How Cal AI CEO Zach Yadegari grew to $35M revenue and 20K customers in 2025.

CalAI Acquired by MyFitnessPal

6 Steps he Used to hit $30m Revenue - YouTube

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//www.youtube.com/watch?v=x_hP76-nXFw

Transcript

(00:00) Are you comfortable sharing how much revenue you've already collected this year? A little over 10 right now. And yeah, I mean, how many people are running? How many people are downloading it right now per day? What's your sample size every day? Every day we get 20 to 30,000 new downloads. That's wild. How are you thinking about a user going into their second year and the the activation rate, the renewal rate? We just came around our year anniversary since launch. (00:24) However, we expect that it's going to be between 25 to 50% renew. What is the team size today full-time? How many folks? We are 17 people actually. Hey folks, I'm here with the founder of Cal AI, Zack Yadagari. Zack, you ready to take us to the top? Hey, thanks for having me on. Yeah, I'm thrilled you're here, man. You know, you're you're really good at press. (00:42) You built a great story. You're a great engineer, but you're even more powerful sort of marketer. We're going to jump in today uh to the story of Cal AI. Um just tell us real quick if for folks haven't if they haven't seen the app yet. Um what does it do? What's the main use case? Cali is an app where you can track your calories just by taking a picture of your food. (01:02) So, it's the easiest way if you're trying to lose or gain weight. Mhm. You you were on your other interviews talking about how you're a skinny kid and it's really hard to like measure every fish that you put in your mouth or every meal and this just makes it easy. How much of the of the code I mean is this, you know, would do you consider yourself a really really good engineer? Was this a hard breakthrough that is only possible in the world of sort of AI or could this have been built 5 years ago? I think it definitely is only possible now because of the (01:26) breakthroughs with AI. However, that's mainly because of APIs like chatbt. We did not train our own model to do this. Yep. Yep. Okay, that makes a ton of sense. So, a lot of things I want to touch on with you today is just growth. So, I don't want to lose the audience. I don't want to bury the lead. Right. (01:43) This is your screenshot you posted back in September 4th, 2024. Uh when you guys this was your first million of sales, right? Yeah. I was like 5 months into the company. That's wild. Okay. So, first line of code was written what in like May 2024? We launched May 2024. The first line of code was probably written in March 2020. (02:02) Okay. And solo founder here or multiple co-founders. How did you guys get the company going? Started as three co-founders. Two of us were working on it. The third was more of an adviser and then we brought someone else on. Everyone became more hands-on as it started taking off. And is this the crew? Is this the right picture or no? So that's that's three of the co-founders. I'm on the left. (02:24) Henry is to the right of me. He's our CTO. And Jake is all the way to the right. He's our COO/CMO, but Blake is the fourth co-founder. He's not in that picture. Okay, got it. That makes a ton of sense. So if we fast forward a little bit, uh again, growth has been pretty impressive. I cheated here and used Perplexity, but why not? Might as well use the tools, right? You get going in May, two folks. (02:44) Do you scale to six people? I'm really focused on this concept of like tiny teams and huge revenue. Are you comfortable sharing where you're at today in terms of revenue and team size? Of course. Today, in the next 12 months, we're looking to generate over 35 million. That's just based on our annual run rate. Mhm. So, just to be clear, you think in 2020, we're recording this in May 2025. (03:05) You think by December 2025, total collected revenue in 2025 will be about 30 billion. So that's assuming no growth but accounting for growth it should be higher. Okay. Are you comfortable sharing how much revenue you've already collected this year? So this year alone we have collected something like something like 9 million nine. (03:31) Okay great that's pretty good over the first five six months of the year. So good growth. What I'd love to jump into is a little bit about how you actually architected the application. So I went ahead and you know went through as a user recorded it here. I'd love for you to just like take us through this. Right. (03:46) So someone searching calorie tracking in the app store. By the way, I guess we should probably start there. Do you do any sort of like the equivalent of SEO for Google but sort of metatags in your app here to show up for those these key keywords? So we do we have actually done some things like our keywords. You could definitely see through our name and and the subtitle. (04:07) We definitely try to fit in as many keywords as we can. What what tools are you using to figure out what keywords are the most search on the app store so you can then rank for them? So tools we actually don't use any tools. I know app figures is a very popular one, but we mainly use it was mainly off of the dome actually. (04:27) The what's the dome? It was mainly off the top of our minds. Come on, man. I'm 35. you're like a young guy like all these all these phrases I'm still catching up. So, okay. So, you just came up you just said, "Hey, listen. I'm I'm the power user. What would I search? Let me go rank for those terms." Yeah, that's how we did it initially. (04:43) And going off a little bit, we started to talk to some agencies. So, had more of a clue, but yeah, definitely most of that is just what our intuition told us. Yeah. So, let's get into the app here. So, I'm just scrolling through here. You got Viral Deance LLC, the holding company. You told me that's not the