How Dataclay CEO Arie Stavchansky grew Dataclay to $1.4M revenue and 200 customers in 2024.

hey folks my guest today is Aria stefchansky he's the founder of data clay a company developing software that automates the production of data-driven creative content at scale his academic and Industry experience inform his entrepreneurial Endeavor is leading a talented team that Sports Enterprise licenses such as Netflix Amazon Apple NBC Universal the NFL and others are you ready to take us to the top yeah why not let's do it all right man so just be clear the logos I just reeled off here your team gave me that when they gave me your bio those are all paying customers of data clay yes that is correct yes that's amazing yeah yeah it's a very powerful tool we've made here let's do NFL let's just do them how do they use you sure so with the NFL um they wanted to separate their marketing department from their video production department to get more content out to their social channels and so our software acts as kind of like a data merge software for video so we built them a slack chat bot where marketing folks could go in and chat with the bot and then content would be made on the other side right on a server that somebody at the NFL would QA and then it would go to their social channel so it's basically helping them create content for their social and then also we have another group in the NFL that's doing stuff like you know just um player stats and just pre-renders for stuff that you see on broadcast so a lot of the work that that gets done in post-production and that kind of you know world where they're creating uh Graphics um our software sits uh atop of their workflow to handle all the data that's incoming from the games and from the players to get that data to display in the way that they want it to display in their uh in their content so all right just be clear look I'm a big Washington commanders fan it's obviously a bad time for us right now but we just put Aaron Rodgers and Green Bay Packers the past weekend and it's always remarkable to me when some play happens right I'm gonna make this up Aaron Rodgers gets sacked and right away Troy acne the broadcast Booth there'll be a graphic that pops up that says this is the first time in nine million years that a quarterback older than 38 with five gray hairs who runs slower than 10 miles per hour got sacked in the third quarter with two minutes left and it's like they they feel like I feel like they can pull a stat for anything and I always wonder how the hell do they do that is this on the back end is this what you're powering someone's basically a marketing person putting that in and then it's going live on broadcast yeah so on the broadcast side um they a lot of those systems are like real-time systems our software kind of plays to that market where they're experts but they're using the Adobe ecosystem the Adobe Creative Cloud ecosystem and so what you're seeing when they do it like in real time virtually real time is um is more of a broadcast based real-time graphic system our system is more of an automator and it allows users to create a lot of different unique content before it gets broadcast or before it gets to a play out so you know it depends on how fast they want to get that content out there but when you're seeing live but you're the not real you're not real time no yeah we are we we're called just in time so it's it's it takes time to render but a lot of the content that gets rendered out eventually ends up in some kind of play out you know some some kind of control panel that gets played out 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 the 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 evaluation this year now the secret valuation is there's many different ways to value a SAS business so the reason you're going to see three or four different evaluations inside of your final 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 the whole business that's a different valuation you can see all those when I hover over here 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 valuation than what you can get now inside of founder path and we're thrilled to bring it to you all right we're gonna 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 valuation 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 well what about what about okay so you're not able to feed data directly to a live broadcast on NBC when I'm watching commanders or screen Bay Packers but what about right wing Terry McClure and a receiver makes a 40-yard catch and it goes up on Twitter from like six different accounts and that becomes a viral tweet for that game that's that's almost real time but not 100 real time is that you that's exactly yes it's that that is the use case for our software yes it's not people at the NFL or even an NFL team it's like people that run their own NFL related podcasts or the NFL content they are able to get these clips you're the one powering that yeah on their servers so our software is running we don't have access to their data and that's one of the reasons why I think our customers really like our software is that the data is actually very precious it's very it's their Crown Jewel for the customer so they don't want some you know video production company having access to that data our software allows our users to install it on their own environment within their own environment so they have complete control whereas data clay has no conception of what data is flowing in and out of its software which is it's sort of on-prem in that regard that's exactly right so how do you generate recurring Revenue so you can have predictability and you know build a team and build companies like an SLA agreement or a licensing agreement how do you structure that yeah so um we it's basically a term-based license um you get a license key that activates the license on the machine it's a recurring uh payment that must be made for that license to continue to operate on the user's machine um and as far as like the larger Enterprises yes we will engage with them on a more SLA level we have you know a master Professional Services agreement for you know Mission critical projects that they might be doing so yeah it's I mean it's in one aspect we have our website where people go and they download a license key they pay us they download a license key and then it's a recurring Revenue stream we also have an exclusive reseller that has more uh uh that we've partnered with that has a lot of inroads to a lot of different studios around the world um so it's a it's a mixed approach as far as as far as that so so help me understand what your price again does it number of Clips generated num amount of data processed per weekend number of seats how does the NFL not the NFL but just we're using NFL how would they pay you yeah so uh we basically license on a per machine basis so it does depend on how much volume they are rendering but um it we don't track per video and I think it's interesting that's that's another reason why I think that our customers enjoy our software