Fanbase Revenue, Valuation & Funding (2024)

hey folks my guest today is isaac hayes the 30s the founder and ceo of fanbase which has raised 3.5 million bucks in seed funding on start engine in may 2021. the company is a new social media platform that monetizes social content for all users isaac you're ready to take it to the top absolutely all right man who's paying you who's using you right now what do you mean who are your customers oh well anybody like anybody that wants to monetize their content right the world is full of people that give away their content for free and the times are changing i think we're moving into a subscription-based world through everything and so it doesn't matter who you are where you are what you do i think all content has value and so i'm really excited to offer the opportunity for any person on the planet to monetize their content on fanbase but it's really hard to build a product and get users if you try and build it for everyone so who are you building the mvp for who are you targeting well really i think fanbase is for the future so it's really for the youth i really think that the future of social media belongs to the younger generation of kids that understand in-app purchases virtual currency subscribing all these things so fanbase is truly for the gen z generation the centennials that are coming right into social media right now the the way you present the story on the website is especially almost like instagram but people can it's a paid instagram you can subscribe to someone's instagram and i'm sure there's video content besides just images and then i can see almost sort of like um oh what's that oh almost sort of like only fans but obviously not that industry related but you can log in and see your revenue reports live too absolutely you can have followers and subscribers on the same page which is cool because it's a freemium app so it's like the things you want your followers to see like you normally would on instagram or twitter or facebook it's free um the things that you want people to pay for whatever their skill set is if it's a podcast the tutorial your private life whatever it is you can uh post that behind the paywall if people can subscribe to see that so i think that's what makes it very simple and then we have tons of verticals which is like photo video long form live audio rooms like clubhouse and sort of spaces stories and our new version of our short form video editor called flicks which is like our tick tock and reels which is coming early at the top of the year so it's just a it's a wide variety of tools for anybody to use to monetize their content isaac when you launch the business well enjoy the first line of code so that started in 2018. really we launched the app the beginning of 2019 and i didn't tell anybody that i built it right i let it sit for a year because i wanted to have a proof of concept without using my name or anybody that i knew to get users i wanted somebody to come on the app and use the app what it was intended for and we had several users do that but one person made about six thousand dollars in a year and we had less than ten thousand users and so that that showed me that i have a proof of concept that i could take you know and raise capital um and to do so but then 2020 came and coveted hit and then i couldn't move so we had to go a different route with crowdfunding um so how many downloads to date all downloads since 2018 of the app uh probably almost 200 oh wow okay and how many just in the last 30 days oh we just had a big uptick maybe maybe 20 25 20 000 what drove you uh well we actually had a a new user um rapper lotto she just joined the platform actually and she's having a birthday party here in atlanta and she's inviting five people to come to her birthday party on fanbase which i thought was really really cool and people are downloading the app and subscribing to her like crazy because they want to come to her party that's very cool okay so you mentioned the one user made six grand in 2018 how much have all your users made all time oh i don't know off the top but i mean it's we're well over probably almost three or four hundred thousand dollars just thinking about all the users in our user base so it's a significant amount of users that made a lot of money so over three hundred thousand made by made by users posting this great content and how many how many have made at least a dollar all time oh probably eighty percent of the ad it's not very high it's not very hard to make money on fanbase and i think um it's very very um intuitive and people are very very transactional with virtual currency like love is the virtual currency so you can like something on fanbase you can love it you buy love in the subscription store if you love a post you tap it you give the user half a penny and you can actually give as much love on the post or in an audio room or on a video or in a live as you want so people are making money like the first day they come on fanbase it's like oh i made three dollars on fanbase and i've been on instagram for 11 years i haven't made a dime so it's very very easy to make money on the plan when you say 80 on the app is that 80 of the 200 000 downloads yeah i mean 80 of the user base so yeah 80 of the people that have actually used that have actually made money so how many users i i don't know how you quantify user base by active users so how do you measure an active user they log on at least once the last 30 days they posted at least once yeah so they yeah they posted it i mean anybody that's posted at least once um all the time yeah that's made money all the time but active users we're in the you know maybe 48 49 000 a month um range which is pretty good for app that you know doesn't have that's almost 25 of the app that's just checking in month and then daily is pretty high too what does that mean though 49 000 made at least one post or they just open the app and cruise through content they open well they open the post they use the post they join an audio room they sit on the stage they're doing some sort of activity um that has them on the app for a period of time i see super interesting okay let's talk about start engine so first off where you bootstrap before start engine yes i actually pay for the the mvp of fanbase with my own money out of my pocket uh how much was that that was probably about 150 000 wow who did you have to pay um my cto and his company which actually they became equity partners and fan base and they are the team that continues to build fan base to this day interesting was that a local dev shop in atlanta or who was it yes it was a local shop in atlanta a gentleman by the name of ramiro kanavos and it was great i got introduced to him through an attorney of mine and he hopped right in and said yeah we can do this and they they've been in business for about 12 years 13 years and fanbase is the first app that they actually