timeline and Agency Shutdown

Pedro Gutiérrez

01:18>> Well, this is crazy because we were a software agency until December last year. We started Avify in February 2021 as a pilot. And after five months working and pivoting and checking new things we needed to to create, we launched officially in July last year with a name. And we started

01:43>> acquiring new customers. We shut down the agency in December, and we started acquiring new customers and totally dedicated team from January to to date, and we have doubled the amount of customers we have.

Nathan Latka

01:57How much revenue was the agency doing?

Pedro Gutiérrez

02:00>> In that moment, the agency?

Nathan Latka

02:02Yeah.

Pedro Gutiérrez

02:03>> It was about $30 k per month, probably.

Nathan Latka

02:05Okay. Okay. So it wasn't that hard to shut down then?

Pedro Gutiérrez

02:09>> Yeah. No. No. At at the beginning, it was like we were struggling because of the pandemic to get high high tickets for the the consulting side, But we were dreaming with having a SaaS every month. So it was a great idea at the beginning. And then when we got accepted in 500, we say, okay, guys, this is the time we need to cheat on the cheat on the agency and just focus on this.

Agency Revenue Before Shutdown

Nathan Latka

02:33I think it's funny, everyone listening right now who's an agency owner is going, man, I'm also an agency owner wishing for higher margins to build a SaaS company. That's what everybody wants to do. Exactly. Well, you can tell that you really know your customers because your website's beautiful. It looks like it's really, really well done. I imagine you got your first customers from the agency. Is that accurate?

Pedro Gutiérrez

02:51>> Yeah. When the pandemic started and we created the software at the beginning, we started receiving a lot of requests from people that they needed something for start selling through internet. They didn't notice in that moment that the social commerce was the most important channel. But the first customers, they came because we are an opinion leader in e commerce development in Central America. And I started knocking door to door. Hey, guys. We have this new system.

First Customers and Cold Outreach Strategy

Pedro Gutiérrez

03:20>> What if you try it for a month for free and just tell me your feedback? And in that moment, we were finishing the startup school for YC, and we were pretty familiarized with retention, retention, retention. So I told the guys like, hey, you know, I'm gonna start interviewing as many people I can. So the first customers, they came for the interviews. My my first cold message is, hey, how are you? I'm the

03:44>> owner of this software. I really want to have an interview with you. What do you think? And they jump in a chat in a call with me, and I sell the product in that moment. And they were like, you know, I really want to try it. So let's do it. So, so far we have more than a 100 customers and that's probably what we have been doing.

Nathan Latka

04:01Oh, what's going on there, YouTube? Good to see you guys. Now imagine this, you love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 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 Founderpath. Check this out. I'll show you how you can access this in a second, but you log in, you connect

04:24your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna

04:48get a different valuation. A VC is gonna pay a different valuation. Private equity firm is different. If you're gonna 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

05:10not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna 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

05:36going out right now and you're raising your seed round. We'll 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 dataset of SaaS valuations than what you can get now inside of Founderpath. 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

05:58if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. 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. Alright. Let's jump back into

Monthly Recurring Revenue

Nathan Latka

06:24the interview. That's amazing. So a 100 customers at $49 per month. You're doing about 5,000 a month in revenue?

Pedro Gutiérrez

06:31>> Not yet because we started with a better price for the first early beta testers of $29. It's an evergreen price for them, and we started acquiring $49 per month this month in May. So I see. We are in 3,000, 3,500 exactly.

Nathan Latka

06:503,500. And that's amazing though. You're you're off sort of off to the races. Now have you bootstrapped this from your agency revenue or did you raise capital?

Fundraising History and Pre-Seed Round

Pedro Gutiérrez

06:57>> Yeah. It wasn't at the beginning, it was with the with the profit of the agency. Then when we started seeing that everything was getting traction, we raised a small family and friends round of $30 k, and then 500 startups continue the the the process with the with the investment.

Nathan Latka

07:16So how much total have you raised?

Pedro Gutiérrez

07:18>> 90,000. And right now, we have a pre seed round opened. We are raising $600,000, and we have closed a 140,000 so far. And what valuation are you hoping to get? 5,000,000 post money.

Nathan Latka

07:33And the 90,000 that you already raised, what valuation was that at?

Pedro Gutiérrez

07:36>> Oh, it was at the beginning, it was 500,000 and then 750,000.

Nathan Latka

07:41Okay. So not not too much dilution. You only sold, what is that, about 15% of the business in your pre pre pre seed?

Pedro Gutiérrez

07:48>> Exactly. Exactly. It's been about 13, 13%, I think. Yeah.

Nathan Latka

07:51Yeah. And now you're selling another, call it, you know, 20% in the million seed on a 6,000,000 valuation.

Pedro Gutiérrez

07:58>> Exactly. Yeah. The the idea is that we can finish this part with a 25, 26% dilution, and we can start working, get more revenue, hopefully, a breakeven point in next fifteen months. That's what we're planning, and go for a seed round with real numbers and positive positive numbers there.

Nathan Latka

08:17You said, sorry, you're raising 600 today at a mill at 5,000,000 valuation?

Pedro Gutiérrez

08:20>> 5,000,000 post money.

Nathan Latka

08:22Yeah. Post money. Got it. Yeah. Cool. Well, this makes a ton of sense. Tell me more about the team. How many folks are full time?

Team Size and Co-Founder Equity

Pedro Gutiérrez

08:28>> Oh, right now we are 12. So the story is that we only we told to the guys in the town hall in November, hey, guys. We're gonna shut down this and we're gonna turn into Avify in in January. That's what we're gonna do. So all of them, they translate all their labors to Avify, and we are 12 right now. We are four founders and eight people on the team, and we are joining two more people next

08:50>> week for sales and marketing.

