How CoachMePlus Reached Over $1.6M ARR Serving Pro Sports Teams and Gyms (Interview with Co-Founder and President Kevin Dawidowicz)

Introduction and Company Overview

Nathan Latka

00:00Hello everyone, my guest today is Kevin Dawidowicz. He is the founder and president of a company called CoachMePlus, built around a simple idea, helping coaches and athletes work together to achieve their fitness related goals. They serve a range of fitness professionals from personal trainers to gym owner to professional sports coaches and military human performance specialists. Kevin, you ready to take us to the top?

Kevin Dawidowicz

00:20>> Yeah, let's get going.

SaaS Model and Product Evolution

Nathan Latka

00:21All right, if folks wanna follow along, it's coachmeplus.com. Now would you consider this a software as a service tool?

Kevin Dawidowicz

00:26>> It is. And the way we started was more of an enterprise service. But over the past year and a half, we've moved into a, you know, a set of packages that are available to basically any kind of gym owner that might be interested in getting the same type of service that the professional sports teams have used at a much reduced cost and a smaller package that's served as a typical software as a service model.

Who Pays: Enterprise vs Gym Customers

Nathan Latka

00:51And who's paying you? The sports league, like the New York football team Giants or is it the actual individual athletes?

Kevin Dawidowicz

00:57>> It's actually it's funny you mentioned the New York football Giants. Yeah, they were a customer of ours for a couple of years, but they are the customer on the enterprise level. On the, gym level, it's the personal trainer or the gym, owner that's, that's the customer, and we try to serve their needs. Right? Like, the main goal is really to connect the athlete and the trainer so that they can achieve their fitness goals. There's no relationship

01:21>> that's more successful than that. So when those two join together to go after the same goal, we see much greater success than an app or a trainer alone.

Customer Count Breakdown

Nathan Latka

01:32And so how many customers do have on your platform, customer defined as the gym owner or the New York Giants?

Kevin Dawidowicz

01:39>> So we've been around for a couple of years and the enterprise customers, we've worked with about 200 in total. On the on the gym side, we're under no. We're a little bit over a 100 right now. We just launched our gym products, reshaped by the COVID, you know, pandemic that's kinda hit the globe. So, you know, we've we've just begun to hit the ground running on that side.

Nathan Latka

02:03And break so break it down. We have 200 enterprise accounts. These are people like bigger sports organizations, then a 100 gyms. You split them out?

Kevin Dawidowicz

02:11>> Yeah. Absolutely. So you've got, you know, the military's a large customer of ours. We would include that in that higher end stack. The gyms and so on, like I said, you know, watching the pandemic kind of wipe around the globe, it really accelerated the need for remote fitness. A lot of gym owners had to shut their doors, and for them to do that, they needed a way to maintain their revenue and maintain their connections with their

02:36>> clients, and that's been the big push from our, you know, our smaller package product over the past couple of months here.

Nathan Latka

02:45And so what is the average customer paying you per month?

Kevin Dawidowicz

02:47>> So for the gym owners, it's about $1,400 a year. So you're looking somewhere around $100 a month or so, which, you know, the return on value on that is is pretty substantial. Right? Like, if you can maintain your fitness clients, you know, through using the application, the return on value is actually pretty pretty significant.

Nathan Latka

03:07And so 300 customers paying a $100 a month, you're doing, like, $30,000 a month right now in revenue, something like that?

Kevin Dawidowicz

03:12>> No. No. No. So on the on the pro side, mean, the average customer size on the professional sports side, enterprise customer is anywhere between 30 and $40,000 a year.

Nathan Latka

03:21Oh, got it. Okay. So so much, much larger business then. Got it. Did you always start that way? Or, like, are you moving upstream today or are you moving downstream?

Kevin Dawidowicz

03:28>> We're actually moving downstream. Know, there there there's a certain ceiling as to how many pro pro teams and pro clients you can have. There's only a 122 pro sports in North America, you know, US military and so on. And while those are great customers to serve, you kind of reach that endpoint. So you have to begin to think like, where do you want to take your business from there? Is it going to be more into enterprise

03:48>> level sales and getting into things like corporate wellness, you know, large insurance customers and so on, which can be a very long and detailed sales cycle. And while the platform serves that customer base, the long tail of the business is really going to be in the, you know, in the smaller gyms and and and high schools and and smaller market. You know, they're much broader approach. You're thinking about 300,000 personal training or gym facilities across The

04:16>> US and the world. I mean, it's a much bigger market than the few 100 pro sports teams and a couple 100 corporate wellness clients that might be interested in something like that.

