Campus Tree Revenue (2024)

[00:00] Hey guys, recording this here on what is it? Friday the nineteenth. Maybe you're seeing this on Monday at the latest, but wanna let you know we are almost sold out for Foundercomp Sorry, Founder500 in Austin, Texas here in about a week. It's gonna be an amazing event. 500 B2B SaaS founders. I'm looking at the attendee list. There's almost 60 founders with more than $67,000,000 in ARR. It's an incredible group of group. There's over one and fifty [00:27] with more than 1,000,000, more than a million revenue. It's an incredible group. You don't wanna miss it. Grab your hotel, grab your flight, grab a ticket right now. I'll put the link in the bio, in the description here on YouTube. And I think there's only about three tickets left. Okay, about three tickets left. I'd love to see you guys there. Don't be bashful. Grab your ticket now. Hey, folks. My guest today is Justin Arenson. He graduated [00:48] college with a BS in business, double minor in economics and computer science. Rowed crew all four years, so he's competitive as hell, guess. Varsity captain for two. Felt a strong passion in college to help make universities a more connected network focused place for students. And so he decided to build campustree, which is what he's focused on today. Justin, you ready to take us to the top? [01:05] >> Let's do it. [01:07] Alright. So first off, who are you selling? Are you selling to students or selling to the universities? [01:11] >> The sales to universities, the students are the end user. [01:15] Okay. So how does the call first off selling to school, this I feel like the sales cycles, it's just a pain in the butt. And then secondly, even once you sell to the school, the school has to convince students to use the software, which is another like big friction point. How do get through both those, those two friction points? [01:29] >> Yeah, great point. So the platform, the key success of this platform comes down to students wanting to use it, right? If students aren't, this is a student engagement platform. It's meant to help increase retention rates for universities by having students be more connected and involved in such. And so if a student isn't getting that out of the app, then that's the most fundamental point that we feel that. So, so what we do first is to make [01:59] >> sure that the platform itself really connects with students. And once we have that as success, it's much easier than to show universities that, Hey, this is something that students really want and can really, get benefit from. And that can help with that process. [02:11] In that regard, the B2B analogy is sort of you're going bottoms up here. So explain to me how you get college students excited about the product. [02:19] >> You talk to a lot of people. So show a lot of friends, you know, outreach as much as possible and just get as much. [02:25] But Justin, what does the tool my audience doesn't know what the tool does. What are you selling? What are you trying to get college students to use? [02:31] >> Sure. So the way to think about it is right now, if a student is going to college, we're not talking by the way, about Harvard, Yale, the top Ivy League, we're talking about most schools in the country, a lot of small and mid sized schools, a lot of state schools. And for those schools, they don't have the same resources as the top of the line universities. And, for them, for their students, administrators are amazing and do [02:56] >> great work, but a lot of times they're constrained with the existing technologies that they have to engage their students, make sure they're having a good college experience. And so what we're trying to do is kind of replace the cold email outreach and the mass text messaging with a more collaborative peer to peer network of [03:16] >> engagement where students can share information with each other and that sort of thing. [03:20] I mean, I feel like I had tools like this when I was studying at Virginia Tech. You know, they would try to get us to use this thing called like, I think Scholar or Scholastic or something like that. And they, you know, say, they'd say message other people in your major and set up a resume. And then look, Facebook came along because it connected founding, you students on college campuses like early on. So like, how do [03:39] you build a it just feels like a very difficult thing to go after. How do you build a wedge here? [03:43] >> Yeah. So what it really came down to for us is the design. All of what we know for the market is it's very, what we call administratively centered. The engagement comes from the administrators to the students. And so all of the infrastructure and the look and feel is really meant to help make it easier for an administrator. But we kind of flip the script. What us, it's more we what we found is students are best engaged [04:10] >> by other students. It doesn't really matter who you are, how well you think you understand a student, but another student is much easier, is much more capable of convincing their friends to go to events than other people. And so the design itself is very student focused, very student friendly. And, and because of that, it results in much more, we're expecting much more engagement and much more, you know, communication and activity on that sort of a system. [04:39] 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 [05:02] 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 [05:27] 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 [05:49] 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 [06:14] 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 [06:36] 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 dot com forward slash products forward slash 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 [07:01] see you there. Alright. Let's jump back into the interview. I think the risk here in this interview is we're still talking like super high level. So I'm gonna try and ask a question that allows you to get really detailed. You're on a rowing team with 20 people. Right? Campus tree comes along, right? You are selling to your own self on the rowing team. How do you land the first unit to land an expander? How do you [07:20] land the first person on the rowing team so that then that one person convinces everyone else to come to the rowing after party four days from now using the campus tree app? [07:28] >> Sure. Yeah. That's a great avenue for this. So, a good way to think about it is that clubs in general rowing teams, a good example of this. When it's the beginning of the school year and they're trying to recruit