How Blox CEO Alon Muroch grew to $240K revenue and 100 customers in 2019.

hello everyone my guest today is alan mort she is an israeli entrepreneur focused on uh developing code from an early age he's been working for many different startups over the past decade include across many roles in 2014 he read the satoshi white paper which inspired him to explore and get deeply involved in the world of blockchain and crypto technology he was a code contributor contributor to bitcoin ethereum developing his own multi-sig pdp wallet peer-to-peer wallet and later on co-founded blocks dot io which we'll talk about today are you ready to take us to the top yeah definitely all right tell us thanks for coming on man all right tell us about box uh what's the company do so blox is developing on crypto as a tracking management and boot keeping platform basically we develop an atc management platform for crypto professionals might be individuals or companies uh to really really engage with their crypto assets on a daily basis and you know do a wide variety of different functionalities that you have to have built in place in order to really be in the space okay so and and how are you guys making money is it a sas platform or what yeah it's a sas platform you have a monthly subscription uh we actually start from 100 a month uh you you still have the free tier uh but once you're are a professional like again might be an individual or a company we start from 100 bucks a month and going out depending on different parameters like the number of transactions you have assets under management and so on and so what's the average customer pay per month well it's difficult to say my guess is that the average will probably pay around two to fifty something on that 200-ish yeah okay very good and when you launch a company what year so we've launched at march 2017 so around two years ago um um yeah and uh we had a long kind of way we developed a ton of things along the way and kind of the product you see today is really the kind of the culmination of the past three years and how many customers have you scaled to so we have the uh the individual side and the company side let's say uh or individuals we have around a hundred thousand uh most of them are free individual free killers yeah yes sorry just just just paid just paid customers how many paid so around 100 okay 100 paid customers total today that's great now how did you find these folks so it sounds like you were already contributing in these ecosystems did you just you know stick a link up and say come use us well so we are very involved in the industry we've been in the industry person has been in the industry the blockchain industry for around six years now so uh we know our way and we know the different companies and the different players in the industry and so it really was um just a thing you know just approaching them offering as we go along get more and more clients and it's also important to say that this again this version of the product where you have three queue but also the premium tier um the premium tier has only been around for past four months so we we only started to really offer it uh since the beginning of the year um and so from the beginning of the year we started to basically approach different companies and we managed to onboard around 100 what are the top tier companies in the industry the kind of the bread and butter the guys who developed the guys or the grassroots kind of companies and through us and and by blocks they manage over three billion dollars worth of crypto today um so again giants from etoro all the way to the small companies um really the top professional i'm sorry i want i want to really actually i want to really dial in right so how you so 100 000 free users 100 today are paying 200 bucks a month so you're doing about 20 thousand dollars per month in sas revenue today is that right uh we're doing i can't get into the exact numbers but we're doing more than that because we have part of the customization installation part which i don't know just i'm talking i'm just talking just burn revenue it's still it's still a bit more than twenty thousand okay uh but uh i think that one of the key things we decided from the get-go was to really cut the prices if you compare us to our competitors most of our competitors take anywhere from starting from around 500 a month and so we decided that we don't want the price to be a factor in the decision because we want to be aggressive and so um from the get go we started with very low numbers yeah in terms of no i think it's fine it's a market grab play i get it um but if you know two 100 customers today paying north of 200 bucks a month 20 grand north of 20 grand a month today help us understand growth in december of 2018 so about six months ago what were you doing per month back then so back then nothing because again the premium version was uh was only launched four months ago so true or false you've gone from nothing to about north of 20 000 bucks a month and pure software revenue under six months uh four months yeah four and a half yeah four and a half that's great now have you done this all bootstrapped or have you raised capital so we did risk okay i liked you so much and then you destroy my heart and you tell me you've raised capital i'm sorry dude how much have you raised let me destroy your heart a bit more so we didn't uh we did do a small seed round back in 2017 early 