is that we're not interested in being so restrictive about oh it's going to cost you x amount of you know dollars per video that gets rendered how many machines though does the NFL have or ambc Universal or apple I mean are we like I just have no concept of this is it 10 or 10 million no it's not 10 million certainly not I mean we're talking about a software that is extending Adobe software which is very much human driven like Adobe requires humans to be in front of their their software so it's it's a desktop software that is basically being extended into an automation software which is what we provide so you know at the largest I'd say some of our clients have like you know maybe like 20 some of them have like five some of them have um you know in between that so it's not it's not a suite with a sweet spot be like 10. yeah I'd say that's a that's definitely like if you're doing if your entire line of business is video and you need to be creating video on demand and you have a lot of requests coming in you're certainly going to need to have a multiple Fleet so just to repeat repeat this back to you to make it make sense to our audience right so you are selling a license key that the NFL would install on-prem on the desktops of 10 of their people in their marketing department responsible for video content that allows them to get this content just in time and post to Twitter when there's a big catch a big touchdown or Facebook or to social media yeah amazing essentially yeah yeah I got it my head's around it now give me give me a little bit more of sort of help me understand I mean these are obviously Enterprise accounts right which would incent you know say that you're sort of selling Enterprise level plans but what would you say sort of the average customer is paying per month or per year um I mean the average customer maybe somewhere like I don't know 6 000 per year um it's uh yeah I mean more so the Enterprise they can be paying up between like 24 to 50 000 per year your biggest customers pay 50 000 a year yeah yeah it depends on yes yeah and that largely is dependent on how many seats or how many machines they want to run the software on yeah so um so yeah well I guess 50 000 a year would be like 20 machines versus 6 000 a year would be like five machines yeah something like that okay so you do get you do get cheaper per machine economics if you're buying ball clothes certainly yeah yeah we have about yeah we have both term-based discounts and volume based discounts uh which entice uh yeah it entices the customer to purchase more licenses up front we also have um month to month or annual recurring uh we also have just term term limited meaning you can buy a key that is only good for three months and it will just cut off at the end of the three months and then if they decide they that customer decides they need more time they'll have to buy a new key so there's so put this on a timeline for me were you like a sort of an ex-nfl quarterback that we're tired and then got into this space or what year did you launch this business um okay so we we launched it in 2014 in the summer of 2014. um I have my backgrounds in filmmaking and in computer science and also and also in something called interaction design which is basically the design of how humans work with you know things products and um you know I took all these uh I used to work in a post-production studio in a Motion Graphics Design Studio in Chicago and I realized you know a lot of this stuff can be automated and so I combined all my skills to build this product uh that I thought would be well served in the industry because I knew the pain points and so the pain points I was solving those with the software I was building uh I partnered with a uh again a a company in New York that is a it's a reseller of of software that um basically you know helps the video post-production world once they saw it the market response was just like I had no idea right you owned 100 of the business yeah yeah at that point I had it was yeah at that point um well I have I have a co-founder and um so it was between us and so yeah at that point it was it was divided in that regard but did you and your co-founder like you so you were the engineering it sounds like what was he or she uh more business development okay you know more more more relationship building so I was kind of the one that was technically at you know the keyboard building building listening listening to the end users co-founder is more he was more about getting you know getting it out there uh trying to uh you know understand this is very similar I'm always just curious though how an engineer and a business person would split Equity at the beginning it sounds like this was your idea first you built it you found him brought him on to go to a market is that accurate that is accurate yeah okay okay so you should you own more Equity then right yes yes okay all right but but still enough for him where you know to call it 10 20 30 where he's a true co-founder yes yes yes okay fair enough fair enough now obviously you guys can keep on and hold that Equity as you grow the business unless you raise or do something dilutive so did you have a bootstrapped or decide to raise we are completely bootstrapped yeah let's go I love that there there has been there have been investors that have approached us um and we did give away a very small fractional amount of equity uh just because um you know this investor was really interested in the software and to see where it was going to go and um so yeah but under five percent yeah okay and so I've seen people say small and then I say how much and they say 50 oh that's not small that's happy because all right so did you put in money or is he just an advisor uh he put in some he put on some money but also advises from time to time yeah and some again some people say small and they say 10 million I'm like that's not supposed to like under a million bucks yeah yes for sure for sure this was early this was only three years into the business yeah apparently like we were still fledgling at that point fair enough okay and then I want to go back and get some a 2014 2015 2016 part of the story but I don't want to bury the late lead either how many customers are you working with now today yeah so I'd say we have around over a little over 200 active Enterprise clients uh dispersed all over the world that's a lot of extra words out of on the end of customers so are they I mean are they all paying or why do you add so many extra words there um because we tier our license cost we have a small business we have a small medium business priced here and we have a Enterprise priced here so when I say 200 Enterprise let's you know our bread and butter comes from the Enterprise and so when we talk about the small business it's like there are more than 200 customers but the issue is that those customers are wow we love them and they do help us um they they're not a majority of the uh of the revenue that we see yeah so 200 our folks that are paying you something meaningful every month you know two