strategy. (05:00) multiple apps like Cali just crushing it that accurate. Yeah. So the goal initially basically we saw we thought that our one the one thing we had that other people didn't was our influencer marketing strategies. We had hundreds or we have hundreds of influencers that are promoting our app, posting about it every single day. And so we the plan was to apply that same thing to other apps but Cali just kept growing faster and faster. (05:29) And so by the time we had finished development on those other ideas we had, we realized it didn't make sense to spend any time there just given Cali's growth rate, it deserved all all of our attention. Mhm. Yeah, that makes tons of sense. And and I meant to ask you earlier too. So 9 million collected so far this year. Original team, you just walked us through it. (05:47) What is the team size today full-time? How many folks? So I was backtracking on the re revenue calculations. Probably closer to like a little over 10 right now. And in terms of the team size, we are 17 people. Actually, we're bringing some people on now. So, we're we're moving from 17, which we have stayed at for the last few months, to we'll probably be at 22 people by the end of the next month or two. Mhm. (06:15) And And how are you finding some of these folks? I mean, I I saw on Twitter somewhere someone posted like just sent you new screenshots of the app and said, "Hey, I could make the conversion better." And you said, "Okay, like join the team." I mean, how are you recruiting folks? Is that easy? I'd say most of our talent came straight from X. (06:28) So, as you mentioned, two days ago, someone redesigned a Cali screen and I like the design. So, now we're interviewing him to join the team full-time. I made a post the other day, yesterday, actually, looking for someone to come on as a Facebook ad buyer for us. Yeah, this is the uh this is the easy way to do it. (06:48) Not the easy way, but it's a quick way to do it, right? These are the hustlers posting real time stuff here instantly trying to capture your attention which is great. So um let's keep let's keep going through the app experience right so how much testing did you guys do in sort of the first five you know screen sessions and what should we show what gifts should we show what's too fast what's too much etc are you asking about the onboarding flow specifically uh yeah let me let me just actually here I'll just make this easier I'll just actually share the parts I'm (07:12) specifically curious about so yeah this onboarding flow here right how do you decide what gifts to show what headlines to show what to put in the onboarding flow here yeah so that's a good question initially we had no animations, we had no GIFs. It was very bland. We only asked the questions we needed in order to give the user their calorie daily intake estimate that they would need to gain weight or lose weight. (07:40) And that was it was purely utility. But then over time, we started AB testing different things. We started adding in different questions which made the user spend more time. But these questions didn't actually have an impact on the end result at all. But we saw an increase in conversion rate. And the hypothesis there, which is pretty confirmed, a lot of other people see this is just that the user invests more time. (08:06) So something like following a specific diet, it doesn't impact their app experience at all. But that actually boosted the conversion rate adding these questions. And then we add the idea to, okay, let's add a screen that says, "Thank you for trusting us. Let's add a screen that says you're going to lose weight faster with Calai. (08:23) And that was cool. That increased the conversion rate. Thought how could we take this one step further? We animated those screens, tested it again, also boosted the conversion rate. So, it's just been a game of creating hypotheses and then testing them out. Yeah, we I mean, I joke with folks. I say, "Listen, whichever teams are moving the fastest and hustling the hardest, the one that gets to 10,000 tests the fastest will be the winner because you're learning the quickest. (08:49) " And so are you following any testing framework on this stuff? Is there a software powering this question loop that we just went through? Is it all sort of custom coded? It's customcoded. We use Mix Panel for our tests right now. And I'd say we don't do anything that crazy. We also are definitely not testing as much as I would like to. (09:09) The 10,000 tests, I would love to run 10,000 tests. We are We've only started running tests since maybe January, 3 months ago. Mhm. We are behind on that front and have mainly operated through intuition. But now everything, every new feature we release, we are running tests. Yeah. I mean, how many people are running? How many people are downloading it right now per day? What's your sample size every day? Every day we get 20 to 30,000 new downloads. That's wild. (09:36) Okay, so we're setting it up here. I've already invested in the app because they spent a minute telling you my weight, my birth date, like all that kind of stuff. How many people convert from this experience, like the $30,000 per day, right into a paid plan? So, we have a 3-day free trial. Not everyone goes right into a free plan. (09:52) I'd say into the trial, it's about 25% 20 to 25 will convert either to paying right away or into a trial. That makes tons of sense. You guys do like this trial process here is so freaking smart. Like when I was clicking through it, I'm going this guy is a freaking genius because you have this continue for free button here, right? And it goes $249 per month. (10:12) And I'm like, of course, I'm going to do a 3-day free trial. It's 29 per year. But then what you're thinking is you don't just like you don't just lay back on your laurels at that point. You then actually upsell me here and you say, "Wait a second. I've got a code