Nathan Latka

08:52So when you four founders started, you just split equity 25 each at the start?

Pedro Gutiérrez

08:57>> No. My brother is one of the founders. He was not working with us at the beginning. He's a Magento and Shopify specialist. So he created the infrastructure behind Avify for integrations and the agnostic layer we have there. My CTO, Alexis, is infrastructure and everything about DevOps, and I do product management, sales, and the administrative part. And Pilar, she's our CMO. She's focused on marketing and having all our customers, yeah, updated with everything. So we have our

09:30>> specific divisions.

Nathan Latka

09:32But they're all different. Everyone has a different amount.

Pedro Gutiérrez

09:35>> Yeah. Correct. Yeah.

Nathan Latka

09:36Do you have the most?

Pedro Gutiérrez

09:38>> Alexis and me, we have the most.

Nathan Latka

09:40Yeah. I see. Okay. Okay. Okay. Fair enough. Alright. 12 people. How many on the team are engineers?

Pedro Gutiérrez

09:47>> We are six, I think. Six. Are engineers. Yeah. Correct.

Churn and Retention

Nathan Latka

09:51You mentioned focusing on retention early early on. What is your, know, your retention or your churn monthly today?

Pedro Gutiérrez

09:57>> So far, our our churn is 1.5%. During all this process, we have forced some churn because we found not ideal customers at the beginning, and they were, like, paying every month, but they were not using the platform. So we are like, hey, guys. How are you? Tell us about what do you need for us? And they were like, you know, this is not my business. My full time business is a side job. So we started forcing

10:24>> them, but it's like 1.5% of churn. And we are growing between 22 to 25% month over month.

Customer Acquisition via Free Workshops

Nathan Latka

10:32Yeah. No. That's fantastic. Tell me a little bit more about how you're getting these customers. Are you paying to get them? What's your CAC?

Pedro Gutiérrez

10:39>> No. Really, what we really like to do is to create free workshops with five with four specific topics. Funnels, creation of funnels, finances, paid media, and content creation. Because there's a lot of different customers, ideal customers, that they are moving from the physical and offline stores into the digital stores, and they need help to have more traffic and understand how they can start selling in automatic pilot. Right? So we are doing these free workshops. Every time

11:09>> we run one of the of these workshops, we are getting between 300 and a thousand new leads. We are closing between three or 4%. And it's great because

Nathan Latka

11:22What's the title of the workshop?

Pedro Gutiérrez

11:24>> Sometimes it's just free workshop for entrepreneurs or free workshop for businesses. And we send them to a landing and we talk talk about the specific topics. So sometimes we do one week free high value content offers so they can come and check all the different resources and everything is recorded so they can get again access if they are in our email marketing. And it depends. Sometimes it's just on a specific workshop Like, give

Nathan Latka

11:51me an example of a specific title.

Pedro Gutiérrez

11:54>> We we we've made one in February. It was free workshop summer, free workshop for businesses. And they can see all the topics inside.

Famous Five Rapid Fire

Nathan Latka

12:04Yeah. Interesting. Very cool. Alright. Let's wrap up here, Pedro, with the famous five. Number one, the last what's the last book that you read?

Pedro Gutiérrez

12:11>> The last book I read Scaling Up. Still

Nathan Latka

12:16number two, is there a CEO you're following or studying?

Pedro Gutiérrez

12:22>> Oh, that's a good question.

12:26>> I have been following the CEO of Action Desk.

12:30>> I I'm I'm I'm pretty interested about the the the job they are doing right now.

Nathan Latka

12:33Number three, what's your favorite online tool for building Avify?

Pedro Gutiérrez

12:39>> Figma, probably.

12:40>> Yep.

Nathan Latka

12:41Number four, how many hours of sleep do get every night?

Pedro Gutiérrez

12:43>> How many what?

Nathan Latka

12:44Hours of sleep.

Pedro Gutiérrez

12:46>> I'm sleeping between seven and eight hours. Yeah.

Nathan Latka

12:48That's that's good. And what's your situation? Married? Single? Kids?

Pedro Gutiérrez

12:51>> I'm single. Yeah.

Nathan Latka

12:53Okay. Any kids?

Pedro Gutiérrez

12:54>> No. No kids for now.

Nathan Latka

12:55Alright. And how old are you, Pedro?

Pedro Gutiérrez

12:57>> I'm 30 years old.

Closing Summary

Pedro Gutiérrez

12:59>> 30.

Nathan Latka

13:00Last question. What's something you wish you knew when you were 20?

Pedro Gutiérrez

13:03>> I wish knew knew when I was 20. Mhmm.

13:09>> Probably the

13:13>> the about the internet, the explosion of the internet and the e commerce. Definitely, it's something that I will love.

Nathan Latka

13:19Guys, Avify was launched last year out of an agency that was doing 30 ks a month in revenue. They shut that down when they were accepted to 500 startups. They've now raised $90,000 in a pre seed round at a 500,000 valuation. They're off to the races serving 100 customers already at $49 a month, doing about $3,500 in MRR or $50,000 in ARR scaling 20 to 30% here quickly. Team of twelve, six engineers, four co founders, again,

13:45helping e commerce brands sell more effectively online by helping them with their back end operations. Pedro, thanks for taking us to the top.

Pedro Gutiérrez

13:51>> Thank you. Thank you very much for your time. See you soon.

Nathan Latka

13:56One more thing before you go. We 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

14:21Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM Central. To make sure you don't miss any of that, make sure you click the subscribe button below here on YouTube, the big red button, and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's an acquisition, a big

14:44fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you wanna take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You want to get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are saying. Sign up

15:05for that at nathanlatka.com/slack. In the 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 and 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

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