How Corus CEO Morgan Stempf grew to $362.9K revenue and 24 customers in 2023.

hello everyone my guest today is jason abramitis he has been building chorus his company for five years he's a former student and basketball player at yale former consultant at accenture and now from outside hartford uh he lives in denver with his wife and two kids his company again focused on answering business questions quickly jason you're ready to take us to the top yeah all right so how are you how are you helping these companies uh answer their business questions faster yeah so we've got a survey platform that we feel is best in class and and one of the things that we do that's very different is we allow uh clients to collaborate directly with their support whether that's analysts whether that's us and what we've now built as a marketplace for them to hire folks to help them very quickly as well and then we've got 80 million people in 135 countries that we have on demand uh we typically see responses come back within a matter of minutes so if you're sitting in a meeting and you've got a question about what you think the world wants uh something that we can get that answer for while you're still sitting there okay and how do you do i mean i assume bias is really critical in any survey how do you make sure that the people i assume they probably self-select who they send their survey to how do you make sure they eliminate bias yeah i think there's a you know no matter what you do in collecting data there's going to be some sort of bias and a lot of that gets addressed on the back end and how you analyze it and how you look for what is driving a key factor but on the front end we address that by continually monitoring and fraud a lot of fraud mechanisms that we've got speed traps red herring questions where we ask people you know what's not an animal and we continually rate and update uh the suppliers we have and the data that we get but even with that there's still a selection bias for who participates in these things and so we continue to add new folks in different clever ways to get folks like you or me who probably don't take surveys for fun um and that's something that we uh continually deal with as a challenge what's the incentive structure on the current survey takers what do they get yeah we pay them linearly based on how long a survey is we think that their time is valuable and so we pay them based on how long a survey is and then really motivate clients to shorten what they ask that cash is is something that we continually try and increase and you know allow folks who are higher income and have a little bit less time in their hands to participate obviously with that more fraud incentive and so that uh it needs to be right hand in hand with with our efforts on that front yeah i also think like time is directly correlated to how much income any of your survey takers are taking so if you have a business that's going after sophisticated investors it's very difficult to get people like that to take a survey right so i mean how do you do you have i guess are you maybe not built for customers that want to do surveys against people with really high net worths who will never spend 10 minutes take a survey no matter how much you pay them yeah so it's interesting we have uh you know certain audiences that we have to reach out to that we don't have on demand so we have to recruit those folks uniquely uh we had an interesting one the other day looking for i.t managers in the micro brewery space right these are not necessarily people that are the highest earners in society but they're still hard to find and we need to get a high response rate so a lot of that's the message that sent a lot of that's the incentive compensation a lot of it's the relationship that may already exist between these folks uh and their clients so sometimes we send the surveys sometimes our clients do if they've got an existing relationship um but yes it is very difficult to get folks that are you know very high earners to participate in these things uh there's one thing that we can often do which is called survivability analysis to extrapolate on the high end to assume what the highest earner would say for something uh if we can't get them and jason how do you build through to the your customers is this a pure place sas model or it's a project-based per survey kind of thing yeah it's it's transactional so we have clients who use this recurring uh we don't charge a fee for for using the software uh so we allow people to collaborate across the organization and we don't have any sharing password issues so past 12 months if you look at recur your revenue how much of it would you say is truly recurring yeah so we we tend to look at our period as over an annual basis because of the fact that it is somewhat seasonal we have clients who spend a lot more fourth quarter that's fine yeah and so last year we did about 800 000 in revenue uh that was truly recurring from the prior year um and we expect to double that this year okay so 20 000 uh 2018 was about 800k let me break this down though for a second so on average per year what's a customer going to pay you yeah so we've got a range we've got a compliance that pay us only a couple thousand a year we've got uh you know a couple clients that pay us in excess of six figures a year depending on how much work they do and how much data they acquire we start