How Factor Technology CEO Hugh Winkler grew Factor Technology to $250K revenue and 6 customers in 2023.

guys Factor technology helps folks especially consultants in the well and drilling industry understand uh how to map these Wells at scale right using a different kind of Technology they want to focus on getting more well bore in the pay Zone as Hugh said it uh he's there working with six customer half dozen customers say bootstrapped which we loved uh love launched in 2017 hoping to break a million bucks in Revenue next year we'll see what happens hey folks my guest today is Hugh Winkler he is trained as a geophysicist and experience in web architecture he invented a sneak for well positioning using machine learning technology with two partners he founded Factor technology to commercialize this technique they acquired their first early adopters in 2022 and he previously founded welstrom which is acquired by uh emeris which is drilling info in 2012. Hugh you you ready to take us to the top you bet all right so so I guess tell us about this technology and why do people care about uh what is in a well Well everybody's drilling horizontal Wells since uh you know for the last two decades and uh you know for the last 20 years people have been kind of using an ad hoc sort of heuristic method to position them so you drill it down two miles and then you drill it across two miles and you want to stay in the in the formation that you're targeting and they've got various methods for keeping it in the formation while they go two miles lateral what's the most popular formation before what you've invented the popular formation sorry not formation technique to State and no formation so you're going down two miles and across what's popular geosteering they call it there's there's Directional Drilling and GTO steering is what guides Directional Drilling and so the geosteer is usually trained in in geology you know reads uh measurements that they take down whole and he sort of uses his um intuition and his knowledge and historically uh uses some desktop computer assistance but also his the seat of his pants to keep the well you know in the Target formation and this has worked pretty great for the last 20 years it's it's not that it's uh failing but it turns out that that there's a big it's a big stress on an individual having to do this job and so every 20 minutes you get some new measurements in and you've got a you've got a read some uh Wiggly lines on a screen that are measurements and figure out what that means as far as the geology and then you know if you make a wrong decision you've steered your wellbore out of the productive Zone and possibly into a hazard that could cause you to you know a very expensive side track so it's a high stress uh decision that people have been making and and you've got sorry huge just to dumb this down for folks that don't know the well and drilling drilling business you know you know really well so Exxon Mobil is drilling something new they're fracking whatever in Texas they'll pay someone to go out and do this drilling to understand what the Economic Opportunity is before they spend all the money to actually do the drilling is that is that what's at stake here that's what you help with they're actually this is actually during the doing the drilling part ah okay they're exploiting the field and they're drilling all these horizontal Wells and they've gone out and made a map of what they think the target Zone looks like but nobody you know you can't see what's 20 10 000 feet down under the surface so they're blind and as they're drilling along they try to use these electronic measurements down hold to determine where they are geologically interesting and what what forgive me for my naivete here but if you know if you go down two two miles you're gonna hit you know a slice right that is I'm gonna make this up 300 feet deep of you know frackable oil or whatever why do you need to know what the pattern is the left right why can't you just keep sucking from the same spot why do you have to why do you have to go to the horizontal horizontally uh if the more well bored that you can expose to the formation the more oil you produce out of there because the kind of formations they're producing in Texas mostly now are no longer the rich flowing ones you know with gushers that doesn't happen much anymore what happens now is that they have to they have a little Trickle coming in after and only after they fractured the well so you drill this two mile horizontal hole through that pay Zone and hopefully your whole well boards in the peso interesting so your argument is pay for our software we're going to help you make more money um by spending less money as you exploit you know these you know much smaller pay zone areas there you go you'll have more well bore in the pay interesting 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 founder 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 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 so who's using you I mean you mentioned ahead of the call that you're selling like financial institutions are you is this more a research tool for hedge funds or is it actually being used in the field by you know Exxon Mobil or someone like oh no no this is all about uh these are for operators and and their Consultants so it's yeah so we've got one uh top 10 U.S company using the software and several smaller uh uh consultancies so a lot of these big companies Outsource this function because it's it's uh a person has to stay up all night watching screens and they don't like to do it themselves so they Outsource the the job to workers you know who work in shifts watch the screens take the measurements in guide the wells and so that's the way it's been done historically and now we're trying to convince people that instead of Outsourcing it this menial sort of all night work you can automate the process by feeding the data directly into our software sending alerts we compute the answer instead of just you know nobody has to make a lot of judgment calls um what are you billing against like are you billing against number of miles tracked uh size of payload area like how do you build similar it's like it's a day rate okay every day you use the software you you pay a certain amount okay what if I am cheap and I want to take advantage of your software as much as possible so I just do all my work and one day that I'm done well that's possible and I encourage you to do that uh but you can't uh I mean if you're if you're for instance if you have a well that you want to know where what happened to it retrospectively you drilled it last week and you want to know whether it's in zone or out of Zone you could do that but while you're drilling the well you want constant updates so pretty much a user is gonna use it while they're in the lateral and pay us per day as you extend the well so that could be five to ten days so is it just per day rate or what if I'm using you daily across 10 Wells do I also pay a per well rate we have a Enterprise uh Edition as well that doesn't work on a day...