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Founder Interview

How Bluerabbit Navigated Pandemic Decline from $84K Revenue to $200 a Month (Interview with CEO Bernardo Letayf)

Interview Date
November 1, 2022
Interviewee
Bernardo LetayfCEO
Watch
Watch the full interview

Company Metrics at Interview Time

Monthly Revenue (Nov 2022)

$200

Annual Revenue (2020)

$84K

Customers (2020)

45

Total Funding Raised

$25,000

Historical Snapshot

These numbers were reported by Bernardo Letayf during his interview with Nathan Latka recorded in November 2022 and are a historical snapshot, not current figures. See Bluerabbit’s current numbers.

Key Takeaways

  • 01Bluerabbit was generating approximately $7,000 a month in revenue around 2020, equating to roughly $84K annually
  • 02By November 2022, monthly recurring revenue had fallen to $200 a month following pandemic-driven customer losses
  • 03The platform had 45 customers in 2020 and lost the majority during the COVID-19 pandemic
  • 04Bluerabbit raised $25,000 from a single angel investor, an experience Bernardo described as one of his worst business decisions
  • 05The company has seasonal revenue patterns, with stronger months between September and March potentially reaching $30,000 in that window
  • 06Bernardo was simultaneously working on a new pre-revenue startup with a German co-founder, structured as a 50/50 partnership
  • 07A prospective contract worth approximately $200,000 a year was lost when the client dismantled its internal gamification team
  • 08Bernardo identified content production by clients, not the software itself, as the core reason customers churned

Company Metrics at Time of Interview

MetricValueSource
Monthly Revenue (Nov 2022)$200Founder interview, Nov 2022
Monthly Revenue (peak, pre-pandemic) (2020)$7,000Founder interview, Nov 2022
Annual Revenue (2020)$84KFounder interview, Nov 2022
Customers (2020)45Founder interview, Nov 2022
Total Funding Raised$25,000Founder interview, Nov 2022
Seasonal Revenue Window (Sep to Mar) (seasonal peak)$30,000Founder interview, Nov 2022
Lost Prospective Contract Value (2020 to 2021)$200,000 per yearFounder interview, Nov 2022

Growth Breakdown

Revenue

Bluerabbit reached approximately $7,000 a month in revenue around 2020, equivalent to roughly $84K annually. By November 2022, monthly recurring revenue had collapsed to $200 a month following widespread customer losses during the pandemic. The business does exhibit seasonality, with stronger revenue between September and March.

Customers

The platform served 45 customers in 2020. The pandemic triggered significant churn driven by clients cutting budgets and dismantling internal gamification teams, not by product failure. By the time of this interview Bernardo estimated the active customer base had fallen sharply.

Funding

Bluerabbit raised $25,000 from a single angel investor early in its life. Bernardo described the experience as one of his worst decisions, noting the investor did not deliver the full committed amount and the relationship became personal and damaging. No further institutional capital was raised.

Team and Operations

By November 2022 Bernardo was the primary operator of Bluerabbit while simultaneously co-founding a new pre-revenue startup with a partner in Germany on a 50/50 equity split. His wife's income from a large tech company provided household stability while he continued to run both efforts.

Growth Strategy

Award-Driven Credibility

Winning an outstanding gamification software award attracted early investor and customer interest, giving Bluerabbit initial momentum and visibility in the gamification community.

Enterprise and Corporate Training Focus

Bluerabbit targeted large corporate clients for training programs and events, with at least one prospective contract valued at $200,000 a year. This segment offered significant revenue potential but proved vulnerable to internal budget and management changes at client organizations.

Seasonal Revenue Management

The business concentrated its revenue efforts in the September to March window, when demand for gamified training and events is highest, aiming to generate enough in that period to sustain operations through slower months.

Pivot to Simpler Content Tooling

Recognizing that clients churned because they could not produce the content required to run gamification programs, Bernardo pivoted toward a new product designed to simplify content development as a step before full gamification, addressing the root cause of customer drop-off.

Partnership and Network Leverage

Bernardo connected with his German co-founder through social media conversations about Bluerabbit's struggles. The new partner brought existing clients willing to pay and a more established business structure, reducing the capital and sales burden on Bernardo.

Best Quotes

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.
I 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
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.
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.
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.
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 get us through the entire year. It's like you end up making $30,000 in that period of time.
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.
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 let's work together.
Trust your gut and ask for more money.

What Happened Next

This interview captured Bluerabbit at a low point in November 2022, with monthly revenue at $200 and most of its 2020 customer base lost to pandemic-driven churn. At the time of recording Bernardo Letayf was actively co-founding a new pre-revenue startup with a partner in Germany while keeping Bluerabbit alive through its seasonal revenue window. The numbers here are a point-in-time snapshot reported by the founder and do not reflect the company's current status. Visit the Bluerabbit company profile for the latest available figures.

View Bluerabbit’s current profile and metrics

Full Transcript

Host Intro and Company Overview

Nathan Latka

00:00Bluerabbit 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

00:21over 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?

Guest Welcome

Bernardo Letayf

00:37>> Yeah. I'm sure I am. Alright.

Customer Count Update Since 2020

Nathan Latka

00:39Give 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?

Pandemic Impact and Customer Losses

Bernardo Letayf

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

Nathan Latka

01:11bit So does that mean revenue is also down since '20 Oh, way down.

Bernardo Letayf

01:15>> Really way down. We're we're we're really under the covers right now.

