Checkd Revenue & Valuation (2020)

just got done editing this interview you guys are gonna love it before i do that though i want you to know that i'm going to be in the comments for the next 30 minutes or so answering your questions if there's additional questions you want me to ask the ceo next time i interview them leave them below or if you're just loving the data points i get ceos to share click the thumbs up button below that's your way of telling me you're loving this stuff and i'll get you more of it additionally again i'll be in the comments answering any questions you have all right for 30 minutes enjoy the interview hello everyone my guest today is tom eric von crock-martinson he is building a tool called checked it which helps simplify communication and construction projects all right tomorrow are you ready to take us to the top i am go ahead so unique space you're selling directly to who at the construction company uh we're going to the main constructors and the subcontractors and also a lot of the property builders themselves okay makes sense now when you last came on you told me you were working with about a hundred customers at that point and that was back about a year and four months ago how many customers are you working with today yeah so we have 150 clients right now uh on a monthly basis subscriptions and have you changed your pricing or do they still pay on average about 500 bucks a month no that's that's uh that's the same that's uh i i like what we saw last time was that the average revenue per customers was 500 now it's 520 so it's going up a little bit but it's still the same price model that we're using yeah sure so you're doing what is that about 78 000 a month right now in revenue 84k a month uh is our mrr right now very good 84 000 per month and remind everyone have you done this bootstrapped or have you raised capital no uh it is uh it is uh friends and family uh so no vcs or anything like that but we have some uh like uh private investors some angels that are in and how much have you raised so what we said that last time is that we have raised 1 million dollars and that's still the same if we look at what we have raised outside like but from friends and family but what i've also been looking at is that we have been putting all the money that we have been earning uh back into the company so actually like it's 3.2 million that is actually gone into the company because they're from reinvesting profits yes absolutely yeah yeah uh that's good and are you guys burning capital today are you rate or are you profitable no we are we are burning so yeah we are still burning about how much are you burning per month uh so that's uh about 200 000 norwegian crowners so you can divide that by eight so uh yeah so uh approximately 20 000k is uh about 25 000 us dollars per month yeah that's that's great yeah that's good now you know everyone right now is looking at their burn because of the crisis going on with the virus right so how much cash do you have in the bank right now uh so we have a cash reserve uh with uh with the bank so uh we have uh quite a few months uh left uh to live and we have a bridge fan uh final financial round uh going on with the investors that we have on board but the big problem is if the clients that we have on subscriptions stop paying because they don't have money so that is where the uncertainty is but otherwise we are financed until we are going break even but the crisis right now of course can be changing thing so what does that mean though in terms of cash in the bank you have like two three four hundred thousand cash in the bank something like that uh yeah we have about 300 we have about 300k so 300 000 uh dollars uh as a cash reserve uh in the bank yeah yeah so your total expenses every month is your revenue plus your burn so 84 plus 25. so you have about 112 and total monthly assuming you do no revenue you spend 112 grand per month so if all your customers cancelled tomorrow you have essentially three months of of runway hopefully that doesn't happen um how so how are you managing that i mean have you gotten people emailing you already saying hey i have to cancel are you seeing a churn spike no uh not yet we haven't we haven't seen that actually we we have signed clients uh after uh after the crisis started even yesterday a new client signed up so we actually have a tool that can help them in the crisis because they're not allowed to meet in big rooms they're not allowed to do construction meetings they're not allowed to do group inspections on site together so what we allow them to do is actually use our tool to do the inspections and then delegate the tasks and follow up without actually meeting face to face so you can you can actually run and control your uh project without being face to face interesting very interesting and how many of you are on the team today we are 11 11 people now that's great how many engineers uh so there are four developers and uh two on customer success who are also like doing development when it comes to onboarding tools and and and and automatic uh automating the processes within uh the system so so it's for developers and and for uh and two uh customer success developers how many quarter carrying reps of any say again how many sales reps do you have with quota uh we have two sales reps and one marketing person so the marketing person has also been doing 50 sales but now is 100 marketing so it's two sales and