How Buzzilla CEO Yoav Pridor grew to $6.2M revenue and 300 customers in 2024.

hello everyone my guest today is joao prietor he's been deployed deeply involved in the relationship between business and technology from the early years of the web he began the entrepreneurial stage of his career as part of the founding team of omg ili and later as co-founder and ceo of bazilla which he's working on today and which has become israel's leading social listening and social research company he currently serves as the company's chairman of the board he's also a shareholder and board member at bazilla's sister company webhost.io and spends most of his time working closely with companies on all aspects of the customer experience you of are you ready to take us to the top yup all right tell us about bazilla what's the company do and and what's the you know business model how do they make money mozilla is into social listening uh it's a social listening company um the the concept is that companies all kinds of companies uh need to listen to what people are saying in order to learn um all about themselves their ecosystems and their business um the technology behind bazilla is crawling technology crawling unstructured information from social networks from forums and blogs and news editorial sites all of that is structured and brought into the system the model is a sas model and also a professional services model we do research that is an analysis of this information in order to give our clients better insight into their ecosystems okay i want to understand kind of the breakdown there because a professor you know an agency is very different than a sas business so if you look at the past 12 months of revenue from buzzilla what percent is professional service versus what percent sas well it's about it it's all uh recurring most of it is recurring just uh over 90 percent and uh it's about 60 sas and 40 professional services okay how walk me through how the 40 professional services how is that recurring typically that's like a setup fee or an onboarding or a one-room one-off research product listening research excuse me i think we got a little disconnected there yeah it's all what it's all research we call it listening research um our clients um have us analyze the conversation for them in various models in order to understand better what people are saying about their their brands about their competition about their their uh um whole business ecosystem about their target audiences and potential uh areas to which they can explore in order to widen their businesses okay now ignoring the ignoring the professional services what do people pay on average per month just for your sas offering well it's per seat and a seat is uh user is roughly five hundred dollars a month um so large companies can can go uh um all the way to uh um fifteen or twenty thousand dollars a month and uh very large companies and then or government agencies and um uh then small companies would would pay the more basic fees give me a sense though i mean you guys are built for a specific kind of user are you really targeting enterprise accounts or one seat kind of new logos well most of our clients are the large corporations uh in the local market that would be uh i guess medium-sized companies or small or medium-sized companies in american terms um our uh international customers are medium companies uh so i would i would say small enterprise okay so so typically when someone signs up for you after you know a year or so about how many team members do they have on the platform are we talking like two or two hundred no it's never 200 because usually it's it's actually um the people who are using the platform are the the social media people the digital people uh so that depends on the the size of the team and the clients for the information within the organization can be in the hundreds because they get alerts and notifications about uh things that matter to their businesses okay what i'm trying to get a sense of is the average kind of business signing up for you are they paying for two seats or 10 seats or 500 seats just on average what is it would you say oh i guess it would be like uh between uh um three and ten seats okay fair enough very good that's helpful and then put this on a timeline for us when did the company launch we launched in 2010 and the business has been growing ever since we uh um we were initially funded seed funded all in all 1.6 million dollars last time funded in 2012 and uh ever since the company has been uh growing on its own uh it's profitable and um it's still growing that's great so when you when you say growth i mean over the past 12 months what's the growth been well the last 12 months have been phenomenal the growth has been um roughly 40 to 50 percent but that's because we have become the sole social listening platform for all of um israel's government companies and government agencies um so so that's a big step forward for us and that took us into our government agencies abroad as well including in the states interesting and so over the past eight years since 2010 and really on a on a you know bootstrap budget basically what have you scaled to in terms of total customers using you there are um there are almost 300 uh companies well we said how many users within a company so that's the the the recurrent business we have at the moment okay so just to be clear so you said there's about 300 kind of paying logos each one pays for maybe between three and ten seats depending on kind of the use case so if we soon assume a minimum there of three seats that's 1500 per month times 300 customers you can kind of triangulate to your monthly revenue of being somewhere around 450 grand per month is that about accurate yeah it's around 400 okay fairly healthy and then if you're going 50 percent kind of year over year that was around what about 300 percent a year ago or sorry 300 grand a year ago yeah something like that and and where is most the growth coming from is it coming is it coming from expanding the base of customers you already have up selling them or is it brand new customers all together well it's usually uh it's both um i think most of the growth in the past year was new customers as i said we uh we got into some very big tenders so uh it's new customers uh but then the the growth in sas and professional services is from existing customers and that's been going on for years okay so that 400 000 bucks per month you're doing today is that that's just your sas correct you didn't have professional service on top of that no that's all that's all in all okay and you said sixty percent then it's sas a little bit just because it's all recurring so for for me it's uh um it's it's all in all so that's the income well but they are very different revenue so i mean professional service is very different from a margin perspective than a sas business they're they look very different so when you you know most people listening right now they're going to say well yo it's saying they're the professional services recurring but really no they have to have a sales team to like sell new research reports every single month to make that recurring be recurring so how do you get new professional services come in if you have no sales team selling it well we have a sales team selling it but um it's recurring