2017 then we did an ico uh which where we sold tokens um and we can get to what the token does in the system but we sold tokens that was july 2017 we raised 10 million dollars um and basically from that moment on um we are running on that that amount of money we sold tokens and uh um hold on hold on no no no break this one real quick just the ignore the ic on the token issuance just equity that you've sold just under a million dollars okay so we'll call it around dominant okay we'll call it a million dollar seed round and was that convertible note or pure equity i started as convertible node was an element of the tokens and themselves as well so the equity investors also got some uh some sort of a discount on the tokens um but uh yeah mostly just convertible notes okay so a million bucks in cash basically you then a year later it sounds like did an ico uh you sold 10 million dollars worth of the token at the time how much of that did you convert immediately to fiat actually not a lot i mean we uh we converted some but we still had some from the actual um sea browns so well but we started selling you know during 2017 and early 2018. uh we were very conservative in conservating the way we managed ourselves because we did not think to pay salaries we didn't get into the whole hype of you know the craziness of 2017 and so the end result was really uh we converted enough fiat uh to last uh for around four years how much was that are you trying like a two million five million how much uh north or fifteen million uh just in fear uh wait hold on hold on hold on i'm confused you said you did a ten million dollar ico i know because because of the appreciation so we raised the ico ether ethereum was around 150 yep right so it went all the way up to 1200 so we we literally enjoyed that appreciation during 2017 so we've managed to sell uh some of it to fiat most of the crypto is still in crypto and we didn't convert most of it um but the end result was that we converted enough to have around four or five years runway which means if you kind of tackle it backwards still have around two two and a half years of runway only on our fiat and the rest of it is still in crypto um which we barely use you know we hold and pay for a few occasions but mostly it's still there so let me summarize this then i want to talk about the actual the value of the token in your ecosystem so in 20 you raised a million dollar seed round before 2017. that was pure fiat right and then in 2017 you did a 10 million dollar ico at the time ethereum was about 150 bucks a pop over the next 12 months after that as ethereum went from 150 to 1200 each you'd convert about 15 million dollars to fiat which you believe is enough to cover your burn for the next four years the rest you've left in in your token yeah okay so that's a year and a half ago right so the actual burn rate relative to the amount of money the company has um that that gives you around four years of runway so it's not theoretical it's actually what's happening okay very cool now what's team size today how many people so we have around 35 people uh we're growing slowly i think that by the end of the year we'll probably hit 40. okay uh both of them are you know developers product guys and now we're obviously because we got into the kind of the premium side of the product we also have sales people um only in the us that's our focus focus we have um and so you you start seeing the team in the u.s starting to build up and more and more people and they do customer you know just customer stuff so sales support and stuff like that how aggressive are you being in terms of growth what how much are you burning per month right now uh so my guess so we're burning around four million a year something like that um so three three hundred twenty twenty yeah yeah yeah something like that um and so and i know as you know it's mostly for salaries um we didn't do a lot of marketing in terms of you know just crazy marketing budgets uh most of its salaries um but we are very aggressive in the way we manage ourselves in terms of the product and the offering um again one of the things we did four months ago is we decided we want to focus on the professional side of of what we do and the product does uh in four months we were very aggressive in the we manage ourselves and today i think and it's and i'm happy to say that we are i think by far the best solution for individuals and companies on the professional side of things so you know if you're holding and managing crypto assets as a professional um you should be using blocks and i don't think there's a lot of other alternatives on that high quality like we do oh and i want to get more into kind of your vision but first at the peak of ethereum when it was the most kind of again per token what was your ico your 10 million ico worth did you guys push what 90 million 100 million something like that um yeah i mean if you if you completely kind of uh exclude any sales along the way then yeah i mean uh you know it's like seven eight x on the on the actual ico and now it's back down to i think 170 this morning so you're back down to around like the original value of the ico around 10 11 12 million bucks of the total tokens issued yeah but i think that again the way we manage ourselves put us in a position where obviously everyone wants to market to go up but uh i mean it takes on speculation out of our decision uh making because we have enough