Bluerabbit Revenue & Funding (2024)

[00:00] Bluerabbit was a gamification platform doing $7,000 a month about two years ago. COVID hit them hard. They're now doing $200 a month. They do have some seasonality where they'll do about, you know, $5,000, $6,000, up to $10,000, $20,000, $30,000 in revenue. So they haven't shut it down yet, but he is working on a side project, which he'll launch here shortly. We'll see what happens. Hey, folks. My guest today is Bernardo Latka. He's an expert trainer and speaker with [00:21] over ten years in the gamification industry. Formerly a teacher and web UX designer, he created bluerabbit to gamify education. The award winning platform has successfully gamified over 12,000 players in all continents and is currently being used to gamify corporate training programs, events, and schools. Bernardo, are you ready to take us to the top? [00:37] >> Yeah. I'm sure I am. Alright. [00:39] Give me an update. When we last spoke, you were serving 45 customers. How that was in 2020. How many customers are you working with today, how are they using you? [00:49] >> Well, unfortunately, we're very down that path. We lost a lot of business because of the pandemic. So from the 45 we had, we I'm pretty sure that we're only somewhere around 12 now. Okay. Because we have a lot more independent individual users, but we lost a lot of big businesses that were working with us. So, yeah, we're a little [01:11] bit So does that mean revenue is also down since '20 Oh, way down. [01:15] >> Really way down. We're we're we're really under the covers right now. [01:20] Well, so how do you decide, like, when you shut this thing down? Because in 2020, you told me you were doing about $7,000 a month in revenue. Right? So it's about 80,000 a year. If you're way down, I mean, you're making, like, 10, 20 grand a year. Why not shut this down and go get a full time job or something? [01:33] >> Well, the the situation I am is standing at right now, it's a little complicated because we moved to Florida. And now I have certain visa restrictions, so I cannot get a job right now. So I'm still pushing for bluerabbit for a little while. And I was also invited to a different project I'm working on with some people in Germany. So right now, I'm kinda like doing that, and I am taking careful time of my daughter. [01:56] >> So it's also it's also another really upside of my of my current current status. [02:02] Can see behind you. We see that we see the all the yeah. [02:06] >> The stickers everywhere. And [02:08] Yeah. So so what is MRR today? [02:12] >> Sorry. What's MRR? [02:13] Monthly monthly recurring revenue. [02:16] >> Oh, it should be so. I know. It sounds I really wanted to share this because I I've been hearing all the other entrepreneurs that that they interviewed with you, and they have really great numbers. But we've been doing [02:27] Not always. Not always. There's all kinds of stories. [02:29] >> Yeah. I wanted to share one that's a little bit of a struggle here. We're somewhere around $200 a month, so it's really, really, really low, but it's keeping us afloat with a little bit of the cost, a little bit of keeping up service around. [02:45] >> And, thankfully, the last around last month, we got three contracts with with some of our our former clients, and we recovered a little bit from the from the very slippery slope. So we got a little bit of revenue in the past months. We got somewhere around [03:05] Bernardo, though. Mean, this is regardless if you get, like, a couple extra bucks, I mean, this is the entrepreneur struggle. Right? I mean, you got a new kid. You're cranking along. I mean, but you can't, like, pay rent and buy food on $200 a month. [03:16] >> Absolutely. I have the fortune of of a beautiful wife who has been able to support us for a good time. [03:22] Ah, okay. So she has the safer sort of corporate gig that frees up your time to take the risk on the startup? [03:28] >> A little bit. Yes. I see. [03:30] Is she also in software? [03:32] >> Yeah. She works for one of the biggest tech companies. [03:37] Ah, very cool. So why not I mean, you have the luxury of sort of experimenting here, and I believe are you also an engineer? [03:43] Do you write code? [03:44] >> I do write code. Yes. Not an engineer, but I direct code. [03:48] Why not pivot? Why not try something new? [03:50] >> That's what I'm doing with with with these people I'm working with in Germany. We're pivoting into a different a different [03:59] so What do mean you're working with them? Are you a cofounder at a new company from with German cofounders, or what do mean working with German people? [04:06] >> Yeah. We're we're working on a new company with these people over there. I I really don't wanna disclose much because we we both agree that we're not gonna disclose a lot about it right now. We're still working on our MVP to to release it, but it's kinda like a step before of what you would do with bluerabbit. As a software, it would be a like like on a higher end that reaches out to a different market, [04:28] >> to a broader market, and it's a lot easier to to sell and build on it. But but it's also pre revenue. Yep. [04:37] Oh, 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 [05:00] your 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 [05:25] get 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 [05:46] 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, 1,200,000 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 [06:12] going 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 We're right, gonna go back to the YouTube video here in a second, but [06:34] if 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 [07:00] the interview. And how did you find this German cofounder, and what gets you excited about this new idea? [07:06] >> Well, he's another gamification expert, and he reached out to me because he learned a little bit of the struggle he was going through bluerabbit when we were talking about it in social media. And he reached out and say, hey, why don't you come over? You I feel like I I'm talking with him a little bit when I'm talking to you because he was kinda like with this same approach. Hey, why don't we try something different? I've [07:29] >> been thinking about this idea for a while, and I know that you that that you could move a little bit around there. And they're like, let's do it. So that that's what I've been working in the past few months. Mhmm. [07:39] Would you ever sell bluerabbit for, you know, $5,000? [07:44] >> I don't know. That's a that has been a very big question on our end. I talked to my partners, and the the thing is about the seasonality of bluerabbit, as you said, like selling it for $5,000 or something. Within the seasonality between September and March, maybe over a little bit February, it's going to resell a lot more. And we make a lot more than $5,000 in that in that in that period. But it's not enough to [08:12] >> get us through the entire year. It's like you end up making $30,000 in that period of time. And so it makes no sense to sell it because it, at the same time, allows me to sell [08:23] Why do all these customers quit? I mean, if they love the tool and they're willing to pay per month, why did they churn? [08:30] >> Well, one of those I can tell you was going to be a very big contract. It was going be somewhere around 200,000 a year. And they, within the corporation, they cannibalized the gamification team they had built. I mean, I'm tell I'm telling you, I helped this company to build a team. I even hired I helped them hire one of the gamification experts that was gonna work with them. And in the end of throughout '20 at the [08:56] >> beginning of 2021, they started stripping the team all the way around. And I was like, what's happening here? So, apparently, they had some business, different business approach, they moved out of it. I I even got into an interview to work for the United Nations in the training program. [09:13] We're not. [09:14] We're getting we're getting distracted, though. So you had [09:16] >> 40 I know. [09:16] No. Five No. [09:16] >> We had 45 customers, though. [09:17] Yeah. You churned about 30 of them. [09:19] >> So Yeah. That's a lot. [09:20] I mean, did something break and you couldn't fix the code or what happened? [09:25] >> Nothing like that. They just stopped using it because internal decisions. They started changing or they're maybe having managed change in management. Those were decisions that were completely off our hands. We're like, hey, but you don't want to do it again? They're like, no, we love the tool. Then why don't continue with it? Oh, yeah. We need you know, the budget changed. They didn't want to do it. I'm like, I don't get it. I really couldn't understand [09:48] >> what was happening. My only The only thing that I could make Give some sort of reason behind it may have been the COVID pandemic hit them hard or something or they started moving budget. And gamification has a problem that you really need to engage for a couple of years so that you can actually start looking at really huge numbers before you get a lot of data. And sometimes, I believe the companies get desperate because they don't [10:13] >> see all the results immediately as if you have a basic What do mean? [10:16] But that's a massive ask. You're asking people to pay you for four years before they see any value. [10:21] >> Who would agree to that? Well, that's what I had with these big companies, and some of them [10:25] But if you know that's a problem if you know it's a problem, [10:28] >> though, why not change it? Why can't you change your onboarding to deliver a dopamine hit within the first ten hours? We do. We we okay. So here's you do have that, but it takes, let's say, three months for the team to build the content that they have to deliver. My tool is not the issue. The issue is that they have to deliver the content that they're going to put inside a tool. So when that team does [10:48] >> not deliver in time, then the tool hurt the tool gets hurt because they say, okay, fine. You do not delivering. And then they just take me out of the equation because in the end, I am not the one that's producing the content for them. [10:59] I mean, it sounds like what the the value here is the content, not the gaming tool. So they don't need to pay you for anything. [11:06] >> They need to create the content. And hence the pivoting. [11:11] Well, but it sounds like your pivot you said pivoting was just a more robust bluerabbit. But what is that? If the problem here is you can't convince people to build content, what's this new project gonna fix that? [11:20] >> Or how? Actually because it's actually not a bigger, more robust bluerabbit. It's a different step. It's a step that you take before that. It makes it simpler for the for the companies to develop their content, and it simplifies the entire process of gamifying their products