Revenue Run Rate and ARR

Nathan Latka

04:27That makes a lot of sense. So considering obviously the impacts of COVID and these gyms shutting down and you moving downstream starting with the enterprise, what was MRR just last month if you add it up?

Kevin Dawidowicz

04:36>> Oh, so our annualized is over 1.6.

Nathan Latka

04:40Okay. And that is you calculate that by taking last month's times 12?

Kevin Dawidowicz

04:43>> We do annual

04:46>> ARR.

Nathan Latka

04:47Yeah. How do you calculate annual ARR? Do you take last month times 12? Okay. Got it. So so you that would put you, like, a $120 a month, something like that. And and how many so what does that mean in terms of total unique seats on your platform, actual end users?

Kevin Dawidowicz

05:00>> Yeah. It's interesting. I mean, it's a floating number, and it depends on the seasonality of the business with, you know, where we see an average of 6 figures. Right? There's hundreds of thousands of users in the application. But the floating usage is dependent on, you know, are you in the off season of a professional sports team? Are you in a training period of a military group? Is your gym, going through a fitness challenge? And and depending

05:26>> on that cycle, you'll see fluxes in the usage.

Prior Year Revenue and Cash Flow Breakeven

Nathan Latka

05:30Mhmm. And so if you've grown about 1.6 in terms of run rate today, help me understand pre COVID. Where were you about a year ago?

Kevin Dawidowicz

05:38>> Just around a million or so. You know, we got to cash flow breakeven, which was a huge milestone for us.

Nathan Latka

05:43Yeah. It's a big deal.

Kevin Dawidowicz

05:44>> Yeah. It is. It it had a flight, you know, had a flight every step of the way to get to there.

Nathan Latka

05:49What was your worst month? What was the month you burned the most over the past, like, two years?

Kevin Dawidowicz

05:52>> Cool. Man, I'll tell you. We get to you get to these periods where you're you're looking at it and you're you're looking at the, the the drop dead date, it's always like around twenty four months out, and then it starts getting closer and closer, and then you're like at twelve, and then you extend it back out again, and it's like, like, we're we're gonna survive these. I think the closest we got was to about like a

06:12>> twelve month, you know, period where we're sitting there going, okay, like we've gotta figure out like the growth the growth again. But we've never been we've never been shorter than that out and we've never been longer than twenty four months out. We've always had like that weird accordion kind of period happening.

Team Size and Engineering Team

Nathan Latka

06:27Now biggest obviously thing factoring burn is his headcount expense. What's your team size today?

Kevin Dawidowicz

06:32>> It's not that big. We've only got 12 people. We're we run a very lean organization.

Nathan Latka

06:36How many engineers?

Kevin Dawidowicz

06:37>> Four. So we're all Four. All the co founders are we're all engineers. I'm a front end engineer by trade. My my brother and cofounder is a full stack developer. Steven Ostro, who's also a cofounder, is more of our integrations kind of guy. And then we've got two other, you know, hardcore engineers. One who's a hosting infrastructure engineer, the other one who is our our front end developer. So I'm actually I haven't been able to touch code

07:06>> in years now, unfortunately, but or maybe fortunately. But, you know, the development team has been together for quite some time. Everybody who's worked together has this is our third startup together. The other two were When did you launch this one? 2013.

Funding History and Early Customers

Nathan Latka

07:262013. And you've done this, you haven't bootstrapped, you've raised some capital. How much have you raised?

Kevin Dawidowicz

07:29>> We raised 1,850,000.

Nathan Latka

07:32So when you raised that first million back in, were they 600 ks and then a million, but let's talk about the and I'm sorry, was backwards, a million and 600,000. But back in 2013, when you raised that initial million, what what were you selling? Was it the same product as you are today?