fear to run and so we're not stressed about you know how we're going to pay paychecks you know where people my question my question here is this right um there doesn't seem to be any downside or there didn't seem to be any to these folks doing icos and converting 60 70 80 percent of the ico to fiat instantly right if you had done that at the peak of 1200 you know you're putting 80 million 90 million bucks in the company bank account right which you could invest in growth but but in your opinion would that have hurt the ecosystem you're building because that's that's a negative sign to your users that you actually don't care about the value of your token since you just got rid of them so you need to differentiate between the actual ether and we we received for the tokens and the token of the company itself the company never sold any tokens um we don't do it today we didn't do it back then and so that's that's a very important distinction to make and the ether itself you're absolutely correct i think that you know if you're in the in the ecosystem and you're selling all your crypto um you know that's saying something but on the other hand again i mean um you know you saw the craziness of 2017 um and and i think it was smart to sell how did you distribute your company tokens relative to how much ether you were selling to people what was the like the ratio or how did you do that what do you what do you mean you said that you uh what you sold you said you just sold you didn't sell tokens you sold ethereum right so right but you also must have tokens that you have out in the wild you're distributing them based off utility value back to blocks somehow so my question is like how many how many of your tokens are out in the wild that that are not owned by the company personal companies no no no what you guys have given out as incentives to users to use the tools right right so during the ico we sold uh 50 of the circulating value okay um which grew a bit because we did some you know a couple of uh incentive programs and stuff like that so i think around now it's about uh 60 circulating value from the total and what's the name it's it's called the block token uh so it's called cdt and cdt yeah you'll find it there very cool okay good good good um so this is helpful to understand talk to me about churn so you've signed customers up are they all really sticky has anyone started paying you 200 bucks a month and cancelled so we actually had a couple of companies uh you know just going bankrupt i think like two or three of them so uh so that was the majority of the churn we had so literally two or three companies um you know just didn't you know just didn't have enough money to uh go about their business so with 100 companies today if you've lost call it two or three it sounds like maybe you're churning maybe two percent per month is worst case it's very it's very low i mean if you look at the actual product what it does it's a very sticky product um so it's very hard to convince people to start using it because or i don't i wouldn't say very hard but it takes a while to explain and get them on board but once they're on board and they know how the product works it's very hard to uh turn you back and do something else again because it's one of the leading products and also because of the way it's built it's very similar to salesforce i don't know if you ever use salesforce yeah of course but what what are you what are you pri what are you pricing against so so if someone signs up for 200 bucks a month what's going to make them go to 500 bucks per month is it literally just crypto assets under management assets under management uh number of transactions and a few other things but those are the two main things by the way you can go to our website and see exactly the uh what you have under and under every plan but uh i mean if you think about it and it's i think it's very uh interesting thing we did in terms of how we priced it because you know when the market is down um the prices are very low because nobody you know the assets undermined dramatically in the number of transactions goes dramatically and so we are able to import those guys at low prices but when the market turns up and everyone um you know the market goes up people doing more business more transactions more assets under management they will be charged more but also they're willing to pay more because it gives them more value they they have more money yeah but you don't drive a ton of expansion i mean just i don't mean to call you out here but like it's 250 bucks a month at 60 million in aum versus 100 bucks per month with 20 million in aum i mean that's not that that means your your max expansion there is like a extra 150 bucks a month yeah i lost you the last uh yeah i'm just i'm just reading your pricing page right so 100 bucks a month for 20 million bucks an aum 250 bucks a month for 60 million in aum i mean you know you must have people with more than 60 million bucks in aum what's the what's the mo the person paying you the most how much are they paying you per month or around five thousand dollars okay got and how much how much aum is that one i can't say okay the company uh hundreds of millions hundreds of millions okay got it very cool all right that's good now how do you sign up i mean you have 100 customers today how do you set up your next 100 you think so i think it's a it's a culmination of uh first of all uh again