How Ember Home CEO Kurt Avarell grew to $3.9M revenue and 100 customers in 2024.

hey folks my guest today is janik karkanan he's a value driven entrepreneur father of four and a team sports enthusiast played a lot of band in front of 80 000 people he set up three companies and sold one now he's building a next phase of evolution in b2b collaboration called one dot cloud it's an integration service provider all right johnny you ready to take to the top yep sure okay so what does that mean a uh an integration service provider well that actually means this kind of like um i think you're you're talking about sas all the time so it's kind of like a primary thing but i i think from our standpoint we are kind of like combining the domain expertise and the sas product to be this kind of like a service provider offering which means that we can actually our customers can hand out the keys to this particular domain which is not that kind of like easy to fulfill and we'll take care of it so anyway we'll take the whole nine yards from from customers so so it's a combination of there's there's you have a software that's built but you also do it for your your users their services too um well two sites so in a way of course you need to ramp up stuff when you implement implement integrations that's only a tiny part but i think the most valuable part is the running of things so in a way we run it so in a way we like your mobile operator for your phones if you don't comparing to your collaboration things between the bw businesses so okay maybe help us get a better understanding of this i mean can you tell us the story of a current customer and and how they use you well usually it's it's um our prime domain is id services so in a way uh companies enterprises have id services so they need to deliver different kind of things for their internal customers so to speak so in a way what they need to do is orchestrate this kind of things so what uh nowadays is a trend is that you actually don't in-house everything you don't do your like you know for stuff applications for it whatever that it needs to be kind of like to fulfill all these things you outsource these things so it means that you need to be able to orchestrate everything that you do and that means that you need to be able to collaborate with your vendors so in a way for example we have a good uh reference case buyer is a big pharmaceutical company they have this collector the biggest outsourcing bid there has been in europe uh i think maybe globally but it's one billion dollars or euros is outsourcing so they need to operate all these things that they are buying from these vendors like gemini or these things now when i interviewed you back four years ago in 2018 and also three years ago back in 2019 you said that on average customers are paying you sort of you know around four thousand dollars per month is it still in that range i think it's it's been kind of like to a certain extent of course lowering but then of course to to kind of look more so it's kind of like thing that gets expand so you start with something which could be lower than four but then of course there's no ceiling on that if you need to i understand if we look at an average though is it about 4 000 a month i think it's like a between the 304 yeah okay okay got it that's great and and we when we came on last we talked obviously about how many of these customers you signed up i believe you're a low volume high price point right so how many customers are you working with today i think we're like short of 100 so 8200 okay that's nice growth again i think last time we chatted you had about 60 customers uh so have you expanded your team to support the extra customers what's your team size today uh we're more i think we today we started with two i think we're like 50 now so five yeah so we have a team in germany in u.s and in in helsinki and of course few few satellites over the nordic and uk 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 the 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 raised 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 now can and can i take 80 customers times 4 000 a month you're doing about 320 000 a month today in revenue i think it's quite close to 300 yeah okay about 300 000 a month and you've bootstrapped i believe correct or have you raised uh we are not that it's a young company so we we've done this for ten years we put stuff the first five or six we had like a minor seat funding from uh one million uh i think it was 2019 in 2018 and uh this year we raised our first round of seven million oh you did raise okay got it yeah you did a million seed back in 2018 2019 and most folks when they were raising seeds back then you know you're selling you know 10 to 20 to the business is that about what you sold somewhere in there okay so like a 5 million cap something like that and then yeah oh eight okay great so you got better terms you got better terms than i would say others did um what prompted the switch you're pretty capital efficient right up to last year you had only a million raised but you had over 3.5 million bucks in terms of run rate why did you decide to raise capital i think it's kind of like obvious that we've done this exploration of our own business model and the kind of like offering that we have and what is really are like we are really proud of the fact that we have practically practically zero churn so in a way we we have tested it so it is the kind of solution that we are providing is really good our customers are really happy and they hardly never leave so this was the point where we felt that okay the solo show works now we need to put the pedal to the floor and get some some acceleration to the market when did the round close uh october this year ah so you beat you closed right before the market the market took a dive right so would you call this your series a i think it's yeah but well usually it's the vcs that define what serious it is so we don't really care yeah but you could call it yeah yeah and then most times again in series a you know you're selling you know maybe a little bit less than the seeds so maybe 10 to the business or were you sort of around there a little bit more than 10 yeah okay so that would have been like a 55 60 million valuation something like that um not really it's like twenty thirty five from twenty twenty five million dollars so that's how i got started thirty okay and that's pre money or post post okay cool well that i mean looking back now obviously you've only had it for two three months did that valuation feel fair for where you were