Nathan Latka

01:20Well, 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?

Bernardo Letayf

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.

Revenue Decline Discussion

Bernardo Letayf

01:56>> So it's also it's also another really upside of my of my current current status.

Nathan Latka

02:02Can see behind you. We see that we see the all the yeah.

Bernardo Letayf

02:06>> The stickers everywhere. And

Nathan Latka

02:08Yeah. So so what is MRR today?

Bernardo Letayf

02:12>> Sorry. What's MRR?

Nathan Latka

02:13Monthly monthly recurring revenue.

Bernardo Letayf

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

Nathan Latka

02:27Not always. Not always. There's all kinds of stories.

Current MRR at $200 a Month

Bernardo Letayf

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.

Recent Contract Wins and Partial Recovery

Bernardo Letayf

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

Nathan Latka

03:05Bernardo, 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.

Bernardo Letayf

03:16>> Absolutely. I have the fortune of of a beautiful wife who has been able to support us for a good time.

Nathan Latka

03:22Ah, okay. So she has the safer sort of corporate gig that frees up your time to take the risk on the startup?

Bernardo Letayf

03:28>> A little bit. Yes. I see.

Nathan Latka

03:30Is she also in software?

Bernardo Letayf

03:32>> Yeah. She works for one of the biggest tech companies.

Nathan Latka

03:37Ah, very cool. So why not I mean, you have the luxury of sort of experimenting here, and I believe are you also an engineer?

03:43Do you write code?

Bernardo Letayf

03:44>> I do write code. Yes. Not an engineer, but I direct code.

Nathan Latka

03:48Why not pivot? Why not try something new?

Bernardo Letayf

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

Nathan Latka

03:59so 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?

Bernardo Letayf

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.

Nathan Latka

04:37Oh, 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

Seasonality and Decision to Keep Bluerabbit Running

Nathan Latka

05:00your 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

05:25get 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

05:46not 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

06:12going 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

06:34if 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

Why Customers Churned

Nathan Latka

07:00the interview. And how did you find this German cofounder, and what gets you excited about this new idea?

Bernardo Letayf

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.

Nathan Latka

07:39Would you ever sell bluerabbit for, you know, $5,000?

Bernardo Letayf

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

Nathan Latka

08:23Why do all these customers quit? I mean, if they love the tool and they're willing to pay per month, why did they churn?

Bernardo Letayf

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.

Nathan Latka

09:13We're not.

09:14We're getting we're getting distracted, though. So you had

Bernardo Letayf

09:16>> 40 I know.

Nathan Latka

09:16No. Five No.

Bernardo Letayf

09:16>> We had 45 customers, though.

Nathan Latka

09:17Yeah. You churned about 30 of them.

Bernardo Letayf

09:19>> So Yeah. That's a lot.

Nathan Latka

09:20I mean, did something break and you couldn't fix the code or what happened?

Content Production as the Core Problem

Bernardo Letayf

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?

Nathan Latka

10:16But that's a massive ask. You're asking people to pay you for four years before they see any value.

Bernardo Letayf

10:21>> Who would agree to that? Well, that's what I had with these big companies, and some of them

Nathan Latka

10:25But if you know that's a problem if you know it's a problem,

Bernardo Letayf

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.

Nathan Latka

10:59I 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.

Bernardo Letayf

11:06>> They need to create the content. And hence the pivoting.

Nathan Latka

11:11Well, 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?

Bernardo Letayf

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

New German Co-Founder and 50/50 Partnership

Bernardo Letayf

11:45>> it becomes more like a step manager.

Nathan Latka

11:48And 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?

Bernardo Letayf

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.

Nathan Latka

12:21Interesting. And did you have you raised any capital at bluerabbit? Do you have any investors?

Fundraising History and Bad Investor Experience

Bernardo Letayf

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.

Nathan Latka

12:49How much did you raise?

Bernardo Letayf

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.

Nathan Latka

13:10Why 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?

Bootstrapping the New Venture

Bernardo Letayf

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.

Nathan Latka

14:24Yeah. Yeah. Okay. Well, that makes sense. So you're gonna bootstrap this new idea.

Bernardo Letayf

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.

Nathan Latka

14:50Yeah. 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?

Famous Five Rapid Fire

Bernardo Letayf

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.

Nathan Latka

15:06Number two, is there a CEO you're following or studying?

Bernardo Letayf

15:10>> Not at all.

Nathan Latka

15:11Number three, what's your favorite online tool for building bluerabbit?

Bernardo Letayf

15:16>> Codeigniter.

Nathan Latka

15:17Number four. How many hours of sleep do get every night?

Bernardo Letayf

15:21>> Five.

Nathan Latka

15:22And what's your situation? Married, single, kids?

Bernardo Letayf

15:25>> Married with one two year old daughter.

Nathan Latka

15:28Yes. We we do know that. And how old are you?

Bernardo Letayf

15:30>> I am 39, almost 40 in about twelve Very

Nathan Latka

15:34cool. Last question.

15:35Something you wish you knew when you were 20.

Closing Advice and Wrap-Up

Bernardo Letayf

15:38>> Trust your gut and ask for more money. Mhmm.

Nathan Latka

15:43Guys, 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.

Bernardo Letayf

16:04>> Thank you, Nate.

Nathan Latka

16:05One 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

16:30Central. 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,

16:54a 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

17:15that 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

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