How Consent CEO Rado Raykov grew Consent to $180K revenue and 10 customers in 2018.

hello everyone my guest today is eroto raykoff he studied marketing and mass communications in the us then transferred to international business overseas he started in business development on market intelligence products and then transitioned into management consulting later and for the longest uh he spent most of his time in political consulting his interest of social processes and information to information dissemination led to consent.io as his first startup after two failed starts bad timing and not the right team he's now going at it for the third time uh lucky and going strong for two years so far we'll dive into the story today rado are you ready to take us to the top thank you nathan sure your cat wants to join the interview the the she's she or he's on the counter behind you i love this what's what's their name uh this is ludo means crazy it's nine o'clock in the evening yeah i love it all right tell us about the company what do you guys do and how do you make money sure uh what we do in the shortest way possible is we're building the universal platform for communication between individuals and organizations some call it feedback some call it customer satisfaction measurement the key to it is we believe the world and consumers and businesses are ready for a fresh approach to market research one that is much more transparent open democratized even we make money by charging a flat monthly fee to our customers who are the business side and uh to our individuals we provide the value of ease of use peeking into how people feel about any topic and last but not least of course empowering their voice so they're actually heard in uh the boardrooms and walk me through kind of what your average customer pays per month for this sure most of our customers pay in the range of starting from 300 let's say dollars or euro up to 3 000 depending on the scope of the topics that they want to have real-time uh analytics and sentiment analysis on so would you say 300 or 400 bucks is a fair average or is it closer to 3 000. 300 is the lower um level and 3 000 is the higher so yeah an average is about 2 500 okay okay very good so good you're kind of min market pushing enterprise face with these price points when did you launch the company what year we launched the company a year and a half ago and we incorporated in the in amsterdam um towards end of last summer okay so 2017-ish and what have you scaled to today in terms of total customers we're approaching about 10 total customers from different segments in industries also different geographical markets okay with uh some in retail banking services media and 10 at kind of 1500 per month puts you at about 15 000 per month in revenue is that accurate more or less so yes and where have you got these customers are they friends of yours from past businesses where did you find them right it's a mix a lot of the initial customers came from our direct sales efforts then our investors helped a lot with opening some doors for us we attend some conferences uh startup matchmaking sessions etc and now we're transitioning into structuring resale partnerships with classic market research agencies and the like how much have you raised to date to date we've raised close to 400 000 euros so you could say half a million dollars five hundred thousand dollars yep and was that a convertible note or was that equity mix mostly in convertible notes uh some in the beginning uh in equity so you've done kind of both and is it two i mean do you have good insight yet into into economics like churn and customer acquisition cost or is it too early on one hand it's too early on the other hand because the specifics of our service churn is high at the very beginning of projects and integrations or pilots or proof of concepts but once we're in we're in for the longer term because of course dealing with data and analytics it all accumulates so the cost of exiting the service becomes increasingly higher the more time is spent in it yes so have you lost any customers yet one okay you lost one so one out of ten cotton be ten percent you know you know churn annually sure although i wouldn't make any averages yeah yeah well obviously it's a very very small cohort but something's better than nothing right um what is it costing you to acquire these customers fully weighted well so far as i mentioned um the main driver of customer acquisition is the operating expenses of the business development team we have hardly engaged in any uh marketing such as online marketing advertising uh ended likes but we plan to transition more heavily into that uh by the end of the year even though if you consider the salaries you're paying to the biz dev people divided by the number of new customers they bring get a cac i would say between a thousand five hundred to two thousand two thousand five hundred somewhere around that chapter and then they're paying on average 1500 bucks a month so what your payback is a month or two sure um is that your payback period yes it's uh so far it's been very clear um based on initial interest whether um a potential customer requires uh further follow-ups and uh structuring some customizations demos etc this is why i believe our cost of uh acquiring customers is we consider fairly competitive what's the team size today 10 people 10 okay and where's everybody based half of the team is here in amsterdam the other half is in our ex-native market in sofia bulgaria the product development and all business development operations are out of amsterdam okay very good so bulgaria and amsterdam uh mainly and then i mean so where do you see the company going over the next over the next 12 months what do you want to grow at over the next 12 months we would like to build our value propositions and develop some very strong case studies and focus our sales efforts mainly in europe because we believe we need to be in a much more advanced position before we tackle the larger markets of us and asia are you raising capital today right now no no we plan to reopen fundraising within the next nine months let's see okay and and how much how much would you like to raise ideally well if um we managed to reach our targets i believe we'll be in a position to both need and argument um let's say seed round in a more u.s volume like a million a million and a half okay and what valuation would you hope to raise at we never do fundraising uh for valuations that would um not allow us to part with absolute maximum of 15 to 20 of the equity in the form of convertibles or straight up equity deals yeah so if you're selling a million of the company you'd want to do that at a minimum four million valuation to sell 20 sure sure more likely but yeah okay okay interesting and you think you need to grow revenue to how much in order to get a five million dollar evaluation well they're we're not saying there's a big discrepancy between the us and uh european um capital uh cultures let's say when it comes to startups usually the rates in europe are half of what would be considered average in the us and then that is mostly valid for london and berlin when it comes to strong but a bit more risk-averse um ecosystems such as the netherlands or even france that figure goes down by half again yeah right my question is if you're raising the states what do you think you have to grow revenue to in order to get a 5 million valuation plan to reach at least a 50 000 monthly recurring revenue uh before we open our next round okay so hopefully by the end of this year maybe q1 q2 next year sure that's great now tell me uh before we wrap up tell me you have some failures before this one what were the two other ideas and why didn't they work uh well the two other ideas had to do with location-based services and also somewhat data gathering and analytics they didn't work because of a mix of under financing not a good enough team or a team that has a good enough fit and very very valid reason also timing because the dissemination of both smartphones and mobile internet monthly packages bought by people was not there yet yep it makes good sense it sounds like you're onto something now though you've got good revenue coming in let's wrap up here with the famous five number one what's your favorite business book have one number two is there a ceo you're following or studying sure i believe uh elon musk is a hero for us all isn't it number three what's your favorite online tool for building your business honestly hacker news i just uh get a lot of inspiration and insights from there number four how many hours i sleep to get every night that is a very tough question let's say between five and seven okay so call it six on average and what's your situation married single you have kids uh not married but not single okay um long-term relationship committed not married and any kiddos no not just two cats two cats all right ludo and another one and how old are you i didn't catch the last one how old are you oh i'm uh turning 36 this august 36 okay last question what do you wish your 20 year old self knew oh uh a bit more on how much i didn't know there you guys have it he wishes he knew how much he didn't know back in the day he's gone through two kind of failed startups where he learned now he's building consent.io launched in 2017 with his team of 10 people basically in amsterdam and bulgaria and other locations in the uk currently serving 10 customers doing about 15 000 a month in revenue they've only lost one customer since they've turned on revenue about six to 12 months ago spending about 1500 bucks to acquire the customer mainly through...