Cuseum Revenue & Funding (2024)

hello everyone my guest today is brendan sieko he is the founder and ceo of a company called cuseum a platform that helps museums and cultural organizations engage their visitors members and patrons he is building he's been building technology since the age of 11 has been recognized by inc magazine as being one of america's top entrepreneurs under 30. he's been featured in the new york times wired fast company entrepreneur and many other outlets for his work in design technology and business brandon are you ready to take us to the top let's do it all right you bet okay cuseum i mean were you like working in a museum totally frustrated quit the 10 hour job and said i'm going to strike out on my own like how did you get the idea yeah so i started in the field of technology from a really young age and uh had the unique opportunity to work with a cultural institution in new york city which was kind of unlike what we did at my agency we were working with mick jagger and katy perry and slash and all of these big music and entertainment brands but this inquiry hit at the perfect time and place my personal interests were really starting to leap into the world of art and culture and design and so for me it really uh looked like an opportunity to help an organization see what this world was about and also kind of fulfill a desire that i had and i just quickly saw how painful and frustrating all of the technology that they had at their disposal was and i was like there must be an opportunity here to uh to help out interesting and is your business model pure play sas yes okay so what do they what's an average kind of museum or or folks pay you on average per month or per year to use the tech so we were really we're really keen on making our technology platform accessible to museums large and small so we have plans that are in the hundreds per month as well as the thousands per month so as you can imagine you have your your momas of the world in your mets of the world they're going to be on that higher mark and then you have those small regional uh organizations give me a sweet spot though brendan are we talking like maybe 400 500 bucks a month is a sweet spot for you uh average might be in the you know yeah five six seven hundred dollars okay and i'm a so i'm a small museum in austin texas i'm signing up for you paying 600 bucks a month what do i get for that paint a picture for me yeah uh so we have a suite of tools uh the first product that we launched with is a digital tour guide so kind of think of those clunky old audio guides that have been around for several decades we have a software package that enables them to have a digital docent or tour guide that lives on a mobile device whether it be a downloadable app or something through browser and that can really allow the visitor to tap into content uh guide the their way around the museum make a donation become a member uh things of that nature so that is kind of the basic mobile engagement uh tool kit but we also have digital membership solutions as well those are our two products today interesting okay and put this on a timeline for us when did you launch so we started the company formally in august of 2014. okay 2014. and then over the past i guess what's it's been four years how many of these folks have you scaled to hundreds hundreds so when we started the company i'd say in 2014 that was really raising funds and how much have you raised today so we raised about uh one and a half million dollars uh we're backed by tech stars we're backed by founder group and accomplice the first check uh into the company which was kind of the catalyst for starting in the first place was from the founder uh and a co-founder of kayak paul english which really gave us the first vote of confidence that we had something to bring to market in uh 2015 we were really honing in on what it is we were going to build and we had maybe three or four pilot customers and then over the summer of 2015 being at tech stars we took that from you know the three three to four up to 30 and uh have grown to uh over 175 paying customers today that's great and i mean we can kind of do backwards math right 175 paying 600 bucks a month you're somewhere around 100 a month right now in revenue yeah some somewhere in that area and what does growth look like so exactly a year ago what were you doing per month uh so we've been we've been uh doubling and tripling uh year over year so it's gonna depend on you know which year we've introduced a uh we've introduced a second product which has definitely um you know aided our growth numbers um so we're doing maybe 3x what we did last oh that's great that's sure okay i mean so if you so maybe around 35 grand a month something like that exactly a year ago some somewhere in the ballpark yeah that's healthy growth and it has most i mean you just mentioned new products so as most that growth come from upselling the new product lines or adding new right folks all together new customers all together it's been a mix of both i mean one of the clear challenges in the space that we serve is the long sales cycle so i myself you know coming from music and entertainment we were able to you know a week after the first meeting have a signed contract ready to go move forward on a project um we're dealing uh in a space of you know non-profit organizations that have long sales cycles you know over a year from first touch point on to getting things going so that's definitely informed how we build our product how we deploy capital and how we look at growth so a lot of our growth you know today has been yes of course adding that second product uh adding new features that we can upsell uh into our existing customer base but certainly understanding the sales cycle and being able to add on resources where necessary so for the beginning of our company's you know story we've only really had one core focused full-time sales person and about six months ago how many people total eight people total eight people on the team and so now two are sales uh yes today to our sales and is everyone in boston uh so we have part of our team our product development team in europe and then here in boston is kind of the the front end of the company so sales and marketing and operations okay very cool talk to me about some other kind of critical elements of a sas company so what does your churn look like today uh so that's probably the justifier to having such a long sale cycle is once you are able to secure a relationship within the space that we serve you have a relatively low churn so it's not like the 10 a month high growth but high churn type of you know space these are larger con you know uh you know longer term contracts uh multi-year contracts and once people have allocated budget to you know utilize one of the uh one of the products that we uh serve uh relatively low churn lower than you know industry so so i mean are we talking like less than five percent revenue churn per year yeah okay very cool and and do you have meaningful expansion that makes up for the five percent you lose from the same cohort um we've been we've also found opportunities to move uh you know move customers to other offerings uh rather than full churn when you know when you know budgets are are reduced or needs change uh but yeah our growth has more than you know accommodated any of that profit loss that takes place from those small amounts of churn so so that would mean your net revenue retention is over 100 per year yeah that's that's healthy that's great and then walk me you know the first few customers are always the