How EstateSpace Reached $600K Revenue and 65 Customers in 2022 While Raising at a $17M Valuation (Interview with CEO Jonathan Fishbeck)

Introduction and Company Overview

Nathan Latka

00:00Family offices pay estatespace to manage hundreds of properties. He charges per seat. His biggest customer pays $7,000 a month. He's up to $20,000 a month in total revenue or $250,000 run rate. Just closed a 3,200,000 seed round at a 17,000,000 pre money valuation, But it's really because of the traction he had before that with his agency doing millions and millions a year in revenue, doing custom solutions for the same customers he's now serving today. That's why

00:22he's now scaling so quickly, and that's what allowed him to get the seed round done in a market that's crazy where no one can get deals done. Team of 17 as he looks to scale, new version coming out here shortly. Hey, folks. My guest today is Jonathan Fischbeck. He is building estatespace.com. It's estate management simplified. Jonathan, you ready to take us to the top?

Jonathan Fishbeck

00:40>> Always. Thank you, Nathan, for having me.

What EstateSpace Does and Why Estate Management Matters

Nathan Latka

00:42No one thinks about estate planning. How do you make them think about this so they pay you?

Jonathan Fishbeck

00:46>> Yeah. So I think from an estate planning perspective, where estatespace really is is is setting the bar is when we're dealing with real property assets. So we're talking about managing your property, maintaining your property, managing your assets and maintaining those assets, ultimately coming back to where we started as fintech, right? We want to help appreciate the value of the things that you own and help you manage them better. We want to add depth to your general

01:12>> ledger and your balance sheet where it might just be a single line item. And then from there, we also want to help you slow down the depreciation of assets that might lose value over time and helping you extend the life of things that you own. So ultimately, you know, the way that we when we started the company, we saw, you know, I've got marketable securities. I have real estate and alternative investments, but who's really managing all

01:36>> my stuff? And and that's how we that's how we really started. That was a genesis in the idea for estatespace. Mhmm.

Nathan Latka

01:42How you know, for me, when I think about managing my own sort of stuff, like, want somebody, a person that I can call focused on it. How do you get people to sort of trust this using soft like, to invest in software to run this process versus someone, a wealth manager, for example?

Target Customer: Family Offices and B2B2C Model

Jonathan Fishbeck

01:58>> Right. So it's an emerging space, right? In the last ten years, family offices specifically have started getting into the fulfillment of the lifestyle of the individual that they're serving, whether it's a single or multifamily. And so we saw an opportunity to really help them with the things that they struggled on, like finding the right person to do the thing that they're looking for, the request being that they need to fulfill. So we've actually had a lot

02:23>> of excitement around helping these families and family offices scale automatically through estatespace.

Nathan Latka

02:29So are they paying you directly versus versus individual consumers paying you directly to manage estates?

Jonathan Fishbeck

02:35>> Yeah. So we're b to c to b. So we yeah. Exactly. So so it may

Nathan Latka

02:39be B b to c.

Jonathan Fishbeck

02:41>> Yes. Exactly.

Nathan Latka

02:42Yeah. Interesting. So how many family offices pay you something today?

Customer Count and Commercial Launch

Jonathan Fishbeck

02:47>> Right now, we've got about 65 family offices on the platform in the last when we launched what was it? April thirtieth of this year.

Nathan Latka

02:54And and wait. Why do I have that your launch date was 2017?

Jonathan Fishbeck

02:58>> Well, that's when we started the company, but we launched our commercial prod product. We we so we did an alpha to a beta. We went through that process with with our clients in in order to get to a commercial ready product for both web and mobile, this last April.

Nathan Latka

03:13You had, though, revenue before this year. Right?

Revenue History and the Pivot from Services to SaaS

Jonathan Fishbeck

03:17>> Absolutely. Yeah. So we we were, you know, as part of my, under 500 story, right? We were doing services, so we were doing a lot of things. It was hard for me to break that service mindset, and we were able to really pivot to complete SaaS here in the last eighteen months. So we've now kind of sunset our services and now we're we're changing all of our revenue over from what was non subscriptions to all subscription

03:42>> based.

Nathan Latka

03:43I see. So, when we spoke in 2021, you said you had about 50 customers and they were paying, I guess, services here as well, but you did about 2,200,000 in total revenue that year. Is that accurate?