Kevin Dawidowicz

07:44>> Yeah. Was enterprise software. I mean, at the time we were at five or six customers on the enterprise level. We had, you know, two three teams in the NHL, Philadelphia Eagles in the NFL, Oregon Ducks, you know, in in NCAA, and that was like the the stack. Right? We had we had proof of concept. We had revenue, you know, which was nice, and we were bootstrapping at that time. So we're figuring out, okay, like, do we

08:07>> wanna do? We wanna grow the pro sports market. And it was sexy. It was attractive. It's it helps, you know, sell the seats. Like, people are really interested in understanding or getting involved in professional sports. But what happened was, you know, we we didn't again, we we didn't realize that the cap was there as much as we as much as we, had hoped. So we began to build to that ceiling of, the amount of potential customers

08:31>> that we can acquire. There's a lot of global competition. We see a lot of competition of Australia, out of The UK, some in Canada, and they've kind of like pulled those markets away where we thought there might have been a blue ocean global approach that didn't quite show up. So we began to figure out ways to pivot. One of those directions was gonna be into, you know, military, and the other direction was gonna be in, the

08:54>> gyms and high schools. And both have actually played out. So we're we're pretty fortunate that that's actually worked out for us.

Nathan Latka

08:59So what was your revenue run rate when you raised that million back in 2013?

Kevin Dawidowicz

09:03>> Oh, 100 ks?

Nathan Latka

09:05Okay, got it. So it was really first.

Kevin Dawidowicz

09:06>> So no, it's like 60 ks, I'm sorry. Yeah, was really small.

Nathan Latka

09:10And that was on a convertible note or you raised equity?

Kevin Dawidowicz

09:12>> No, we raised equity.

Nathan Latka

09:13Okay. So it was a price. What equity, what valuation did you get back then?

Kevin Dawidowicz

09:17>> 2013, I think the valuation was around 3,000,000 or so.

Nathan Latka

09:23Do you feel like you've grown into that? You've grown past that? You're worth more today?

Kevin Dawidowicz

09:26>> Absolutely. Yeah.

Nathan Latka

09:27What would you value it at today?

Kevin Dawidowicz

09:29>> If we're going for a fundraise, whatever the market will accept.

Nathan Latka

09:32Good answer. What would you put that though? Best case.

Kevin Dawidowicz

09:36>> It's gonna be a $10,000,000 plus valuation.

Nathan Latka

09:38Okay. And you're raising, sounds like you're raising now.

Kevin Dawidowicz

09:40>> Yeah, we are.

Why CoachMePlus Is Raising Now

Nathan Latka

09:41And why is now the right time?

Kevin Dawidowicz

09:43>> So we we began we began to realize that the gym market was gonna happen pre COVID. So we began to, you know, develop a new deck, develop a new presentation, everything else like that in the beginning of the year. And we literally began to hit the roadshow in February. I did a I did a, you know, Cheddar interview, you know, was at the NASDAQ, we're talking about our military growth and everything else like that, and then

10:04>> everything shuts down. Yep. So we we put the skids on all of that, making sure, like, are we gonna survive this? Is everybody gonna survive this? We we thought the entire market was gonna get wiped out with pro teams peeling back, universities peeling back, and everybody else like that, and gyms getting shut down. But the app the opposite kind of happened. Everybody kind of stayed put, and the gym market completely shifted right underneath us, which was

10:27>> fantastic to, you know, for us to have happen. So when I take a look at it now, we've got data to support the idea of the hybrid omnichannel model for a gym. If you have a brick and mortar fitness facility and you're not offering remote fitness right now, you're dead.

Nathan Latka

10:45Yeah. No. Michael, the model makes complete sense to me. Totally sorry, Kevin. I totally get that.

CAC, LTV Ratio, and Marketing Channels

Kevin Dawidowicz

10:50>> Yeah. So we've seen that play out. And while it played out, I began you know, we began to get some data in June and July. Our our, you know, LTV and CAC numbers started to fill out. We began to What was CAC? Right now, it's about 700. So our Okay. Our ratio is like 3.6, which is great. Like that's Okay.

Nathan Latka

11:09You get paid back in like four months.

Kevin Dawidowicz

11:11>> Yeah. Exactly. That's where, you know, like for a SaaS model, that's like where you should be. So we had to have that model mature. And now that it's matured, we can pump marketing dollars into the system and actually pull back the value and actually see that happen. So now it's pour fuel in the tank. Mhmm.

Nathan Latka

11:25And where's that money being spent? Ads?

