How Doerz CEO Tomi Virtanen grew Doerz to $50.6K revenue and 40 customers in 2023.

hey folks my guest today is tommy bertano and he lives like a local traveler a technology enthusiast and experienced business developer he's the founder of several companies including one micro bc to help other local startups get first investments also a board member and advisor he's now building d-o-e-r-z dot com to help people find local experiences tommy are you ready to take us to the top yes yes all right so just to be clear this is you're selling to consumers it's not like this is b2c not b2b uh well it's c2c maybe b2c but we are we are growing our business as sas product so in that sense we we also sell to governments and businesses so it's a little bit of everything you might say tell us about the use case where you're selling it to another business uh to another business that would be that would be some um travel related business wanting to use our platform in selling their activities so so this is something that we because we run a platform where there are i don't know 1250 plus experiences and activities and more coming every day so typically it would be some travel related business selling some activity but our sas product we also have have some companies using that so so what's the sas product that would be the the actual platform that we've built and and you know we found out that it's a little bit difficult to scale it to to several european countries for example with limited resources so we basically pivoted a little bit to to start selling it as a sauce product to cities for example in germany we are located in finland we have already like several customers here but we wanted to go to another country so in germany for example the cities would license our platform and then use it in their region together with us okay so just what's the difference between the first thing you described where companies paid doers to help run activities and the sas product you just described in germany um well sas product is our way of growing and gaining those those um activity providers oh so it's the same business model it's the same business model uh although two different steps maybe because like finding finding the content is sometimes you know takes resources and we didn't have that so we we started funding basically our growth through the sales model and so you have that you have the sas product that you just described how else do you make money we make money from uh all the activity sales so there's the commission um that's that's one way of of making money but we also sell some additional services to our city customers like what like something like workshops uh additional marketing services we even run some contests uh online contests together with them to to get um you know marketing permissions emails stuff like that so okay so you've got the sas business you've got sales commissions on activities and you've got services to city customers yes i see and over the past 12 months when you look at total revenue which one of those three made up your most revenue sales license fees and subscriptions easily so that's kind of like bringing us 90 90 to 95 percent of all our already oh i see i see let's just focus on that use case then for the rest of the show so what are what are companies are like this company in germany what do they pay on average per month to use your technology um it's a city-owned businesses like visit organizations they pay um at the moment 249 euros per month uh now we're just about to raise the price to 450 euros per month so okay yeah and and talk me is it taking back to your first customer when did you launch the business and when did you get your first customer uh we started oh i started back in 2016 so that's like a little bit over five years ago uh i started building platform for local experiences this was time before airbnb experiences and i kind of like found i had the problem of finding authentic experiences and meeting the locals wherever i went so i started solving that problem basically and we are still doing the same although people did a little bit a couple of times to to i mean the strategy and the end goal is still the same but way of getting there has been changing a little bit very cool okay so 2016 is when you got going that's when you got your first customer now have you bootstrapped this tommy or did you raise capital um well i had some you know ten thousand of my own money i took a loan of forty thousand uh and then we've been getting some government support but we've been doing crowdfunding so we've been raising uh something like a little bit less than half a million in euros in in like true crowdfunding equity crowdfunding on what platform um cedars in london uh lately and then a couple of times in finland just by ourselves so what's it called how do you spell that s e e d r s dot com s e d s-e-e-d-r-s.com got it that's like a equity crowdfunding platform yep yep okay interesting so so you put in 10k in 2016. you then took a loan for 40 000 and then to keep growing you've you've done crowdfunding 500 000 bucks on platforms like cders and tell me more about the team today how many folks today we are seven uh tourism travel professionals uh and working remotely everyone today are in finland but in several locations and how many of those seven are engineers one we are one one one tech lead yeah we've been outsourcing some parts of it like you know maybe front end coding and stuff like that but he's a he's a like true doer you might say he can you build stuff no that's good now when you raise on a crowd funding like crowdfunding equity effectively do you have to set a valuation or no yes yes you do so what i i think what you said 2.4 million euros is your pre-money evaluation um yeah we had like lately last round we that was 3.5 million fully deleted and 2 million with with the share so we have quite a big option pool for the for the team today so what does that mean like you were the sole founder how much like basically an esop pool is what you're talking about how much did you have you reserved for employees um so something like um [Music] well i still have have positional shares and then we have the option option pool so it's kind of like a trigger to calculate everything but today i have something like 70 plus percent of uh equity myself and the team has um roughly 30 that will one day be converted into shares so my i'm going to be deluded then and the team is going to be going to be owning more so what about what about the 500 000 you raised from equity crowdfunding how much would they own a little bit less than 15 percent and that's 450 uh people uh like individuals all together some companies some angels but mainly just you know ordinary people who want to own on a part of the growing business so if that 15 percent comes out of your 70 you own like 55 fully diluted today the esop pool is 30 and the crowd funding is another 15 something like that something like that you could say yeah yeah anything surprise you about crowdfunding equity i know a lot of my listeners have thought about doing this okay yeah well there's gonna be quite a lot of surprises i would say but um it's gonna be hard work you can you can say that um it's gonna be like putting a persona uh involved in the in the in the campaign but it's a good way of getting people who are enthusiastic about their brand maybe it's good to have a consumer somewhat consumer brand to because it makes it easier to raise money i don't know sometimes they say that one-third comes from your network uh one-third comes from uh the network of your network and then one third like honestly comes outside of that and i might say that's pretty close to the truth and tell me a little bit more about how many customers are serving today um yeah so we have three customers one being the cities which we have a little bit less than 100 cities while using our platform today then we have the experienced providers that would be 1250 experience provided providers roughly and then the end customers obviously to buy the experiences uh used to be international travelers uh nowadays domestic travelers maybe virtual experiences that you do before you travel somewhere and those but tommy how many customers okay sorry go ahead yeah yeah something like i would say 10 000 up to up to monthly monthly uh depending on the season and and obviously the pandemic has played a little bit of partier but how many in october at least one experience through your platform i'm gonna give you a number from july because that was a you know okay month you might say and that would be 2 300 a little bit over people just buying experiences and what's the average price on those experiences um average booking would be a little bit less than 50 euros 46.47 and an average price of sold experience is something like you know 25 euros each okay guys so 2300 activities at 50 bucks a pop a minute it's like 115 grand of activity flowing through your platform which you take a small fee on that's that's basically basically the case and the the commission changes from five percent to 20 depending on the location so i see i see but you have a hundred customers paying for your your sas tool uh a hundred cities using that we would have um today um 40 paying customers and through that we have have the roughly 80 90 cities so so ar annual recurring revenue 92 000 today and uh and growing mm-hmm 92 000 today means you're doing about what is that 7 500 per month in revenue uh yeah monthly recurring revenue of seven and a half thousand yeah and where were...