Jonathan Fishbeck

03:53>> That is accurate. Yes.

Nathan Latka

03:55I see. And but no 0% of that was SaaS?

Jonathan Fishbeck

03:58>> Yeah. It was it was it was yeah. It was like, no. Not 0%, but maybe 5% of that revenue was SaaS revenue. And so now flipping the script. So we pivoted to pure SaaS. We do no services at this point in time.

Nathan Latka

04:13Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 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 Founderpath. Check this out. I'll show you how you can access this in a second. But you log in, you connect

04:36your Stripe account, you see your valuation real time. You can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna

05:00get a different valuation. A VC is gonna pay a different valuation, Private equity firm is different. If you're gonna 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

05:22not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna 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

05:48going out right now and you're raising your seed round. We'll 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 dataset of SaaS valuations than what you can get now inside of Founderpath. 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

06:10if you wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link, this link, founderpath.com/products/valuations. 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. Alright. Let's jump back into

2022 Revenue Outlook and Legacy Services Wind-Down

Nathan Latka

06:36So will revenue decline this year because you shut off all that service revenue while you're scaling your SaaS?

Jonathan Fishbeck

06:42>> Yeah. So we're we're actually doing a, a a seed round funding right now. So we're, we're we're raising capital. I put in more capital. We're still bootstrapped. So we're doing this through friends, family, partners, our closed network, and our board. And then we'll, we're we're scaling back up. So we're probably we just crossed 250,000 in in recurring revenue in ARR in this in the past five months since we launched our

Nathan Latka

07:09So you're doing so you're doing 20,000 a month in MRR, which is a $250,000 run rate, and that that'll that's your revenue for this year?

Jonathan Fishbeck

07:15>> No. Our revenue by the end of the year should probably some be somewhere around 600,000. So Okay.

Nathan Latka

07:20So you still have 400 of services or something? 400? Yep. I see. I see. Okay.

Jonathan Fishbeck

07:26>> Yep. So that's the exactly. We we've we've still got, like, annual legacy, just under a $500,000 in ARR coming from services.

Nathan Latka

07:34How do you manage that storyline, especially if you're raising now? Even just with employees? I mean, imagine when you close books in 2021 and you do 2,200,000 revenue and then 2022, it's gonna go down, you know, significantly down to 600. But the story is, hey, guys, we're moving to higher margin SaaS. That's a hard storyline to manage. I mean, any employee looking at the books is going, oh my gosh, we just declined by a lot. How

07:52do you manage that storyline?

Seed Round Details and Valuation

Jonathan Fishbeck

07:53>> Yeah. So I'm transparent and honest, right? So I've just told every employee kind of what we're doing, right? The same story I'm telling you right now. So I'm I'm we're raising we're raising around 3,250,000 that'll take us through the end of next year. We'll be about $2,000,000 in ARR by the end of next year, and it'll all be SaaS. And so actually, have more excitement from our staff than we did. And we've also it wasn't like

08:18>> I had to sell that to all 17 people that work with us now, right? At that point in time, we were only about six people. So it was just me and a few other people at that time. So we tripled in size here in the last eighteen months now that we made that transition over to us.

Nathan Latka

08:33Interesting. How much equity do you think you'll have to sell at your current size to raise 3,200,000?

Jonathan Fishbeck

08:39>> So I've already raised 2.4. Okay.

Nathan Latka

08:42And what does that mean? That's committed, signed, wired?

Jonathan Fishbeck

08:45>> Yep. So it's, so closed closed and signed, closed off. We're at just under 2.1 and then we've got another 350 k of, commit of soft commit at this point.

Nathan Latka

08:56Okay. And when's the first close? When are you gonna take the first wires you think?

Jonathan Fishbeck

08:59>> Already started doing it. So I've already got $2,000,000 in the bank.

Nathan Latka

09:02So then I don't have we don't have to speculate. Right? So so what valuation did you set or cap if it's a note?

Jonathan Fishbeck

09:08>> Yeah. So we did we did we're just we're doing pure equity sell common stocks and we set $17,000,000 pre money.

Nathan Latka

09:15Mhmm. Yep.