for you. You got to use it today. If you use it today, it will take you like directly into a paid plan. (10:27) " Whose idea was that? Is that software? Do you have a is there a tool that's powering that or is that uh something that you guys built from scratch? We use a tool called Superwwell for our payw walls and that's actually worked out really great for us. Can you quantify that? This is Super Wall right here, right? So this is all built through Superwall. (10:45) It's a web payw wall viewer that makes it super easy. Yeah. And so you true or false once you install these you saw higher conversions more people paid on the first session. So you have to build the payw walls. Well they have templates and then run the test but 100% our conversion rate is much higher for using Superwall. (11:02) It has allowed us to run so many tests. That's the one thing we don't lack on. We definitely lack on testing features but testing out payw walls. We're we're running so many tests on that. Hundreds. Here's what's crazy. It's very different than B2B SAS. You don't ask for the sign up until all the way at the end, like all the way at the end. (11:18) Uh that was obviously intentional. You got it, man. Yeah. What other things did you eliminate from like traditional onboarding flows so that you could have less friction? That's a good question. Well, early on we had like nothing, but then we saw that adding more questions would increase the conversion rate. Definitely moving the signin screens to the end because there is a lot of drop off there. That was the biggest by far. (11:39) Mhm. Mhm. Okay, that makes tons of sense. Look, we've covered a bunch of stuff so far. We talked about onboarding flows. We talked about pricing. What else is top of mind for you? Anything I should have asked that I haven't asked already? You're asking some pretty good questions. Pretty spot on, I would say. (11:52) All right. All right. Cool. You're doing the whole university thing. You want to spend that time with other folks your age. Like, I totally get that. It's also potentially a great You're going to end up hiring professors, I think, right? You're going to go in there and recruit the head of CS. Yeah. I mean, we'll see. (12:08) you um you though you're not just someone that's sort of I I don't want to say really good at social media here. You also know how to take an acorn piece of content that might go viral on Twitter and translate that into into traditional media, cable appearances, things like that. That doesn't just happen by accident, right? How have you done that? Well, I had this crazy moment on Twitter going viral about my college admissions. I knew it would go viral. (12:32) I'm kind of wired to know when posts will go viral just because I grew up on social media, but I thought that it would get like two or three million views. It got 28 million views and then if you scroll down, the personal statement got 40 million views by itself. And so that garnered so much attention and we actually had a few stations reaching out. (12:54) Early on, it was like one or two, but then as I made appearances, more started reaching out. So, it's definitely a snowball effect here where once you're seen on one, the other stations probably get some FOMO. They see, okay, this guy actually can present well on camera. We should bring him on our show, too. Mhm. (13:09) No, it makes sense. What I appreciate about you is there's a lot of people that are sort of hustling and stuff, and they just say provocative stuff that's just like it hurts somebody else when they say it. You're going viral in ways where you're you're just a genius storyteller. You're not knocking somebody else down while you make the post, right? And so, this is just proof that you can get attention. (13:27) you can build a great media brand around your company uh doing it the right way. And so this is great. I'm excited for you. Excited to see what you do here in college. Um anything else that I'm I want to make sure. So we touched on the early team here. We touched on downloads. We touched on conversion rates. Um all the team's remote, I assume, right? Everyone is remote. (13:44) Maybe we should touch on marketing a little bit. Let's do it. Where what's what's top of mind for you on that right now? So, our biggest way that we've marketed the app, our biggest channel is through influencers on both Tik Tok and Instagram. We have about 250 influencers right now on Retainer that are just posting, integrating us into their content monthly. (14:05) So, this account right now, I I wouldn't actually say this. I'd say go to our Instagram and then go to our real section and you'll see our collab posts with other influencers. How many You mentioned something interesting though. you mentioned. So, so you find let's say I'm an influencer with a big audience. You would reach out to me and say, "Nathan, I'm going to pay you a,000 bucks a month. (14:24) Fix just make two posts per month or walk me through like let's negotiate live how you do with other influencers." And so, we would definitely start by making an offer like that. We would first look at your account is first and foremost. We would look at your metrics, your views, but then not just views because not all views are valued the same. (14:42) We'd look at your engagement and based on all of these small factors, we would come up with what we think is a fair price, the maximum and minimum that we would want to pay you for your for your posts. Mhm. Mhm. Interesting. So, can you share maybe what's the what's the large you don't have to name the influencer if you don't want, but what's the largest influencer like what do they what do you pay them per month? Um and and what's the expectation that they deliver a number of post-wise for that per month? The largest it's in the tens of thousands per month and the (15:14) expectation is four posts. Interesting. And do you give them any guidance on