or services. So it just it just takes a lot of the time it takes to produce your learning development or your training content that you wanna deliver to to your people, and [11:45] >> it becomes more like a step manager. [11:48] And How did you negotiate the deal with this new partner? I mean, do you say, I want 80% of the new company because I've already built bluerabbit for five years? Or how do you negotiate that? [11:57] >> No. We're we're going fifty fifty, and this is he called me and he says, I want you as my CTO, and I want you fifty fifty. I want all of you because I know that you know more or less about the how the the business works, and I don't know any of the tech side of it. So I wanna build it like that. I have clients that are already willing for to pay for this. So let's [12:17] >> let's work together. So he brought the idea, and I'm working with him to deliver it. [12:21] Interesting. And did you have you raised any capital at bluerabbit? Do you have any investors? [12:25] >> Yeah. That's another part of the equation. You know how you learn how to to make good decisions? By making bad ones. So one of the worst decisions I made was the investor that I decided to take in because he ended up crashing and losing everything, and he's it was it it got personal, so it was a very bad choice of of an investor. [12:49] How much did you raise? [12:50] >> We raised $25,000, and then he he ended up not even delivering all of it. He just wanted to put part of it then. He wanted to see revenue before, and then he took money out of it and was like so it it ended up being a very bad choice, and then tried to get other investors after that was was my mistake. [13:10] Why why go raise $25,000? I mean, they they tell you this all the time. The small checks are the most annoying. Right? You want go raise a million or nothing. You know what I mean? So why mean, you must have how did you were there warning signs that this was gonna be a problem early on? [13:24] >> No. Actually, there there there were not exactly any for what I had as an I mean, maybe as I was very naive and very inexperienced. But when he came up to me, he said I had just won the award for the outstanding gamification software, and they were, like, rushing towards me. And I was like, fine. Let's do it. Let's let's push into it. And he was very eager to it. He brought the money. He brought the [13:47] >> mistake. He he pushed on the terthing. And about six months later, everything started crashing. And Mhmm. I tell you, it gets a little personal, and and I can tell you a lot of things around him have fallen apart. So I I don't know. I I do can tell you. I didn't see it coming. Probably, it was my mistake for not being aware of all the other signs. And I agree with you. The smaller checks are are [14:13] >> the are the most annoying. You should go for the bigger box because that way you're gonna get better contracts, better structure, and you're gonna make sure that you're not gonna deal, you know, smaller quantities and people are gonna be nitpicking everything out of you. [14:24] Yeah. Yeah. Okay. Well, that makes sense. So you're gonna bootstrap this new idea. [14:28] >> Yep. Yeah. And we also have [14:32] >> my my new partner also has different paths for investment. He has, I think it's two other businesses that that are are good. He he already has hired people. He has a more robust structure, he has a lot more experience than I do with business. So I I'm trusting that side a little bit on it. [14:50] Yeah. Well, I'm certainly rooting for you. We'll see what happens ever. In the meantime here, let's wrap up with the famous five. Number one, what's your favorite business book? [15:00] >> Oh my god. I have the name. I I've I always forget. I have here Rework. It's my favorite business book. Rework. [15:06] Number two, is there a CEO you're following or studying? [15:10] >> Not at all. [15:11] Number three, what's your favorite online tool for building bluerabbit? [15:16] >> Codeigniter. [15:17] Number four. How many hours of sleep do get every night? [15:21] >> Five. [15:22] And what's your situation? Married, single, kids? [15:25] >> Married with one two year old daughter. [15:28] Yes. We we do know that. And how old are you? [15:30] >> I am 39, almost 40 in about twelve Very [15:34] cool. Last question. [15:35] Something you wish you knew when you were 20. [15:38] >> Trust your gut and ask for more money. Mhmm. [15:43] Guys, super honest interview. Bluerabbit was a gamification platform doing $7,000 a month about two years ago. COVID hit them hard. They're now doing $200 a month. They do have some seasonality where they'll do about, you know, $5,000, $6,000, up to $10,000, $20,000, $30,000 revenue. So they haven't shut it down yet, but he is working on a side project, which he'll launch here shortly. We'll see what happens next. Bernardo, thanks for taking us to the top. [16:04] >> Thank you, Nate. [16:05] One 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 alive. It is fun to watch every Thursday 1PM [16:30] Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at 2PM Central. 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 fundraise, [16:54] 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 for [17:15] 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. 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 got to [17:34] push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright. I'll be in the comments. See you.