Kevin Dawidowicz

11:28>> Yeah. Facebook placements, LinkedIn placements, Instagram. We do see a lot of junk posts from Instagram or junk junk leads from Instagram. I think you see more fitness people looking for, solutions as opposed to the professionals or you might get some, you know, there's there's there's a lot of variation in where we actually see it, but we do have we do have a really fine tuned profile. And the profile looks like somebody who is running a, a

11:57>> gym that's also a, like a high performance center. So if you're you're training kids, you're training young athletes, you're training not only them, but also their mom and dad, that's kinda like the profile that we fit into. And we know exactly, like, where to throw that ad and pull that back, our lead conversion ratio just keeps like

Churn and Upsell Strategy

Nathan Latka

12:16And, Kevin, sticking to unit economics, what does churn look like in the business?

Kevin Dawidowicz

12:20>> Revenue wise, I think we're at about 7% right now.

Nathan Latka

12:22Monthly or annually?

Kevin Dawidowicz

12:23>> Monthly. No. Monthly. Sorry.

12:25>> Annually. Okay. It.

Nathan Latka

12:26So 93% retention. Do you have meaningful expansion revenue? Are you upselling anybody? Anything?

Kevin Dawidowicz

12:31>> Yeah. We just started the upsell, market. We had we had a few this month already. So, like, we just we we just began the upsell about What are you upselling? Eight weeks. So there's package levels. So your base package, get, like, some remote fitness and and coaching and things like that. But then you start going up packages, and you can start getting into device integrations, wearable integrations, and things like that. So you begin to go from

12:53>> that $1,200 $1,400 up to $2,500 plus.

Nathan Latka

12:58Got it. And that's where you get to $30,000 $40,000 average ACVs?

Kevin Dawidowicz

13:01>> Yeah. When you start getting to 30,000 and 40,000, those are those are complete enterprise package, complete customization. You get a, you know, full dedicated support staff. It's a completely different, you know, model.

Current Raise Size and Use of Funds

Nathan Latka

13:12And how much are you looking to raise?

Kevin Dawidowicz

13:14>> We're gonna raise between 2 to $3,000,000. Interesting.

Nathan Latka

13:17And where we spend that money?

Kevin Dawidowicz

13:20>> Need a new product developer, you know, two software engineers, product manager,

13:26>> and lots of conversion.

Nathan Latka

13:27Go ahead.

Kevin Dawidowicz

13:28>> Headcount. Sales. Yeah.

Nathan Latka

13:30Headcount.

Famous Five Rapid Fire

Nathan Latka

13:31Very good. Alright. Let's wrap up Kevin with the famous five. Number one, favorite business book.

Kevin Dawidowicz

13:36>> Oh, Nudge. It's not a business book, but it's kind of interesting.

Nathan Latka

13:39Number two, is there a CEO you're following or studying?

Kevin Dawidowicz

13:43>> It's hard to, you know, throw out like the Gary Vee You can say none. The celebrities of, know, celebrity CEO. It's so strange that the celebrity CEO has become this thing, but yeah, there's nobody that I'm like.

Nathan Latka

13:57Great. Number three, what's your favorite online tool for building a business?

Kevin Dawidowicz

14:06>> Give me one second, let me pull it up. I'm going to say that we use,

14:12>> I use on a daily basis, I use SuiteCRM on a daily basis. Like it's a free CRM tool that we just modified the hell out of.

Nathan Latka

14:19Number four, Kevin, how many hours of sleep do get every night?

Kevin Dawidowicz

14:22>> Sleep at night? Three? Four? On a good night, five.

Nathan Latka

14:25That's not healthy at all.

Kevin Dawidowicz

14:26>> No. I've got two I've got two babies under, you know, two. So

Nathan Latka

14:30Okay. Fair enough. So so married with two kids? How old are you?

Kevin Dawidowicz

14:34>> I'm 44.

14:35>> 44. Last question.

Nathan Latka

14:36What's something you wish you knew when you were 20?

Kevin Dawidowicz

14:39>> Invest in Bitcoin.

Nathan Latka

14:42Guys, there you have it. Kevin founded CoachMePlus back in 2013, raised 1,000,000 fairly quickly at a nice $3,000,000 valuation. Today, they're doing $1,600,000 in revenue, Going out to raise, call it 2 to $3,000,000 on a $10,000,000 post-money valuation serving 300 customers. These are typically enterprise accounts like big sports teams now working down market into newer models like private gyms that also do health and wellness programs, strength programs. They are profitable today. Great place to be.

15:08Team at twelve people has looked to scale with four engineers. Kevin, thanks for taking us to the top.

Kevin Dawidowicz

15:12>> Thank you, Nathan.

Nathan Latka

15:14One 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 alive. It is fun to watch every Thursday, 1PM

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