wanted to invest in because they believed in this so much i was really excited that they want to join the journey and i couldn't do it without them and i'm glad to have them on board so how much equity did you give them oh i can't tell that i mean a range is fine are we talking like a percent or like 10 oh no it's it's well above a percent i mean you ha and and in tech you have to have you know ctos that actually have some skin in the game because when you're building these things and you're raising capital um people have to know that the buttons are going to do what they're supposed to do and believe that people are going to stay involved who are around so they own more than ten percent no okay so between one and ten we'll leave it at that yeah i see okay cool and then um you mentioned he invested then so were they your pre-seed round before start engine or they put money in via start engine um both they were precede and so they just came on and said hey let's get in this um and then they they came in a little bit more on start engine so when did you raise your precedent round well it really wasn't a it really wasn't a precede that's the thing it was just they wanted to come on board and be part of the the platform so i allowed them to do that i mean the only other capital that we raised at starting it was just started it was just myself uh romero and his team and then we went to start ninja i see okay tell me about start engine how much did you end up raising and how much of the company did you sell we raised about 3.4 almost 3.5 million dollars right at 3.5 million dollars um at a 20 million dollar valuation so that's about 15 percent of the company free money or post um you're saying oh 20 million pre-money pulse one is 23.5 okay so yeah you sold about what 18 percent something like that 17 17 yeah every point matters baby every point matters all right 17 and tell me about the rest of the team how many folks will time today uh um probably about 20 maybe um maybe maybe more even with development i mean i have a senior team of executives that work on a bunch of different things especially onboarding and marketing we're in we have sports and music so there's a lot of verticals to the platform that require a lot in building some of this technology um you have to have the right personnel that helps you scale in those different areas so um the executive team is pretty robust and even on the um the marketing and um the metric side our data and analytics so yeah so 20 people how many are engineers oh probably half you know about half about 10 engineers and then flash up on the story for me we haven't talked about how you guys make money so fanbase takes 20 of all the revenue that comes through so it goes to in-app purchases through the apple app store so for every dollar you know apple and google take 30 cents we take 20 and we pass 50 on to the user yep um and that can be a lot of revenue um as as you scaled up with with users so over the last 30 days how much money was sort of you know spent through your system i don't know right off the top hand because we're we're rolling right into the end of the year but not not off top i don't know right off top of that off top what's a range it really varies and honestly there is no it really varies just depending on who actually comes in and uses the platform and works on it so it's really hard to tell no no i get that but i mean isaac this is your number one driver i mean this is revenue into the company um every sas now this is like the number one priority right so you had 300 000 come through the platform all time you already told me that what's a range of what came in over the past 30 days you think i'm telling you it really honestly i can't it varies it just it honestly varies on the amount of users and what what activity is going on we have a huge uptick in revenue because of a lot of activation right now so even i i couldn't even tell you well i guess i guess i guess i'm just a little surprised like that isn't the thing you're looking at every morning when you wake up i'm just shocked that that's not like you would know that number instantly to anyone who asked you um not not really because i mean i'm the money will come i'm more interested in in building our user base and the things that we're building and actually getting users to come on board so the first thing that i look at is is our growth like how many how much time people are spending on the app because money um we generated money from the day that we launched so most at most platforms are not even profitable right some are generating remember someone trying to figure out generating revenue at the moment their fan base existed it was already generating revenue so we're going to make money it's about taking that and scaling that with a user base so i'm more focused on the community community building is really what's going to make the platform last long the platform will make money and we'll do totally fine but if we don't build a community then there won't be a platform so you mentioned you really track average time on the app right so what is that today in 2021 it was an hour and 25 minutes okay through the whole year or monthly or weekly or what yeah through the whole year is about an hour and 25 minutes but it probably varies between 35 and 45 minutes a day um uh probably in the last like three or four months but that's really that really has a lot to do with audio because people are in the audio rooms and they stay in the audio rooms consistently but there's also a lot of content that they can scroll through while they're in the audio room wait sorry i'm confused so of the how many are spending 35 to 40 minutes a day in the app the the average daily user in 2020 one spent an hour and 25 minutes a day in the room for 2021 an hour and 25 minutes a day yeah that's that's like that's like crazy high i know it's absolutely high i i think because when you combine like so let me just repeat that back to make sure i understand it you've got 49 000 monthly active users right now today what you're saying is those 49 000 will spend today each an hour december 15th will each spend an hour 25 in the app between between 45 and an hour and 25 minutes a day it varies across all those 50 000 monthly active users so 50 000 people today will be in the application for about 45 minutes today probably yeah absolutely i know that so and you know what's so funny is when i'm so as i think are you sure are you sure that that number is accurate i'm i'm sure that i'm sure that the yeah i'm not it's i know it sounds crazy but yeah our analytics absolutely show that and i'm telling you the reason is is because you're combining a visual component of photos and videos and interactivity with audio rooms if you're on twitter space is a clubhouse you're just in an audio room but if you're scrolling an app and you're actually having conversation you're using both the