hello everyone my guest today is Bernardo Latif he is a high school teacher or it was where were eight years and he's an entrepreneur in web design for fifteen and gamification expert for eight years three as an international expert today he's focus on his company blue rabbit bernardo are you ready to take it to the top yes yeah very good okay so tell us about the company what are you doing how do you make money okay so what we do is that we developed a platform called blue rabbit and we salute to schools so that they can gain five classes or the whole school to get all together so we can actually track what players are interested and motivated to to do okay and it is a pure plumbing software as a service model these schools are paying monthly recurring fees basically it's a software itself it's uh you can you get a WordPress version or you can get an appended version you install with it and you work with it it's not a software a service is just a plane cloud software it's probably simpler so they're paying like a one-time fee for a license or something no they pay a monthly fee okay so it is a peer it is a software as a service model well yeah okay yeah okay I mean are you seeing healthy economics what are your tell me about your trend well this year we just managed to get we started up 2017 we managed to get something around ten thousand dollars but we're looking forward to our work hundred thousand uh by the end of this year okay so just to be clear at the end of we're at the right at the beginning of 2017 you were doing ten thousand dollars a month in revenue no idea by the beginning of seventeen we were doing nothing by the end of it we made only ten thousand dollars okay so what a small are you what do you at today what did you do last month around dollars okay around three thousand dollars and how are you how are you how are you scaling this up I mean how are you finding new customers to sign up we're having an online campaign and we're also having we have sales sales people going to schools selling the software directly okay how many people are on your team today that's seven people right now okay and how are you paying them if you're only making three grand a month oh it's based on Committee for salesmen these basin commission and we get some funding from capitalists one month ago how much everyone shares one month ago up how much have you raised five thousand ok 21,000 was that that was just a convertible note that was what what kind of financing was that was a convertible note or an equity round it took a liquid erode yakked and 50 we gave away 15% from four to five thousand okay so so that's a valuation of what some are on a home for $2,000 Yeah right yeah yes yeah okay so okay got it so this is summarize you have seven people on your team they're all commission based you're doing three grand a month in revenue right now at the beginning you just launched this about a year ago so it's all grow have this point you raise 25,000 bucks priced around you about 15% of the company how many customers are you serving today right now we have two pink schools four thousand four thousand reser users and we're looking forward to 150,000 growth due to a project we opened with it's called the engaging project with the Erasmus Foundation in the in Europe so we're looking forward to 150,000 growth in the next couple what does that mean hundred thousand worth of course of what growth of 50,000 registered players in the platform okay but registered players just increases your cost structure doesn't necessarily drive you more revenue right yeah in this case since we're actually solidly on their servers board racer cost they're just like getting the license and they're just working with it so they can put their own life courses through blue rabbit so it does not increase or cost at all okay why how do you look invert this huge pain user base and do I mean sorry this huge free user base into axel more revenue for the company well right now we're using it as it helped us use as marketing we won an award in November thanks to this because people believe in the party so we're using it as a marketing push so we can get more paying schools through this huge advantage by telling that we've got 150 thousand European students getting got it okay but just to be clear right now bernardo you have to paying schools that make up 3 grand it's about beige pay about 1500 bucks a month for 3 grand total yes more or less okay got it and what your jewel onto the company in sorry what what year did you launch the company in ok uh last year yeah just this year in 2017 ok 2017 and considered like exactly and where was I mean where was your head at when you did this you're you're a high school teacher you have your hands full teaching you like gamification I mean why start a software company actually I started developing blue rabbit because as a teacher I decided to give me five more classes back in 2010 and and I started figuring out