one marketing and you told me last time that you had about 36 percent annual revenue churn is that accurate on a gross basis um i i i don't we don't calculate it so our churn uh at in december was 1.75 as an average six month churn so so man so 1.75 times 12 is 21 annually yeah that's correct that's what we had in december yeah i see now that's your gross revenue churn when you add back upsells and expansion do they make up for that lost revenue uh yeah yes of course we we are not we we're not we're not we don't have a positive uh churn rate that that we don't so but uh as as i'm saying we are growing but the churn is bigger than uh than the added uh upsell per existing clients all right do you mean to say that your upsell from existing clients is more than what you're losing no no that's that's that's that we are our upsell is less unexisting customers is less than the churn okay got it that means that you you have positive net churn then not negative correct meaning net negative revenue return would mean your upsells are more than lost revenue positive net churn revenue churn would mean that your expansion does not cover the gap from turned revenue no that's true so so our expansion from existing customers does not cover the revenue churn i see so that's from that that cover is covered by the new clients yeah which is more than the chair of course i see yeah yeah yeah but obviously when you're looking at churn you don't look at new customer ads but as a business as a business for growth obviously that is important so okay that makes sense and are you still getting customers by spending about three grand to acquire them no it's a bit more so it's about uh for a bit over 4k per uh as a customer acquisition where are you spending that money uh we are mainly spending it on facebook uh and uh also a little bit on google uh ads so everything all the meetings that we're having now all the clients that we are meeting they are coming to us uh through our either facebook ads or google searches so that means that they are qualifying themselves answering some questions what they would like what they need from us etc so when we meet them they have already qualified themselves so we don't have to like tell them that this is smart to do because they already see that they have a problem yep uh interesting uh are you uh are you making any cuts to your business to try and extend a runaway to get through you know this crisis no one knows how long it's going to last obviously it'll end at some point but no one knows when now the norwegian government has come out with a so it's a 10 billion dollar rescue package uh so that means that we can send home all our people and they will get full paid from the norwegian government for 20 days so that means that we could send everyone home but since our clients are there the business is up running we we don't have any need for sending people home because there is a lot of work to do obviously so we are hoping they are changing parts of that package to actually giving like a 50 uh salary uh um commitment uh contribution instead of uh just giving everything to the people who send everyone home yep yep that's good that's a good program all right let's wrap up here with your famous five uh number one favorite business book yeah it's uh it it's measured what matters it used to be scaling lean but now we are working with okrs so i really see that measure matters is a great book number two is there a ceo you're following or studying uh yeah uh i i really love what elon musk is is doing he's a quite eccentric and trick but but still if you if you want to solve huge problems you need to be bald and nobody's more bald than that guy number three what's your favorite online tool for building your company yeah it's uh we're still using hubspot a lot so that's good but i also see that google hangouts has been great for us now in these quarantine times because doing web meetings really solves a lot for us now number four how many hours i sleep to get every night i still get seven about about seven hours to sleep maybe even eight something and 47 48 how old are you yeah i'm 47. and situation still married with two kiddos absolutely all right take us home what do you wish your 20 year old self knew it's it's still what i said the last time it's build your team early don't try to do things alone get in uh co-founders and and have a team from the start that's what i would do if i did it again guys checked it selling to construction teams they've got 300 cash in the bank their net burn is 25 000 per month so they've got some runway to get through this crisis the question is will they start getting mass cancellations from construction companies of which 150 pay them right now about 550 bucks per month they have 82 000 or about 84 000 a month right now in revenue they're pivoting their product to try and work in a virtual scenario as well to continue adding value to their customers as a backup the norwegian government obviously has a 10 billion dollar bailout plan he could tap if he needs it but tom eric i think you're going to get through this just fine thank you for taking us to the top helping out thank you nathan and have a nice day these ceos rarely give these kinds of interviews i hit them hard i get the data and i want to do it more so if you want to get more of this stuff make sure you subscribe up here and then additionally go check out one of my other ceo interviews right now