ChoreRelief Revenue, Valuation & Funding (2021)

hey folks my guest today is turik kurbesh he's building a tool called chore relief.com a marketplace and operation software for home services tariq are you ready to take us to the top yes sir let's do it all right so we've spoken a couple times but last we spoke i think was back in august or july of last year you were just really getting going you had about 200 customers i think 30 000 bucks in mrr help me understand uh help folks that miss an interview understand what are people paying you for well well two things now we're not just a marketplace alone we also offer service management tool for contractors so when we make money uh customers pays us to out to connect them with local contractors based on their time and availability so we take a transaction card from there but also now small businesses are paying us for a subscription-based model anywhere from 59 mid tier 119 249 depends on the size of the team that they have and it depends on how many freebies would they get from us but as sometimes as they increase their subscription they lower down their commission so when you say customers pay to connect with local contractors those customers are all smbs uh no there's some of them uh originally we started with individual homeowners don't switch into landlords and now we're in a process to experiment with small to mid-sized property management as well as a restaurant retail stores okay but the majority of your customers say are homeowners and landlords uh from the consumer side yes but the service providers are smbs okay i don't understand that when you say local you're saying pay to connect with local contractors those local contractors are the smbs yeah i see and those local contractors are paying you 59 to 250 per month to get access to those homeowners and landlords sure i mean there's always the free tier for them if they want to pay high subscription high a commission fee from the lead that we send over their way but if they're looking to create their own invoices their own dispatch and have all the tools and management they deal to run the day-to-day operations without breaking the bank uh we build this tool that bring in the quickbook integrations in place like you don't need to have a quickbook you can use the same app to create your own invoices to track your time in to make sure even do your payrolls also the same tool allow you to create a customized unique invoices to your business need with the customers you can collect signature for approval for quotes and you also have a team management tool that allows you to create some sort of collaborations if more than one of your team members is working a specific project and who are some of these smbs that the homeowners and the lords want to use your platform to connect with are they painters contractors landscapers yeah yeah so as you can see from the t-shirt when we brand new process now we can switch it to all better because what we built it's not necessarily just curated for the home service category it's created for the gig economy in general but yes we're sticking to the home service category from plumbers electricians handymans movers snow removals but we plan to add in some other verticals uh as we expand well and why is that i mean why not go deep on just the categories you're focused on versus trying to go wide and do everything no we're not doing this like right away but you know what the system we built it works pretty much for it creates some sort of a flexibility for the end users at the end of the day you know the the covet 19 has accelerated the growth of gig economy people that used to do this as a side hustle now it becomes their main hustle and we just want to create a sort of foundation infrastructure for the people that are coming into the gig economy which by the way growing three times faster than the u.s workforce to have the sort of tools that are affordable and also have resources that allow them to connect with consumers in the area at the end of and how many painters landscapers snow removal folks are paying you per month the 60 to 250 per month so since we launched we launched this but last month we've already closed to so the free package came in we had about 9 1 400 people that sign up within the first month for the free uh package for the trial and now we have about a forty percent conversion rate that are popped in into the paid uh subscription so 400 are now paying yeah and the minimum they're paying is 60 bucks per month 60 bucks per month that's assuming it's one solo entrepreneur got it so that product that launched about a month ago went from nothing to 60 dollars a month times 400 about 24 000 a month in mrr something like that yeah and then we're planning on adding the annual subscription model so we can discount the actual monthly so we can have even a long uh sales ticket and when you add back on the homeowner and landlord side who pay to connect with all these uh local contractors how much mrs coming from the homeowners and landlords oh would that vary we've had anywhere from like you know it could be 10 000 it could be 35 000 depends on the actual time but we're we're right now we're wrapping up all of our refor resources and marketings to focus more on bringing those type of customers because what we notice is this the more job we send to these contractors in a regular basis the more incentives they see for them to upgrade to the paid subscription model because now you can you know any jobs that we send you rather than pay me 20 you pay me 10 so that's an incentive right there and uh so as as we ramp up our pr strategy and marketing effort which we're actually putting together as we also going through the rebranding process uh we're planning on hopefully getting somewhere around 20 on average somewhere between 25 and 35 a month so so last month all your revenue from both as the marketplace combined how much did you do last month in top line revenue i don't have the numbers in front of my head but it's somewhere around the mid 30s 30s okay and that's about the same as where you were last time you came on so why the flat growth well you know the covet has kind of shifted the uh the economy a little bit more um but we're also didn't have too much of resources in the team we're just hiring some more members in our marketing team so we can shift the focus on getting into the custom the contractors we're heavily focused on building these sas platforms and that itself takes so much time and so many resources from our end yeah and i understand that how do you bootstrap or did you raise still still bootstrapping but we're getting a lot of interest from uh from outside investors what kind of interest well uh you know the raise we were looking for that initially now we had to map you know raise up a little bit the uh minimum ticket entry we've given a lot of interest from um follow-up interest from uh lightspeed venture um uh softbank and some other uh sequoia that they're looking for like you know not to be part of the seed round which because we're like we're looking at it's about a 1.78 million dollars to get us to where we need to be but we already have those discussions with them line up so as you know once you raise the c seed round you know you could always go back and raise the series a within a short amount of time so you're looking to raise 1.8 million right now seven eight yeah at what valuation uh at a well that's that's going to be convertible note what cap uh nine nine million okay at a nine cap and so so do you think you'll i mean do you think you'll be able to drive a process there and get that valuation i mean it's a significant multiple on your current four hundred thousand bucks an ar uh well you see