that using Excel to gain 5 class was not enough so I develop a blog and then it did it was enough and so I add it started adding stuff to the blog things that players could upload their their own projects into it so blue rabbit has started to grow out of the class itself so I ended up developing it based on what I was teaching the way I was teaching why I was teaching so it turned into a good business and and it's not working and other teachers are inviting it and everybody's were like hey dude you should start selling this so we decided to take it to the next level and did you develop the whole thing you wrote all the code or do you have a developer Honor no well when a developer just is year but all the other lines of code were developed like me ok got it so you're the developer you're the business guy are you the only person that owns equity besides the investor no no no we're it's my other partner partner at the end and a partner Luis who is also helping me with the development at the end has been working with me for the past three and a half years and at least just guarding with when the other partner got in also I see and do you know yet I mean it's really really early but do you have a sense of what it costs you to acquire a new paying school we already had that it's something around between $50 and $100 ok English and how did you get to that number more or less we calculated the expenses my my partner there and has a lot of experience selling software to schools he's been working on that for almost 7 years and also calculating through the direct Commission and the cost of the cost of the software on the cloud itself what commission do you pay a salesperson it's 20% of the no it's sorry it's 30% of the year deal and then for the second year they get 15% if they get another signed up okay so and and the two schools right now they're paying fifteen hundred bucks a month each right it's not exactly they pay one is paying something around two thousand and the other one is being around went out okay so this okay my point is though if I take 30% of that year-long deal that's like five grand which is part of your tak but you just told me or cackles only a hundred bucks mm-hmm yeah more or less yeah but it's not right if you pay a sales person thirty percent of the deal 30 percent of two grand a month is a $5,400 Oh Michelle sorry yeah yeah I didn't count I'm sorry I'm sorry I didn't come for that yeah you're completely right about it yeah in in terms of cost of the school for a whole year yeah it would be around five thousand dollars but it's a little less based on I was just considering how much it costs us without considering the Commission I'm sorry about that you just think there who are there any other are there any other costs associated with the sale besides a commission at the salesperson mm no no no not right now we actually crunch that down there's no other there's no other cost right now maybe if you count a little bit of the development but we absorbed that with uh with a capitalist got it yeah now that makes a lot of sense I know that cost itself it's pretty much and and what is for the team is a seven where are you based today in Mexico City Mexico see I love that and most of your customers the two schools are in Mexico or Europe yes right now we only have them here in Mexico okay very good very good will Bernardo let's uh let's wrap up here with the famous five number one what is the last business book that you read it was it last what business book that you read rework good one number two is their CEO you're falling or studying right now uh I started following again Bill Gates a little bit number two is that what's your favorite online tool for building the company it slack by far number four how many hours of sleep take it every night how many what hours of sleep Oh you can actually track me in Fitbit it's around 7 1/2 hours every day I always get all the pay hours that's good and how old are you I'm 35 next Friday no congratulations in what's your situation Bernardo married single you have kids married married and he locates marry three dogs and one rabbit all right last question take us back 15 years what do you wish your 20 year old self knew that it doesn't matter how hard it will get it doesn't matter how dark it looks you're gonna get out of it don't worry about it guys it doesn't matter how dark it looks it'll be ok coming from a high school teacher of over eight years in Mexico City he had had now launched software called blue rabbit to gamify the classroom his peers and himself are using it a lot in their rooms launched in 2017 now as to schools paying for the software doing about three grand per month in total hoping a scale at ten grand per month in total by the end here of 2018 there's they're spending about five grand to acquire these new customers with a salesperson Commission model they have a team of seven right now bernardo thank you for taking us at the top no thank you