three five machines and the biggest of the 200 have 10 20 30 machines yeah yeah okay let's go back to 24 early days real quick I always like to ask sure do you remember do you remember what first year Revenue was 2014. I mean it's embarrassing um I know that's why yeah it's not it's not just embarrassing but it's like it's you know we've grown by Leaps and Bounds when you put it in the perspective of our founding days our first year right of course but you're inspiring everyone else right now who's listening who's thinking about founding a company right so so how low was it I don't know it was like maybe like 35 40K I mean and who was the first customer how did you find them how did you get the customer so again uh we partnered with that reseller who their focus is on marketing to post-production Motion Graphics designers and so we weren't selling direct to anybody we were just like hey if this thing works on your site you know when you do the marketing work what Kickback did you pay them I think at the beginning was like like an Apple Store kind of thing it was like 30 and then okay and then as as we saw the market respond you know we negotiated uh half of that so it ended up being 15 yep so are they still selling customers for you today yeah yeah that's amazing yeah is that how you're adding all your customers say is through value-added resellers or do you have do you have your own internal sales reps that carry a quota so we have um I have so it's only a total of nine of us we're still very small okay um I have uh uh one of the team is in charge of sales and there are direct sales that are being made the largest sales are being made direct how many are full-time employees that are sales for you one oh you're just the one okay cool yeah and and how many Engineers besides yourself it's 200 two other Engineers besides myself okay so three total so what do the other five people do one is a project manager because we have other product that is being developed right now which we're really excited about by the way um another you want to tell me about it uh yeah if you want to hear about it all right let's save that for the end okay so uh the other uh we have a quality assurance professional who makes sure that every release doesn't break because we have on demand you know we have always on systems so the QA is extremely important um and then uh let's see I have a technical lead that basically helps with all things infrastructure internally Yeah in our in our site you know um and then we have um I think oh I have a very very awesome customer support special who's who comes from Apple so like basically the face of the company in that regard and the technical support customer success I mean couldn't ask for a better we know your team now this I was curious if it makes this all right so nine folks full-time I love that you're bootstrapped now look I mean with this many customers at the price points we were talking about earlier I mean you've got to be flirting with if you haven't already passed the million dollar run rate can can you do that this year you think yeah yeah I think so for sure okay um but the you know um I think the release of new product new Revenue sources new revenue streams I think that's critical for our continued growth and we're doing just that and so and at the top of January we're going to reassess our pricing model that is to say we think that eliminating this small to medium business price uh is going to actually help us even if even if we see some attrition um and then we'll have two new uh well we'll have a completely cloud-hosted product that's more easily accessible right now it's uh very expensive we're going to be lowering that price and then this new product that we're developing now um is going to be released in beta at least at the beginning of next year there you go all right we're out of time we're gonna try and rock it through these real quick I need 200 customers right a six thousand dollar your price point you told me earlier it would put you at about a hundred thousand a month right now in Revenue but it sounds like you haven't hit 83 000 a month but I just want to be clear I mean you feel like we've got two months left here in 2022 you feel like you can break 83 000 bucks a month here in the next two months yeah yeah I do all right well I'm rooting for you man it's very obviously it's fantastic to bootstrap to that size it's taking you uh it's taking what eight years but you know what that's that's the that's the hustle right that's the journey so on on that note let's wrap up here with the famous five number one favorite Business book um the messy middle yep number two is there a CEO you're following or studying um really no I I can't say that I am now you're good number three what's your favorite online tool for building data clay um I mean I really like I have to say too there's I do like jira for management but I also like Miro which is phenomenally great at whiteboarding across remote teams Nero it's great number number four how many hours of sleep do you get every night between four and five and a half all right Sarah and situation married single kids uh I am married with three children three kids wow busy guy how old are you I'm 45 years old last question something you wish you knew when you were 20. um I think that I wish that I knew how difficult it was to you know put together a really great team and at this point I feel like I've nailed down a really good core team but I realized that team is really what it is all about and getting the right people in the right place and motivating them finding the space to push them to new heights to make sure they're not bored to death with their jobs you know that kind of stuff I wish I had known that at the outset before it was just more like I'm going to invent a widget and it's going to be great and it's not the case it really does take a team to do great things and so I I you know I wanted to know that earlier guys there you have it those clips you see on Twitter after your favorite NFL receiver catches that bomb touchdown that's dataclay.com powering that on the back end they work with over 200 Brands like NFL Apple uh MBC uh that pay on average cost 400 or 600 bucks per month it's a per Machine model they'll break a million bucks in Revenue this year of boots dropped up from 40 000 bucks back in their first year of 2014 their go to market was actually through a reseller where in the early days they paid 30 Kickback now scaling that channel is just a 15 Kickback but very Capital efficient again bootstrap with team of nine second product on the way here in January all right thanks for taking us to the top thank you it was a pleasure to be here thank you so much one more thing before you go we have a brand new show every Thursday at 1 pm Central it's called Shark Tank for SAS 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 our poo CAC LTV you name it they share it and the buyers try and make a deal live it is fun to watch every Thursday 1 p.m Central additionally 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