Feedvisor Revenue & Funding (2024)

this is the top where I interview entrepreneurs to our number one our number two in their industry in terms of revenue or customer base you'll learn how much revenue they're making what their marketing funnel looks like and how many customers they have I'm now at $20,000 per Tov I haven't experienced his have bent on global domination we just broke on a hundred thousand units roll mark and I'm your host Nathan black new episode guys if 691 almost a 700 how crazy is that but be sure to tune in every morning tomorrow morning we talked to John Ferrara he just landed a massive deal with Microsoft that helped him grow his monthly recurring revenue to $225,000 big question now is will heal in the CRM space good morning everybody my guest this morning is Victor Rosen man he's a CEO and founder of feed Weiser before founding feed Weiser he was a founder of an innovative social media marketing start-up and a senior R&D manager at Sun Microsystems Victor holds of BSC in computer science and an Executive MBA from Kellogg Northwestern Victor are you ready to take it to the top thank you all right give it to us what is feed Viator duan what's your revenue model how do you make money oh we're free get off my show by now not exactly advisor what's adviser that is where decision support system for large e-commerce vendors that sell through marketplaces so we're helping them to make all decisions in the most optimal and smart way we kind of bring bringing them as markets on demand say so so when you think about I got to bring it down to earth when you think about the e-commerce business Victor given really give a real example of an e-commerce game so let's think about any commerce station let's say 20 30 million dollar name warning name one at the customer we can't really disclose names that is the only problem because we under NDA but whatever we have in the website we can because I cannot disclose on the show because your name one that you can disclose I'm just trying to make this easy for people to understand so you have you have RM des agree you've got a leather care supply and you've got a company called undercuts tell us about undercut so what do they do and how do they pay you so I cannot talk about the specific customers I'm really sorry on their maker you have this on your website so make you increase you can create a revenue 6.5 X percent there's a 250% increase in profit and 300 cent increase in sales talk about what you can talk about yeah so whatever is in the website we we can talk about whatever is in the website I can tell you what what we do for this person so what we do for this merchants is the join feed butter most of them will have significant business on out of them before before joining feed visor they will be doing some sort of marketplace selling through Amazon they will manage merchandise right they will manage pricing through us and then what will happen as soon as this join feed visor and we're just looking into way more parameters into how they optimize pricing how they make purchasing decisions how do they replenish and we just make these numbers right so for example if they've been selling on a certain price we can find the right price if if they were why do what gives you the right to tell them the right price tell us more about that oh sure so what we do is we look into a lot of very number searcher for human really consume what's going in the market think about the stock market as an example for example selling an apple not much different than stock market so you have a lot of competition and competition changes prices and the competition has certain amount of reviews and and rating and and they have certain amount of items in stock everything so so really to go and look into all these various numbers it's very good and it's very tough to make these decisions and that's why you employ the artificial driven algorithms artificial intelligence driven algorithms and they apply machine learning to actually make this decision more precise so any decision specifically the big one that you guys tackle is pricing pricing is the biggest decision but the second biggest would be replenishment and the third one bigoted would be a sort what do you mean by were plasma is that like inventory management how many items who wants to keep in store got it okay so and then how do you make money from this we actually we charge certain monthly subscription Plus which are certain amount of red share ok what's the monthly subscription on average we leverage our customers pay us to $3,000 a month okay and that's a flat fee regardless of this combination of subscriptions which can be two three thousand dollars and certain amount of ratios can come up to another thousand dollars okay I don't care about the registry part to start just to saw just the recurring flat or revenue what is that typically per customer it's around twenty five hundred okay and so they're paying they're paying that too they can get access and I'm going to read right off your website this is from undercut they sell it looks like grooming products or like bathroom products essentially very nicely designed they said that they use things like the 30-day trailing information of thing on feed visor profits units sold and sales it's a dashboard they have these are all things they paid at that splat twenty five hundred bucks a month for right so they actually getting information and they getting the automated price adjustment we can which reduce so so then all of these is included into this slide package and then for a revenue that they make through the system they Rev share okay I get decides not to do anything through feed visor and not to pay director but it would be unreasonable why couldn't they just keep you they say okay P visor says change my price - $10 I'm just not going to do that through them I'll do it myself and get the benefit without paying them a cut yeah well it doesn't make sense because first when you do it so you need two things to be successful you need to be precise and you need to be fast there is no way you will be spot by doing things manually so the rapture represents really small portion of of your entire fee so it's rather you should go and simply use the system there's no reason to the circumvent because we create the ry so if I am if I if I sign up for you and I pay you 20 bucks a month and then let's say in that month I do $100,000 in volume all through you what