How Cuvama CEO Alex Smith grew Cuvama to $673.9K revenue and 4 customers in 2024.

hey folks my guest today is alex smith he's the co-founder and cco at kuvama customer value management has been a passion for alex through his 20-year career in b2b assassin across sales pre-sales delivery and customer success he's based in manchester uk started out as a physicist at oxford university as an avid cyclist as well now building cubana.com to help come connect companies and customers on value alex you're ready to take to the top yeah jump in all right so tell me maybe start off with a customer story uh and and explain why they're paying you and what they use you for yeah so that's a it's a great question um the the world of b2b sas has been transformed by the move to subscription it's uh you know everyone knows that but uh the move to saturn subscription means that the the kind of the customer has so much more choice the customer has so much more power in the in the kind of the business to business environment the way they're operating in they can they can pick from lots of different vendors they can choose to churn um the end customer i should say the customer of our customer so we're we're helping our customers to to really kind of engage with their end customers with an understanding of not just what features and functionalities you need but what are the success outcomes that that end customer wants to achieve and then make sure that that relationship that connection passes through to a delivery team a customer success team so that you end up with a bit more of a focus rather than in the traditional world of of sas customer lifetime value has been the lifetime value of a customer to the company our vision is to try to flip that flip that on its head and actually move it to be more of the the value the lifetime value for the end customer land expand retain ndr above 130 that's the goal exactly exactly so there's loads of great reasons why a sas company needs to do that and there's just been it's just been an area that is it's been a gap for a number of years we recognized it again in my career i started down in software when it was all on-premise perpetual licenses i've kind of been through that move to sas and subscription and i've seen a lot of companies struggle to catch up with the new reality of the new way it works maybe they put a customer success team in place maybe the sales team are in theory selling value but but it's never been a joined up approach and it's never been kind of customer-centric so i think we understand the product that's fantastic give me a general sense of what are customers paying on average month or you guys pre-revenue you're just getting started no we are we're definitely post revenue uh so um it's it's you know in terms of kind of what what are they paying it depends a little bit on the size it at the moment it ranges from maybe uh 50k dollars per year 50k thousand dollars per year up to around two thousand dollars uh per year in that kind of range okay so you largest company paying maybe 200 000 per year help me understand why what how they're getting more value is it number of seats is the number of features turned on what enables you to upsell to 200 grand a year so it's um so honestly the women we're still at the stage where we're figuring out the right way of the right monetization model for this uh so actually my background is i've done a lot of consulting work for sas companies on packaging and pricing so it's i have some experience in it but it's not always there's not always one easy obvious answer so the the model that we're using at the moment is a platform feed plus a user license uh so we're targeting our app to be used by the business development function so be that bdr's sdrs uh sales people the pre-sales team you might have business value engineers and then customer success managers post sale as well so there's quite a lot of different kind of user user types and user roles but at the same time um we you know i've used to have a platform be based on the kind of the scale and the complexity of the solution that's put in place so so our upsell model as we grow will be a combination of the customer growing their their kind of the usage of the tool in terms of users and teams um but also then selling in additional modules to to better support the the end-to-end journey of that uh that interaction oh what's going on there youtube good to see you guys now imagine this you love watching these interviews with sas founders but imagine if we took all of the valuation data out from over 2807 interviews i've done manually saves you a lot of time well we've done this we've built it into the beautiful interface inside of founder path check this out i'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for valuation this year now the secret evaluation is there's many different ways to value a sas business so the reason you're going to see three or four different valuations inside of your frowner path dashboard this is all free by the way is because depending on who's doing the buying of your sas company you're going to get a different valuation a vc is going to pay a different valuation private equity firm is different if you're going to do a minority sale that's different and if you sell a whole business that's a different valuation you can see all those when i hover over here right so the teal is what a vc would pay yellow is what private equity and red is if you sold the whole thing outright now what's cool about this is this is not built off random data again you guys hear these interviews on youtube all these datas are built from real-time valuation data points founders share with us on the show so traction 1.2 million seed round 3.7 raise they sold 22 percent of their business go in here and filter by the event maybe you only want to see companies that have sold the whole business well here are a bunch that have been acquired the valuation and the multiple maybe you're going out right now and you're raising your seed round well go in here and look at all this recent seed deals that went down what they raised what valuation they raised at and what percent that they sold there's never been a larger data set of sas valuations than what you can get now inside of founder path and we're thrilled to bring it to you all right we're going to go back to the youtube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your evaluation here and go ahead and sign up to give it a whirl again all that valuation data live right inside the platform i hope to see you there all right let's jump back into the interview understood so cheapest though four or five grand a month 50k acb all the way up to 200k acvs depending on how many bdrs and sdrs they have okay and put this on a timeline for me when you launch the business so we started out as a consultant company uh so again i know that you you engage with a lot of companies that bootstrap to really get things going i think that's very much kind of part of our our journey we started out in 2017 um still focused on b2b sas companies that is our main target market but initially doing consulting and helping them monetize their offerings through consulting throughout that life cycle um the we won a we had a kind of a passion for this this this topic of the the value management part within the overall monetization problem and um we explored it through lots of interviews and through building out a prototype initial just to design in 2020 in the kind of the summer of 2020 we want a grant from the uk government an innovation grant in um q3 so around october 2021 started to build up code how much was the grant for a hundred thousand pounds and it was kind of linked to covered recovery linked to a few other pieces um so at that point we you know we we brought on some contractors did our first bit of code development sold that to our first customer in uh contracts signed in q2 fully in q2 of 2021 and have grown from there so we're now at uh four we again if you look at our customer base it's around 15 to 20 customers in total that we've worked with over the years and we now have four uh customers that are up and running on the kind of the new technology platform but consulting how many are paying you something per month right now um that's four of them that are paying us per month so why didn't the other 11 stick around well the other 11 was a mixture of consulting words so it's not that they are um no i don't mean to say that they they started on the on solving this problem and then haven't stuck around it's more that i guess i would describe it as a point in the past we've solved the same type of problem with consulting projects and with microsoft excel-based tools and things like that so so we're going to our model this model makes a lot of sense right but going back to the agency's story what year in terms of revenue was your best year at the agency before you started really pivoting to peer play sas oh it's a it's a good question to which i'm not sure i have the...