at 10 cents per question if you do a lot of work with us and you buy a lot of data so if you're conducting a 20 question survey and asking out of a thousand people in five different countries uh and you're paying us a couple thousand dollars just for that one run of data and uh we do that several times a year with them jason let me go out this a different a different way how many customers did you work with last year yeah so we had two dozen paying customers last year uh that you know a range of revenue levels yeah so eight you know 800 grand in total revenue right divided by 24 folks they each paid about 33 grand over the year if you did get a true average right um uh and then that obviously comes out to call it maybe two three grand a month something like that yeah um it's a back of the napkin right um very good and so that does that mean i mean if you back into kind of an mrr approach if i take 24 customers times 2700 bucks a month you're doing like 64-ish grand today a month in mrr that's right and where were you a year ago so back in january 2018 back in january 2018 we had some non-core revenues so if we were to back that out we had about hundred thousand uh of the same style revenue in 2017. uh so you got it you know yeah so what did you um i guess i get i mean i can figure out if i do if i do 600 grand by 12 that means you ended that year about 50 grand a month in kind of mrr uh now you're over 64 grand so call it what is that 15 20 year over year growth that's right yeah yeah our bootstrapped have you raised bootstrapped oh i love that man i thought you were gonna say you've raised like 100 million bucks and i was gonna be really unimpressed but this is bootstrap that's great yeah so we've uh we've got no debt no outside equity holders we are you know looking to now really grow as we've turned the platform around from being our dog food uh for the last couple years as we figured out what it needed to be and so that growth has been somewhat hamstrung by the efforts that we've needed to make towards building a more scalable model so we're excited about what 2019 looks like for us that's good and what's team size today how many folks uh we've got 11 people um six full-time and then five contractors and where's everyone based uh we're based out in denver and we've got a couple people in new york denver and remote awesome all right and then turns critical in a sas company so for you it would be impossible to measure churn on a monthly basis but you can look at it on an annual basis so of the people that paid you something in 2017 how many of them paid you something in 2018. yeah we really only lost one of those clients going into 2018 uh so we've got a very low churn rate it's like five percent in logo turn per year yeah yeah i think that's a fair way to look at it yeah that's interesting um and how many of them uh expanded so they paid you 30 grand in 2017 but went up to 60 grand in year two yeah that's not something i have offhand but i would say we expanded almost all those clients uh really maybe one of them declined in any sort of material way and is that just by driving up the number of questions they're asking that's your most powerful pricing axes it is i think um you know the the services over the top of the data is something that we are shifting through the marketplace and so we've been able to reduce the amount of effort that we need to put in and so that's been really a key part of our growth strategy going forward is making sure that the platform makes it really easy for service providers to help clients uh in as quick and efficient a way as they can yep and then are you imagine because you're bootstrapped you're operating at what right at breakeven uh yep exactly uh it's you know can't spend money we don't have any plans to raise we actually just start a process uh right around the holidays here um and that's something that we're looking to close out hopefully fairly soon and be able to push on uh the great response we're getting in the market now to our marketing and sales efforts jason have you looked at um as you explore kind of raising capital have you looked at um venture debt at all like non-dilutive uh vendor debt a little bit um i think we've considered alternative uh sources right now we're considering just the simplest form of capitalization uh until we see is that a better option for us so what is i mean some people would say venture debt is actually simpler because you don't go on they're not you're not giving up equity so when you say simple who do you think is simplest well i think of straight equity is simplest in terms of its flexibility right the debt has in some ways uh you know obligations that carry with it decisions that need to be made that may not be the best long-term decisions are you talking about covenants and warrants and things like that yeah well i'm thinking about it in terms of uh you know where those payments start to need to be made there's obviously been a decision that is being driven by when do those payments need to start and uh obviously as it complicates future raises you know what does that do to a future equity holder so i think that's where we've considered straight equity to be simpler in our mind but we are open to alternatives if the case can be made for it yeah and what are you hoping i mean obviously don't discuss any term sheets you're actually negotiating but just in terms of what