percentage of that will go to you it depends on the subscriptions on a subscription plan whenever is let's say about a percent oh this is just a cover like processing fees yeah yeah it's not it's only huge amount it's not like 20 percent yeah you're really is that you're really making your money then you're a SAS business if you're - yeah we stopped didn't majority of our revenue is coming from the beast as an industry got it okay and so take us give us some history here so what your Jalan CH the company in so Sophie visor was founded I phoned is actually in 2011 what I was working basic in myself and then I really bootstrap the company initially for the first year in 2012 we get initial seed funding how much ah if I'm not going saying about talking million okay something very initial get a convertible note or priced round I know this was Alexa T there's all equity okay and how much have you raised today 33 million 33 million okay great so walk us down I mean is the funding round kind of what you expected it to be or is there anything different than what you expected at the beginning in funding yeah well you never know at the beginning I had to say that our funding experience was notice that's very easy but it was fair okay and how did you would you do I know you're transitioning right now from kind of the UK I believe right where were you from originally started in Israel Israel so you're transitioning from Israel to to New York by the way I'm so impressed with the amount of talent coming out of Israel in the past three weeks I've talked to like three or four Israeli companies who are just killing it you know one of them I think I forget who was raised like a hundred million dollars I mean they're just killing it so Israel - New York City you're making the transition what was it like raising capital in Israel Israel has very powerful VCA consistent very powerful so there's a lot of capital in Israel it's it's not different than from any other place like Silicon Valley New York so for for me it wasn't creatively difficult to start with because I came after year in bootstrapping I had a first few customers I had working prototype I wasn't days working product but I've been working prototype with people paying for it what were you what were you doing in terms of revenue in the month right before you raise that first seed round well this was terrible yeah but like are we talking like like five grand or ten grand in revenue or is something in this range yes got it so I'll give you a fun story so when I raise the seed funding if I did I really didn't know that much about e-commerce didn't so I knew the details of the commerce didn't but I didn't knew about this is not like the impact and how things are going to work so and when we started speed-wise was primarily rev-share because it was the the risk less piloted or all the three free way to engage with customers because if it doesn't work you don't pay so and then when you move to more of the fix that actually when you get gaining credibility when you gain credibility you can ask or larger model come to start three with revenue because it's a significant fee so um so what really happened is I raised the defunding and it what q4 and everything was looking great and it's a rev share and the numbers went up and I sold it to look I don't remember the exact details that I will be making this up I said like we're doing 10k today in like three months all the 30k look it's all rocking up and then everyone was excited all with good and then you know if you want started and is it dumped and then you are everything went south and I couldn't believe that sighs oh wow I mean how the lighting goes down because it's a seasonality thing this was ripped and in the comers really blunt among on q4 and in q1 everyone goes to occasion so Josh Levenberg was your first investor with gel ventures correct JLS nodding not exactly the first one was disgusted from micro angel okay so how did you explain this to them like how did you prevent them from getting like totally pissed off of you slowly over over alcohol right okay very you know a be an angel investment is is really it's really much more personal business it's really about whom you're working with do you really trust the person and think best things happen it's not necessary ended up to be the worst thing in the company I mean we still managed to the incredible return from this guy yeah they existed this is half a million that whatever it was really early on what was it really like a two million cappers or two million very things like these I don't remember the exact title but it was really low I mean these guys I know made like human hey what you give us I knew it we north of cynic yeah a way way north I can imagine you just did your series be well don't don't tell me that actually the physical numbers but what percentage of their company did you give up in your series be well I cannot come in there sorry yeah but I cannot comment that because then you get evaluation by simple math but it's but I say it's really we really done and common valuation for the series be we're having it what is it that's that's more my question not necessarily your numbers but what is a common valuation for series be like what's a range common relations for series be was probably between 60 and 150 okay yeah cuz you're more mainstream now you're not working with angel investors I mean I believe General Catalyst did you're serious be back in January 2017 420 million right yes yeah so these are big guys so you're transitioning so again fast for us to today so you're moving from from Israel to New York what's your team size hundred people okay an hour a day mostly Israel or mostly in New York mostly Israel okay mostly Israel and and in terms of total customers you're serving now what are you up to we have a bus lasting sun is commin o 600 okay that's great well will soon 500 to be a minimum so I mean can I can I do I mean can I back in the napkin and take 500 times that minimum kind of style revenues there's no such numbers in feed life I think like what monthly revenue now you just said you had 500 customers right 500 customers but the remedy is not 500 om meet you yeah I know what I was going to say it can I take 500 customers times your minimum RP which you told me earlier of 2500 bucks and assume you're doing about 1.2 million in monthly recurring revenue somewhere with them around their neighborhood causing the neighborhood well I'm