the idea when people are buying into the space they're not necessarily buying what the actual return on revenue they're looking for longevity and how is this business is can stack up in the future so take a look at example a sas model just for the home service category loan there's a company called service titans already at eight point three seven five billion purely so yeah yeah yeah i know those com streaks but people are gonna look at your growth rate and say you're flat they don't they're not they're gonna lose your ability to execute so how do you convince them that you can execute a rapper i don't know what you come up with but we're not flat like so last year we did the 367 000 this year we're almost on track of doubling the user growth has already increased this year by great hold on hold on so i might ignore user growth look at revenue for a second i just want to make sure i didn't mistake you because i want to get this accurate you told me a year ago you were doing about 30 000 a month in revenue or about 400 000 in total revenue last month you just told me last month you did about mid 30s in revenue so 30 000 a month is the same run rate are we talking about the marketplace we're talking about the sas or all together no the question i asked you was on the marketplace side on both sides how much revenue did you do last month and you said mid 30s so the marketplace that's just the leads that we get that's not including the subscription base that we charge for the contractors to be part of the ecosystem that's what i was asking so on both sides of the marketplace on the boat side like roughly around 50 to 60 000. i don't have the exact number in front of me i see consumers like you're trying to compare last year to this year so we grow in the marketplace the legion service uh the operation software that's just brand new just recently launched 45 days ago and that itself is already generating converting and paid like from three tiers to eight years yes that growth is that growth has been impressive what i was articulating when i said full marketplace revenue is you've got homeowners and landlords paying you as a percentage gmv going to the platform and then you've got snow removal folks landscapers painters paying you on the flip side and they're also now paying you for subscription tools to do things like invoicing and what you're saying is that new sas tool is growing really fast and you back that up yes i mean we're bridging the gap between like we want to make this affordable and simple for small businesses mom and pop shops you know they don't have any resources to find clients we bring your clients we give you a resource to work and grow your business so why do you need to raise capital i mean dude 1.78 on a nine cap i mean you're selling what is that 10 15 of the business yeah but it's still i mean having that you know that we want to hire some more teammates sorry it's hard to do all the things and wear too many hats yourself like i'm trying to bring in teams so we can actually grow in how many are on the team today i didn't even know uh six so far six full-time and there's four that are contractors that we work with on just the social media aspect how many engineers are full-time uh four four are they local or you outsource them outsource so how did you find out the entire firm overseas so this is my business that i put together overseas yeah i've worked with them in the past yeah i worked with these guys in the past in the previous project previous companies that i started is it a marketplace though like cody toss or top towel or they're just individual developers you found randomly on linkedin so these are different developers that work within the course of the last seven years and then i finally put them all together and i set up whatever you're making i'll give you 20 increase you work for me the whole time i'll pay you six months in advance yeah that's great together yeah it's a lot of channel and more affordable of course yeah so cap table today is you've raised no capital so do you own 100 of business i have 95 where's the other uh cmo paul mcfellen very cool that's exciting are you guys leveraging any paid spend stuff these days or no you're about to ramp up yeah we are but here's the thing like also another thing we start leveraging is a pr and just since i got into the pr already got like seven different outlet channels seven cities that already feature our story so i think that's what we shift in more focus to build credibility total the brand awareness and then perhaps we can take those stories and then craft them up into good paid ad and run that into facebook to get even more credibility from the people that did not see those uh segments do you track how much rev like how much project volume homeowners and landlords pay contract off your platform do you track that gmv every month uh we do sometimes a lot of time what happened is we've seen this so we're we're still trying to figure out what's stopping so many of these homeowners even though they're getting bits but they're not responding back to the contractors or they're canceling a job for no reason so we're trying to figure out what that is and that's what some of the things me and paul are currently working on just trying to get some extract some feedback from the users be like okay we sent you four different bits why didn't you decide to hire anyone what stopped you from making that decision so that's the part that we really heavily now focus on is the consumer side all right let's wrap up here with the famous five number one favorite book uh zero to one peter thiel number two is there a ceo you're following or studying um there's a combination actually um one is obviously the elon musk innovations that this guy is just looking for 10 years ahead of it anyone else and the second person is elon musk is fine if the second one isn't obvious number three what's your favorite online tool for building the business uh my preferred tool that i use even though my sounds like soap archaic and everything it's still like it i like skype just so i can keep that interaction with my team on real time number four how many hours of sleep to get every night depends sometimes three sometimes i just sleep four hours and every two nights how much did you get over the past 24 hours uh last night i had six hours sleep and what's your situation married single kids oh still married any kids not yet all right and how old are you um i just turned 41. 41. happy birthday last question something you wishing you when you were 20 oh man that's easy one just take all my saving and put in bitcoin guys there you have it chore relief helping homeowners and landlords connect with local contractors they need whether that's a painter snow removal or anything else they're going to be expanding markets here shortly they just launched their sas tool which helps these local contractors do things like invoicing charging 60 to 250 dollars per month on that they went from nothing to about 20 000 bucks an mrr and that very quickly over a thousand on the free trial 40 converted paid that plus their other side of the marketplace revenue equals about 60 000 a month in revenue right now which is double where they were about a year ago he's looking to hope to take this growth and go out and do an equity round looking to raise 1.78 million on a 9 million cap we'll see what happens tariq thanks for taking us to the top thanks man thanks for having me nate one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas 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 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m 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 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