would make you happy what kind of valuation would make you happy yeah we're not looking to be unreasonable because obviously we want to be able to keep growing so we've looked at uh raising a million dollars and uh we we don't have unreasonable multiple expectations by any means um you know we we saw qualtrics exit for 40 times revenue and we don't think that that's reasonable uh we don't expect that for ourselves either so yep so just to be clear i mean you're looking to raise a million i would say reasonable for you at 64 a month right now or about 800 a year i mean you'd maybe say something like five pre or four pre something like that is that kind of the range you're looking at yeah that's right well it's where we've been asking yeah that's great very good and do you think you'll uh you'll do convertible note or really straight priced round equity i think it's going to depend on the the investor um we prefer to do price i think for the fact that out here in colorado that's kind of the norm but um depending on who the right investor is then then we'll uh work with them yep and put this on the timeline for me when you guys launch uh so we launched the actual software platform to the public end of last year uh whereas i said it was you know behind the scenes enabling us to do our work and learn what it needed to look like uh starting in 2014. uh wait hold on i'm confused so you launched the company in 2014 but you launched the sas offering just three months ago we lost we launched the version that clients could access themselves just three months ago uh we were still serving those clients and not necessarily letting them know how much the software could do behind the scenes and really turn it around to let them use it themselves and do you have good kind of are you confident in your data yet in terms of what fully weighted cac looks like so if you're going to sign up someone is going to spend 30 grand next year do you know what you're willing to spend to get them not for those larger spend clients yet uh you know we don't have enough of those that i think that we've got a sufficient sample size uh we do know what it takes to get a self-serve client signed up now who's starting to push some data through uh where we're looking at about 15 to get someone signed up to be able to push some surveys uh that's obviously very low that's on the consumer that's on the survey taker side no that's on uh you know small businesses looking to get feedback from their customers not necessarily reaching out to the broader world got it so what would they be paying per month on average would you say so those folks right now aren't paying anything yet uh and that's where we're transitioning them from just listening to their own customers to also asking non-customers what they think okay so smbs you're signing about 15 bucks right now but you're not quite sure what payback looks like or the value of those because they're not paying yet exactly i see you got it very good all right let's wrap up here uh with the famous five number one jason what's your favorite business book uh i was saying you would lean start at the most for how much it overcame my cynicism yep number two is there a ceo you're following or studying uh not in particular i like to follow a lot of different models and try and learn different things from different people number three what's your favorite online tool for building the company i think trello has been one that i've really enjoyed the most for how flexible it's been to our multiple needs internally number four how many hours of sleep to get every night highly variable i got two little kids too so last night three hours the night before uh made up for some and got eight but uh you know about four or five is a normal night maybe and so it sounds like married with two kids two kids yeah okay and how old are you i'm 33. 33. last question what do you wish your 20 year old self knew how much cheaper life could have been i think you know i'm trying to look at my 33 year old self and wonder what 45 year old jason's going to say man i wish you'd have known how easy it was then for i don't know if it'll be my knees just don't hurt as much or what it is but uh yeah what do you want what do you mean by life is cheaper oh you can eat ramen sleep on a couch and you know the lack of obligations you've got uh you really need to take advantage of that and have a chance you know everybody's got their it could have been stories i had one don't need to go into it but it's uh you look back and you think man i really could have been fine without salary that would have been uh different yep guys take advantages of opportunities especially when you have less responsibilities coming out of college things like that jason now launches company chorus back in 2014 today 24 customers paying caught 2 700 bucks a month so doing about 64.65 grand a month right now that's up from 50 grand a month just about a year ago they're bootstrapped which i love even looking at raising a million on maybe four or five pre-money today we'll see what he does team of six based in denver in remote locations five percent local return per year driving expansions revenue by getting customers to ask more questions via their surveys spending 15 bucks to sign up new smb customers too early to talk about payback period though jason thank you for taking us to the top appreciate it thank you so much