because the analyzed products are also on a recurring basis and they don't need to be resold every month uh i'll give an example um um all of our companies all of our clients not only get notifications and alerts from the system on a regular basis they also get analyzed reports on a regular basis in a standardized format in several standardized formats and this is something we do for them without it's a recurring order it's uh something that's yeah is there a human is there human touch on that is there human analysis or is it like they click a button for pdf download no there's always human analysis and this is part of my my um the things i believe in i believe that real insight is is has to come from a human brain so the system does a lot of the heavy lifting and brings it to the people in order to bring that that um valuable insight that lets them actually grow their businesses yep so give me an example you know you mentioned your kind of big use case are governments so how are what do you mean if a government is trying to grow their business what does that mean well um let's give you an example let's say that the ministry of education would like to listen to what parents teachers and students are saying in the social arena in order to give better services in order to answer more correctly um to uh design their offering more correctly to their target audiences so that's their kind of business okay it's not it's not a um a profitable business but it's a business that needs to tend to the needs of their customers okay got it churn is critical in a sas business what's your turn today well um the the net is around -10 okay so so um and then it's actually it's actually becoming lower and lower through the years it's pretty amazing because um the service itself is uh is already so fine-tuned that it it actually there's very little churn it's about uh 1.2 okay and that's on a logo basis or revenue basis that's on the revenue okay so 1.2 revenue return that's per month or per year that's per year okay per year and is that gross or net that is um wait let me think about it for a minute um growth gross okay so when you add an expansion on top of that you're above 100 in net revenue retention per year exactly yeah which would obviously that's also what drives churn to net negative 10 which is great um tell me more about how you're signing up these customers and where are you finding them what's the onboarding look like well first of all we have to remember that we operate our base market the israeli market is is a very small market and we are by far the leader in this market so it's a lot of word of mouth um we have a pretty small but efficient sales team that brings in the big customers and we have some uh um marketing online marketing going on um that's how much you have like how much are you spending per month on online marketing oh maybe two thousand dollars a month okay so that's that's easy and then on the team the sales team what's the total team size today and how many of them are sales total size is about 25 and we have a sales team of four um all based in israel all based in israel i love that very good and then what do you assume you know your economics are so healthy these numbers can get dangerous and i'm about to ask but what do you assume your lifetime value is on these accounts um we uh we see a growing lifetime lifetime per customer and the lifetime value right now is uh somewhere around seven thousand dollars how much lifetime uh seven thousand dollars i guess you know in in terms of uh um not seven thousand dollars until it's it's about uh 3.5 years per customer okay that's what it is yeah so if i take so if i take you know 3.5 years times you know 12 months here that's about 42 months and if you said on average that a customer might pay for three seats at 500 bucks a month i can take 42 months times 1500 to get an ltv about 63 grand exactly and that's around around right we calculated around 65. okay fair enough that's very good and then uh gross margins kind of in line with the other sas companies you're around what 80 85 percent in the cess yeah well well that's why i'm asking right you your and the professional service is what professional services are lower professional surfaces are around uh forty percent yeah so so uh it's it's around eighty percent and forty percent yep not bad and obviously those two play nicely together one drives retention of the other which makes good sense any plans to raise additional capital or no not at the moment actually the company is doing pretty well uh in growth and um is able to to develop its next generation product as we speak funded by what we make i guess we will be looking maybe in a year or two to expand the whole business model and that may that may require us to to uh to get an additional funding you're doing about 4.8 million call 5 million bucks per year right now professionals plus sas if someone came in and offered you that you know four or five xs to say 20 million bucks would you sell the company um i think not and it's a very general question because my question is always how can we make it much bigger together so that somebody would have to uh would have to strategically be a partner that um in joint forces will aid us in making this uh this whole company a much bigger enterprise yeah very good yo let's uh let's wrap up here with the famous five number one what's your favorite business book my current business book is uh um is the the new book by yuval noirari it's uh it's not per se a business book but it's a uh 21 thoughts um about the 20th the 21st century and it's fascinating number two is there a ceo you're following or studying right now yeah um lately i've been looking at ray ransom is the ceo of datarama they they just sold their company to salesforce for 850 million dollars and it's intriguing to me how how they pushed through since 2012 to make their business grow well 800 million bucks would be intriguing to a lot of people uh number three of what's your favorite online tool for building your business uh i guess it would have to be slack number four how many hours i sleep to get every night six to seven okay so not bad and what's your situation married single kiddos married three children they're not children anymore three dogs and a cat holy mackerel you're a busy man and how old are you i'm 52. 52. last question what do you wish your 20 year old self knew i would um to ask for help i would definitely have me as a 20 year old listen more to other people and learn from their experience guys ask for help there you have it launched bazilla back in 2010 so eight years ago now doing about five million bucks in annual revenue that's about 50 year-over-year from the same run rate in september 2017 again last year doing this on a you know with small amount of capital relatively speaking 1.5 million bucks into the company they're serving about 300 paying customers that buy three seats maybe up to 10 seats on average at 500 bucks a seat they've got net a negative revenue of negative 10 percent and well north of 100 net revenue retention annually with just you know churning 1.2 percent revenue gross underneath that so healthy economics based in israel with 25 people lifetime value about 30 42 months or about 65 grand in terms of dollars yo thank you so much for taking us to the top thank you