new students, usually what happens is there's this huge, exciting club fair where all the hundreds of clubs come and all the new students come and you kind of hope that the right people walk by each other and [07:52] >> that you remember your school email address that you just got last month. And there's a lot of touch points subsequent to that where the engagement can fall off. You got to remember to come to the first events, the first intro, that sort of thing. With this sort of platform, what we're doing is we're getting these students who from the beginning in the summer before they're coming to college, tell us what their interests are. We can connect [08:14] >> them with these clubs so that those clubs now at the beginning of the school year, they now have a hot list of leads of students that are actively interested in the event they can connect with more closely rather than, you know, a broader thing that I still think is a great and a fun time to do with the club fair, but isn't as effective. At, at actually getting that engagement to. [08:33] So you reach out before the new freshmen come on campus the first time? [08:38] >> Yep. Yeah. Summer before. So [08:40] then how do so, okay. So now let's different role play here. I'm a senior. I just graduated. It's like May. I'm going off to college next year. How do you know that I was accepted to some school? How do you get my email and how do you know to contact me ahead of time? [08:54] >> Yeah. So we come in once the students are accepted into the platform. So there's lots of other expansions outside of this, but it's pretty simple. Really our focus is on, especially for the first couple of years of students, once they're a student with preventing them from dropping out by increasing their engagement. So, so once you're in, you've accepted that you're going to the school, you're putting your deposit down, part of your onboarding process with that school [09:20] >> is sign up for the platform. [09:22] Know, that's assigned to the school though. You told me that you go bottoms up. You convince the student to use it first and the student sells it to the university, but what you just described as a university making this required download during the orientation process. [09:34] >> Yeah. So the university is the one who's distributing the platform. Right. But what I meant to that initially is that it's the student focus that is really driving the success of this. Right. The design and all of the relating things are meant to be a place for students to go to. Not as administratively centered. [09:53] Yeah. I see. I see. Okay. And the website's not live yet. So I assume you guys are still building, you're pre revenue. [09:58] >> We're pre revenue. We've got an MVP, but we're redid, but we're redeveloping with the funding off of a, a new design paradigm that we found to be a lot more effective. [10:08] So obviously new school year is coming up here shortly. Are you running active beta tests right now with new students coming in as freshmen? [10:15] >> So I can't speak on that right now with the new students, but I'll say, mean, we're in exciting conversations with universities about rolling out this platform later on. [10:26] When did you write the first line of code for the platform? Are you and your team? [10:30] >> Yeah. So this it's we pivoted a lot. This platform started off as a college roommate matching service. [10:38] What year? [10:38] >> Back when I about three years ago now. That was the first version. And from there, I knew that the root problem was you know, college engagement and connection. But it was really finding about what is the right solution for this. And so over, you know, a series of a ton of pivots, we ended up to where we are now. [10:57] How many people drop out per, you know, students per capita in The US? [11:01] >> So in your so the freshman class, if you're a first time student, about twenty six percent will leave nationally on average, just in that first year. [11:10] That high, really? [11:12] >> Yeah. And over a six year period, measured over six rather than four because some students are delayed and such with graduating. Over forty percent of those students won't graduate, which is a lot of lost revenue from tuition fees, housing, food. All of those things are millions of dollars of lost revenue that we're trying to bring back in through these retention rates. [11:33] Well, if you're in your fourth year and you can't graduate because you haven't completed something, that means you have to pay for college for another semester, which increases revenue for the college. Why would that decrease revenue if they didn't graduate? [11:44] >> There's a couple reasons. One of one of the primary reasons is retention is a pretty big focus of colleges for their standing, right? A college just seem to be more attractive if they're able to get students out in a shorter time period, which boosts their rating for more students and more qualified students wanting to come in. [12:05] >> That's that's one of the primary reasons for that. [12:07] But I mean, if if every college had their way, they would keep students paying fees as long as they possibly could with new programs, MBA programs. I mean, whatever they could get it. Right? They don't want people leaving campus at all. So I guess how how do you think about that? [12:23] >> Yeah. You know, it's an interesting point. I personally don't have much to comment on with the university side on that. But I do know from the student side of the platform that of course their priority is to save as much money as possible. And so for them, there's the, you know, the opposite force of students wanting to graduate earlier. So, yeah, I don't really know. I don't have much else to say on that. [12:47] How are you, you know, a startup founder, you know, you got to figure out how to like make ends meet while you're like trying to get your startup off the ground. You've doing this now for three years, you're still pre revenue. I mean, how are you doing consulting on the side? I mean, how are you funding like basic human needs? [13:00] >> Yeah. So So when we started three years ago, that first year and a half, I would say was a lot of formulating. We weren't spending much money. And it was just me really at the time with a couple of friends I was working on at the beginning and there was very minimal expenses. When I was getting closer to graduating, that's when, we really started to step the ball up. And so far it's all been, I've personally [13:26] >> been funding it. It's all coming out of my pocket at this point. [13:28] Do you own a 100% of the business