hardest i mean do you remember can you tell us the story of how you landed that first customer yeah so i think it's not unlike a lot of entrepreneurs where through you know warm introductions of people who champion you from the you know the ugly duckling phase that takes place you're able to really sell the vision and the idea of the type of experience you want to create in a space or the problem that you're solving where we were able to launch some small scale pilots to prove out the technology gain some early uh you know product feedback and just overall um you know process feedback and that you know kind of looking at the first six to twelve months of the company really informed what mattered what didn't what we needed to build what we could you know push through dial in for me though on the first customer who was the first customer and specifically how did you land them yeah yeah so the the first customer was an organization called the boston athenian they're one of the oldest cultural institutions in the united states if not north america as well as the mit list visual arts center which is the art museum for massachusetts institute of technology and so those were for you know those came from uh kind of warm introductions uh people in the community that were like hey this is a really interesting idea um and those are also you know part of the customer development phase where we were reaching out to organizations kind of in our city uh to see if we could learn a little bit more about what the needs are how technology can play a role in solving them so those were the the first two so those are your first two you're at 170 today do you have better insights now into what you're willing to spend on your fully weighted cac to get a new 600 a month customer uh those are things that we're you know kind of dialing into right now so we've been playing kind of the traction game where traction cures everything and it's a huge goal for us in q1 to understand the the metrics like a true sas company what paid channels are you testing um so most of our acquisition channels have been uh cold outreach sales we've done very very little with regards to uh social media marketing or traditional marketing avenues um so this year you know even testing out if uh you know advertising and lead generation through channels like you know facebook twitter linkedin and other sources makes sense because today it's been all about the you know it's been all about the emails and the calls and the conferences uh which are somewhat different than something that maybe you know a visitor can click the link sign up and then they're off to the races sure yep and i assume you know you raise capital you're looking to scale are you burning capital today still or you're operating a break even uh we've been we've been cash flow positive for about a year so we've been in a really good place because we've been very lean about how we deploy capital again kind of going back to the pace of the industry that we work with we wanted to be cognizant of what it takes to build a sustainable company and you know realistically for a lot of these spaces if you're selling to let's say non-profits or higher ed or organizations that have been around for 100 plus years they want to see that the company has been around for two three years before they're willing to even jump in and play um so for us it's been really important to stay lean in those first couple of years prove out the model and now for the upcoming year 2019 we want to deploy more capital you know uh and and add more resources so are you raising additional capital right now uh no no not not at all so we're healthy financially speaking and we're able to fund our growth based on the the growth and revenue that we have the 1.5 i mean you have you mentioned tech stars there's traditional vcs in there i mean those once you're either you have nothing raised right and you have total freedom or there's capital in and you're on a timeline i mean once you raise any venture there's an implied timeline there right so like i mean how do you how do you continue to drive aggressive growth if if you're only able to reinvest profits you've got coming in on 100 grand and top line revenue yeah um so the kind of the circumstance we have with our investors has been really flexible around that area so if we raise the series a it'd be a completely different story but we are still you know going off of what we raised in our seed phase and able to re you know reinvest profits in our growth um so you know those are those are things that we're exploring right now is do we want to raise a series a and kind of lock in for a 10x long term big growth uh strategy or you know where do things look where's the sweet spot or take the whiskey approach go go raise some debt and buy out the investors that was really interesting to read there you know them being a boston area company do you talk to chris uh no no okay yeah i know i mean there's a lot of companies that are starting to do this it's becoming very popular um let's wrap up here brendan with the famous five number one what's your favorite business book favorite business book would be traction by gina wickman number two is there a ceo you're following are studying ooh that's a great question um no not off the top of my head i mean i'm really inspired by the peer group of ceos that i have through techstars boston so being able to be down in the ditches and sharing war stories every six weeks has been really important and really valuable to me as a as a leader and as a ceo number three what's your favorite online tool for building the company sorry what was the favorite online tool for building your company favorite online tool for building my company um i've been a really big fan of yesware for you know sales automation i've been really a big fan of base as our crm very loyal yes where another another boston-based company matthew bellows has been on the show a couple of times yeah he's amazing that's amazing very good number four how many hours of sleep to get every night uh my wife and i just had our first child so uh our daughter's been definitely keeping me up and forcing me to become more efficient with my time so i'd say i'm a polyphasic sleeper so less and less hours uh how many do you get right now per day what was that how many hours per day right now maybe five okay that's good and uh how old are you i am 30 years old 30. last question uh take us back to your 20 year old self what do you wish she knew [Music] uh i wish at the age of 20 i knew just how important it would be to be in a major metropolitan area so i was still living in western massachusetts outside of boston outside of new york and had i plunged into the into the ecosystem you know that is so resource-rich has capital flowing and people willing to help i think it'd be at a very different place uh than i am today so i you know have to under underscore how important it is to be in a really uh you know supportive ecosystem guys there you have it helping cultural tourist attractions like museums run more efficient operations cuseum has now 175 customers paying on average 600 bucks a month so called 105 grand in terms of monthly revenue up from about 35 grand a year ago so healthy growth and their cash flow positive which is nice 1.5 million bucks raised eight people between boston and europe less than five percent revenue return per year right now net revenue retention above 100 other economics too early as brennan looks and decides how he's going to dial up and try and scale brendan thank you for taking us to the top thanks for having me nathan