that? You say, "Listen, just be creative. Figure out a way to mention Calai. They are the professionals. They know what goes viral for their audience." So our best our job is to make sure they integrate the product well. (15:30) But in terms of the video concept, we'll leave that up to them. Interesting. And how many influencers are you paying at least a dollar in fixed fees per month? We are betting 250 influencers right now. Wow. Okay. So 250. And so I mean is that just oneonone recruiting or do you use an agency to go find those folks? That's why we've had to build out kind of a I mean you say this is a small team's podcast. (15:53) I feel like we're a big team at this point. Not that big I suppose, but 17 people about half of those are just on the marketing side right now working with these influencers. And and these influencers why not go why not only pay them for when they drive you a customer? Why go why in like a commission structure? Why pay them a flat fee instead? That would be the dream. (16:12) But the reality is that there's too much competition out here with the brands and they want to be guaranteed a payment. And if we're not going to do it, another brand will. Yeah. Yeah. That's super smart. It's limited resources. It's not It's scarce. Totally. Interesting. Can you are you comfort could you quantify like last month how much total you paid out to influencers? Six figures. (16:31) Mid six figures. Mid. Okay. Like four or five00 grand something like that. mid six figures. Yeah. Yeah. Okay. Is that something you're going to like double triple down on assuming you can find enough influencers to pay? So, that's what we've been mainly focused on doubling down on the last 12 months and that's Yeah, we've continued to grow. (16:48) Every month we're signing new influencers. Okay. Very cool. Hey, Zach, I want to be respectful of your time. You want to talk for maybe four or five more minutes on other marketing channels or you want to wrap up? I'd be happy to stay on for a few more minutes. All right. So, we just talked about sort of Tik Tok. (17:01) Sorry, I'm trying to get into Instagram here on my desktop and I don't remember my password so I can't get to it. Is there any other way I could showcase or can you screen share something? I'm actually banned on Instagram at the moment, so I can't um I think I'm being targeted by some other account. Wait, tell me more. I mean, why people are jealous you're growing so quick or what? Maybe I I think there's probably some aspect of jealousy. (17:23) There's also a business aspect to this. people. I I saw someone made a fraud account of me and I'm imagining that they're DMing my followers, probably offering some course or something that's generating them revenue and they're making enough to justify paying to get my account banned. Wild, dude. All Art of War social media edition, right? Crazy. This is wild. (17:47) What kinds of things are there any sort of like ninja things you're doing that I haven't asked about besides the viral stuff? Besides the influencers, you've got the referral code system. You mentioned like rapid product iteration in other interviews. Is there anything you want to touch on there that's sort of not common? Rapid product. (18:05) The main thing that's I think product is it's kind of straightforward when you just talk about rapid product iteration. I mean, it's just about moving fast. And I think that's what most brands, most companies don't do well is moving fast. I think most companies move too slow. And that's actually our number one core value at Cali is speed above everything. (18:26) It's push things out fast, develop it fast, push it out fast, see the test results quickly so that we could get going, get more experiments running, move along very quickly. Something interesting we are focusing on though is hiring. That is the number one priority right now is hiring, but not just hiring anyone, specialized talent. (18:46) So my goal right now for the company is let's bring someone on whose only job is just payw wall experiments all day. He's just thinking about how can I increase the conversion rate. Another guy his only job is making the food scanner more accurate. Another guy whose only job is the homepage. (19:01) That kind of thing is what we're focused on right now. Really interesting. Super super sort of project specific. Are you using any of these sort of like gum loops or these MCP agentic interfaces to like like automatically run any of these viral loops or is it all it's all humans right now? Right now all humans. I mean definitely some of the developers are using cursor. Okay. Yeah. (19:18) And then I guess we should touch on retention here, right? So you do really good job at driving people into annual plans. You really don't even act. It's crazy. You've done so much revenue. You don't even really have a year under the belt yet. But how are you thinking about a user going into their second year and the the activation rate, the renewal rate? That's something that we're starting to focus on now a lot. (19:36) We don't have the data yet because we just came around our year anniversary since launch. However, we expect that it's going to be between 25 to 50% renew, which is very broad, but that's the window we expect it to be in. Very cool, man. Well, hey, listen, as we wrap up, is there anyone else you just really respect that we should get some love to that are the Tiny Teams, Giant Revenue, Young and Hustling? I'll think about that and I'll send you some people. All right, guys. (20:01) There we have it. Zach at Calai doing over 30,000 downloads per day. Over 10 million of revenue collected so far in 2025 on track for 30 million. He says, "You know what? I'm making a lot of money. I'm still going to go to school. I'm still gonna go have fun. He's focused on hiring, viral loops, and a lot of pricing payw wall updates. (20:16) Zach, thanks for taking us to the top, man.