then? [13:30] >> I own 95%. We've got some, we've got advisors that are coming in, and we've got a team of, of some great people that are also working for us. [13:40] Well, I like that you're betting on yourself holding 95% instead of giving away, you know, 80% to someone else to like try and help you out. I love that. That's bullish. [13:47] >> Thank you. Yeah. We're going to be having to, to raise money. But, so it won't be 95% then, but hoping to maintain as much as possible, of course. [13:58] Well, you mentioned the catalyst, you said earlier, because you mentioned you're redoing the designer, some of a design paradigm or something that you found. And you said you used the words using funding. So did you already raise like a very small angel round or something? [14:11] >> No, we haven't raised yet. By that I meant that the funding round that we'll be doing, a large part of that is going towards bringing on a development team. [14:21] I see. I see. How do you, I mean, now, obviously markets are compressed, right? How do you, I mean, and you're pre revenue, right? So it's really tricky. I mean, how do you tell a story that allows you to attract capital in a market like today? [14:32] >> It really comes down to the problem being so severe for a lot of these schools. You know, I can't give any specific names of universities right now, but, there are multiple schools that are in deficit, or, or, you know, just losing millions of dollars. [14:49] Let's agree on that though, Justin. Let's agree. Let's agree. Let's say the whole world agrees on that. Colleges like are in deficit and there's a major problem. Let's agree. The second part of the story though is, is founder product fit. So like, why are you the guy that's going to like win this space and go get 30 universities in the first three months on your platform? [15:07] >> We've recognized the right approach for this, right? It's one of those things where the market is currently the comp the competition is based off of that older administrative model that I mentioned, where the outreach is coming from the administrators to the students. We found that like through all of our research and, and, and so forth, the right approach is really to go through the students for the student engagement. And so coming I'm I was a student, [15:33] >> right. I was, I was pretty involved myself. And so I experienced firsthand, you know, a lot of these problems that, with some friends or people that I knew who weren't engaged that can result in dropouts and so forth. The other big piece I would mention too about the product that's a huge sell on the investment side is data that we're collecting. [15:57] >> Because of our approach to student engagement, we're able to get a lot more granular with [16:04] >> what we can understand about student activity and what's driving increased engagement, what's not working, so forth. And so far on the market, we're the only people who are able to do this. I can't talk too much about that in this space right now, but that's a huge sell for universities. But like how [16:21] do you know that? I mean, you just said earlier, like you're talking to colleges about using it in the future. You're talking in the future tense. So like, I mean, you say you've like shown improving and do this, but like, you you haven't been able to say like, we're already live at 10 colleges and they've signed up 5,000 students, which is fine, by way. That's not a hit. Just saying like, you can't say that you've proven [16:39] it, but then you but don't have anything live yet. You know what I mean? [16:42] >> So, yeah, here's here's kind of the way I would think about it. If you're a university right now, usually the information you're able to collect are basics due to demographics. Right? [16:54] >> And sometimes you can get head counts of students going to events. Because our platform is really ingrained into the student's activity. We're knowing what type of students are going to what type of events. And because we know just across different demographics, how effective things are and changes over time, we're able to provide a new layer of information that if you're using the old design paradigm, you can't collect it. So it's it's coming fundamentally from the difference [17:27] >> in approach. [17:28] All right. We're rooting for you, man. Wrap up here. Quick famous five. Number one favorite book. [17:34] >> I'd say, Extreme Ownership, Jocko Willink. [17:37] Number two, is there a CEO you're following or studying? [17:40] >> I've been looking at you recently. Congrats on the, raise, by the way. [17:43] Thanks, man. Zero equity to raise $135,000,000 in debt. Just wanna point that out. I hate dilution. Number no. There's other deal terms, but yeah. No. I appreciate that. [17:53] Number two, is there a CEO sorry. [17:55] Number three, what's your favorite online tool for building campus tree? [18:00] >> Trello. Simple. [18:02] That's a good one. [18:03] Number four, how many hours of sleep do get every night? [18:06] >> Probably average around six and a half, seven. [18:09] Okay. Good stuff. And situation why? You're you're I think you just graduated. This is probably easy one for you, married, single, kids? [18:15] >> Significant other. [18:16] Okay. Significant. No kids, though? [18:18] >> No kids. No. [18:19] Alright. And how old are you? [18:21] >> 22. [18:22] 22. Last question. [18:23] Something you wish you knew two years ago when you were 20. [18:27] >> Don't be afraid to pivot and, talk to customers early. [18:31] Alright, guys. There you have it. Campustree.live, hoping to help students get a better college experience, which in turns helps the college with retention. It's a major problem. Twenty six percent of freshmen don't graduate. He wants to solve this. Just came out of college, understands the problem. We'll see what happens. Justin, thanks for taking us to the top. [18:46] >> Thanks so much. Have a good one. [18:50] 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 live. It is fun to watch every Thursday 1PM [19:15] Central. Additionally, remember these recorded Founder interviews go live. We release them here on YouTube every day at 2PM Central. To 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 [19:37] fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you want to 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 [19:59] up for 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 and 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, I do it so that we can all learn. We have to counter those people. We [20:18] got to 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.