at the time i think so yeah well we started the path towards the next round just before the coveted so we can like run into a few issues because you cannot meet people and it usually visits invest into the team so it's kind of like looking at the eyeballs more or less of course you need to have the numbers and ideas and these type of things but at the end of the day it's the team that they invest in i i feel that that was a little bit tricky for us because we need to do everything online and so forth so yeah yep how many of the 50 people on your team today are engineers i think it's more or less from the engineering like development side i think it's like 16 17 then we of course have support engineers and this kind of like more technical people but not the developers maybe five six okay so maybe 23 total something like that and then do you have quota carrying sales reps uh yep yani or no yeah how many well if you are kind of like having like a button like these multiple roles but uh i think in germany we have two uh three us two so it's five total yeah how did you figuring out your first salesperson's quota is not easy for a sas founder how did you set your quota for your first sales hire um again so it's gonna be not sure okay yeah and i i think when it comes to the sort of quotas and things to how to measure this kind of sales i think in our case particularly it is a team effort we don't really we feel that it's it's kind of like that we're our our bonus mechanisms are more kind of like joint so when the team and the whole company yeah makes them and you shared back in 2018 that you were spending you know about sixty thousand dollars to get a new customer paying four thousand dollars a month right so you had a payback period of around 13 months are those still the same metrics i think we've gone up a little bit okay spend a little more yeah well um but you still have i'm i was gonna say you still have the really good retention right above 100 net dollar retention yeah yeah yeah and that's um ltd attack is quite quite extensive since we don't have any chairs so so the calculation would if you need to divide by zero it's a little bit tricky so yeah yeah that's tricky now when you say the cac went up a little bit where i mean that's 80 000 bucks where are you spending that money how are you using it well of course company of fire size is its salaries of course okay so most that cac is salaries not paid marketing expenses paid ads no no no it's it's personalized for explain labor that we need to do and of course inbound and this kind of market awareness is something that we are exploring a lot but uh it's a tricky business that's amazing we haven't really found like a okay we put money there and we're so we're like before we wrap up i have to ask about the three guitars behind you how did you get in front of 80 000 people i mean are you in a band or a solo performer or what yeah i used to be in band like 10 years ago so that's amazing what was the name of the band uh it's called sunrise avenue sunrise avenue and the biggest venue you played was 80 000. yeah wow i'm i'm looking up pictures of you from back in the day right now on google you were you were you were quite the you were quite the guitarist huh yeah well that's for somebody else else to decide experience of course you still do you still get a chance to play today uh yeah well i have another band at the moment uh well not that active though but it's got phoenix effect you can you can find that in spotify as well however i think where the sunrise avenues is uh having a farewell tour at the moment and actually i'm planning to join the guys in on stage in july so it's going to be exciting stuff that's amazing uh yeah that's really amazing i'm on metal i'm on metalshockfinland.com reading about you uh so this is your last this is your last stadium huh what uh how many folks were you guys expecting to be in attendance well actually they've renovated the stadium just north i'm not sure but it should be invited for you wow wow variant is there is there any big similarity between building a software company and playing a guitar in front of 80 000 people with your band directly playing but actually by doing a band i think that there's a lot of similarities so it's uh kind of like you you need to build the prototypes do the demos sell it to a record company kind of like a market yourself like question yourself all the time well you name it so it's a it's a similar road and i i think that it's been exciting things too to develop have these experiences and and bring them to different kind of domains so it's a that's exciting well hey let's wrap up with the famous five number one what's the last book that you read i think it has to be some sort of like a well it's a finished book finished i'll just say finish book yeah all right good one number number two is there a founder that you're following or studying okay number three what's your favorite online tool for building one io now we have this lucid ports whose depth which we use for this kind of sketching what's it called loosen port losing charge lucid oh lucidchart number four how many hours of sleep do you get each night oh eight at least and what's your situation married single kids i'm in a modern family of six kids and wow okay mary six kids holy cow and how old are you 45 okay last question what's something you wish you knew when you were 20 sorry something you wish you knew when you were 20 years old but actually i don't know everything [Music] guys there you have it uh 1io.cloud is helping uh service providers you know it servicers uh deliver stuff to their retail customers like application support at scale we had him back on in 2018 you know uh is smaller than much larger now he's grown to over 300 a month in revenue 3.6 million dollar run rate he was very capital efficient to only a million raised back in 2019 to grow a three million dollar business that he know what now's the time to step on the gas he just closed a seven million dollar series a in february at around a 30 million valuation 50 people on his team as he looks to scale and oh by the way he's a guitarist and a band with their farewell tour hitting here in july with 30 000 people man of multiple talents yani thanks for taking us to the top 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 arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2 p.m central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathanlacka.com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive i am on these shows but i 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