Jonathan Fishbeck

09:17>> And that's gonna be somewhere around $2,121.07 post by the time this is all said and done. And then we'll, we're positioning the company right now, to put, you know, we we feel that based on the the market comps, the business model of cash that we've already raised, we support that and that we're we're gonna be adding significant value over the course of the next twelve to eighteen months here as we potentially look to to either do

09:42>> another round or, you know, as we talked last week, potentially doing something here with Founderpath.

Nathan Latka

09:48Yeah. How how do you get, I mean, look. At your stage, the revenue is almost meaningless. It's really about do they believe in you and your story. Right? Which clearly they do because you're raising this amount of money in a time when, like, no one can raise. Right? Now if you did do a revenue multiple, right, 17,000,000, right, on a $250,000 company, it's a 68 x multiple, which isn't I mean, you know, again, I wouldn't say

10:10that that's important. What's important is a story you're telling. So but point being, there's lot people listening that are at your stage that are trying to raise this kind of round. How did you get it done?

How Jonathan Closed the Round in a Tough Market

Jonathan Fishbeck

10:19>> You know, I think it was it was kind of what you just said. Right? I mean, people aren't investing in my multiple right now. They're investing in the company. They're investing in the vision. They're investing in Jonathan and and where we are. Right? We have traction. So we were able to leverage our traction. We were able to leverage the space that we're in and we've kind of created a marketplace. So I would say some of my

10:42>> advice is, again, we've been successful by staying two inches wide and two miles deep. So we're not saying that we're property management simplified. We have a very specific goal with the company. And so with that story and that transparency, it resonates with our investors and shareholders. It also resonates with our buyers, right? Like they get that we are purpose built. So when it comes to some of when we start to look inside the numbers, I've been

11:10>> able to raise capital because we have over a 90% retention rate for paying clients, right? We have some issues prior to that on activation that we are that there are things that we can solve for but from a you know, from a from a raise perspective, you know, we started this raise on September 6 and it's been, you know, and then the market kind of turns down and, you know, we were just we just stayed honest

11:35>> and we just, you know, stuck to what it is that we do and what we know. And ultimately, you know, we've we've had success raising capital, Nathan.

Retention Rate and Investor Story

Nathan Latka

11:42Yeah. No. It's good. I mean, it is interesting to compare, though. I mean, I I believe I remember when we talked in 2021, you said you turned down a $20,000,000 acquisition offer. Right? Yep. So so you're now raising at a at a valuation that's equal to or slightly below that. Right? How do you think about that?

Jonathan Fishbeck

11:59>> I don't. You know, I mean, I think that I look Should

Nathan Latka

12:02you have sold for 20,000,000?

Jonathan Fishbeck

12:05>> No. No. I mean, I I I I see this company being much more valuable than $20,000,000, and I was not in a position

Nathan Latka

12:12But then why are you raising right now at a 17,000,000 valuation? If you think it's gonna be if it it's gonna be worth way more.

Jonathan Fishbeck

12:18>> Just because that was what I was able to get. Right? So, I mean, working with some of our primary investors and myself, I mean, we felt like that was the that was an appropriate number that we were able to get kind of that first initial one and a half through a primary investor of ours. So that was, you know, that was just where we ended up with this deal.

Largest Customer and Pricing Model

Nathan Latka

12:34Fair fair enough. Fair enough. Okay. Very cool. So 65, customers doing 20,000 a month in revenue. So they're each paying about $300 per month on average. Do you have any of the 65 customers that are paying, you know, a grand per month or $2,000 per month? Like, why what are the big customers? What are they paying you for?

Jonathan Fishbeck

12:50>> Yeah. So our largest client is about 7,000 of that a month. Oh, wow. We have yep. And so with with where we are right now, we have a release coming out end of this month. So it's our 3.5. 3.0 is our April release. So now we're on our fifth release since our primary. And with that, we're reaching a maturity level on our platform of a three out of five. And with that, what that means for us

13:16>> is that why if people come and we have like a 52% closed win, why isn't it higher? Because we're missing feature functionality. We got something out there, right? So I think the story in SaaS, it's always just put some put yourself out there, right? Get a product out there, get feedback.

Nathan Latka

13:30But what's the seven k customer paying for? I I wanna know that. Are they paying for more seats? Is there a specific feature they you upgraded them against? What are they why are they paying so much more?

