How BodyBlock CEO Greg Moore grew BodyBlock to $900K revenue and 15 customers in 2019.

hello everyone my guest today is greg moore he's building a company called bodyblock.ai a consumer body platform for apparel all right greg you're ready to take us to the top yeah let's do it so what does this mean consumer body platform for apparel yeah it's a good question so back in 2012 we realized that nobody had really captured a lot of data on the human body especially on the surface of the human body nor its measurements yet almost everything we buy has to do with our body right we buy clothing that fits our body we sit in seats that are built for our body we lay in beds that are made for our body and nobody's really understood the body and so generally what we did is we laid out a 3d body scanning platform we developed scanners all throughout the world in 50 plus countries and we've scanned millions of human bodies so now we use all that data to help brands design products to better fit the human body and we help consumers get access to the appropriate size product for them with all the brands we work with which side are you making money on uh the b2b side okay so it's free for consumers that's right consumers don't pay us the thing okay and walk me through the onboarding funnel here so first off how many scanners do you have deployed across the world yes we deployed just over 2 000 scanners we deploy between 50 and 75 every single month okay and i mean i imagine these are not cheap what do they cost and do you do those sit on your balance sheet or do you have some relationship where they don't yeah good question um we actually sell them so we sell them into fitness weight loss wellness chiropractic physical therapy they use the scanners to increase membership drive retention increase consumer experience right there's all sorts of tools built around it we on the other hand anonymize the data and then we get to use the data for purposes like body block ai and so um from that perspective they only sit on our balance sheet as long as their inventory and we sell them out i'm into the b2b world there okay what do you charge for those uh anywhere between i think nine and twelve thousand dollars kind of depending on whether they're national or international okay and then what is it i mean do you basically give those out at cost or do you have a margin built on there for yourself what's it cost you to build no it's a it's a handsome margin right so we both profit on the distribution of scanning side of the business as well in the data set of the business that's great i mean can you give me a general sense there are we talking like a grand to build or three grand to build or what uh it's it's sort of in those ranges yeah okay okay i can't go into details where how do you set up that supply chain are we talking like china manufacturing typical process there or what no so we actually do it's not it's like huge batch right i mean we're doing between 50 and 75 units a month um so after running all the cost curves and comparisons we'll fabricate a little bit in china but predominantly uh we manufacture out of san jose california the whole thing even the manufacturing oh interesting are you in one of those like i was down there interviewing a guy that runs a big mattress company that comes with casper and i walked into his warehouse and i'm like it's like this big old hot air warehouse with no ac but he's doing all his manufacturing in there are you the same kind of way no so we're uh i think it's full iso 9003 compliant or something it's like it's a top end shop um and we have a really good really good system with them again i was going to say is this you does this all sit on your balance sheet or you are essentially you're paying a company that does this full time that's right yeah we pay a contract manufacturer to actually build them for us so we own all the research and development all the patents all the ip and then we own a lot of the supply chain and then they actually source it and assemble it for us so once they then we pay for it isn't the billion dollar business here like the data play and if so why would you wouldn't you want to just get these scanners down to as cheap as possible to just get up to billions of bodies scanned why build in a whatever it is a 40 50 60 margin on the hardware yeah i mean that's a good question the reality is is it comes down to funding right and i think as you've noted right you don't necessarily have to have a lot of investment to create a lot of capital um and so the reality is that yes um if funding were omnipresent then that's the play right the play is to reduce the cost down to nothing give them away for free aggregate the data on the back side and create services on that the challenge is that we live in good old silicon valley and there's a social media site every every day that pops up right and there's something that's promising billions of dollars to growth tomorrow and so for us as a company we've always had to be very scrappy we've had to make money from the beginning we've had to drive it close to profitable business in order to drive this thing and now that we have statistically relevant data sets now we fit that more traditional sort of vc infrastructure where if we wanted to raise money we could but right now we run through profits yeah not bootstrap we've raised about six just over six million dollars okay from like angels uh ventures um some big groups out of china actually out of hong kong and then uh quest venture partners projector venture partners a couple of entries here and there okay and so you say close to break even i mean how much are you burning today you're talking like 100 grand a month or something like that no like maybe five okay five out of five yeah we're very very close to profitability and we'll teeter like last month we were profitable a month before we weren't so we're basically hit sustainability on the business side when was last run of ec financing 2017 okay interesting so so most i mean once you're on the vc track you're like on the vc track and you're typically raising every 18 months otherwise it's kind of like a warning sign something's wrong like you couldn't get the valuation you wanted in your next round is that the case uh no i mean we we we knew that developing hardware is a tricky business and so we wanted to get that up and running break that even aggregate the data on the back side and then grow the revenue from the data side um and so and then as that grows valuation continues to grow right and so we don't need money right now and so the beauty that we have is that we can keep growing the business and we can take money at a valuation that we think makes sense for us but until that valuation comes is we just we don't need it when did you launch the company 2012 okay 2012 and then how much did you put into the mvp total total expenses before your first dollar of revenue oh god no idea um a lot of it was like i mean the beauty is we took advantage of like the 3d print revolution right um so a lot of the first systems where we first started making revenue were like literally 3d printed components off of our co-founder's desk so it didn't really cost us much outside of brain power and we put the three co-founders together i had a lot of expertise in computer vision data science or the co-founder of a lot of a lot of experience in full stack engineering and the other one in manufacturing okay and so the three of us together can pretty much create whatever product you want very cheaply what's the team size today i've got 20 24 full time i think and then we have another like 75 people here there um when you look at like who's manufacturing all the logistics and pipelining um temp work that we have here in there of the 24 how many are engineers versus quota carrying sales reps 10 about 10 engineers and how many sales reps uh seven they carry quota yeah do they carry quote on the hardware plus the software uh hardware only right now on software yeah on the software side it's it's pretty burgeoning right it's it's very new it's early um and so what i like to do as a founder is take on a lot of the biz dev stuff as we get it going because i'm going to feed all that information back to the product and then as we get some money back behind it then we start hiring sales reps um because we can repeat a process if i hire sales reps but i can't repeat a process then i'm just having people running the gun and it doesn't really work all that well yeah so a fully stated rails rep sorry a fully weighted sales rep how many how many physical devices are they going to be selling per month what's their quota target uh anywhere between 10 and 17 i think okay annual month month monthly okay interesting and how did you how did you come up with that number so what made sense um i think the biggest number that i could come up with when i when i did sales was about that um i think i hit 17 one month and then i'd sit around 10 um and that's with some other responsibilities so i figured that they should be better than me um so that's kind of how we came up with that number yep so 10 devices at a minimum quota right at 10 grand a pop they're basically having to close 100 grand in new business per month yeah close to that that's right yeah and do...