saying I assume if mine if those numbers are correct and I'm just using kind of inputs you're giving me here that's a minimum because I'm not even including even though it's only half a percentage point you have register on top of that yeah you know it's a it it's always I mean 500 their student gals distribution there's those making little bit more this doesn't make a little bit less so I think you you're right in the neighborhood great yeah you have you're saying you have historical users that might have gotten in at a grand per month or new users paying 3 grands per month but on average it's somewhere around here okay and tell me about churn so what's your gross customer term per month so so actually assurance aghasura is really low so in so we have what is Lola nectar what what is low what is low below theme okay so your your call it call it 13 percent in an annual let's say so annual churn or monthly turn no no no I'm not so sure we'll be done by now okay good that's outing so yeah we can assume somewhere around 11.3% and monthly churn not really go there so yeah yeah good good senses I've got to say that's not always standard I mean I know many companies that are sat there turning five six percent per month one point five percent is great let me tell you something getting five four five percent you can get to raise money from jail get it there's no way yeah no I believe you and then are you have you gotten into the area yet where your your net negative revenue churn your your expansion revenue drum on the growth we kind of playing with it we haven't done it yet because in order to get there you need to have a massive upsell play and then it was still young company and we still kind learning it but right now we not so much focused on how we can squeeze more from any customers we actually focusing on value well into a clear Victor it depends on how you phrased it right I could also phrase the same thing as you add so much value at $10,000 upsell and 100 percent year-over-year growth and ARPU makes perfect sense because you're delivering a 2% value increase year over year yes okay I mean you just what I'm what I'm what I'm curious is you haven't put a ton of effort yet into figuring out how to add a bunch more value so you could double the ARPU you over here you're working on that now yes okay got it and so what is your hunch tell you I mean is it a lot of people different levers to grow our poo it could be a number of seats it could be a usage based utility number what's your going to be your lever we are musicians those are by definition we're stimulation we optimize the business but demising the business will create the ROI so if we can go and optimize additional assets of the business additional phases of the business then we'll create additional streams of ROI as soon as we create additional streams of RI we cannot sell easier yeah so as long as we focusing on a particular facet lesser pricing and then that's what customer is buying for there is no way for us to upsell into that because this will be squeezing I mean just just to point out something I mean for undercuts that worked with you mean it says right here you know last year from January they're doing $23,000 in sales and by August they did 150,000 you're only capturing from a revenue perspective 0.5% of that plus the flat fee of around 2,500 bucks there's a lot of value there I mean when you ask people to like if you double the revenues you they double what they pay you per month in terms of a SAS model well how do they respond or you just want to go that route no we right now I think we'll be charging is fair amount we know exactly how our customer valley toothpaste how much do they wants to give for kind of per channel yeah various types of sources we really understand our customer really understand these models so for it is a large market so rather growing the market share that's assess our focus right now and and it's not like endless amount of businesses if you think of Lissa Tech Amazon Amazon is definitely the kind of the leading marketplace today so you look at the Amazon you see probably I don't know 20,000 large businesses that sell there it's not like endless and then for us to get to 2000 will be 5% of the market that is this quite significant force our company to start it so how are you adding customers how are you finding them we we primarily doing it through the content marketing and brand building initiatives so so we really invest a lot in to feed Weiser brand we only need no vector like I understand so when it's a brand it means that when you think when you think Pete Weiser you think it's a reliable solution that was for me meant brand in order to do that we need to educate people we need to appear to start leaders with free content we publish extremely valuable ebooks and webinars and then we do interviews with our customers they take each you know about these visors teach you how to grow your business we do our own conferences which became an industry event where people joined we do the same thing online and then it'll be just by combining all of these together we create an environment where people can really benefit from us so people benefiting from us by learning a lot of stuff not related not directly related to feed wiser it's being translated into the brand that means ok this is something that helps me to grow this is something I can learn from so this creates is very good initial handshake between us and the customers when they come to us they know if adviser sends good how many people do you have paid kind of employees just creating content for you three four three four okay so you know for any significant investment I will give a shout-out though guys you've got to check out kind of how Victor's doing the blog they have this I mean it's first of its really well designed and then they have a little eyeball that kind of shows you the number of views per post which helps you kind of kind of actually drive the click so for example one of them says insights from a ten million dollar Amazon seller with twenty two hundred clicks another at the top I've got ebooks events videos webinars the Victor I clear you're investing a lot in content marketing yeah kind of marketing is key but it's not only comes with marketing as it is primarily investing into everything this can help you to position yourself yes it's a good guy I imagine yeah I imagine last few questions your honor on custom economics before we