pushing our brand name because again four months ago we were non-existent in the professional side of things so we see more and more companies and more professionals starting to refer people to us or our companies to us but also i think it uh it's just how aggressive we do our sales we're increasing our sales teams um and so we get into more and more and leads getting more and more conversions and and also the market itself i mean when the market gets better i i think it's better for everyone and so i think the culmination of all those things will drive um adoption alan what are you willing to spend to get a new 200 per month customer what's your fully weighted cap would you say so i think that we don't have the numbers yet again just because of the short term uh since we started so it's only four months but i think that we're willing to pay probably around or eight hundred dollars for um a subscriber on the lowest year uh which is 200 a month right so no it's the hundred hundred dollars a month okay that's the lowest the lowest tier or the lowest plan um which is 100 a month and so we actually started experimenting with a bit of referral programs and so i think that's around between five and eight hundred dollars a month uh but again we'll we'll tune it as the way as we go because we don't know the the lifetime value of the declines yet because again we didn't even have a year or two of experience yeah i mean the only way to even forecast that is two percent churn per month or about 24 churn per year if you extrapolate which is which is dangerous all i'm saying is yeah you can basically say you have two percent sure and you've told me so far you had two or three people cancel on 100 people right so let's say worst case is 20 or 24 churn annually which gives you a 50 month lifetime value at 200 bucks a month that gives you 10 000 ltv but that's very dangerous to extrapolate like that but that probably is the best data you have right now but again i mean i think that our focus and because of our financial resources i think that our objective is not necessarily to optimize on the revenue right now but it's really to take a market share i mean again the only thing you really need to do in a crazy market like the crypto market is really to grow as fast as the market grows and so i i think that's definitely our objective we can put ourselves with the right product at the right time and grow as fast as the market can i'm not too worried uh on revenue at least let's say the next year or two well the revenue should take care of itself if the market's growing if it doesn't if the market doesn't grow then revenue is not going to take care of yourself and you have to do something else definitely but it's also the the the side of optimizing on the revenue right so increasing up saline making sure that the actual price point is is what you want to take and not necessarily undermining uh with low prices and so on so again one of our the strategy from the get-go was get a good product at low price take market and you know and then start to optimize and so uh i think the next year or two we'll probably not focus too much on making sure to extract every single dime we can from the clients um but um but really to create a product which is so sticky and beats the rest that we grow as the market who's your number one competitor so we have a couple of them some of them are actually closing so we have a bunch so libra is one of the one of our competitors um balanced trees one of the competitors um what is it called brown what uh balance balance three so it's like just right balance but instead of the e uh just the number three uh and then if you kind of expand a bit a bit larger and to indirect let's say competitors you have you know guys like contractor and stuff like that so uh very good all right let's wrap up here with the famous five number one what's your favorite business book oh i just finished reading the sales force uh behind the clouds book that's a good one number two is there a ceo you're following or studying [Music] so i guess the the the dancer everyone gives is ellen moss but um a bunch of them um so from alan moss uh tim cook um good number three what's your favorite online tool for building your company uh well that's it blocks i guess now besides your own um i don't know man it's a tough question gmail all right number four how many hours of sleep to get every night about seven or eight and what's your situation married single kids i'm merely without kids no kiddos and how are you i'm literally turned 23 to two days ago very hey congratulations very good thank you all right all right last question what do you wish your 20 year old self knew take it easy i mean it will fall into place um yeah i think yeah guys take it easy rare combination here blocks dot io sas plus cryptocurrency did a raised a million dollar seed round back in uh early 2017 a 10 million ico in 2017 converted 15 million bucks of that raise to fiat their ico was obviously on the ethereum token and when it was 150 bucks went up to 1200 which is why they were able to convert 15 to fiat alon believes that i'll cover more than four years of burn they're burning about 320 grand per month right now uh they are doing about 20 000 north of 20 000 per month in revenue across over 100 customers that are using them to manage their crypto assets under management elon thank you so much for taking us to the top thank you bye-bye