same time we're having users sit on the platform all day long in audio rooms no i believe that what i'm trying to wrap my head around is you're saying there's 50 000 people that do that that are going through that today december 15th today there are 50 000 people that are gonna spend an hour in your audio rooms on your app today pro well probably not 50 000 no okay that's what i'm trying to do monthly our monthly active our monthly active users are around 50 to 60 000. what's your daily after that daily probably i don't know maybe between five and eight a day 25 and eight no i said five and eight oh five and eight got it okay so that would be there are five thousand people today that are spending an hour in these audio rooms scrolling around that's your daily activities between five and eight okay that makes somebody wait that makes way more sense um yeah okay what what is the right revenue moving forward right i mean you've done 300 through the system if you're taking 20 you really only made 60 000 and i think that's probably before you're paying apple so how do you no no no no that's our revenue after okay so your total revenue over the past three years four years has been sixty thousand dollars no no no no that's no like i said that's no no it's over that it's way over that why is it over that you told me your total total gmd through the problem was about 300 000 and you take 20 percent no that's because what the money that flows into our platform comes in after apple's already taken their percentage you see what i'm saying you understand what i'm saying the money doesn't our money our revenue doesn't come to the platform it only comes in the platform after apple takes their um what did you mean when you told me that fans all time have made 300 000 on the platform that's what that's what we yeah that's what the platform is made probably about 300 000. and does apple take 30 of that no what i'm saying is all that money that that's after apple takes their percentage okay we don't see anybody that come we don't see that money i don't count that money because we never it never shows up yeah so you're watching users give each pay for likes go to your shop etc 300 000 of money has gone through your system you told me your model is you take 20 of that correct right the twenty percent of three hundred thousand dollars is sixty thousand dollars all-time revenue to you but we don't we don't see that though you understand i'm saying i don't i don't see them i don't see the money that apple takes i'm not you know isaac you just told me that 300 000 is after apple right so ignore apple you're telling me you see 300 000 after apple and you make money by taking 20 of that is that accurate yes okay then 20 of three hundred thousand is sixty thousand dollars in all-time revenue absolutely so is that is that yeah but also um the users don't always cash out their revenue so we pay once a month right so people have to enter their payment information and say i want to receive my money i want to pull the money out and once they do that then they get paid but a lot of users also haven't actually asked to get paid anything and then also we only pay out anything over 50 dollars too as well so you have to make over 50 to get paid that's another benchmark that you have to do so most users are actually um there's a bunch of money stuck in the app basically yeah until people decide they want to thank it so you as a company are making like a couple grand a month two three grand a month net net like your 20 take no we're i mean well probably more than that and i'm not like yeah more than that because again it varies on what we decide to pay out we might we might say we're going to pay out 17 18 000 in a month that might be what's due everybody may or may not take that 17 or 18 000 i'm not talking about that's an expense for you i'm talking about what you as a company make your cut you have to put this stuff on start engine when you list it i mean it has to be very very clear what did you put on start engine your revenue was um no we don't have to always we don't have to list all of our revenue start engine you have to do that absolutely not and i mean and most companies aren't going to um most companies aren't always going to post all their revenue i'm close with howard and i remember being at his office in la discussing start engine specifically and his concern was making sure investors understand what they're investing in and so he was really pushing people that list to share as much as they possibly can i'm reading under your section right now the business model fanbase takes 20 percent of all in-app purchases from users including purchase of love packs or subscriptions of their favorite creators is that accurate yeah and then you say users are paid the first of the month right our average order value is 2.83 cents right your cac is 25 which is very low cache by the way congratulations uh but i mean you put some of these economics out there right so so i guess my question to you is how do you get to the point where you're not having a raise every six months to fuel the growth of the business like how do you get up to like you know 10 20 50 000 a month in revenue um the the actual growing the community and again i think that's what's that's what's more important is growing the community because again i mean with most platforms not making money um i don't think we'll have to scale i mean i don't think about the raise that much capital moving forward all right well we will see what happens in the meantime let's wrap up with the famous vibe number one favorite book the bible number two is there a ceo you're following or studying um i i study or follow i follow or study zuckerberg just for for perspective number three what's your favorite online tool for building fanbase um content like i guess um yeah like apps that create engaging content so it can be premiere pro adobe rush something that creates engaging content and number four isaac how many hours i sleep to eat every night about six and what's your situation married single kids single all right and no kids nope all right and how old are you i am 46 46 last question something you wish you when you were 20. i could build an app guys there we have a fam based launch back in 20 uh caught 2018. they've got over 200 000 downloads in the last 30 days 20 000 users have signed up an active user or someone who's posted at least once all time they got 49 000 monthly active users today and daily about 5 000. they're scaling fast creators have made over 300 000 on the platform fanbase makes money by taking 20 they just did a successful raise on start engine raising 3.5 million bucks at a 20 million valuation with their team of 20 as they look to scale to keep building the community isaac thanks for taking us to the top thank you 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 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