wrap up I imagine General Catalyst when you raise I mean these are smart guys they probably push you on things like well Victor what do you think your LTV is and what are you spending to acquire a customer these are obviously back of the napkin kind of gut feels based off the historical cohort data but what is your best guess in terms of what a what a user is worth to your customers worth to you over their lifetime I would say sleep sitting at least at least 10x what their 2500 notice 2500 will be monthly socialistic 2500 is is it like a contouring 8:30 ba and also I would say 300 K God I got it so you're at least 10 years what you're saying yes yep not as you know investors will always come in and try to get it hot this is Alyssa look if it happens it but even dad let's say the sides even dead if you think of 150 K worth of a customer dinner yeah I mean look this is a back of the napkin thing it's an art not a science and you use historical data right to figure that out so with that in mind I am curious though what are you wanting to spend to acquire a customer fully weighted so that includes kind of content marketing salaries divided into total new customers per month any inside sales reps any paid advertising etc so so the way we're looking into it is we're looking to to actually follow the standard stance metric and then return the customer within the year and I eat your payback period you want to be less than a year yes literally year you want to offend less than about 22 to 30 grand on acquiring that customer yeah okay okay many of you know I am buying companies that I really really like and there's no quicker way for me to get to the bottom of what is happening on that website then using this tool called Mathematica calm towards flash hot jar h.o.t jay-ar it basically will give me a recording okay when anybody lands on the website I'll give me a recording of where that they were scrolling and obviously does the basic stuff like heat maps to but I learned so much about where the users are scrolling and clicking on my site using that tool that helps me increase conversion rates make more money and grow those businesses faster and we'll have to see what happens with those businesses but I'm buying them I'm buying them very quick and I'm using Nathan maca calm for / hot charm for all of my website analytics you can - I work with them it's totally free even go to Nathan latke dot-com ford slash hot char a no credit card required again use it as much as you want making like a calm forward slash hot char I'll see you there makes good sense Victor hey let's wrap up here with the famous five you ready okay these are like easy compared to my other questions all right number one what's your favorite business book oh oh this is Lex one number two is there a CEO you're following or studying right now so quite a few I would say definitely just business and I would probably also say that um feed the Orbis if Jeff offers you 90 million dollars to sell a company do take it no no way I'm looking at your eyes I'm looking in your eyes trying to see if I believe you or not number three with your favorite online tool like a cutie scan doing um well I actually don't have really a favor until I use a lot of florists things but I wouldn't use it the most um we both will use the communication tools like it what's happened then July number three how many hours of sleep to get every night or number four sorry the only surprise I do sleep well how many hours I would say between 6 & 8 okay so go get called 7 there and what's your situation married single you have kids married any kiddos - are they young uh because early teenagers okay so so you've got past the hardest part right I don't know mitigate no more changing diapers for you all right and Victor how old are you I'm 46 okay last question take us back sick at 26 years what he was your 20 year old self new Wow is the toughest actually like the Dorota it says I don't really think the question isn't the question isn't what would you change it if you could pass a lesson back to your 20 year old so specifically if we have 20 year old listeners right now what's the lesson you tell them well that says it doesn't uh I would think when you ever make a decision you need think a little bit longer that's it that's good all right guys there you have it when you're making a decision always just take an extra minute take an extra night to sleep on it think a little bit longer from Victor who founded feed visor back in 2011 they've now got over a hundred folks working on this issue of optimization pricing optimization specifically as their beachhead on Amazon now serving over five hundred customers paying a minimum or about twenty five hundred bucks per month again as far as our SAS model so doing alcohol in the range of one point two million dollars per month in revenue less than or around one point five percent gross customer churn per month he wants to get a payback period in terms of acquisition of less than twelve months he's assuming lifetime value of about 300k spending about 30 K or a little less on acquiring those customers again thirty three million dollars raised Victor thank you for taking us to the dock Thank You Nathan enjoy today's episode of the victor go back to listen to yesterday's episode with scott Brinker who created the mark Tex chart there's one piece of content that it creates if there were a million free unique views see how he does it we also spoke about the future of CRM and how to passively monetize content so that would be yesterday's episode it would mean the world to me if you guys got any value from this episode if you would go leave a review on iTunes right now and then subscribe you know I hustle I have to get these episodes out every freaking day for you guys and struck me I love it I would do with no listeners but boy oh boy makes my day and it makes my team day when we see great reviews and get your feedback so thanks so much okay top drive I love giving away free money I feel like Pope for giving away cars and I have something special for you today how many of you have heard our super sharp cats talk about success they've had with Facebook and Google Apps well all of you listening right now if you're listening you can under dollars in three AdWords here's how you get it based again thanks for listening it's a $300 from Google right when you sign up with my website post provider 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