Jonathan Fishbeck

13:39>> Property maintenance and project management feature sets. We've opened yep. And they're they're a large b two b. So they're they see estatespace. It's gonna be fuel

Platform Ecosystem and Vendor Inclusion

Nathan Latka

13:49Large, no measure by what? Is is it number of employees at their company, number of properties they manage directly? What's the utility numb the number?

Jonathan Fishbeck

13:57>> Yep. So they they have about, just under 200 employees. They're doing between 50 and $100,000,000 in revenues annually, and they're managing over a 100 properties.

Nathan Latka

14:07So that's why they'll pay you 7 k because you charge per property. Right? Or and or something like that?

Jonathan Fishbeck

14:12>> We charge per we're just per per user per month.

Nathan Latka

14:15So it's against the 200 employees? Yep. I see. I see. Okay. Interesting. Very interesting.

Jonathan Fishbeck

14:21>> Estatespace isn't designed just for your company or the people that are in it.

14:27>> Like when we talk about an inclusive mindset, right? We have created a platform with very specific and very flexible roles and permissions to allow for our clients to involve their entire ecosystem. So we might have a family that has 15 properties, and each one of those properties has vendors that are helping them maintain it on a daily, weekly, monthly basis. Those individuals could be a vendor, could be a member of their estatespace, and they're actually communicating

14:57>> and tasking and doing all of those transactions with that vendor through estatespace. So they're paying for that vendor to be someone that they're able to then securely manage and protect their interests.

Nathan Latka

15:09Understood. Love the story, Jonathan. We're out of time, though. Let's wrap up here with the famous five. Number one, favorite book.

Famous Five: Books, CEOs, and Tools

Jonathan Fishbeck

15:15>> It would be, The E-Myth Revisited.

Nathan Latka

15:18You're consistent. That was your favorite two years ago as well. Number oh, no.

Jonathan Fishbeck

15:21>> The revisited version.

Nathan Latka

15:22There you go. It's the update.

Jonathan Fishbeck

15:23>> Yeah. Revisited and Traction. Those were the two that kinda got me kicked off into becoming a serial entrepreneur here.

Nathan Latka

15:28Number two, is there a CEO you're following or studying?

Jonathan Fishbeck

15:31>> Yeah. I mean, it's still gonna be, Bezos. It's still gonna be, Apple. It's those are gonna be my top two that I follow.

Nathan Latka

15:37Number number three, what's your favorite online tool for building, the business?

Jonathan Fishbeck

15:42>> I mean, I'd say that, you know, from a peer development perspective, we're using Atlassian. I do love it. It works. Leave it at that.

Nathan Latka

15:50Fair. Number four, how many hours of sleep to get every night?

Jonathan Fishbeck

15:53>> Seven.

Nathan Latka

15:54Okay. And what's your situation? Married, single, kids?

Jonathan Fishbeck

15:57>> Happily married, three kids, two dogs, four birds, and a partridge in a pear tree.

Nathan Latka

16:02That's amazing. What? You're 40 now? 41?

Jonathan Fishbeck

16:05>> I just turned 40. Yeah.

Nathan Latka

16:06Just turned 40. Yeah. Very cool. Last question. Something you wish you knew when you were 20.

Advice for Founders: Get Good Advice Early

Jonathan Fishbeck

16:12>> To get good advice before starting a company. Find somebody that's already done it. Right? That's what I I always wish I I would have known that it took me about eighteen years in business to actually learn that one. So that's my always my number one advice.

Nathan Latka

16:28Guys, family offices pay estatespace to manage hundreds of properties. He charges per seat. His biggest customer pays $7,000 a month. He's up to $20,000 a month in total revenue or $250,000 run rate. Just closed a 3,200,000 seed round at a 17,000,000 pre money valuation. But it's really because of the traction he had before that with his agency, doing millions and millions a year in revenue, doing custom solutions for the same customers he's now serving today. That's

16:50why he's now scaling so quickly, and that's what allowed him to get the seed round done in a market that's crazy where no one can get deals done. Team of seventeen, as he looks to scale, new version coming out here shortly. Jonathan, thanks for taking us to the top.

Jonathan Fishbeck

17:00>> Thanks, Nathan. Appreciate it. See you soon.

Nathan Latka

17:03One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. 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

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